For years, text books and pundits credited Franklin Delano Roosevelt as the savior of capitalism, and who got us out of the Great Depression--claiming without FDR,  America might have adopted European socialism. Every week it seems there's an article in the national media comparing President Obama with FDR's first 100 days.

Franklin Roosevelt undeniably was an inspirational communicator to the down and out -- he also was an economic illiterate with a flair for catchy phrases about "Fear, empty lunch pails, and infamy."  FDR declared a "Bank Holiday" and signed FDIC Insurance into law that was critical to stopping bank runs; however, while depositors were protected, banks continued to fail. He instituted Social Security, the greatest Ponzi scheme in the history of civilization, which raised the cost of labor and increased unemployment, but that's a topic for another time. Most of what FDR did between 1932 and 1939 made things worse and prolonged the Depression.

FDR was America's greatest president based on good intentions -- and most disastrous based on facts. In 1932, when elected, he inherited over 11 million unemployed. And after eight years of "audacious economic experiments," there were still over 11 million unemployed. Only after 11 million were inducted into the military for WWII did the Great Depression end. Facts are stubborn things.

FDR's Treasury secretary, Henry Morgenthau, told his fellow Democrats, "We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. 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!"

Interestingly, FDR accused Herbert Hoover of being a spendthrift. He then spent three times more money than all 31 presidents from Washington to Hoover combined, in the previous mother of all "stimulus packages".

Roosevelt tripled taxes with the highest rate over 90 percent and demonized businessmen as "economic royalists." He taxed working capital as undistributed profits reducing the ability to hire and keep workers. Businessmen were concerned he would suspend property rights, and starting with the TVA, nationalize all power companies (and other businesses). His justice department filed around 150 anti-trust lawsuits charging businessmen and whole industries with raising prices, lowering prices, and keeping prices the same under the guise of monopoly pricing, predatory pricing and price fixing.

Most telling, the U.S. Census reported only one year of double-digit unemployment between 1900 and 1931, followed by 10 consecutive years greater than 14 percent with highs of 25 percent in 1933 and 19 percent in 1938, the 10 years of FDR's massive government intervention. The Bureau of Labor Statistics shows only two years of double-digit unemployment in the 63 years since FDR's death. Yes, FDR prolonged the Depression and a strong case can be made that without FDR there wouldn't have been a Great Depression.

Besides his charisma, how did FDR get elected four times? One clue comes from a 1938 Senate Committee on Campaign Expenditures investigating charges made by the Scripps Howard newspapers that Democrats were paid more in supervisorial positions for dishing out money during the Great Depression and the unemployed were denied benefits if they didn't register as Democrats.

We hear a lot today about character. The New York Times reported that President Roosevelt helped his son Elliott borrow $200,000 from the head of the A&P stores to buy a radio station. Elliott called his father at the White House to assure John Hartford there would be no conflict of interest while the A&P was the target of a congressional investigation. Hartford told a congressional committee that eventually he was repaid $4,000. Son James Roosevelt was able to earn $25,000 a year "more" than his father, president of the United States. Seems the silver-tongued James was able to sell insurance policies to America's largest corporations doing business with the government according to The Saturday Evening Post.

Eleanor Roosevelt, however, may have set the stage for Reagan, Clinton, Daschle and Panetta and thousands of other politicians profiting from their political offices. While never elected she purportedly received an estimated $1.2 million (a lot of money in the 1930s) from lectures, columns and radio programs over seven years while in the White House proving it helps to have a working wife in tough times.

Only after World War II ended, with FDR's death in 1945 and the abandonment of his policies, did a strong economic recovery take place. Confidence was restored among businessmen and they began investing, expanding and hiring to produce goods and services to meet the pent-up demand from the war years.

And if all it takes to "save" the country is for the government to create wealth out of thin air through a "stimulus package," then a recent Wall Street Journal editorial (Jan. 26) suggests, "the government should spend $10 trillion and we'd all live in paradise."
 

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