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Everything you know about FDR, The New Deal and the Great Depression Banking Crisis is wrong!!!! "From David Stockman's Contra Corner. Remarks to the Committee For The Republic, Washington DC, February 2014 (Part 4 in a 6-Part Series) Go to Part 1. The Great Depression thus did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression-absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions.  Instead, the Great Depression was a unique historical occurrence-the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking. But ironically, the "failure of capitalism" explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens--Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier--that is, the old-time religion of balanced budgets- that had kept America a relatively peaceful Republic until 1914. To be sure, under Mellon's tutelage, Harding, Coolidge and Hoover strove mightily, and on paper successfully, to restore the pre-1914 status quo ante on the fiscal front.  But it was a pyrrhic victory-since Mellon's surpluses rested on an artificially booming, bubbling economy that was destined to hit the wall. The Hoover Recovery of 1932 Worse still, Hoover's bitter-end fidelity to fiscal orthodoxy, as embodied in his infamous balanced budget of June 1932, got blamed for prolonging the depression.  Yet, as I have demonstrated in the chapter of my book called "New Deal Myths of Recovery", the Great Depression was already over by early summer 1932."

Part ONE "by David Stockman Remarks To The Committee For The Republic, Washington DC, February 2014 (Part 1 of 6 Parts) [From David Stockman's Contra Corner.] Flask in hand, Boris Yelstin famously mounted a tank outside the Soviet Parliament in August 1991. Presently, the fearsome Red Army stood down-an outcome which 45 years of Cold War military mobilization by the West had failed to accomplish. At the time, the U.S. Warfare State's budget- counting the pentagon, spy agencies, DOE weapons, foreign aid, homeland security and veterans--was about $500 billion in today's dollars.  Now, a quarter century on from the Cold War's end, that same metric stands at $900 billion. This near doubling of the Warfare State's fiscal girth is a tad incongruous.  After all, America's war machine was designed to thwart a giant, nuclear-armed industrial state, but, alas, we now have no industrial state enemies left on the planet. The much-shrunken Russian successor to the Soviet Union, for example, has become a kleptocracy run by a clever thief who prefers stealing from his own citizens. Likewise, the Red Chinese threat consists of a re-conditioned aircraft carrier bought second-hand from a former naval power--otherwise known as the former Ukraine. China's bubble-ridden domestic economy would collapse within six weeks were it to actually bomb the 4,000 Wal-Mart outlets in America on which its mercantilist export machine utterly depends. On top of that, we've been fired as the world's policeman, al Qaeda has splintered among warlords who inhabit the armpits of the world from Yemen to Somalia and during last September's Syria war scare the American people even took away the President's keys to the Tomahawk missile batteries.  In short, the persistence of America's trillion dollar Warfare State budget needs some serious "splainin". The Great War and Its Aftermath My purpose tonight is to sketch the long story of how it all happened, starti

"Mr. Obama came to office without a conspicuous vision other than "bipartisanship" and a belief in the beneficent influence on America and the world of seeing a black man exercising the powers of the presidency. He wields his party's shibboleths like one who sees them mainly as levers for delivering the goods. His ideas about the exercise of politics, in fact, may be accurately reflected in the recent stimulus bill -- in office you supply the wish lists of those who put you there.

His will be a fascinating presidency to watch, not least because of his inexperience, his intellectual agility, and the crisis in which he finds himself. But his presidency will get really interesting in a year or two, or six months -- whenever he finally realizes that everything he thought he wanted to do is irrelevant. He'll then have to adapt an agenda for the world as it is, in which many childish things no longer have a place.

And, by the way, he kids himself if he believes he will be allowed, like FDR, to preside over a depression without being politically blamed for it. The public is different now -- the world is different -- and he will own the "Obama depression" sooner than he thinks.

Amity Schlaes, author, "The Forgotten Man," re the mistakes made by Herbert Hoover and/or FDR in 1931-1934 that deepened the recession into the Great Depression.  Amity identified the four errors, what I call the four horseman, as taxes, protectionism, class warfare, and the abuse of private capital so that it leaves the marketplace.  One of these four is already in place in the closing weeks of the Bush administration as a result of the extraordinary bullying session of October 13 at the grandiose office of Hank Paulson at Treasury when the nine biggest banks in the country were forced to accept Treasury billions in exchange for accepting the regulations and unknowns of the executive and the legislative branches.  Private capital is no longer safe from Congress, and in the 1930s the effect was to drive private capital into hiding.  

The Great Depression of the 1930's tested America's political institutions like no other event in our history except the Civil War. Much as Lincoln saved the Union and established the symbols of American nationalism, so Franklin Delano Roosevelt (it is said) saved capitalism from itself and laid the framework for the American welfare state.