A decade earlier than the FDR tax, Calvin Coolidge was able to generate a surplus by lowering taxes. He and his Secretary of the Treasurer, Andrew Mellow, believed in scientific taxation (similar to a modern day Laffer Effect theory). By lowering taxes on the wealthy it created more tax revenue for the government because businesses and individuals did well and prospered. FDR’s massive tax plan more than tripled the tax on wealthy Americans not including FDR’s tax increase on corporations especially the profits tax. Despite all these taxes, FDR was able to generate a mere 40% more in tax revenues. Hence, deficit spending soared because FDR more than doubled spending. FDR (as did Obama) cut government wages and saved about 100 million in expenditures, but this was not nearly enough to decrease the massive federal deficit. The wealthy would move money into tax exempt municipal bonds and find other loopholes to avoid taxes. Andrew Mellow used these techniques with his wealth. And this is what infuriated FDR about Mellon; he claimed he was a “scrooge”. FDR would later find out that Mellon did not use all his tax deductions on his art, but that did not stop FDR from having the IRS to try to prosecute Mellon (which failed). Ironically, after his tax increases, FDR sent a letter to the IRS claiming that the tax forms are too complicated and he was not able to complete the form. Yet, this did not stop the hypocritical FDR from trying to prosecute other tax dodgers. But no President is a bigger hypocrite than Obama which will be discussed later.
The Obama administration certainly had some monetary advantages over the FDR administration. First, FDR and Hoover were unable to stabilize the dollar and treated the recession as an inflationary problem and not a deflation one. This should have been obvious in the FDR Depression because there were thousands of cases of localities creating their own script money. After all, there is no need to create more money if enough existed, right? FDR experimented for a year on monetary issues and moved from the gold standard to the paper standard and back. The Supreme Court ruled his gold manipulation scheme as being unconstitutional. The present day FED better understands deflation and how to stabilize the dollar – this surely helped Obama.
One thing that Obama has been able to emulate from the FDR administration is the ability characterize the populous of the U.S. as groups and not individuals. And what’s worse they both understand how to pit groups of people against other each other by demonizing rival groups of people: rich v. poor, Wall Street v. Main Street, male v. female, black v. white, hetero v. gay, unions v. right to work, big business v. small business etc. FDR and Obama mastered the art of demonizing groups of people to win public favor and elections – i.e. Obama’s war on women. FDR’s WPA employed thousands of artists, journalists, and actors and he was able to use this army of people to look favorable in the public eye. Obama has also been able to use a similar army of people armed with billions in campaign funding used the internet successfully to win public opinion.
One issue that demonstrates how the times have changed is immigration. Immigration into the U.S. was reduced during the depression because more people could further stress the economy. The same is true today, yet Obama and Democrats want to grant amnesty to 12 million illegal aliens. Why? For political reasons, Hispanics favor Democrats in elections by a 2 to 1 margin. Liberals do not care if amnesty will hurt the economy or a majority of people in the U.S.; they only care if they win reelection.
Both Obama and FDR were vindictive and wanted to punish their perceived enemies – big business, the wealthy, and even conservative individuals on their enemies list. One way to punish the wealthy was to increase taxes and to sic the IRS on them. Obama even used the IRS, DOJ, and EPA to target conservative groups to make sure they did not get involved in the 2012 election cycle. FDR went after Andrew Mellon even though he donated 100 million in art and built a National Art Gallery for the people of the United States. Both Obama and FDR were in a continued state of narcissism and paranoia that they spent a lot of time going after enemies. There are many examples. The Obama administration made a website for citizens to “snitch” on their neighbors if they did not agree with the administration. Obama tried to bring back the fairness doctrine to quiet conservatives on the radio. FDR placed over 100,000 Japanese Americans into internment camps – not much different than Hitler’s concentration camps. It is a move that can only be made by a greatly disturbed genocidal leader. Thousands of innocent Japanese citizens died.