New Deal or Raw Deal?

Any unbiased analysis of Franklin D. Roosevelt’s New Deal must come to the conclusion that it was a failure. It was a failure in the sense that although many people were aided by the various programs, the New Deal failed to end the Great Depression. The US economy was essentially in the same state in 1940 as it was in 1932. There is good reason to suspect that the New Deal actually prolonged the depression.

Unfortunately, the Roosevelt myth has prevented many historians from making such an unbiased analysis. To this day, I sometimes see comments such as Roosevelt saved the economy from the excesses of free-market capitalism. To make matters worse, many of the same mistaken ideas that FDR used to plan the New Deal are still widely believed, such as the notion that only massive government spending can get a country out of a recession. President Obama used such ideas in his stimulus package, which worked no better than the New Deal.

Burton W. Folsom has provided us with the necessary and long overdue analysis of the New Deal in his book “New Deal or Raw Deal“. To Folsom’s mind, there is no question that FDR’s policies were a raw deal. He examines in detail the misallocation of resources that Roosevelt’s planners causes, the crony capitalism of the NRA, Roosevelt’s destructive vendettas against businessmen  who objected to policies that threatened to put them out of business. Folsom records Roosevelt’s use of WPA funds as political patronage to assist him in getting reelected in 1936 and the abuse of powers that culminated in his infamous court-packing scheme.

All in all, Folsom makes a powerful case that the New Deal was indeed a raw deal, whose ill effects are being felt in our economy and politics to this day.

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