Monday, July 12, 2010

Six Million Pigs

In September 1933, the Agriculture Adjustment Administration in an effort to raise the prices of commodities slaughtered six million young pigs. With unemployment hovering at 22.9%, the homeless numbers rising each day, in the middle of the Great Depression, Franklin Roosevelt's economic policy to drive up prices in order to help the farmer resulted in the slaughtering of six million pigs. Never mind that millions of Americans went to bed hungry each night, six million pigs were sacrificed to the economic experiment of FDR and his advisers. Not only did the poor and hungry not get to eat those pigs, but the policy had the desired effect and the price of pork soared until a single slice of bacon was prohibitively expensive.

FDR's policies were breathtakingly naive and their destructiveness, far reaching. The parallels to the policies being pursued by our current Administration are chilling though far less understandable. President Obama didn't inherit the disastrous economy FDR did, rather, he is hell-bent on creating one.

When FDR began manipulating the price of gold over breakfast in his White House bedroom in the fall of 1933, he had already vacillated so dramatically and capriciously on monetary policy, British and European financial and political leaders not to mention American businessmen were furious. His efforts failed to calm the markets instead, increased uncertainty. In the spring when he had ordered the Treasury to no longer honor its own gold clause in contracts (a political maneuver that effectively took the U.S. off the gold standard) there was no formal mechanism to set the price. FDR desired to do so and a willing Senate complied with an amendment providing the Executive with the power. Senator Elmer Thomas of Oklahoma cheered the inflationary redistribution of wealth from the creditors (wealthy) to the debtors (those without wealth) by saying: "No issue in 6,000 years save the World War begins to compare with the possibilities embraced in the power conferred" by that action (Shlaes 158).

Yet Roosevelt confided to one of his advisers that he didn't know what his own policies might be at any given time. He was on "an hourly basis and the situation changes almost momentarily" (162). As Shlaes summarizes Roosevelt's behavior, "...the president was also inconsistent because he saw no cost to being inconsistent" (162).

But Roosevelt's arbitrary gold pricing program did not have the desired result. In January of 1934, FDR submitted a bill to return to the gold standard. Almost a year was wasted on his great gold experiment while one in four Americans remained unemployed, millions lost their homes and Hitler strengthened his grip on Germany. The cost of inconsistency was great.

History will reveal the cost of Obama's inconsistency and destructive economic policies. Millions have been and will be hurt irreparably. All of us will bear the scars. The slaughter of six million pigs by FDR's Administration in the face of unprecedented unemployment and suffering during the Great Depression was unconscionable. One wonders what will tip the scales for Obama?

Will it be Mr. Obama's reckless disregard for national security demonstrated by his Administration's lawsuit against Arizona, unwillingness to protect our borders, proposal to try terrorists as common criminals in New York City, and efforts to close Guantanamo? Or will it be the profligate spending of Trillions of dollars placed on the backs of future generations? Will Health Care--not just the policy but the way it was achieved--be the final straw for historians? Or his ineffective and incompetent management of the Gulf Oil Spill? Relations with Israel? Inconsistent execution of the war in Afghanistan? Or will it simply be that while unemployment rose this president shamelessly and relentlessly worked only on lowering his golf handicap?

Time and history will tell.

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