History Says Obama's Stimulus Won't Work

This is a rush transcript from "Glenn Beck," February 10, 2009. This copy may not be in its final form and may be updated.

GLENN BECK, HOST: Well, hello! I'm so glad that you have joined us.

There is a new book out called "New Deal or Raw Deal." And I'm going to be real honest with you, I've read about this much, and it was really good. This part could stink on ice but I don't think so. Burton Folsom, Jr. is its author.

And I learned more — honestly, Burton, I learned more in first 100 pages of this book about the Great Depression than I — oh, yes, I should say, it just crystallized so much because you have the facts and figures in the book, which is exactly what we're looking for. Tell me a little bit about the depression and the idea that Geithner said today, which is frightening: "We're going to try things that have never been tried before."

No, wait, hold it. That's my money, too.

That's kind of the spirit they had in the New Deal, was it not?

Video: Watch Glenn's interview

BURTON FOLSOM, JR., AUTHOR, "NEW DEAL OR RAW DEAL": It was. That's what we tried in the Great Depression. We started with the highest tariff in U.S. history. That stifled foreign trade.

The automobile industry went from about 5 million trucks and cars per year down to about 1.5 million trucks and cars per year. Then you start trying various bailout schemes with Reconstruction Finance Corporation, and those don't go well. We have high unemployment.

And, in the first two terms of Franklin Roosevelt, we simply did not get out of the Great Depression. We had employment in the high teens throughout Roosevelt's second term.

BECK: Look — I'm a small business guy. I own my own small business. I make cupcakes.

And I have to tell you, my business has been going well. However, there's no way I would invest in this atmosphere. There is no way I'm going to — I'm not going to put...


BECK: ... any money out, because the government is going to try things they have never tried before. Isn't this exactly why the depression lasted so long, because businesspeople could never trust that the rules of the game were going to change in the next year or the next month?

FOLSOM: In the — in the early '30s, the top income rate was 25 percent on top incomes, and then it goes up to 63 percent on top incomes. Then Roosevelt brings it up to 79 percent on top incomes ...

BECK: Wait. Didn't ...

FOLSOM: And then 90 percent on top incomes by World War II.

BECK: Didn't he sign — didn't he sign an executive order at one point to — everything over $25,000 would be 100 percent taxed income?

FOLSOM: That is correct.

BECK: Right.

FOLSOM: In World War II, Roosevelt signed an executive order for 100 percent tax on all income over $25,000. He said all, quote, "excess income is needed to win the war."

BECK: OK. Do we have — do we have the list of all the pork that Barack Obama says is not pork? Because he says it's a spending bill, "It's not pork, there are no earmarks in this." Well — I mean, if you put the pork in, you know, and nobody is saying, you know, attaching their name to it, I mean, of course, it's not an earmark, but it's still pork. I mean, I don't think we need the — do we have the one here?

Yes, we need $50 million for new TSA uniforms? They can wear Levi's as far as I'm concerned! What the hell are we doing?

OK. So the New Deal also was riddled with pork, was it not?

FOLSOM: It was. We had much. The WPA — some critics had it stand for "We Piddle Around." It did build roads and various airports, schools. Often, they were not well-built. The word boondoggle came into popular parlance during the 1930s.

BECK: OK. Real quick because I got two more questions for you. So, really, the second question one is ...


BECK: So riddled with ADD — labor unions.


BECK: Labor unions back in with FDR, the same kind of atmosphere that Obama has with labor unions where they were just encouraged to grow and grow and grow.

FOLSOM: They were, and they were not given much check at all by the National Labor Relations Act, so that you had a sit-down strike against General Motors that stopped car production there at General Motors almost completely in 1936 and '37. And the UAW gained a tremendous amount of power, and that contributed to the high unemployment in the late 1930s.

BECK: All right. Real quick, I just want to go through the — can we put the stats up, please — for the world unemployment index and United States unemployment index. Can you explain this? I don't know if you can see these.

FOLSOM: Right.

BECK: Real quick.

FOLSOM: In 1929, the United States had the lowest unemployment rate of any country in the industrialized world, according to the League of Nations. We had a lot of free market policies that went into that. Then you'll notice the intervention comes in, the protective tariff, the manipulation with the Federal Reserve, the high income taxes. All of a sudden, we are below the world index.

Then by 1938, notice, the Roosevelt recovery is a non-recovery. We have one of the higher rates of unemployment in the world ...


FOLSOM: ... almost 20 percent.

BECK: Real quick — you could say that maybe in 1937 things were looking good, but that — isn't that a critical year?

FOLSOM: Right.

BECK: We'll have to have you back maybe tomorrow — critical year because of what happened with labor unions, correct?

FOLSOM: Absolutely, and labor unions, we had a minimum wage law that came in shortly thereafter.

BECK: Right.

FOLSOM: We had a non-distributive profits tax.

BECK: Which we — we'll get in to it tomorrow. This will blow your mind. The history of the New Deal and the history of FDR out of control and we will share that with you tomorrow.

Burton, really, truly an amazing book "New Deal or Raw Deal?" I'm not going to spoil the ending for you. Did you know he was in a wheelchair? We'll talk about that tomorrow.

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