Report by Richard Geno
In the second largest crowd to attend a Conservative Forum meeting in history, Dr. Burt Folsom both enlightened and entertained the audience with his knowledge and humor. He started out by pointing out that life is not fair. He was able to trade the icy cold snow of Hillsdale, Michigan for a balmy 70-degree day in Silicon Valley. He also pointed out that it was not fair for him to be showered with such wonderful hospitality in exchange for delivering a lecture on two of the worst presidents in American history (Franklin Roosevelt and Barack Obama).
Before launching into his main message about the damaging effects of "stimulus packages" and excessive government spending, Dr. Folsom shared the historical background on two of the greatest presidents who receive little credit from historians - Warren Harding and Calvin Coolidge. With many recommending a government stimulus package back in 1920 with unemployment at 12% after World War I, Warren Harding and his successor, Calvin Coolidge used a two-part plan of cutting federal spending and reducing tax rates.
The results were immediate and exceptional. Calvin Coolidge responded to the requests for stimulus with a "no," providing two reasons: (1) It is unwise to take money from the private sector and give it to a non-productive government sector, and (2) it was unconstitutional. Instead, by cutting government spending and lowering taxes, the unemployment rate dropped from 12% to 2% in just two years. The average rate of unemployment in the 1920's was 3.3%, the lowest decade in American history - and the entire national debt created by WWI was eliminated.
As a result of these steps, prosperity and freedom pervaded America. Entrepreneurship was let free, and many new inventions were created, including the zipper, air conditioning, talking movies and many others. When Herbert Hoover became president in 1929, being one of those who recommended government "stimulus" earlier in the decade, he started tinkering with the economy, and signed into law restrictive tariffs that slowed down the economy. He then raised the top tax bracket from 25% to 64%, and we experienced the early stages of the Great Depression.
Franklin Roosevelt, who ran on the campaign promise of a balanced budget, changed his tune dramatically when he became president. He first raised the top income tax bracket to 79%, and eventually to 94%, and instituted such boondoggles as the WPA, the AAA and the NRA. The word "boondoggle" was poularized in the 1930's. The Supreme Court eventuallfy found the National Recovery Act (NRA) unconstitutional with at 9-0 vote. While FDR's measures were singularly unsuccessful in helping the economy, they proved to be a magnificent way to buy voters.
The parallel today with Obama's efforts to subsidize costly energy products like ethanol, wind and solar are having the same effect on jobs as FDR's efforts had. Unemployment actually went up to 20% in 1940 - after 8 years of FDR stimulus. The same thing is occurring today, moving up from 7.4% when Obama took office to between 9.5-10.2% in the past 20 months. Dr. Folsom contrasted the successful years and entrepreneurship during the 1920's and 1980's after taxes were reduced with the 1930's and recent years when taxes and government spending have substantially increased while unemployment remained high.
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