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New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America

Publisher: Threshold Editions • 2009 • 336 pages
4.55 out of 5 • View Ratings Details • 11 Ratings

The greatest and most enduring economic myth of the

twentieth century is the idea that Franklin Roosevelt’s New

Deal pulled America out of the Great Depression. This

fantasy is so prevalent even today that liberal Democratic

leaders in Congress call for a “new” New Deal to lift the

incomes of the middle class and shelter American workers

from the competitive forces of a global economy. Now, in

New Deal or Raw Deal?: How FDR’s Economic Legacy Has Damaged

America, Burton Folsom makes the case that government

intervention, not private enterprise, both triggered and

prolonged the Great Depression — and that much of what is

threatening American prosperity today has its seeds in the

government programs of the ’30s and the New Deal legacy FDR

left behind.

Folsom rigorously reviews the history and leaves

no doubt to anyone with a clear and open mind that the New

Deal was in every objective way a failure. New Deal or Raw

Deal? reveals:

Why the Smoot Hawley tariff of 1930 (signed by Herbert

Hoover), which raised the import tax to the highest level

ever, may have been the single most economically

destructive law ever to pass the U.S. Congress. . .so far

How taxes and tariffs triggered the great stock market

collapse in 1929 — then held the head of the economy

underwater for another dozen years

How the Depression lasted eight years after FDR was

elected and his first hundred-day assault on free markets

was launched

How the tax rate under Roosevelt soared to almost 80% and

then 90%, thus smothering any possibility of a recovery — a

history lesson that Democrats would be wise to memorize

How, in the decade of the ’30s, U.S. industrial

production and national income fell by almost one-third

How the minimum wage actually increased unemployment in

the 1930s — which averaged greater than 12% during all of

FDR’s first two terms in office

Social Security: why “pay as you go” worked like a dream

when there were 40 workers per retired person, but now

looks like an Enron accounting fraud to today’s young

workers — every two of whom will eventually subsidize

every one retiree

FDR’s dishonorable tactics as president: how he used the

IRS as a tool to go after political enemies; how he doled

out economic relief along pure patronage lines; how he

attempted to pack the courts, how he ran on a platform of

lower taxes and a balanced the budget, yet did opposite

once in office, and more

How FDR’s popularity had more to do with his gift as an

orator, his personal charm and his manipulation of the

press than the popularity of his programs

How the Democrats’ current laundry list of “new” New Deal

programs — from cap and trade anti-global warming

regulations, to 52% marginal tax rates, to socialized

health care, to $300 billion of new spending programs

every year — would cause the U.S. economy to crater

“The irony of the New Deal is that this agenda, based

on good and honorable intentions to help the poor and

unemployed, caused more human suffering and deprivation in

America than any other set of ideas in the twentieth

century. And this book proves it. Democrats make many of

the same lofty promises today: They promise to put equality

above growth. Yet they are likely to discover, as we

learned from the New Deal, that this redistributionist

agenda produces neither.” — STEPHEN MOORE, The Wall Street

Journal editorial board, from his foreword

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