Saturday, April 18, 2009

Is Obama the new FDR?

I sure hope not after reading a new book that just came out this week entitled The Politically Incorrect Guide to the Great Depression and the New Deal. The author, economist Robert Murphy, notes that government intervention prolonged the Depression and explains through the use of historical facts and information why this is so. Adding to this, he states that much what is written in textbooks on the Depression is false (no surprise there) and politically correct, making it seem like government saved the day. With Obama trumpeting himself as the new FDR heading a government "lending a helping hand," Murphy says this is no cause for celebration. Instead, we might have similar problems (or even worse) then we did in the Depression: double digit unemployment, arbitrary policies toward businessmen resulting in net investment of less than zero, and big government policies that stifle liberty.

Anyway, if you are interested in the topic, read the book, it's easy to get through and digest, even for those who are laymen in economics.

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Blogger uncle ken said...

Not really. FDR had a birth certificate.

11:05 AM, April 18, 2009  
Blogger J. Bowen said...

I'd recommend Robert Higgs' book, Depression, War, and Cold War. It came highly recommended to me. I'm only about a quarter of the way through it, but I find it fascinating (though not too surprising) already.

I've not read the book you suggested, but I have read other works by Robert Murphy, so I know I'd be able to expect a good thrashing of FDR and the conventional telling of Great Depression-era history.

12:27 PM, April 18, 2009  
Anonymous Anonymous said...

@ uncle ken:


1:21 PM, April 18, 2009  
Blogger jimbino said...

It appears that we will need another Hitler to extricate us from our Depression.

5:42 PM, April 18, 2009  
Anonymous Anonymous said...

Cafe Hayek has a link to a 1985 interview of Friedrich A. Hayek.

A couple of great exchanges:

From the 8-minute mark:


I probably was, when I began my study, [..] convinced that there must be an intelligent solution of the many dissatisfactory events of this world.
I was very soon cured of this belief that socialism was the solution, because I came after three years under the direct influence of Ludwig von Mises, who had published his great book On Socialism, demonstrating that the socialist solution was impossible in a technical sense.


It proposes a solution which is not the solution. You cannot… well it takes a long time, but it is my central problem: Socialism assumes that all the available knowledge can be used by a single central authority.

It overlooks that the modern society which I now prefer to call the extended order, which exceeds the perception of any individual mind, is based on the utilization of widely dispersed knowledge. And once you are aware that we can achieve that great utilization of available resources only because we utilize the knowledge of millions of men it becomes clear that the assumption of socialism is that a central authority in command of this knowledge, is just not correct.


So what you’re doing is you’re turning on its head the common point that one often hears from the left, that because the problems of modern society are so difficult, they require planning, you’re saying because they’re so complex, they make planning impossible.


Well, I think the nicest form to put it is, to say that socialism protesting against the production for profit and not for use objects to what makes the extended society possible. Production for use is only possible in a society where we know all the facts.

But to achieve the situation where we’re all working for people we do not know, and are being supported by the work of people we do not know is made possible because we produce for profit. Profit is a signal which tells us what we must do in order to serve people whom we do not know.


47 minutes:


I have to then say, let us take a society in which nurses are paid much less than striptease dancers. I wonder if that society will accept that situation indefinitely or permanently, because people will tend to feel that it is immoral. Unjust in some sense.


[..] It is certainly objectionable to our instincts. I dislike it, and yet I’m convinced that if we are to maintain a society which makes use of much more information than any individual is… we have to put up to it.

But we are up against this very strong and in a sense justified resistance of our instincts. That’s our whole problem. A society which is efficient cannot be just, and unfortunately a society which is not efficient cannot maintain the present population of the world.

6:32 PM, April 18, 2009  
Blogger GawainsGhost said...

Thank you for that, Mr. Todoroff.

What we are in the midst of is a debate over economics. There are three schools of thought, Keynesian, Monetarism, and Austrian. Hayek would fall in the third.

I don't think people appreciate how perilous the current situtaion really is. It would not take much to plunge the entire world into a devastating depression and a concurrent or resultant global war.

Unfortunately, this administration is pursuing the exact wrong policies. It's only a question of how much damage Obama can do to the US economy, and thereby the world economy, before he leaves office.

I seriously doubt he will be re-elected. Things are going to get a lot worse before they get better, and in a year or two people are going to be really pissed.

7:09 PM, April 18, 2009  
Blogger Cappy said...

Obama is also extending a helping hand. Right into your wallet.

7:42 PM, April 18, 2009  
Anonymous Anonymous said...

One more thing:

Ayn Rand's novel "The Fountainhead" contains a quotation by Ellsworth Toohey.

"It is always safe to denounce the rich. Everyone will help you. The rich first."

This is truer today than at any other time.

The obvious culprits like the wealthy entertainment industry ilk, the wealthy professional sports ilk, and the wealthy mainstream media ilk, fly their true colors as we expect them to do. However, the less obvious culprits like wealthy business owners (Warren Buffet,, wealthy professionals [sic] (doctors, lawyers, etcetera, John Edwards, et. al.), and wealthy executive business stewards (CEOs, presidents, VPs, etcetera, Jobs, Gates, et. al.), who actually contribute to the well being and the advancement of our society, are the real disappointments who betray the very foundations of capitalism upon which their wealth (and our advanced lifestyle) was made possible.

This suggests the classic quotation by Arnold Toynbee:

"Civilizations die by suicide, not murder."

4:28 PM, April 19, 2009  
Anonymous Anonymous said...

Quick quotes here and there. snarky comments ...Obama and the left a failure. Face it: The grand recession did not begin under the socialist (?)Obama, and the regs in place by FDR were destroyed by members of BOTH parties. If the Obama plan will not work, clearly the cut taxes idea has been a failure, shown over the past years, and the do nothing cause it is a cycle will not change things. So what do YOU propose? WWIII, a major war to increase spending and creatwe jobs, as happened under FDR?

7:49 AM, April 20, 2009  

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