Economist’s views on ‘Great Depression’ at RLC raise questions about Obama’s plans

Lawrence Reed, president of the Foundation for Economic Education, delivered a riveting address about the Great Depression during the banquet at the Republican Liberty Caucus national convention.Economist Lawrence W. Reed delivered the keynote address at the Republican Liberty Caucus national convention Saturday during the banquet, and he committed some serious myth-busting about the ‘Great Depression.’ Reed fractured one myth in his opening statements. Most Americans believe corporate America caused the Depression.

"The Federal Reserve system was at the core then—and today,” he said. Reed built a solid argument for the Depression’s causes, and analyzed the economic meltdown that began during President Herbert Hoover’s first term and proceeded to antagonize the global economy for more than two decades. By the end of Reed’s address one conclusion is inescapable: the current administration is following a path very similar to steps taken by administrations in charge during our troubled past.

Hoover has been categorically criticized by many historians for not doing enough to head off the collapse; President Franklin D. Roosevelt achieved virtual sainthood for taking aggressive actions.

But Reed cites one of Roosevelt’s policy architects who, decades later, made a confession of sorts. Rexford Guy Tugwell, offering remarks for Paul Johnson’s ‘A History of the American People,’ (1997) said, “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.” If you leap from that sentence to thoughts of TARP, you’re on the right track.

Reed, president of the Foundation for Economic Education, makes more sense than the pool of economists backing Obama’s future spendthrift plans. Reed breaks the Depression into 4 phases, including a phase he called a ‘depression within a Depression.’ Once international trade was renewed during World War II, Reed said “A reinflation of the nation’s money supply counteracted the high costs of the New Deal, but brought with it a problem that plagues us to this day: a dollar that buys less and less in goods and services year after year.”

Roosevelt shared a characteristic his Democratic Party holds today—the ability to project one version for the American public while the reality of his actions were kept secret.

I had an interesting conversation with my mother about this; she lived through the Depression. In a nutshell, her family was dirt poor, so poor that my middle-class father’s family took a dim view of their marriage. To this day, she praises FDR for helping the people. So after reading a booklet Reed’s organization distributes, I asked her a question. Did you realize FDR had 6 million baby pigs slaughtered and buried in mass graves and had farmers plow crops under while your family was starving? She was speechless. At times I take furtive delight in busting ideas my Democratic kinfolk have about American history.

Roosevelt’s big government actions, oppressive and often near-senile regulations, and runaway spending, his tariffs and his governance of agriculture, were an economic disaster for the country. Yet it took 4 decades for historians to finally look at the Depression through a clear lens. Our president and Congress are following in Roosevelt’s footsteps as I write this article, and the American public is apparently clueless about the future impact of all this spending. The Washington Post published results of a poll conducted jointly with ABC news today. Respondents who agree President Barack Obama’s policies will improve the economy: 64 percent. It’s hard to know whether to pity or deride that 64 percent of clueless constituents.

The booklet ‘Great Myths of the Great Depression’ comprising an essay and afterword by Reed should be required reading for every American, especially those who pay taxes. It should be mandatory reading for public school teachers. It’s lengthy, so we can’t do it justice here. Reed wrote, “Suffice it to say here that governments inflate because their appetite for revenue exceeds their willingness to tax or their ability to borrow.”

If you ever have the opportunity to hear Reed speak, I highly recommend listening to him. He puts terminology in perspective, corrects propaganda and manages to make sense of that Great Depression during which so many, like my mother’s family, suffered unduly because the government did exactly what it has done today—sparked an economic meltdown with unsound fiscal policies, blamed corporate America, and proceeded to throw good money after bad.

Reed was one of a number of speakers at the RLC convention. To learn more about the organization, visit the website. To learn more about Reed and to purchase a copy of the booklet for a very modest price, visit the Foundation for Economic Education website. That, by the way, will be the best time and the best $1—the price of the booklet—you ever spend.

 The Republican Liberty Caucus held its national convention in Jacksonville Mar. 27-29. Jacksonville is an excellent location for a convention, and I'm admittedly biased because I live here. [Photo by Kay B. Day]