Having written about the causes of the American depression, I will now proceed to tackle some of the misconception and the dust being thrown in our eyes by even very respectable historians. Many American historians write in glowing account of FDR’s achievements, prominent among them is Arthur M. Schlesinger Jr. Arthur M Schlesinger, Jr. was a Harvard eminent historian who wrote copiously on the great depression and FDR. He stated in his own autobiography that he was not interested in economics, yet he did not have any qualms, but had the ultimate confidence to declare that Roosevelt’s administration saved America’s economy from the great depression. If as a historian you are writing the history of an era, which was shaped by economic circumstance then you admit that you are not interested in economics then what can that historian possibly write to give an objective analysis of the period. You will basically be short changed if you read such history books like his: The Crisis Of The Old Order and The Coming of the New Deal. You will pick up any nonsense he writes if you do not understand economics.

Of course, Mr Schlesinger was not alone. Before Mr Kwarteng introduced Paul Krugman, I have read quite a few of his articles, and I was not surprised that he used him to support his position. To avoid going in circles I will quote him per Mr Kwarteng’s understanding. Mr Kwarteng wrote, ‘Krugman also says that no economic model, not even the economic models developed by Joseph Schumpeter or by the classical economics, provided satisfactorily answers to address the American crisis (the Great Depression) and, as a result, American economists and politicians turned to the Keynesian model of state intervention. And it worked. Keynesian economics saved American capitalism.’ To start with, all the policies that Krugman espouses as Keynesian were all in full swing before the General Theory was published in 1936. So, it is silly and absolute stupidity for any serious thinker to make that unguarded statement. And this is how silly some of these intellectuals can be when they want to promote a certain narrative. Besides, some of the policies were continuation of what President Hoover started before he left office.

What sort of data did Paul Krugman studied to arrive at such incredibly fantastic conclusion? I will say Mr Krugman lives in a fantasy world; what he said as an economist has no historical basis. I would have shrugged my shoulders and moved on if he is a historian, but since he calls himself an economist and a Nobel Prize winner at that, I will take him on because I hate such fatal wilful ignorance. The Americans always get alarmed when unemployment rolls above 6%. In his book End This Depression Now!, published by W. W. Norton & Company, he stressed on the need to end the debilitating unemployment in America. So, it is fair to judge him on his own terms and moral yardstick. Based on unemployment, how could he say that FDR’s policies were a success when the median unemployment rate from 1933-40 was 17.2%. According to the statistics there was no single period during his tenure until the war did unemployment fall below 14%; they were always in the high teens. Is this how a Nobel Prize winner interprets data? I think his books should be accompanied with a disclaimer; I am not joking, it is a serious indictment. I am not sure what Mr Kwarteng was thinking whether I will be scared of Nobel Prize winner as source of his ridiculous economic ideas. This brings the whole edifice of the Kwarteng enterprise down. I can stop here, but I am yet to run out of ideas.

When by 1934 the figures showed that American agricultural exports had fallen to $590 million, did they reverse their stupid decision? And you can’t believe this, when they voted for the Smoot-Hawley tariffs, ‘1001’ economists told the bureaucrats and the lawmakers not to do it. But they went ahead to do it anyway. Now, how do you expect a capitalist economist who advocates for free trade to solve a crisis created by the Smoot-Hawley tariff? Tell me, and I will stop my ad hominem attacks. This is stupidity that breaks the concept of proportionality. I don’t care a damn what Mr Kwarteng thinks; he can go to hell if he feels like. I know my subject and I don’t dabble in amateurism that embrace every silly concept and try to draw a common ground. In my philosophy, you are either hot or cold. I don’t entertain any halfway houses; it is a dangerous philosophy entertained by people who are not sure of their beliefs. If you are unsure of your thought processes it is slightly reasonable when you leave room for maybe. Of course, that is the trade of Mr Kwarteng; he does not know his stuff so he can make room for Washington consensus, Beijing consensus and the Nordic model and jump when there is the need to. Where do you draw the line and who pulls the levers for that decision? Is it Mr Kwarteng, or Paul Krugman who is going to be yanking the economic levers, perhaps some disinterested bureaucrat or someone with his own personal interest and agenda like Benjamin Strong who cut interest rate to save the British Pound? Let’s take the analogy of the preservation of food for example. To preserve food you either keep it cold or hot; halfway in between is a very dangerous and deadly territory where killer organisms flourish. And economics is just like that. Most damaging corruption occurs when government meets private enterprise. I am not some neophyte believer in capitalism. I graduated from socialism to capitalism, and all the silly argument that Mr Kwarteng is advancing I have made more strident ones in the past with aura of certainty before I saw the light. My conversion was gradual; nonetheless, it was equally traumatic. I sympathise with Mr Kwarteng because when he steps on his road to Damascus he might have to destroy all his neurological connections in order to survive; he may end up in an asylum.

To conclude on the nonsense of Paul Krugman, the American economy was saved by the Second World War when war production and conscription mopped out all the excess unemployed. Don’t let any silly Paul Krugman, whom I think has brought the name of the Nobel Prize into disrepute tell you otherwise. The answers Joseph Schumpeter and other classical economists offered were tailored made for free economy not for government controlled ones. How does a capitalist economist solve a problem that was not created by capitalism? It is ignorant for him to make that statement. If he had stated that, perhaps, FDRs policies did stabilise the American economy there might be a wiggle room for escape. Ignorance, I think is very mild to describe Paul Krugman; I believe he needs Prozac if he is mad, or methadone will wean him off if he is on drugs.

Now, leaving the silliness of Krugman aside for a while, after the Smoot- Hawley tariff has devastated the U.S. agric industry leading the charge to solve the problem was Henry A. Wallace, the secretary for agriculture and later Vice President. You need a good history book of the era to really have a grip on the insanity of some of the policies adopted, which was supposedly to heal capitalism. It was like children having a picnic. Mind you they had the backlog of over capacity from the First World War, besides those created after the Smoot-Hawley tariff sent the cadaver of the American agric industry to the mortician. I cannot catalogue all the silly actions the FDR’s administration took to salvage the problems that his predecessor unleashed, but will mention the most outrageous ones.

They started on the premise that the depressive farm prices were the cause of the depression, so they sought to manipulate production and supply in order to push up prices. So the government started paying farmers not to cultivate a third of their land. This did not work. Remember, the farmer is a business man and he will take actions that will benefit his own personal interest as Adam Smith wrote in 1776. This is a fundamental nature of humanity, which can never be altered. The farmers took the money and abandon their least productive part of their land and intensively cultivate the most productive. They, therefore, ended up coming to the market with more produce than before. Ask yourself where did the money they used in paying the farmers come from. They taxed the food processing industry to finance this devilish scheme. When this didn’t work they started destroying cultivated crops. Millions of acres of planted cotton, tobacco and many other crops were destroyed. It wasn’t just crops that were destroyed; farm animals were also at the receiving end of these draconian measures. Millions of litres of milk were poured down the sewer just to keep the prices of these commodities up. You have to read this in the history books to believe it. These things were done at a time when Americans were suffering from malnutrition. Besides, the most sinister misinformation, which is the hallmark of the proponents of big government was a bulletin issued by the department of agriculture. I quote the following from ‘The Roosevelt Myth’ by John Thomas Flynn: curiously enough, while Wallace was paying out hundreds of millions to kill millions of hog, burn oats, plough under cotton, the Department of Agriculture issued a bulletin telling the nation that the great problem of our time was our failure to produce enough food to provide the people with a mere subsistence diet. Can you comprehend this Machiavelli style of governing the people by the so called socialist who are supposed to help the common man?

The irony about the last quotation is that FDR before he became president campaigned that he will not do anything of the sort. Of course, he is not the first politician to have reneged on his promise, but on such a devastating scale is unpardonable. And a silly person like Paul Krugman want to tell the rest of the world that FDR saved capitalism and his stooge Mr Kwarteng who cannot use his brains believes that nonsense. My case has been sawn here, but I won’t stop, because I take delight in burying Mr Kwarteng’s megalomania. In California fresh peaches were allowed to rot in the orchard just to make sure that prices of those that got to the market got good price. It was not just consumables that had such rough ride. All sorts of nonsense transpired during FDR’s administration, which sounds outlandish now when you read them. For example, a 49 year old immigrant drycleaner was jailed for charging 35cents instead of 40 cents stipulated price. Does this make sense to you in a free enterprise economy? Put yourself in the shoes of a consumer and don’t be prejudiced by your hatred for my position and some of my obnoxious language. First and foremost you have to recognise that we are all consumers bar none. The efficient running of an economy should be, without a shred of doubt in my mind, in the interest of the consumer. What I have written may sound bizarre to you, and you may not believe it. I will entreat you to get your hands on a book entitled: The Grapes of Wrath by John Steinbeck. The author was inspired by the follies of FDR and it was published in 1939 and won a Pulitzer. He touched on so many subjects, but what I want you to know about is the purposeful destruction of food to keep prices high. Thank you, and look forward to the last part.


Philip Kobina Baidoo Jnr
London
baidoo_philip@yahoo.co.uk