Book TV: Burton Folsom "New Deal or Raw Deal?"

thank you to the Heritage Foundation and I'm glad to have my wife Anita also at Hillsdale College here with me and Thank

You audience and it's hard to have a stoic calm about Franklin Roosevelt because he's such a fascinating figure it was fun to write a book in which

Franklin Roosevelt is the major figure in the book he is exciting to write on he is a central figure in American

history and it is very questionable whether he warrants a place as a great president in American history I see his

life in many ways is a political tragedy here you had somebody who was living off the fame of his famous cousin Theodore

Roosevelt it helped get him elected to the state legislature in New York and an appointment as assistant secretary of

Navy just as Theodore Roosevelt had held decades earlier minor positions he's 40 years old has accomplished very little

on his own and then he gets polio a career-ending disease for just about anybody who ever had it but Roosevelt

one trait he had was persistence and that persistence plus the help of some friends he had Louis Howe and Missy lehand in particular those assistants

who worked and chugged on his behalf and wrote letters and Roosevelt was there in his wheelchair was able to shake hands

was able to with assistance walk with guidance and help holding him up Roosevelt was able to turn this lackluster career into an upset victory

for governor of New York the largest state in the Union what puts him in contention for the presidential Hunt in 1932 and then at lo and behold a great depression and the Republican era is

going to be shattered and ended Roosevelt will assume the presidency and here you have somebody charismatic somebody who had a way with words eloquent

on the radio starts out saying the only thing we have to fear is fear itself trying to instill confidence in the American people all of this a dramatic

story overcoming adversity into the presidency at a grand time in our history and yet I submit that his career

is that of a political tragedy he had a failed presidency in the sense that he never got us out of the Great Depression

in his first two terms he had a situation which was so bad that we had unemployment six years after he was

president of over 20% when you consider that before the Great Depression the highest rate of unemployment that we had

ever had in our history was 18% to be in office for six years to launch the New

Deal and then at the end of six years to have 20% unemployment sometimes it would range down to 17 or 18 but in that range

17 to 21 is a failure that simply must be explained what in the world went wrong let me just talk about this a

little bit by quoting from Roosevelt's Secretary of Treasury Henry Morgenthau Morgenthau was put in the Treasury Department because he was such a good friend of Roosevelt's Roosevelt wanted

an ally in the Treasury Department someone who would help him implement programs spend money the to Roosevelt

Morgenthau Acts they lived near each other in upstate New York they had campaigned in politics together Morgenthau knew Roosevelt before his

polio episode their wives shopped together the two men would chat and pass notes during cabinet meetings sometimes

Morgenthau had a sign on in his office from Roosevelt a picture of both of them and Roosevelt signed it to Henry from

one of two of a kind Franklin Roosevelt Morgan thought deeply liked Roosevelt and gave his life has

occurred in career to help Roosevelt and yet dealing with this unemployment was so frustrating to Morgenthau that finally in 1939 Morgan's boss said this he said it

privately he did not make this a public statement but he said it nonetheless privately to Democratic leaders we have tried spending money we are spending

more than we have ever spent before and it does not work we have never made good

on our promises I say after eight years of this administration we have just as

much unemployment as when we started and

an enormous debt to boot he knew were of he was speaking he saw the statistics on unemployment

he saw the statistics on the national debt from 1776 in the Revolutionary War up to the time Roosevelt came into

office we accumulated about 20 billion dollars of debt Roosevelt in the 7 years in which we still had 20 percent or

there abouts unemployment had spent another 20 billion dollars in other words in Roosevelt's two terms or less than his two terms actually we spent

more than every administration in the United States had ever spent on federal spending whether it's civil war World War one Mexican War Revolutionary War

whatever the federal debt had doubled the New Deal had created circumstances

where unemployment was still at 20% or almost 20% Morgenthau was expressing his frustration and the question we must ask

is what went what went wrong I think as we analyzed the New Deal programs and I study many

of them in depth in my book we can look and at them and say a centrally directed

economy simply does not work well at all a centrally directed economy ultimately

results in programs that fail programs that have terrible unintended consequences programs that do not accomplish what market forces accomplish

in the case of Roosevelt he was so sure it would go well because he had brain trusters working with him he had experts let me give you a couple examples

programs designed by experts heavily influenced by experts you start out with a farming crisis Roosevelt's program the

Triple A the Agricultural Adjustment Act the problem well the farmers are getting low prices because there's a lot of overproduction now part of the reason we have

overproduction is because under President Hoover we passed the highest tariffs in US history other nations when we refused to buy

their imports they refused to buy our imports thus the agricultural market which in for example in wheat is about

25% of the total crop you lose your export market you have a surplus and you have declining prices well now it might occur to someone that getting rid of the

tariff would help because then other countries would be more likely to buy your goods because you're buying more of their goods and to Roosevelt's credit he

did talk in the campaign and eventually move toward freer trade to his credit that he did do but it was a slow process right off it was the triple-a and the

idea here here's the solution and the brain trusters helped him with this we will pay farmers not to produce and if we pay for not to produce on part of their land

then some of the land will be taken out of circulation we won't have crops that would have been produced on that land that go to market and then the remaining

crop will have a higher price because there won't be as much of it and therefore that will help solve the farming crisis well first we get into

the unintended consequences we're gonna pay farmers not to produce it sounds funny doesn't it we have hungry people we have over 20 percent unemployment so we'll pay people not to produce but in any case we've

started out and we find that some farmers say yeah we'll take 25 percent of our land out of circulation but we

have to send people around to check on them because although they say that they'll take it out of circulation if we don't have somebody go over to make sure

they actually did then we will be paying them to plant more crops on their land so we have to send checkers around well

lo and behold the checkers are there measuring land on thousands and hundreds of thousands of farms throughout the

country and then we found out that a lot of diminishing of the land is not occurring because some of the checkers

are being bribed