Lies My (Right Wing) Teacher Told Me
My friends, the last President to raise taxes during tough economic times was Herbert Hoover.
-- John McCain, Oct 7 2008
I continue to see this crap repeated, even here, in spite of the fact that using the series of internet tubes we can actually look this stuff up:
By 1940, US military spending had not yet really ramped up. In fact, it was 1.7 percent of GDP which is far less than it is today. The 1940 number is just a little over half of what the all-time post-World War II low military spending was, in percent of GDP.
And yet the economy was growing for most of FDR's first two terms, prior to the real ramp-up in military spending. In fact, economic growth was at its all-time high in 1936 (over 14 percent!)
Another point worth mentioning is that official unemployment figures normally cited for the period counted people working in government programs as "unemployed". If you adjust unemployment figures and count the people who had "emergency work" (thanks to New Deal programs), by 1940 the unemployment rate had fallen to around 10%. Why is this relevant? Because today's method of counting "unemployed" has all kinds of statistical tricks, such as not counting people who have "given up looking for work". Put another way, if you counted today's unemployment in the pessimistic way that anti-New Dealers do for the 1930s, it would probably come out close to 10% right now (maybe even higher if you count the prison population as "unemployed"!) See for example Kevin Phillips' article (written before the recent bad few months) Numbers racket: Why the economy is worse than we know.
Why is this going to continue to matter? Because in the coming months right wing hacks like Amity Shlaes are going to keep repeating these lies, in their campaign to stop the government from doing something to reverse the present slide.
In 1936, President Roosevelt won re-election in the biggest election landslide in history. He had more than 60.8% of the votes, to Landon's 36.5%. It was a margin of victory of more than 11 million votes -- Obama won by 8.9 million this time around. If you believed the crackpot theories of right wingers that the New Deal did nothing to help, that result could not possibly have happened. The correct explanation is that the people voted for what worked, and today's right wing propagandists are the biggest assembly of professional liars since Goebbels.





Thanks for this Tigger. Nice to see you expand on your comments earlier, and put them into a solid post. People are going to need ammo as we walk forward into this, because the bleating will have reached a roar by around, ohhhhhh, January 21st.
Rec'd.
November 23, 2008 4:01 PM | Reply | Permalink
George Will was just on ABCSTEPH ranting about how the New Deal never worked and that the New Deal was the cause of some "slowdown" in 1937. I swear that if the Capital Gains Tax were 5%, there would be Republicans claiming that the Government would yield more income if it were dropped to zero. What the so-called Conservative Theorists would really like ala Uncle Miltie Friedman would be a country without Social Security, Medicare, Medicaid, Minimum Wage......I grew up in the 50's & 60's listening to Republicans talk about FDR as if he were a Communist. I like this article and the graph and the point concerning taxes.
November 23, 2008 4:05 PM | Reply | Permalink
I made the graph posted above from internet sources cited in a comment below.
November 23, 2008 10:02 PM | Reply | Permalink
When he said that I thought to myself "Didn't Paul Krugman JUST own you when you said that before?"
November 24, 2008 11:15 AM | Reply | Permalink
Second quinn's thanks. I'm going to use this, too.
November 23, 2008 5:44 PM | Reply | Permalink
I just read that it was the sale of war equipment that we manufactured to Europe *before* the U.S. entered the fray that pulled us out of the depression and that it was the increase in taxes in 1937-38 that stalled the recovery. I can't remember where I read it but will post a link if I find it. I don't see a link to the graph you picture above. I frequently miss them, though.
November 23, 2008 6:14 PM | Reply | Permalink
I cannot comment on the specific claim without seeing the article, but if the claim was about LEND-LEASE then the claim is wrong.
The Lend-Lease act (under which equipment was provided to the UK and USSR and China) was passed in March 1941.
An earlier agreement was negotiated in September 1940 (called "the destroyers for bases agreement") in which the USA exchanged 50 destroyers of World War I vintage for the right to build bases on British territory.
In November 1939 the Neutrality Acts were modified, allowing an end to an American arms embargo that had been earlier imposed. According to the Wikipedia article, http://en.wikipedia.org/wiki/Neutrality_Act, US corporations (Texaco, Standard Oil, Ford, General Motors, and Studebaker) provided trucks and oil to fascist Francisco Franco in Spain in the late 1930s. But the amount owed wasn't that big, and that's only a fact that extreme right wingers would be proud of, since not opposing Franco is one of the most shameful things about American conduct in that period.
So in sum I still don't know what facts the article you refer to could be claiming. But most right wingers don't hesitate to make stuff up if they cannot find actual facts, so it could just be that.
November 23, 2008 6:40 PM | Reply | Permalink
For everyone who ever wondered about the extreme hatred and vitriol directed towards the Clintons by the right wing noise machine, the answer is in the last line of the above paragraph.
Except it's not about taxes - it's about Healthcare and how Britain's Labor Party saw a lasting rise in party popularity after it established the National Health Service after World War II. Conservatives on both sides of the Atlantic recognized the implications and took notice.
Almost 50 years later, the lessons learned bore fruit in the form of a memo from Bill Kristol, in what may have turned out to be the first and only time he got something right. He sent the memo about two weeks after Hillary Clinton had presented her Health Care Bill to Congress:
Fast forward 15 years to the 2008 elections where the Republicans have lost the White House, both Congressional chambers and their majorities in state governorships and assemblies. In fact, about the only place they are welcome is the federal prison system, which they themselves had designed with Democrats in mind, not each other.
But the real kicker comes after the Obama landslide and his campaign promises to make healthcare reform a priority, because it is the selection of Tom Daschle for Secretary of Health and Human Services that has Republicans rethinking their stance towards physician assisted suicide.
Michael Cannon at the Cato Institute saw the writing on the hospital walls when he blogged, Blocking Obama’s Health Plan Is Key to the GOP’s Survival. (Link below)
If this was a video in Republican circles, it would be viral.
November 23, 2008 6:55 PM | Reply | Permalink
Nailed by the 2 link limit.
Blocking Obama’s Health Plan Is Key to the GOP’s Survival.
Why Conservatives Hate Social Security, from Angry Bear.
November 23, 2008 7:01 PM | Reply | Permalink
Thanks for the links.
Yes I agree, the Republicans must obstruct, and they know it. If Government actually works their whole theory of everything goes into the toilet. So they must strive to make sure government does not work.
But this is not new!
November 23, 2008 7:21 PM | Reply | Permalink
"they must obstruct" --tigger
Agree completely:
http://www.talkingpointsmemo.com/talk/2008/09/the-fat-man-in-the-doorway.php
November 23, 2008 7:28 PM | Reply | Permalink
I had to laugh out loud at that one, tigger.
Indeed, one could make the case that about the only thing they would want to work well would be the toilet.
November 23, 2008 7:33 PM | Reply | Permalink
Hence their fascination with (so-called) Joe the (so-called) Plumber, I guess?
November 23, 2008 7:35 PM | Reply | Permalink
Two in a row, tigger.
Actually, not-Joe, the not-a Plumber expects to make $250,000 a year soon through plumbing, which means he will immediately become unreliable and unregulated.
However, there is a cure.
Republicans like efficiency a lot. They also like shredders, but this is more modern I think. Think about Cheney: One stop shedding and shredding, so to speak.
:-)
November 23, 2008 10:51 PM | Reply | Permalink
Happy to be here among people who get it. Tigger, another great contribution.
November 23, 2008 7:20 PM | Reply | Permalink
Thanks!
I'm learning a lot these days from the internet tubes. I just wish I could do it as fast as Number Five from Short Circuit.
One thing I find really helpful is The Nation's Digital Archive which (for subscribers) is free and goes back to 1865. One letter writer last week wrote to the print edition of The Nation something that stuck with me (because it's the comparison of prediction with outcome that people who've been around for a while should be able to make -- and this completely discredits the right wing):
November 23, 2008 7:30 PM | Reply | Permalink
I wonder if ultimately we're going to need a blog or two that catalog the info we need as ammo for the coming wars with the right.
Any ideas?
November 23, 2008 7:34 PM | Reply | Permalink
One of the most heinous, and apparently creeping, are the attacks on "Hippies" and other "liberal" views as tracable to 1930s Germany . . .
One sees them in Amazon reviews in the most bizarre of places. The falsifications, and uninformed arrogance behind them, remind me of the approach and attacks of "clearthinker".
November 23, 2008 9:06 PM | Reply | Permalink
A quality "liberalwiki" would be a pretty good idea, actually.
November 24, 2008 12:46 PM | Reply | Permalink
an enso as an avatar? very nice.
November 24, 2008 1:10 PM | Reply | Permalink
Thanks for posting tigger! Another GOP canard bites the dust! I'll second FDRdog's query above as to the source of the graph in your post.
November 23, 2008 8:58 PM | Reply | Permalink
I actually made that annotated graph using the graph of GDP available at Wikipedia:
http://en.wikipedia.org/wiki/Roaring_Twenties
To that I added the information about tax rates which is available using the internet tubes here:
Corporate tax rates:
http://www.irs.gov/pub/irs-soi/02corate.pdf
Capital gains tax rates:
http://www.ctj.org/pdf/regcg.pdf
Individual tax rates (or married couples):
http://www.truthandpolitics.org/top-rates.php
http://taxjustice.blogspot.com/2008/11/tax-and-1930s-depression.html
A graph here:
http://www.data360.org/dsg.aspx?Data_Set_Group_Id=475
Timeline of Depression era events/taxes/economic progress here:
http://www.huppi.com/kangaroo/TaxTimeline.htm
November 23, 2008 10:01 PM | Reply | Permalink
oops sorry Timeline here:
http://www.huppi.com/kangaroo/Timeline.htm
Also this graph shows that in the peak year (1936) the Estate Tax was 11% of the total tax revenue of the Federal govt!
Pretty amazing stuff considering the swamp of propaganda we live in today would deny it all.
November 23, 2008 10:24 PM | Reply | Permalink
Amazing indeed! thnx again for putting it together and posting. Noteworthy is the change from a flat corporate tax of 13.75% in 1936 to a graduated corporate tax rate topping out at 31%, (with a minimum rate of 21%), in 1941, a period that saw a sustained increase in GDP with a small reversal in 1937. That reversal does more or less coincide with an increase in the max capital gains rate increase from 31.5% to 39% and which was subsequently reduced to 30% in 1938. More to the point however was Roosevelts concern over balancing the budget by decreasing spending in 1937 which led to the brief recession.
November 24, 2008 1:40 AM | Reply | Permalink
This is great stuff, Tigger. You are to be commended.
November 23, 2008 9:34 PM | Reply | Permalink
One thing I believe which separates 2008 from 1932 is today there is little excuse to get many of these things wrong.
The cumulative knowledge that is available at our fingertips is not something easily dismissed. Our policymakers are obliged to really do their homework as they consider legislation and whatever actions they might take. All the mountains of information being commonly availabale to government and citizens means we'll always be able to expose where government arrives at illogical or flat wrong conclusions. More importantly is the possibility of contributing, in real time, to the formulation of what our government does.
We have just observed an election where the outcome was a result of this. Voters had access to virtually every shred of information they could have possibly needed to make a sensible choice. Compare this to the Bush WH where choices were made about Iraq that paid little heed to the fact that the assembled intelligence information was clearly ambiguous and should never have lead to the conclusion made. It is fair to ask what might have been the decision had people had access to the same information as the president.
Does this mean we should have unregulated access to details of national security? Probably not. There is reason though to examine the process to better understand where the executive and congress share responsibility on these things and bring pressure to bear so this doesn't happen again. Congress was wrong not to thoroughly examine the circumstances surrounding Iraq and had they done so a tragedy could have been avoided.
Unfortunately government is doing the same thing right now with the bailout of Wall Street. Paulson has been reluctant to provide the transparency required by congress. We cannot allow government to operate in obscurity. The hard lessons learned over the last few years should make us very cautious of allowing decisions to be made behind closed doors. In the case of Wall Street and banking we have a core group of persons who are born and bred creatures of the banking system running things. Their experience and knowledge is necessary. At the same time though it has to be recognized that they are at least somewhat conflicted in their loyalties. This quite obviously then demands complete transparency to assure these persons are advocating for America.
I don't think it possible to minimize that elevating public awareness of factual information is going to most often lead to our government being truly and accurately responsive and accountable to citizens. The election we just had made Bush and republicans accountable for their actions. We need to advance this so that government is obligated to acknowledge the public expression of ideas and accommodate the contributions we make here and all across the Internet. The notion of by and for the people is truly possible. We have to make it happen.
November 24, 2008 5:44 AM | Reply | Permalink
There are at least two problems that have been (especially under Bush) plaguing the US Govt: secrecy, and deception.
Both of these should be big issues in election campaigns but in fact they don't get much mention.
In the case of secrecy, since the days of secret FBI programs spying on Americans (COINTELPRO) until today, we've got a government that tries to keep the public from knowing -- whether it's Dick Cheney's secret oil meetings or Bush's secret program to begin the Iraq war in 2002 by diverting money from Afghanistan, to Paulson's desire to keep the TARP expenditures from any oversight.
The deception starts with the Iraq war. I don't think a conclusion was reached that "intelligence" justified the Iraq War -- the intelligence was leaked to the public in an attempt to publicly justify a war that was decided on for other reasons (such as domestic politics, knowing that wars are often popular). This is well known, in fact, thanks to the leaks from the UK.
Deception also comes from things Phillips mentioned in his article about how statistics have been altered to make things look good, e.g. not counting the number of people who've given up looking for work as "unemployed". Or in the editing of scientific reports because the reports conclude that global warming is a serious problem.
In general I think the American public is still unaware of many basic facts of life. That's how politicians can say with a straight face that we have the best health care on earth (false), or that we have the best standard of living (false), or that we're the most generous with foreign aid (false). And many people seem to be unaware that we have the most people in prison, spend the most on our military (by far), and haven't ratified many important human rights treaties. In terms of public knowledge of our place in the world, I think we have a long way to go!
November 24, 2008 10:42 AM | Reply | Permalink
This is an acknowledged problem. However, on both counts, the wheels are turning, ever so slowly, to chnage it. Everywhere you look public awareness is on the rise. Everyone won't take the time to call their elected officials but in time people will come to realize that if they don't they'll pay a heavy price for their apathy. Fat, dumb and happy can't be tolerated as a lifestyle.
November 24, 2008 11:57 AM | Reply | Permalink
It's worth noting, however, that while you can learn from history, you can't co-opt it.
Today's country is vastly different than that in 1932.
In 1932, we were rich in energy resources (literally oil independent) -- now, not only do we have to import more of our energy needs, but the world doesn't have enough cheap energy to sustain this arrangement.
In 1932, manufacturing was the largest sector of the economy. Today, it is finance. While necessary, finance produces nothing. In 1932, you could think about making things to help the economy -- including steel for public works projects. Today we would probably have to import that steel until we could re-build our manufacturing infrastructure. But it takes cheap energy to rebuild manufacturing infrastructure -- and see point above.
In 1932, we had the means to dig ourselves out of the situation we were in, truly nothing to fear but fear itself.
In 2008, even if we get over the fear, we are still facing daunting challenges from decades of neglect wrought upon us by both parties thinking to the here and now rather than the future.
November 24, 2008 1:31 PM | Reply | Permalink