How many people are familiar with “The Great Depression of 1893?” How many are even aware there was such a thing? Well, there was, and it was arguably one of the worst, if not the worst, in American history. It was a major economic contraction that lasted until 1897, albeit the economy did experience a sizeable spike from mid-1894 through the end of 1895.
Unemployment was above 10 percent nationally and as high as 25 percent in many industrial centers. A quarter of the nation’s railroads went bankrupt, and more than 15,000 companies and 500 banks failed. There was tremendous agricultural distress due to the plummeting prices of export crops, and labor strife was rife.
Keep in mind as well – this was taking place on a national scale in a drastically different time period than today. This was an unarguably difficult period, not without sensationalized newspaper accounts of suffering, class warfare and envy promulgated in no small part by factions similar to those we are familiar with today. There were also the obligatory demands for government intervention by the likes of Jacob Coxey and company.
But the economy began to recover in 1896. And after the election of the pro-gold, high-tariff Republicans and William McKinley – over the pro-silver Democrat William Jennings Bryan – confidence soared, and the economy experienced 33 years of rapid growth.
How many are familiar with the “Sharp Recession of 1920-1921?” This depression was short lived in duration, but no less severe. Unemployment rose to 12 percent, wholesale prices declined to 37 percent, and once again the economy stood on the abyss. But as before, it recovered and experienced rapid unprecedented growth until 1929.
Of course, all are familiar with the accounts of the 1929 crash and the subsequent years – unemployment, foreclosures, bank failings, bread lines, stock market collapse, ad nauseam. The difference between the aforementioned and the earlier depressions is made by Dr. Walter Williams who points out, “In 1929, the collapse of the stock market would have lasted two or three years at the most. But the Hoover and Roosevelt administrations threw their stimulus packages and turned it into an affair that we didn’t get out of until 1946. They turned a short downturn into the “Great Depression.” The point being that America came out of two of the worst economic contractions in our history without the government intrusion of Roosevelt and, now, Obama.
History books, and many so-called educators today laud Roosevelt’s New Deal legislation as the ingenious efforts of a president who brought America out of the worst economic period in history. But that is a selectively myopic and wrong view of history pursuant to depressionary periods. Moreover, it is a baseless and incomplete representation of the same.
Seldom is it taught that Roosevelt hated the industry titans of his day and set the top tax rate at 90 percent on his version of the rich. Seldom is it taught that on May 27, 1935 (his aptly termed Black Monday), the Supreme Court handed down three unanimous opinions that struck down key provisions of the New Deal.
“In Louisville Bank v. Radford, the Court declared unconstitutional an act that provided mortgage relief for farmers. In Humphrey’s Executor v. United States, the Court denied the president the power to replace members of independent regulatory agencies, thus thwarting his ability to bring the agencies in line with administration regulatory policies (see Appointment and Removal Power). And in Schechter Poultry Corporation v. United States, the Court struck down the National Recovery Act, holding that Congress could not delegate such sweeping powers to an executive body (see Delegation of Powers).” It should also be noted that three liberal justices were included in those unanimous rulings.
Roosevelt, however, denounced the Court and introduced the “court-packing bill” in an attempt to expand Supreme Court membership, by which he planned to nominate justices who would side with him. This resulted in a bitter dispute between the two branches of government, with Roosevelt ultimately prevailing – which resulted in his overstepping the Constitution and ushering in the belief that government is our nanny.
Now President Obama has raised this same specter of government intrusion exponentially. Sadly, neither the president who is hailed as bringing us out of the Great Depression of 1929, nor the president who is being hailed as his modern-day successor, have belief in industry and confidence in people. To them, government is omnipotent, omnipresent and omniscient – the problem is, that title is already taken.