FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression [Paperback]

Jim Powell (Author)

Book Description

ISBN-10: 140005477X | ISBN-13: 978-1400054770 | Publication Date: September 28, 2004

“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.


From the Hardcover edition.

Editorial Reviews

Review

“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 Roosev... --This text refers to the Kindle Edition edition.

From the Inside Flap

"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.


From the Hardcover edition.

See all Editorial Reviews

Product Details

• Paperback: 352 pages
• Publisher: Three Rivers Press (September 28, 2004)
• Language: English
• ISBN-10: 140005477X
• ISBN-13: 978-1400054770
• Product Dimensions: 5.2 x 0.9 x 7.9 inches
• Shipping Weight: 10.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (94 customer reviews)
• Amazon Best Sellers Rank: #41,863 in Books (See Top 100 in Books)

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83 of 104 people found the following review helpful:

5.0 out of 5 stars Valuable Resource on the Great Depression, May 12, 2008

By 

Doug (Washington D.C. area) - See all my reviews

This review is from: FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression (Paperback)

A common historical misconception is that FDR's New Deal rescued the United States from the Great Depression. However, Cato Institute Historian Jim Powell argues that the New Deal exacerbated and elongated the Great Depression. With impressive attention to detail, Powell examines the long-term results of the New Deal and persuasively argues that they crippled the U.S. economy.

In this detailed book, you will learn about the numerous programs the FDR administration brought about, including the following:

* Programs that inundated private businesses with unprecedented waves of regulations, such as the Agricultural Adjustment Administration, the National Recovery Administration and the Securities and Exchange Commission.

* Programs that redistributed wealth from producers to consumers, such as the Federal Emergency Relief Act and the Reconstruction Finance Corporation.

* Programs that nationalized industries, centrally planned infrastructure or created make-work projects to increase employment such as the Civilian Conservation Corps, the Public Works Administration and the Tennessee Valley Authority. Powell argues that these programs typically led to poorly planned infrastructure that was more expensive than what could have been acquired in a free market.

The economic results of FDR's programs were devastating. For example, consider the Agricultural Adjustment Administration (AAA). 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 oat and corn, 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 oppressive controls on income and wages under the FDR administration. Under FDR, scores of private sector jobs were eliminated through minimum wage laws, personal income taxes hit 79% for certain brackets and how government spending during FDR's first two terms exceeded the total amount of Federal spending in the prior history of the United States.

Powell reveals how all of FDR's programs are based upon the fatally flawed premises of Keynesian economics, including the following:
* That government spending is always good for the economy, even if it is engaging in pointless ventures such as building pyramids.
* War is good for the economy.
* Gold (as a standard of currency) is a "barbarous relic" that prevents economic growth.
* A capitalist economy will inevitably slow to a halt without periodic bolsters from centralized planning.
* Consumption (i.e., the destruction of wealth) not production, drives the economy. Thus, government should redistribute wealth from those who would invest it to those who would spend it.

From reading this book, you will also learn that many of FDR's earliest programs, such as the AAA and the National Recovery Act, were originally ruled as unconstitutional by the U.S. Supreme Court. Unfortunately FDR stayed in office long enough to appoint 7 of the 9 sitting supreme court justices, which eventually opened the floodgates for New Deal reforms. Thus, is the unforeseen danger of having a President serve more than two terms.

Powell has done a fantastic job with this work. I am not surprised that FDR's Folly has been enthusiastically recommended by famed free market economists such as Milton Friedman and Thomas Sowell. I highly recommend this book for anyone interested in free market capitalism and learning the real history of the Great Depression.

40 of 55 people found the following review helpful:

5.0 out of 5 stars A heavy read, but well worth the effort, January 10, 2009

By 

Francis Meyrick (LA, USA) - See all my reviews

This review is from: FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression (Paperback)

(Note: I own and have READ all of this book) (...)
Short review:
A heavy read for us simple bears, written by an accomplished academic. It's bursting full of information, and very thought provoking. I like the lay out of the contents, where each of the 19 chapters asks a question, so you know what you are getting into. A must read for anybody willing to seriously set aside prejudices, and look at the underlying facts of FDR's often bizarre and haphazard "experimenting" with the US economy. I urgently need to go read an admiring book (any suggestions?) written by somebody who thinks FDR was a great president, because the more I read about him, I increasingly get the impression he was somewhat of an "economically uninformed klutz" and basically just a shrewd and manipulative bluffer. Who,behind the rhetoric and the "fireside chats" didn't give a hoot about anybody except (votes for) himself. Who only got saved by the distraction of the "crisis" (he provoked?)of Pearl Harbor and WW2. And whose policies and shadow haunt us to this day.
(Sorry, apologies to FDR lovers; I have looked at the dissenters' comments, who absolutely hated this book, and I AM shopping around for some PRO-FDR books. Let's check out the opposition's story...) (Bernanke's essays?)

Long review:
I put the book down a few times, and read other stuff. I went back to it again, and eventually finished it. That tells you either that I'm a dimwit who struggles with words with more than two syllables, or that it's just highly concentrated, heavy-heavy-heavy, with constant new names, dates and places, and lots of leafing back and forwards to follow the plot. Well worth it though. Some quotes for you, to get a taste of the goodies:
(page 57) "A major effect of deposit insurance was to transfer the cost of bank failures from depositors to taxpayers. The full consequences of federal deposit insurance didn't become apparent until the 1980's, when bailing out savings and loan associations cost $519 billion."
(Page 71) "FDR imagined he could fix the world gold price from his bedroom"
(page 75) "From the very beginning of his administration, FDR attacked investors and employers". This theme shows up clearly throughout the whole book.
(page 75) "The business community... was pitifully inept when FDR launched his moral crusade against free markets." FDR certainly interfered with the free markets, but he did so haphazardly, and seemingly on an ad-hoc,improvised, "Hey! Let's try THIS idea" experimental basis. The man, if nothing else, was remarkably high handed and conceited, it seems to me.
(page 77) "Like FDR, Mussolini believed that individualism was old fashioned, an obstacle to progress."
(page 79) "Confiscation of wealth may satisfy the vengeful in us. It may sooth a retaliatory spirit. But it is the path of national suicide.... There must always be the reward motive."
(page 82) "...FDR delivered a speech that again demonized investors and employers. He employed one attack after another..."
(page 86) "...in a November 1941 Fortune poll, 93 per cent of employers said they expected their property rights to be undermined and also anticipated the possibility of dictatorship". One wonders how much FDR maybe admired Stalin and Mussolini?
(page 87) "FDR tax adviser Randolph E.Paul had acknowledged much worse, that FDR's tax policies "intensified the depression they were working to correct". Shades of... January 2009?
(page 93) "Invariably, politics influenced the way PWA money was spent."
(page 185) "Experience everywhere indicates that politicians will hardly be able to keep their hands off such easy money".
There truly is a staggering amount of information in this book. The pace is relentless. What amazes me is that so much of the content is -intensely- relevant to the big debate going on right now, January 2009, in the incoming Obama administration. Some of his devotees come out with policy statements, and express "Big Government" "Federal" attitudes, that have an eerie similarity to some of the content of this book. If you read this book, here are only a few of the issues for you to assess, and take a view on:
1) that the debate issues raised in "FDR's Folly" are as topical today as ever. Supremely relevant.
2) Too many politicians, who delight in the sound of their own voices on national television, never read History or Economics, and never seem to learn from past US policy mistakes. They rarely seem to refer to History. And when they do, they come out with either vague generalizations, or really sweeping statements ("We need a NEW New Deal"), which make this bumpkin nervous. The implication seems to be that everything about the New Deal was GOOD. And that everybody AGREES. Right? Duh...
3) It's serious; are we once again going to see a US President and his "experts" prolong this depression by trying the SAME past failed remedies? Surely not. Mr Obama, please, you are way smarter than that, right?
4) And this is just my impression: Isn't it amazing how FDR had all sorts of people cheering wildly for him, when in fact there is so much evidence in this book and others that he basically...err... shafted them? That's a neat trick: get people to vote for you, and love you, whilst you cynically... spend that public money where it will get you the most votes? I know that doesn't sound kind, but DO read the book.
There's maybe more -much more- to FDR than many worshipful devotees would have us believe.
Just one of many examples in this book: so much money went to the richest states, because they were seen by FDR as 'swing votes'. The poorer states, which were already loyal to him, got a fraction of the funds. Seeing as we are dealing here with empirical evidence, (cold facts) I don't see how FDR lovers can explain that one away, but I'm more than willing to listen, ya hear?
5) FDR had complete contempt for the black race. That comes out with his treatment of the black tenant farmers, and above all his refusal to back an anti-lynching law. That amazes me. That alone paints a somber picture of the man who many revere as one of the greatest US presidents. Where was his "compassion" there? It seems FDR's colleagues were trying to prod him into action. From what I can see, he just thought it was funny. That is backed up by some contemporary private diary entries... Hard to avoid the conclusion that deserving black people, anxious to enter mainstream America, were treated with a cynical disregard. Simply... horrible. I will be reviewing some of those diaries in due course.

Good book. I shall be using it a lot as reference material. Now to look at what the "other side" says about it all. We MUST always keep challenging our own beliefs. Heck, maybe FDR WAS a great president. I just don't quite see HOW yet, but maybe somebody who is wise and patient will help this bumpkin into the New Deal light...
Peace. Enjoy the read.
PS: Please 'comment' constructively if you feel I am missing the point somewhere, or if you feel you can point me to further useful reading material to broaden my understanding of this time period, or to correct flawed reasoning - thanks...

34 of 47 people found the following review helpful:

4.0 out of 5 stars Did Powell Get The Depression Right?, August 8, 2004

By 

W. Walker (westminster md) - See all my reviews
(REAL NAME)   

This review is from: FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression (Hardcover)

Powell details many good criticisms of the Hoover and Roosevelt administrations as well as state laws that appear to have been counterproductive in solving the economic crisis. However, he ignores several key points in understanding the Depression. Firstly, there is a rough correlation between when a nation got off the gold standard and when their economy began to recover. Many economists believe FDR's most important positive action was to get the US off the gold standard as soon as he could. Secondly, massive deficit spending began in 1932(under Hoover), yet the GNP didn't begin recovering until 1934, in contradiction to Keynesian predictions. Thirdly, Perrson concluded it was changes in the real(not nominal) interest rates, as influenced by monetary policies, rather than government spending, that explains the ups and downs of the Depression economy....I criticise Powell for not including tables and figures of critical data to support his contentions, as well as ignoring what other countries did and how they fared. I suspect these omissions were often purposeful. After examining the data from various internet sources, FDR comes out looking much better in the big picture than the portrait Powell paints, whatever the seeming counterproductiveness of many of his policies. I should also point out that his basic viewpoint was first articulated by certain european economists in the 1930s, who were drowned out by the Keynesians.