by Jim Powell
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Product Description
“Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929—33. Truth to tell–as Powell demonstrates without a shadow of a doubt–the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government. Powell’s analysis is thoroughly documented, relying on an impressive variety of popular and academic literature both contemporary and historical.”
–Milton Friedman, Nobel Laureate, Hoover Institution
“There is a critical and often forgotten difference between disaster and tragedy. Disasters happen to us all, no matter what we do. Tragedies are brought upon ourselves by hubris. The Depression of the 1930s would have been a brief disaster if it hadn’t been for the national tragedy of the New Deal. Jim Powell has proven this.”
–P.J. O’Rourke, author of Parliament of Whores and Eat the Rich
“The material laid out in this book desperately needs to be available to a much wider audience than the ranks of professional economists and economic historians, if policy confusion similar to the New Deal is to be avoided in the future.”
–James M. Buchanan, Nobel Laureate, George Mason University
“I found Jim Powell’s book fascinating. I think he has written an important story, one that definitely needs telling.”
–Thomas Fleming, author of The New Dealers’ War
“Jim Powell is one tough-minded historian, willing to let the chips fall where they may. That’s a rare quality these days, hence more valuable than ever. He lets the history do the talking.”
–David Landes, Professor of History Emeritus, Harvard University
“Jim Powell draws together voluminous economic research on the effects of all of Roosevelt’s major policies. Along the way, Powell gives fascinating thumbnail sketches of the major players. The result is a devastating indictment, compellingly told. Those who think that government intervention helped get the U.S. economy out of the depression should read this book.”
–David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom
The Great Depression and the New Deal. For generations, the collective American consciousness has believed that the former ruined the country and the latter saved it. Endless praise has been heaped upon President Franklin Delano Roosevelt for masterfully reining in the Depression’s destructive effects and propping up the
country on his New Deal platform. In fact, FDR has achieved mythical status in American history and is considered to be, along with Washington, Jefferson, and Lincoln, one of the greatest presidents of all time. But would the Great Depression have been so catastrophic had the New Deal never been implemented?
In FDR’s Folly, historian Jim Powell argues that it was in fact the New Deal itself, with its shortsighted programs, that deepened the Great Depression, swelled the federal government, and prevented the country from turning around quickly. You’ll discover in alarming detail how FDR’s federal programs hurt America more than helped it, with effects we still feel today, including:
• How Social Security actually increased unemployment
• How higher taxes undermined good businesses
• How new labor laws threw people out of work
• And much more
This groundbreaking book pulls back the shroud of awe and the cloak of time enveloping FDR to prove convincingly how flawed his economic policies actually were, despite his good intentions and the astounding intellect of his circle of advisers. In today’s turbulent domestic and global environment, eerily similar to that of the 1930s, it’s more important than ever before to uncover and understand the truth of our history, lest we be doomed to repeat it.
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Average Customer Review:
1 of 1 people found the following review helpful:
 FDR was not as great as you think, 2008-05-12
Unfortunately, many historians and modern politicians praise FDR's New Deal because of the underlying intent behind his revolutionary programs. Not this book. CATO Institute historian Jim Powell properly evaluates the domestic policy of FDR by examining the results of his programs and persuasively argues that they have had devastating effects on the U.S. economy.
In this detailed book, you will learn about the numerous programs the FDR administration brought about, including:
* The Securities and Exchange Commission
* The Civilian Conservation Corps (did makework projects; worked on National Parks, etc.)
* The Public Works Administration (built roads, schools, dams, warships and submarines)
* Federal Emergency Relief Act (offered federal aid, which was funded through mandatory taxation, for states that could not "afford" to provide financial relief)
* Reconstruction Finance Corporation (encouraged extensive and unnecessary government involvement in the form of farm subsidies and home loans)
* Agricultural Adjustment Administration (massive price controls; see below)
The Agricultural Adjustment Administration (AAA) was easily one of the worst programs. From reading this book, you will learn how the price and production controls of the AAA led to perverse practices such as millions of tons of domestic oat and corn being burned while the U.S. simultaneously imported overseas, millions of peaches being left to rot and millions of "excess" pigs being needlessly slaughtered while lard was being imported from overseas. The extent of economic regulation under the FDR Administration reached such absurd levels, there was even a government board organized solely to control the production and pricing of milk!
This book will also detail the extensive and oppressive controls on income and wages under the FDR administration. Under FDR, large numbers of private sector jobs were eliminated through minimum wage laws, personal income taxes hit 91% for certain brackets and it was a stated part of FDR's platform that nobody should have an annual income in excess of $25,000.
The author eloquently argues how all of FDR's programs tragically are based upon the deeply flawed Keynesian view of economics, posed unnecessary government involvement in various sectors of the economy and many of them have helped elongate what would have merely been a large market crash into what is now commonly known as the Great Depression. I agree with much of this, however, I will acknowledge that some of these programs arguably greatly helped towards the war effort, such as the PWA, and should not be assumed to be all bad.
Although many of FDR's programs, such as the AAA and the National Recovery Act, were ruled as unconstitutional by the U.S. Supreme Court, his administration eventually started getting everything court approved after FDR stayed in office long enough to have appointed 7 of the 9 sitting supreme court justices. This is what happens when a President breaks George Washington's two-term limit tradition so that he can overhaul the entire economy.
Jim Powell has truly done a great job with this work and I am not surprised that his book has been enthusiastically recommended by both Nobel laureate Milton Friedman and Thomas Sowell. I highly recommend this book for anyone interested in free market economics and acquiring detailed information of the programs and inevitable economic consequences of the New Deal.
2 of 2 people found the following review helpful:
Excellent account of good intentions with bad results, 2008-02-22
The old saying "The path to hell is paved with good intentions" should be noted in any discussion of the New Deal. This was a time when academics believed that markets were naturally inefficient, and only trained experts of bureaucracy could streamline it and make it effective. We laugh at that now (after bitter experience from the past 60 years), but at the time, various forms of central planning and control were all the rage in world governments. Business was seen not as an engine of opportunity, progress, and prosperity, but a necessary evil. Businessmen of all stripes were viewed the way we view trial lawyers and used car salesmen today... inherently corrupt, to be held on a short (government) leash.
2 of 4 people found the following review helpful:
Very good book,!, 2008-02-15
In just the introduction I was learning things that I never knew. Good book, full of great information. Makes me wonder why our public school system never points out the faults of the new deal.
38 of 55 people found the following review helpful:
 Powell Deserves an F in Economics, 2007-11-29
If Mr. Powell had submitted this as a paper in one of the college economics classes I taught, he would have received an F, for incompetent economic analysis and intellectual dishonesty. Mr. Powell picks his facts carefully, citing only those for which he can argue (almost always fallaciously) that FDR was wrong. Listing all his economic whoppers would become tiresome, but here are a few:
On page 41: "The fundamental fallacy in the high-wages doctrine was that it didn't increase the total purchasing power." BAD ECONOMIC ANALYSIS (BEA) Powell cleverly confuses instantaneous total purchasing power with total purchasing power over time. The same dollar (or $10, or $100) can make many times that many purchases over the period of a month or a year, with no change in the total instantaneous purchasing power. If Alice pays Brian $10 for something, Brian can spend that $10, as can those he pays it to, and so on. Economists call this the MULTIPLIER EFFECT, a term Powell never mentions.
On page 83, after admitting that only about 5% of Americans paid income tax during the Depression (carefully omitting that it was because wages weren't taxed) Powell says "these taxes surely discouraged employers from making investments." (BEA) Excess plant capacity and lack of demand, not taxes, were the major reasons for lack of investment. Even with zero taxes, who will invest in more plant capacity when their existing plant is operating at 20 or 25% of capacity and producing all the product they can sell?
On page 89: "Each dollar taxed meant a working person had a dollar less to spend on his or her own." INTELLECTUAL DISHONESTY (ID) Powell knew (he mentioned it on page 83) that wages weren't taxed.
On page 96: "(again, not counting jobs destroyed by taxes that reduced private sector spending)" (BEA) Powell makes much of the theoretical possibility, but never cites even one job destroyed by taxes. It is, of course, difficult to obtain an accurate count of those job losses that didn't happen, and Powell prefers to ignore the jobs created by the government spending of that tax money.
On page 41: "In any case, public works projects tended to require people with construction skills, so they weren't an effective way to help poor people" (BEA) Skilled workers were needed IN ADDITION TO, NOT INSTEAD OF common laborers, which generally outnumbered any of the skilled trades.
On page 161: "business investment remained at historic lows throughout the Great Depression." (ID) Production was increasing almost thruout FDR's presidency, but very little new investment was needed until the production facilities approached capacity.
On page 179: [Social Security] "supposedly would involve contributions by employers. In truth, the entire payroll tax would come out of the pockets of working people, because the tax would be part of the cost of providing a job; and if the money weren't going to the government, it would be available for employee compensation." (BEA & ID) Powell understandably does not specify which employers would actually have paid that money to employees, were it not for FICA {Social Security) tax. One suspects the list would be embarrassingly short.
On page 183: "The advocates of Social Security must have realized that private retirement plans would offer a better deal," (ID) No doubt they would have OFFERED a better deal, but experience (in Chile and England, for example) indicates that it is unlikely that they would have DELIVERED a better deal. And every laundry detergent cleans better than any of the others.
on page 254: [Social Security] is a pay-as-you-go system without an investment fund yielding returns to help cover future obligations." (ID) An out-and-out lie. SS is not fully advance funded, like the New York State Employees' Retirement System, but unlike pay-as-you-go, it does include an investment fund sufficient to meet ALL obligations for nearly four years and growing. (Source: OASDI Trustees Report, 2007)
On page 187: "Labor unions were generally based on force and violence . . . ." (ID) A blatantly unfair, untrue, and prejudicial statement. While it is true that a minority of unions descended to unjustified force or violence, most of the violence was started by company goons or strikebreakers. And calling elected union officers 'bosses' is similarly prejudicial and generally, false.
On page 200: "General Motors car production plunged from 50,000 in December, 1935 fo 125 during the first week of February, 1936." (ID) Comparing dissimilar items, a month's production to a week's. This technique could have come straight from Darrell Huff's How to Lie With Statistics It would have been quite proper to say 'from an average of 12,500 a week in December,' but impressive as that 99% reduction is, Powell chose to make it seem four times as big. Not only dishonest, but downright silly.
On page 203: "UAW picketers fought with nonunion workers, and some people were stabbed." (ID) The 'some people' that were stabbed must have been union members, because had they been the strikebreakers, you can be sure Powell would have said so very clearly.
On page 245: "Personal income tax rates hit 91 percent . . . ." (ID) Deceptively, Powell fails to mention that this was the highest tax bracket, not the average tax rate, which was nowhere near 91%.
On page 273: "Maintaining wages above market levels is guaranteed to maintain unemployment at high levels." (BEA & ID) A 'guarantee' not worth the paper it is written on. Since the enactment of minimum wage laws, there have been many periods of full employment. The 'market levels' Powell envisions are the result of a monopsony market in which the sellers (workers) would be price-takers, forced to take whatever wages are offered or be unemployed and face starvation.
On a lighter note, on page 226: "October 19, 1937--which came to be called 'Black Tuesday'" I googled "Black Tuesday" to be sure there weren't two, but all the entries referred to October 29, 1929.
The above is but a small sampling of the lies, distortions, and bad economic analysis in Mr. Powell's book. FDR did indeed do some bad things, such as the blatantly racist internment of American citizens of Japanese ancestry during WWII, and permitting the refusal to allow Jewish refugees from Germany to enter the United States, but he also did a great many more good things; the credit for bringing the nation out of the Great Depression is deservedly his, and Mr. Powell's mean-spirited hatchet job doesn't deserve even one star.
watziznaym@gmail.com
0 of 8 people found the following review helpful:
 An unique read, 2007-07-07
This is a good book for everyone. It gives a perspective that you don't see often in history books about President Franklin D. Roosevelt. Since FDR was a great president, it's easy to write a pro-FDR history book but this book points out the flaws in FDR's policies and how the New Deal did not actually end the Great Depression. Personally, I am a fan of FDR and his policies but he was not perfect, nor were all his programs perfect. I highly recommend this book for anyone interested in reading more about FDR and getting many different perspectives.
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