Lessons From 1938

I love revisiting history with my Dad for two reasons: 1- it keeps proving that history will repeat itself over and over, and 2- he was actually there for so much of it, so his view is more factual experience than historical conjecture.  


For example, he and I were discussing some of the new job programs that our federal government is planning to stick us with.  He began to reminisce about a time when there was another federal jobs program during a time of economic crisis.  Yes, I'm referring to the Great Depression that began in 1929 and the New Deal that resulted.


As we all know, the New Deal was a series of economic programs implemented between 1933 and 1936, during the first term of FDR.  The programs were responses to the Depression and focused on what historians call the "3 Rs": Relief, Recovery, and Reform. That is, Relief for the unemployed and poor; Recovery of the economy to normal levels; and Reform of the financial system to prevent a repeat depression, with its base in liberal ideas, big government machines, and newly empowered labor unions.  


The New Deal basically poured federal money towards job creation in the form of economic stimulus.  Sound familiar?  At the time, the New Deal was pouring unheard of amounts of federal money into the National Recovery Act,  the Wagoner Act to promote labor unions, the Works Progress Administration (WPA) relief program, the Social Security Act, and new programs to aid tenant farmers and migrant workers. The final major items of New Deal legislation were the creation of the United States Housing Authority and Farm Security Administration, both in 1937, then the Fair Labor Standards Act of 1938, which set maximum hours and minimum wages for most categories of workers, and the Agricultural Adjustment Act of 1938.  


Now, let's forget for a moment that many of these federal acts were considered (and actually were) unconstitutional, but rather let's focus on the real, plain, unadulterated truth as told by someone who was actually there.


NONE OF IT WORKED.  In fact, THESE FEDERAL PROGRAMS ONLY MADE THE DEPRESSION WORSE.  I quote my Dad, "the worst economic year during the Depression was actually 1938, years after the bulk of the New Deal was implemented.  There was NO business to be had anywhere in 1938.  That's when we hit rock bottom.  Truly the only thing that brought this country out of the Depression was WWII.  The New Deal just burdened us with federal programs that we still can't get rid of today.  Programs that are now called entitlements."


So, as I said above, as history repeats itself we can actually tell the future.  Our current administration will win re-election, burden us with more unconstitutional federal programs and regulations in the guise of "job creation", and 9 years after the Recession started in 2008 we will hit rock bottom, which means that we will then enter into a huge war in 2017.  With one distinct difference; this war will not be about fascism, it will be about 2 billion Chinese jacking us for the $30 Trillion we owe them.