PRESS RELEASE
Neocons in Full Mobilization
Against FDR Policies
Feb. 1, 2009 (EIRNS)—In an article in the Feb. 1 Washington Post, titled, "FDR Was a Great Leader, But His Economic Plan Isn't One to Follow," Council on Foreign Relations senior fellow, who has written for the London Financial Times and Wall Street Journal, Amity Shlaes tries to rewrite the history of the Great Depression and Franklin Roosevelt's New Deal. Distraught that Barack Obama "has made it clear that his model is Roosevelt," Shlaes states that while "Roosevelt inspired those in despair," as an economist, he "is unworthy of emulation." In fact, it is she lies, "FDR failed abysmally." In September 2007, EIR refuted these arguments, in its review of Shlaes's book, The Forgotten Man: A New History of the Great Depression.
The first goal of the New Deal was to create jobs, but unemployment still averaged above 10%, Shlaes reports, while acknowledging that it was more than double that figure, 25%, when he took office. Nowhere is it explained, as it has been repeatedly in EIR, that it was the fear and sabotage in the Congress, in pulling back funds for infrastructure investment and public works employment, that put the brakes on FDR's planned jobs creation.
FDR's second goal, according to Shlaes, was to "stimulate the private sector. Instead, it supplanted it"—a truly fantastic assertion. What the government programs did was step in to create the infrastructure to lay the basis for a real recovery, which industry had refused to do. The private sector that was "supplanted," for example, in the case of providing electricity, was that which had helped create the stock market bubble that burst in 1929, through its imaginative pyramiding schemes. It had refused to provide electric power to rural populations, claiming it wasn't profitable.
Contrary to Shlaes's lies, FDR's creation of the Tennessee Valley Authority and the Rural Electrification Administration brought electricity to millions of impoverished people, whom the private sector had "forgotten." It was the provision of government-sponsored infrastructure—electricity, water management, 1,700 schools and hospitals—under the New Deal, that brought new industrial growth through private investment into whole sections of the country, such as the Southeast, where subsistence farming, poverty, and disease had, until then, been the major "industries." Shlaes bemoans the passage of the Public Utility Holding Company Act in 1935, which was designed to end Wall Street's control of this vital industry, describing it as the Death Sentence Act" for "private capital."
So if FDR's economic policies were a failure, what should President Obama do? "Put market reform before spending," she says. Shlaes, who wrote her book while a fellow at the right-wing American Enterprise Institute, is part of a think tank network that is determined to distort and destroy any understanding of FDR, a network which is directly derived from those fascist forces who fought against FDR.
