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Delayed Recovery, Prolonged Depression
In 1931, in some of the darkest days of the Great Depression and the middle of the Hoover administration, the national unemployment rate stood at 17.4 percent. Seven years later, after more than five years of FDR and literally hundreds of wildly ambitious new government programs, after more than a doubling of federal spending, the national unemployment rate stood at — 17.4 percent! As economist Jim Powell points out in his devastating book FDR’s Folly, “From 1934 to 1940, the median annual unemployment rate was 17.2 percent. At no point during the 1930s did unemployment go below 14 percent. Even in 1941, amidst the military buildup for World War II, 9.9 percent of American workers were unemployed. Living standards remained depressed until after the war.”
In his celebrated First Inaugural Address of March 4, 1933, FDR unequivocally declared: “Our greatest primary task is to put people to work. This is no unsolvable program if we face it wisely and courageously.”
But for the president and his economic advisers, the task of putting people to work did remain an unsolvable problem — until world conflict led to sixteen million Americans leaving the workforce for the military, and millions more finding new jobs in humming defense plants. Considering Roosevelt’s self-proclaimed priorities, the persistence of devastating unemployment (in an era when the typical family relied on only one wage earner and women for the most part stayed away from the workforce) should alone identify the New Deal as a wretched, ill-conceived failure.
Other measures of recovery show similarly dismal results. After the stock market crash and the beginning of the Great Depression, the Down Jones Industrial Average hit 250 in 1930 under Hoover (it had been 343 just before the crash). By January 1940, after seven years of New Deal “experimentation,” the market had collapsed to 151; it remained in the low 100s through most of Roosevelt’s terms and didn’t return to its 1929 levels until the 1950s. At the same time, federal spending as a percentage of the gross domestic product soared at an unprecedented rate: from 2.5 percent in 1929 to 9 percent in 1936 (long before the wartime spending began). In other words, the portion of the total economy controlled by Washington increased by a staggering 360 percent in the course of just seven years — without providing discernable benefit to the economy.
Such statistics look so disturbing, so incontrovertible, that they raise serious questions about the survival of the myth that the New Deal fixed the Depression.
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Crowding Out Charity
…In The Tragedy of American Compassion (1992), Marvin Olasky of the University of Texas explores the numerous reasons why private-sector efforts work better than government initiatives in meaningfully transforming the lives of the downtrodden. For instance, “a century ago, when individuals applied for material assistance, charity volunteers tried first to ‘restore family ties that have been sundered’ and ‘reabsorb in social life those who for some reason have snapped the threads that bound them to other members of the community.’ Instead of immediately offering help, charities asked, ‘Who is bound to help in this case?’ “ This approach of course discouraged the extension of poverty as a semi-permanent status passed on from one generation to another.
As Olasky notes, faith-based and private aid organizations also maintained the crucial ability to make distinctions between “deserving” and “self-destructive” poor. “Charities a century ago realized that two persons in exactly the same material circumstances, but with different values, need different treatment. One might benefit most from some material help and a pat on the back, the other might need spiritual challenge and a push.” This echoes the clear division Reverend Joseph Tuckerman proposed in his classification of the poor he served as victims of either “paupery” or “poverty” — the first more in need of moral refocusing and the second in need of aid. But bureaucratized and governmental interventions, no matter how well-intentioned, do not — cannot — make such distinctions, or help to repair or encourage the family relationships so essential to escape from poverty and dysfunction.
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Erasing Embarassment, Encouraging Dependency
Charles Murray’s pathbreaking 1984 book Losing Ground asks an obvious question about Lyndon Johnson’s “Great Society” and its aftermath in the late 1960s: what caused the painful increase in poverty, illegitimacy, crime and social dysfunction at the same time that government spending to address these pathologies vastly increased? He concluded that the well-intentioned and monumentally expensive programs of the period contributed to the problems, rather than to their solutions. As President Reagan trenchantly summarized the situation: “We had a War on Poverty. And poverty won.”
The unmistakable failure of Great Society programs related to their underlying assumptions: they went far beyond the New Deal in erasing all distinction between the “deserving poor” and the “undeserving poor.” The new welfare “entitlement” made all struggling citizens eligible for the same programs, regardless of the respectability or destructiveness of their behavior. Social workers and politicians aimed to obliterate the stigma once associated with receiving benefits from the government.
My barrel-maker grandfather never prospered in this society, but he always viewed the dole as an indication of failure and disgrace. Like most Americans of his generation, he would rather go hungry than lose his dignity as an honest workingman.
Great Society reformers worked hard to extirpate the sense of shame that previously kept the “working poor” from claiming government largesse, promoting “welfare rights” and insisting that the destitute bore no responsibility for their status. But an individual who bears no responsibility for his situation exerts no control over it – and must depend on outside forces (in this case the federal government) for his redemption. By removing the embarassment previously associated with taking public money, antipoverty programs encouraged a culture of dependency and discouraged self-reliance…
Michael Medved
“Government Programs Offer the Only Remedy for Poverty”
The 10 Big Lies About America
Posted by Count Mazz 