Saturday, April 11, 2009

how did FDR get win a landslide in 1936?

And it was a blow-out!

This has always been a bit of a mystery-- which hypothesis to give more weight-- especially given the performance of the economy during his first term.

Possible explanations:
-the economy had gotten better, albeit slowly in comparison to historical recessions
-FDR was perceived as a great leader
-voters enjoyed some of the early hand-outs of the New Deal
-the Republican alternative, Alf Landon, was lame
-the electorate was willing to continue FDR's grand experiment
-the Republicans still bore blame from Hoover's FDR-lite administration (they did not recover until the 1938 Congressional elections)

Although the current economy is nowhere near the Great Depression (at least, not yet), it's still worth noting that politically, Obama, Bush and the Republicans are in an eerily similar situation. As such, it will be difficult for the GOP until 2012 or probably 2014.

In any case, in the most recent issue of Reason, Damon Root interviewed Burt Folsom about his new book, New Deal or Raw Deal. The book focuses on the long-term consequences of the New Deal. But as an economic historian, Folsom knows a lot about the immediate context as well.

Folsom offered another explanation: particular voters within special interest groups were pleased with the bones thrown to them by FDR. Folsom cites a multi-billion dollar subsidy on silver which helped FDR capture the seven Western states.

Two other nuggets from the interview:

-Folsom notes that more of the massive increase in taxes during FDR's terms came from excise taxes rather than the more famous income taxes-- and those, came disproportionately out of the hides of the poor.

-This wonderful anti-Keynesian quote in 1939 from Henry Morganthau, FDR's Secretary of the Treasury: "We have tried spending money. We are spending more than we have ever spent before, and it does not work."

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