Watching live online. Here at the Young America foundation. [applause] it trains conservative views were across the country with conservative values those initiatives and conferences and known as the conservative force to call a key pillar of the conservative movement by politico to educate americas youth is undeniable. I also have doctor full so speak two years ago at this conference and one of the main reasons why now im a history professor myself. He received his ba from indiana universityy, ma from university of nebraska phd from university ofof pittsburgh. From Northwood UniversityHillsdale College. He was a professor of history at Hillsdale College 2003 through 2017 and recently appointed distinguished fellow as well. The two favorite courses to teach were history of the American Economy also a regular speaker and friend of the Young America foundation especially our center for entrepreneurship and Free Enterprise. Please join me to give a warm welcome to doctor full some. [cheers and applause] [cheers and applause] thank you. Thank you. Thank you. And i have a question for you. [applause] are you glad to be here . [applause] i am delighted to be here. And i have this one remaining and want to give you the best that i have two deal with the historical record and the myth we encounter on College Campuses and if i can help in any way to prepare you to deal with this when you leave the Conference Today i hope that is a success on my part. The three myths of history that most teach and the teaching of these perpetuates the idea that government solves problems and capitalism creates them it is the reversetl if we look at the historical record and talk about those number one the Great Depression was caused by capitalism we know it the argument in classrooms alread already, a lot. The Great Depression and sometimes you see the connections like the stock srket crash and banks are closing, the Unemployment Rate skyrockets over 20 percent and it looks like business collapsed capitalism collapsed, it failed. If you see Jimmy Stewart running a bank it collapses under the strain of the Great Depression and he is there to try to rescue it. Sou so lets go through this a little bit and talk about what is wrong with that argument. It is true the stock market collapsed. Its true unemployment skyrocketed but what caused that quick. I have three causes that have nothing to do with capitalism. Number one, the Federal Reserve, which was manipulating Interest Rates throughout the twenties, they raised Interest Rates in 1929. The raising of those Interest Rates made money heart oh one harder to borrow than it was harder for Business People to get the capital they needed to invest. Milton friedman won the nobel prize what he coauthored on the Federal Reserve and the American Economy. That included the 1930s and his argument is the Federal Reserve manipulating Interest Rates is the chief cause of the Great Depression. That is point number one. Point number two, the protective tariff. Tariffs were raised in the 1930s to record highs the smoothawley tariff was the highest tariff in us history and enacted during president hoovers presidency when the Great Depression began. Know you are thinking a tariff is helping to cause the Great Depression . That sounds like that may not make sense but it does if you think of it this way. If you restrict trade you slow down the economy so in particular the restrictions in the smoothawley tariff was odd roughly 3000 items we raise them sharply on others in a situation where we had to switzerland as a major export of swiss watches. The best in the world. In dollars today they were 30 apiece. They were the best in the world they kept perfect time and sold a 30 apiece but americanmade watches from New England States like rhode island were not as good and cost 25. Nowwi this is back in the day when we had to wind the watch every morning we would wind it and then it would keep time for that day and then we would wind it again the next day. The americanmade had a problem if you would wind it it would run for an hour in about 58 minutes which is to say sometimes it was off a couple minutes an hour. But thatsr okay because the next day you could reset it and get it back. Would you rather do that with a 45dollar american watch for a swiss watch you dont have to do that d with . Most americans said i want the swiss watch which is fine because they would buy our watches or cellar stairs and by our typewriters or automobiles United States had the cheapest cars in the world of the best cars. Now when we put a huge tariff on the watches because the watchmaking congressional districts wanted to price some lists markets out of the market so theres would sell so they had to pass a tariff that virtually doubled the price now roughly its a 30dollar tariff on a 30dollar watchad so now you have to pay 30 for the watch and 30 for the custom tariff now a 60dollara watch and american watchmakers thought to good. Of ours is 45 more people by our watches even though they dont tell time very well you might say maybe. But look at it this way we lose car sales because switzerland absolutelyor cut us off with exports. Now multiplied country after country we put a high tariff on french wine, spanish olives so we have tariffs on all and all of these items that all these countries refused to buy our products. So now american cars that sold over 5 million in 1929 is one. 5 million in 1832 michigan and detroit is a Great Depression. We lost those sales that was part of the problem so that tariff was a key cause of the Great Depression. The third and final is that president hoover responded. He was a republican but he was a member of the liberal wing of the Republican Party in his presidency was a disaster indeed but he wanted to use government whenever he could and raised taxes and thought t this to be good to gather more money for the government because we are losing money because the depression is creating lower revenues and income and coming from the United States. He thought a tax rate would be good. So in 1929 it was 29 percent maximum. I have an essay by then way and the myth of the robber barons in my book which talks about the tax rate was lowering in the twenties to get down so we had tremendous inventions like talking movies, radio, heres one thats good for summer day in dc, airconditioning. In some cases it was invented before when we got the tax rate down then those entrepreneurs like carrier had the incentive to invest they did so in the twenties were prosperous but now the tax rate goes 29 percent which was the maximum rate up at 63 percent. So wealthy people at some point paid more than half of their income to the government if youre going to pay more than half of your income to the government you will be very careful about what you invested and maybe you shouldnt be investing in much at all. In other wordspr it cannot rely on investment or entrepreneurship the right when we need investment to create jobs to replace the ones that are being lost by the Federal Reserve raising Interest Rates by the smoothawley tariff. So what i am saying is we have three things. The Federal Reserve raising Interest Rates, high tariff and expenses is that capitalism or government tt . You have government creating mae Great Depression. Those changes make it harder almost impossible for capitalist to operate. Free enterprise thinkers were at a standstill because of taxes, tariffs affected usimports and because of the Federal Reserve raising Interest Rates. So what we have is the Great Depression was caused not by capitalism but by government. It is ultimately part of the solution, part of the problem. That is myth number one. Myth number two is Franklin Rooseveltov, because hoover lost the election to roosevelt and so the republican is out the democrat is in, and his program called the new deal will have a set of programs which he will use to combat the Great Depression. Myth number two is that fdr with his new deal used government effectively to help get the United States out above the Great Depression. Franklin roosevelt with his new deal used government effectively to help get the United States out of the Great Depression. How many of you have had that talk to you in school . Thats exactly what i had taught to me. How many here . He wow. That is the prominent teaching because sometimes there are some variations sometimes they will say not completely that it helped. It was a movement in the right direction and then other things came later. It was always waste his praise as a step in the right direction and some will say the whole way out or some part of it capitalism failed Franklin Roosevelts new deal. What i was writing my i book i wrote the book new deal or rod deal . And in writing that book i spent about ten years the longest time writing a book and that was because i wanted to get this right and i asked my fellow history professors , and students to what was roosevelts best policy maneuver his best program . Then i would say roosevelt failed Insight Program after program is a failure with horrible unintended consequences. What do you think of that and then they would say yeah maybe but he did this which was good and it comes back to one particular program under of emergency relief and construction act it gave food for money to cities and states to feed starving people 25 percent unemployment. I think there is some logic in that argument if you take it just that far. If you have a situation 25 percent of the people are unemployed, naturally they will rungoin out of money at soe point unless their savings is huge and most didnt have that than they are hungry, they cannot feed their families, even if other parts of the program are not so good but the fact he was willing to feed people to use that money is a good thing and it shows the importance of a Good Government program. But i want you to look at this really its a First FederalWelfare Program in us history they called their belief in the thirties today is called welfare. It was 300 million. Thats a lot in todays terms it would be billions of dollars. It was a large program. And the way that it was distributed you might find interesting. The state of illinois. [laughter] we had illinois students. We are not bullying them. These are the politicians in the state of illinois. Those politicians were very clever and crafty and they maneuver the situation so their state received almost 20 percent of all the money. Of that 300 million they got more money in illinois then new york, california and texas put together. They did it by saying we are good with getting votes for him when he needs it the most count on illinois to deliver votes in emergency situations. S. They were politically important as it was a swing state that roosevelt wanted to carry so illinois ends up the number one state receiving relief money. Pennsylvania is number two. I know those are large estates but not the largest and you will find interesting those that tend to be republican in the thirties didnt do so usll. Massachusetts its hard to believe but it was a republican state at one time. In the 1930s massachusetts and connecticut were both republican. They received a grand total of zero dollars so 300 million is spent for relief and massachusetts and boston connecticut get zero. They were not the only states. The bottom five states all got zero. And they tended to vote republican. The top five states got over half the money. You have 300 million the top five states and over half the many in effect its not a welfare or Relief Program that redistribution to redistribute wealth from republican states or states that are not serviceable to roosevelt, two states that are very influential and key in roosevelts economic and political career. So we have Harry Hopkins who is one of the leaders of the relief act one of fdrs people in his administration helping to administer the money they would be careful to thosedi they thought politically where the most worthy. Boston is caught in a bind and it is part of my research in the book i was trying to deal with how massachusetts was dealing with this. W it was constantly working to raise money because it has to feed its own plus it has to send taxes to washington to feed illinois. T listen to this. And massachusetts estate ride unemployment drive raised over 3 million in todays money would be more like 50 million the boston civic symphony gave money to benefit the jobless there was an Exhibition Charity for ballgame to benefit boston gardens 5000 for locals to be closer to 100,000 today. City officials raised two two. 5 million as gifts from city employees. Teachers donated 2 percent of their salaries. Lets hear it for the teachers. [applause] i cant take any credit but they did donate 2 percent of their salaries to help feed the poor. Historian charles trout who has studied bostons amazing efforts wrote no major city assisted so high a percentage of its jobless as boston did. N the 1930se it had to because the money is being redistributed from massachusetts to illinois. Boston has to take care of its own poor people plus send money to washington to give to illinois. Once you see the Relief Program in this way, you realize this was not so much helping needy people but it is redistribution and thats a key component in the one most vigorously defended as part of Franklin Roosevelts new deal. It was greatly expanded under roosevelt it was passed very late in the campaign of 32 and expanded under roosevelt. Thes program perhaps best is the wpa the Works Progress administration to give jobs andid roadbuilding. There were a lot of roads being built that puts them to work and i you have roads built. So there is a familiar picture l about those people know its like you are listening to a broken w record so those who had influence can get wpa funds those people not from influential states did not get iry much at all i have some quotations that the democratic countynt chairman of indiana said what will help us change the wpa management from top to bottom. Pet put man in there that are in favor of thesees projects that doesnt leave a lot to the imagination it is my personalha belief democrats should be holding those positions so we might strengthen the offense for the 1940ct election. So the wpa director in new jersey answered his phone always. He always answered democratic headquarters. Because that is where you had to show yourself important to get a job in new jersey on wpa. The congressman from newark new jersey said in this county were 18000 people on the wpa with the average of three people in a family you have 54000 potential democratic votes can anyone beat that if its properly mobilized . So this is a program to redistribute money in a political direction to benefit president roosevelt. The final program is aaa agriculture adjustment act because farmers were in trouble two. So roosevelt came up with a plan to help farmers. This plan is so wild it could only have been invented by a College Professor and it was. Professor john black harvard economist helped with this program the aaa to give aid to the farmers low prices for their crops is what they are rsgetting so we will give more money to the farmers because the crops are getting much money and do it by paying farmers. They could take part of the land out of circulationan and they will be paid not to produce on that land for go that way they get more money they dont have to work as hard and it doesnt produce as much crop so that will raise crop prices it turns out many were buying fertilizer with their money than heavily fertilizing the other land so put that aside the idea is you pay farmers not to produce. Now be honest held many would like to be paid not to do homework . This is really big. I dont want to appear selfrighteous but i would like to be paid not to grade homework. [applause] that the crazy thing is if we pay farmers not to produce how do we tell others . That was a big question was never on the farmers but we pay the farmers not to produce thats key part of aaa. So how is this a program . It doesnt make sense but the republican candidate who first ran against roosevelt said this is a stupid program paying people not to produce. This is the governor of kansas. This is stupid. A lot of people were applauding. Than the farmers said y o if you take our program away are you ,oing to take it away . He said no. So it raises the question if you will validate it as a reasonable program who should the farmers vote for . Those who gave them a program that pays them no