"We believe it to be illegal and we know it to be oppressive."

"Since the industry began to formulate a Code under the NRA in June, 1933, we have at all times opposed any form of price-fixing. We believe it to be illegal and we know it to be oppressive. We quite understand that, if we were compelled to sell our tires at exactly the same price as they sell their tires, their great national consumer acceptance would soon capture our purchasers and ruin us." - Carl Pharis, general manager of Pharis Tire and Rubber Company, one of the victims of the NRA

Since 1948, at least 17 surveys of historians, professors, and presidential scholars have ranked the presidents from best to worst. Only five presidents have been in the top 10 of all 17 of these surveys. They are: George Washington, Thomas Jefferson, Abraham Lincoln, Teddy Roosevelt, and Franklin Roosevelt. When the rankings are averaged, Abraham Lincoln comes out as #1 and FDR as #2.

The amount of praise that this country has heaped upon Franklin Roosevelt has always been a thorn in my side (to put it mildly.) I've steadfastly stood by my belief that FDR was the closest thing to a Socialist this country had until BO came about and that the credit he gets for pulling the country out of the Great Depression is misplaced, since entering World War II is what pulled us out and he tried his damnedest to keep us out of the war. Very few people have ever agreed with me.

Then, by chance, I came across a book. This book was called New Deal or Raw Deal? How FDR's Economic Legacy has Damaged America. I thought I'd died and gone to Heaven. Burton Folsom, Jr. took every thought I'd ever had about FDR and backed it up with facts so concrete that I wanted to run out into the street and find someone to argue with just so I could prove them wrong.

What was even more astounding, though, is that Folsom wrote his book in 2008, before BO had had time to make an impact. To read the policies that FDR set in motion, and see them playing out now, is mind-boggling....and terrifying. This is the start of several blogs I'm planning to write on Folsom's book and BO's administration today. So next time a liberal tries to argue that FDR is ranked right up there with Abraham Lincoln and George Washington, you can set them straight and watch them writhe as you decimate their idol.

The NRA

Then

No, not that NRA. FDR's NRA (boy, these acronyms are going to get old real fast) stood for National Recovery Act and was signed into law in 1933. Under the NRA, a majority in any industry had government approval to establish the expansion limitations, wages, hours, and prices of all products within an industry. Anyone in that industry was subject to the "codes" established by that majority and faced jail time or heavy fines if they failed to comply.

Sound like Socialism? Because that's what it was.

Under these codes, everyone in any particular field was equal - which resulted in next to no competition or innovation; there's a reason that applications for patents for inventions were lower in 1939 than they had been any year in the 1920's. With set prices, industries had no motivation for improvement.

All the industries under the NRA followed a trend - higher prices, higher wages, and less hours. Perhaps in theory this meant that more people would have more money and more time to buy products; in reality, most businesses couldn't afford to pay workers more to do less, the result being that these companies stopped hiring and starting firing.

One example comes in the tire industry, whose codes were established by giants like Goodyear, Goodrich, and Firestone. Prices for tires immediately raised and thus, so did the price of cars. America's export of cars decreased and so did the number of Americans buying automobiles - American car sales in 1933 were 1/3 of what they had been in 1929. Inside the industry, tycoons like Goodyear and Goodrich flourished despite the decrease in sales because they had a nationwide audience. Small companies, like Carl Pharis' company in Newark, Ohio, survived by selling quality tires at cheaper prices to a small and supportive community that trusted their products. When the codes were established, though, Pharis was forced in increase the price of his tires despite knowing that he could have made a profit at a lower price. When the prices were evened out, though, he didn't have the same audience and couldn't compete. He fired all 1,000 of his workers and closed down.

Not everyone complied to the codes like Pharis did but they suffered the consequences nonetheless. Jacob Maged of Jersey City, New Jersey, owned a dry cleaning business. For 22 years, his low prices and quality work had enabled him to keep up with bigger companies in town despite the fact that he was on the outskirts of town. Under the NRA Cleaners and Dyers Code, he was instructed to charge 40 cents to press a suit. He continued to charge is customers 35 cents in order to stay in business. Not only was he thrown in jail for this, he was also fined $100. According to the Washington Post at the time, "For a parallel it is necessary to go to the Fascist or Communist states of Europe."

This wasn't a singular case. Between 1937 and 1939, business failures increased 50%. So common were the problems for small businessmen, in fact, that the NRA was taken to the Supreme Court in 1935 and unanimously voted unconstitutional.

Now

The NRA never returned but the assault on small businesses is something that the U.S. is all too familiar with today through Obamacare. Under Obamacare, employers will be required to provide the same health care plan to all their employees...if they employ more than 50 full-time workers. Like the NRA, if they fail to comply, they will be forced to pay a fine. The solution? Either pay the fine (which, in many cases, would be cheaper than the health care plans) or, much like the businessmen under the NRA who could no longer afford to pay such high wages, small businesses are going to keep their employee count under 50.

What's more, just like the businessman who no longer needed motivation to improve his products, without competition, there's no reason for doctors to improve the quality of their service. Under Obamacare, patients will be assigned a doctor rather than choosing their own like they would in, say, a free country. In a 2012 survey, based on 5,000 answers, 60% of doctors questioned said that they believed that Obamacare would have a negative impact on patient care. Without competition, doctors won't have a chance of earning higher salaries through hard work and improvement. 43% said that they were considering retiring in the next five years because of the law, 90% said that they wouldn't encourage their family to go into health care, and one doctor was quoted as saying, "I would not recommend becoming an M.D. to anyone."

This is what happens when government's try to regulate matters that they have no business being involved in - everybody loses.


Up next: How FDR started government paternity...and how BO encourages it.


God bless America