Hansen (FGCU)- Indoctrination in Schools- Economics

When I was in high school, I was taught that Franklin Delano Roosevelt was a savior.  After all, he was elected for four terms, “brought the US out of the recession”, and his policies were great for America.  After Obama got elected, and I woke up to see that his policies (both social and economic) made no sense. I started watching shows like Glenn Beck, Hannity, and the O’Rilley factor and I started seeing things from a new viewpoint.  Then a two months ago a conservative man named Lawrence Reed came to campus and presented his speech, “Great Myths of the Great Depression.”  From this it cemented my beliefs that if the free market was left alone it will perform much better than one with government regulation. 

                In high school I was taught that Herbert Hoover was a laissez-faire Republican, meaning that he thought markets were self correcting.  Not True.  Turns out that he was a progressive, and believed that he should run the country as a CEO might run a huge business.   He started piling up big deficits, by increasing spending by 50% starting in 1929 at the start of the recession (not yet a depression) to support massive public-works projects.  (Does that sound like today?  Bush slowly increased the deficit from a surplus at the beginning of his term, to 350 billion in the red by the end, then Obama quadrupling it to 1.8 trillion.)  He also insisted to business leaders from cutting wages when the economy started to fall.  Another disastrous, big government policy, which he signed into law, was the Agricultural Marketing Act.  This would later transform to be called “Smoot-Hawley” under FDR, which set quotas on production and paying farmers to destroy their crops in order to raise farmer’s income.  In other words, the government incentivized farmers to reduce demands and force their goods to be sold at higher price.  But logic would tell you that it would fail because the cash strapped consumers would not be able to afford this, and would cut back on the amount of food and other necessities that support other parts of the economy such as clothing, auto, appliances, etc.  Another thing that proves that Hoover was not a free market guy was that when he was competing against FDR for a second term, people spoke out saying that if you vote for Hoover, it is a vote for socialism.  FDR ran as somebody who trusted the free market to solve the problem on its own.    

                Another thing that was taught was that FDR was a hero, a savior, and pretty much just short of a god.  His policies caused us to recover from the severe downturn and prevented America from collapsing.  Once again not true.  Hoover, and FDR made the economy worse through their big government, progressive policies, which caused unemployment to spike to 25%.  One of those policies was the New Deal.  I was taught that this benefited the average citizen by giving them a job.  After all the unemployment rate did come down a little after it passed, to about 18% after a few years.  But if you look at how it was sold, people claimed that it would end the recession by putting people back to work.  Obviously it did not.  In order for the government to spend money, it needs to take it away from you, me, and corporations in the form of higher taxes.  So if it spends $800 billion, it must take over $800 billion out of the economy to pay for this because they must pay the interest rate when they borrow the money.  FDR tried countless big government ways to “benefit the economy.”  In fact, his treasure secretary, Henry Morgenthau said that after two terms of FDR being in office that,

“We have tried spending money.  We are spending more than we have ever spent before and it does not work.  After eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!”

                It’s funny how in school, our textbooks did not mention anything of the Great Depression of 1920.  This is a depression that in some ways was worse than the Great Depression.  This downturn lasted for a year as the economy transitioned from wartime to peace time, and recovered from Woodrow Wilson’s extremely progressive policies.  In the Depression severe deflation occurred where prices dropped by 56% in one year for all goods such as housing, products, and services, the highest ever in American history.  The Gross National Product also dropped by 24%.  Compare those figures to today, where housing dropped 18% in 2009, GNP dropping less than 3% since the beginning of the recession, and unemployment reaching 10.4 percent.  This was the last economic downturn, besides when Regan came in, where no big government policies were used.  To deal with it federal spending was cut from $6.3 billion in 1920, to $5 billion in 1921, and to $4 billion in 1922.  The Federal deficit accumulated by 1920 was 24.2 billion, and was paid off by 1925.  He also cut taxes by over 50% and they stayed there until 1928.  What did this do?  Unemployment fell from 11.9% in 1921, to 6.7% in 1922, and continued falling to 1.8% in 1926, the lowest in peacetime history.  It lead to the roaring 20s where it was the most prosperous time in American history with the greatest expansion in the middle class.

                The final lie that I was taught was that World War 2 ended the depression.  Actually it was mainly because FDR died.  His successor was more of a conservative than him, and as a result ended some of his spending programs.  Only then did the economy start to recover.  Then WW2 happened, and the Government was forced to cut back even more because they accumulated such a high deficit.  Then the economy really started to take off.  If WW2 was the real culprit then when the war ended we would have went back into a recession, just like after every war, because we were in a period of transition.  However this did not happen because the government was still paying off the war, so they were forced to keep spending low. 

                So, why have progressive ideas infiltrated the textbooks when they have no track record of ever working?  They have had detrimental effects on the economy, causing the 1920 depression, the 1930-1944 depression, the recession at the beginning of Regan’s first term, and the current one.  America does not need to conform to Europe and China socialist and communist ideas.  Having a limited government is what made America the most prosperous nation in the history of the World.  If the Progressives succeed in indoctrinating us youths, then they will eventually run the country for a long time.  It seems like they are succeeding.

This entry was posted on 11. March 2010 at 20:54 and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.