FDR did however continue many bad and failing Hoover policies in his presidency. FDR continued the Hoover tax hikes on the rich and he continued many of the Hoover social programs – especially Hoover’s vision of building more damns and creating more hydro power. Then Governor Roosevelt hailed President Hoover and his request to have state governors increase social spending. Hoover was in many regards similar to President George W. Bush. Both were progressive and big spending Republicans. However, the 2008 recession was probably more due to the mortgage bubble bursting. Financial institutions granted bad loans and millions of Americans bought homes they could not afford. What’s worse, millions invested in these mortgage backed securities. And when deflation occurred, the banks and individuals owed more than the homes were worth. The mortgage bubble built up over decades and was the result of liberalism and their belief that everyone should own a home.
Both Obama and FDR have a vastly different view than early economists about who the “Forgotten Man” is in the U.S. Economy:
“As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X, or in the better case, what A, B, and C shall do for X. What I want to do is to look up C. I want to show you what manner of man he is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of …. He works, he votes, generally he prays – but he always pays.” – William Graham Sumner, Yale University 1883
“These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power, for plans like those of 1917 that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.” - Governor Franklin Roosevelt of New York, Radio Address in Albany, April 7, 1932
It is hard to argue the poor are forgotten since a majority of U.S. economic policy and departments have been created to care for the poor. In fact, people on some sort of welfare are now the majority in the United States. Meanwhile, responsible and hardworking tax payers who refuse to accept government handouts are truly forgotten. This is no different than the failing U.S. educational system. The U.S. spends billions trying to bring struggling students up to speed, but the government refuses to spend money on kids who are advanced or gifted. The government only cares if students pass a test of minimum requirements and does not care how much they exceed requirements. This is a formula for failure as is the liberals’ formula for the forgotten man.
The biggest failure of both the Obama and FDR administration during the downturns was their tax increases. At a time when individuals and companies do not have money to spend is not a time to raise taxes. Both FDR and Obama raised taxes on the wealthy including income taxes as well as estate and inheritance taxes. In fact, FDR raised the tax on top earners to 79%! FDR also increased taxes on corporations and went so far to create a profits tax on money that companies saved and did not return into the business and finally, FDR created a dividend tax. FDR also found a way to collect taxes for new entitlement programs to help his forgotten man. Both ObamaCare and Social Security won in the Supreme Court because they were considered taxes and not mandates or an insurance product. Obviously, taxes take money from individuals and businesses and therefore make it impossible to grow businesses and create jobs. Under Obama the average medium income declined by over 10% and remained at that level for several years, but that did not stop him from raising taxes.