Thursday, September 24, 2009

Lessons Obama Should learn from FDR

We are familiar with the various quotes about the lessons of history. Bottom line, if we do not learn them, we will find ourselves reliving them. Since the election of Barack Obama to the President of the United States, we have seen this Administration try an approach to government that we have seen before and we have plenty of evidence as to how effective it is.

During the Great Depression, Franklin Roosevelt moved to have the government take over huge amounts of the economy after the nation experienced a meltdown.. The man he hired to over see that project was Secretary of Treasury Henry Morgenthou, Jr. Morgenthou was both a trusted adviser to Roosevelt and one of his very close friends.

Morgenthou was called on to take an ambitious approach to the nation's economic problems with a primary objective of relieving the pain of unemployment caused by the protracted decline in the economy. That approach was centered on massive increases in government spending and intervention in a manner never seen in our nation's year. After eight years of this expansion, the Secretary had the following to say to Congressional leaders: "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!"

During the Great Depression, the government assumed a larger role in "helping" people with their poverty through politically driven programs that rewarded battle ground states that money could influence into the Democrat column. Furthermore, by taking away the personal accountability that came from state run agencies and private organizations, the government's approach led to chronic unemployment and the crushing of the spirit of people who simply wanted a job. Most disheartingly in the end, it didn't work. After a decade of throwing money at the problem, nothing had fundamentally changed.

Albert Einstein is credited with saying that the definition of insanity is doing the same thing over and over again and expecting different results. People are the same now as they were back in the 1930s. Human nature hasn't changed. Free markets and individual responsibility works and government does not. Let's hope we learn that lesson sooner than Henry Morgenthau.

For additional lessons from the Great Depression, consider New Deal or Raw Deal? by economic historian Burt Folsom.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

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