If there is one thing President Barack Obama and I ought to have been doing last week, it was our homework.
With all of the hoopla surrounding the congressional committee's new draft of the stimulus package, I found it hard to turn off Fox News and NPR. I was really hoping for bipartisan leadership that would approve appropriate concessions. But once again, my bipartisan yet conservative-leaning heart was broken by what seems to be a politically polarized debate surrounding the bill.
Now, I am frustrated with our leaders, tired from staying up late doing work, and behind in class. I really should have just done my homework.
However, Mr. President, I think you should have done a little more homework yourself. Last Monday evening you passionately stated that there are "some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And, in fact, there are several who've suggested that F.D.R. was wrong to interfere back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago."
If you spent just five minutes, Mr. President, researching the phrase "New Deal Debate" you would quickly realize that these battles were not settled years ago; rather they are still being hotly contested by many members of the current Congress.
But perhaps you already knew this. As a product of Harvard, surely this debate that few Americans are aware of was touched upon.
Perhaps some of the proposed educational stimulus money can go towards enhancing and correcting the elementary civics curriculum, considering Franklin Delano Roosevelt's New Deal is such a paramount and poignant part of U.S. history. I am not going to say we were taught lies as children, but we were seriously left out of the loop regarding information and statistics that surround the 1933 plan to end the Great Depression.
A little refresher of the generic New Deal as taught to us in elementary and high school may help shed some light on this issue that many present economists are still fighting over. During his 1932 election campaign, President Roosevelt proposed a plan which he promised would put Americans back to work and end the depression (sound familiar?).
The stock market's value had dropped close to 90 percent since 1929, people could not access their savings, and unemployment reached an all time high of 25 percent. From 1933 to 1935, the New Deal took effect and was followed by the Second New Deal, which ended in 1938. Various programs such as Civilian Conservation Corps, the Works Progress Administration, and Social Security, coupled with reform of the banking system, all claimed fame as "enders" of the Great Depression.
Although these basic facts may be true, some may be fabricated. Unemployment, the key aspect of the New Deal, is contested by The Wall Street Journal. It recently reported that "there was even less work on average during the New Deal than before Roosevelt took office. Total hours worked per adult, including government employees, were 18 percent below their 1929 level between 1930-32, but were 23 percent lower on average during the New Deal (1933-39)." In addition, Nobel Laureates Robert Lucas and Leonard Rapping determined the revised Federal Reserve policies had allowed the economy to stabilize by 1935.
In third-grader terms, this means people were working less during the New Deal years than they were during the Depression. Subsequently, there has to be a legitimate explanation as to why the market did not recover in 1935.
The answer is New Deal policies.
Though scholarly journals, editorials, and books abound on this subject, the best way to sum up the default of the New Deal is to say that it limited, mandated, and manipulated the private sector's natural free market tendencies by creating cartels as well as artificial and temporary relief to workers. In other words, when the federal government intervened in the work of private corporations, the depression continued via the New Deal.
To relate this back to the present day, many people are dangerously calling the current stimulus plan a "new New Deal." Some economists claim that the depression of the late 1920s and early 1930s was caused by Hoover's record spending as well as other economic events. Similarly, the effectiveness of our government's $700 billion Troubled Asset Relief Program (TARP), which buys troubled assets in an effort to help banks, is under high scrutiny and could be a cause of our current day crisis.
Although many parallels exist between the two crises, a new plan of action is needed which will create long-term employment as opposed to Roosevelt's short "make-work" jobs.
Hopefully the final version of our stimulus package will mend the mistakes of Roosevelt's plan and allow capitalism to flourish, thereby pulling us out of recession.
You are right, Mr. President--federal government intervention is needed, just not in the private sector. In addition, it is wrong and deceitful, Mr. President, to tie this package to the nostalgia of a Deal whose consequences are still being debated in an effort to gain public support.
If change is what you believe in, please consider changing the association of your plan to something a little more clever and timely.
Be the first to comment on this article!