When Franklin Delano Roosevelt (FDR) took office in January of 1933 the United States economy was in the worst shape this country has ever seen. The unemployment rate in 1932 when FDR was elected was a staggering 23.6%. The highest in US history and in FDR’s first year the unemployment rate went even higher to 24.9%. The US economy was in shambles when FDR came into office and he is often credited for guiding the US out of the Great Depression. But if we look objectively at the unemployment stats during FDR’s time we can see some very troubling facts. Stats from US Bureau of Labor.

1933 – 24.9%

1234 – 21.7%

1935 – 20.1%

1936 – 17.0%

1937 – 14.3%

1938 – 19.0%

1939 – 17.2%

1940 – 14.6%

1941 – 9.9%

1942 – 4.7%

1943 – 1.9%

1944 – 1.2%

FDR died in April of 1945.

While the unemployment rate did decline from the all time high of 24.9% in 1933 during the Great Depression, it still remained unbelievably high until 1941 when the US started gearing up for WW II. From 1933 until 1940 the unemployment rate averaged a staggering 18.6%. A number that represents absolute misery for the civilian working population of any economy.

Why the unemployment rate remained so high and so painful is clear to see today. The amount of money in circulation in the US economy remained below 1929 levels until 1938 (Friedman and Schwartz, “A Monetary History of the United States”, pp. 712-714) . When money is lost from an economy all remaining money gains in value in the same way that if gold was lost from the world supply the price of gold would rise. As money gains in value people become reluctant to spend or borrow it. It’s foolish to spend money today when tomorrow it will buy you even more things and even more foolish to borrow money gaining in value because when you pay it back you are paying back money worth more than when you borrowed it.

The result from lost money in any economy is always the same. Slower spending and borrowing with resulting slower economic growth and higher unemployment levels.

Really it was not until 1940 that the Federal Reserve started releasing new money into the US economy to help with the pre-WW II ramp up that people started spending and borrowing again at normal levels.  

Today if you search for lists of the Greatest President’s of All Time, FDR is almost always listed in the top 5 and sometimes listed as #1. The facts say otherwise. The unemployment stats during FDR’s time as President tell the real story. From 1933 until 1940 the average American worker was living in absolutely miserable times. The worst in US history. If FDR truly was a Great President he would have solved the root cause of the Great Depression and put an end to the American people’s misery in a year or two’s time. Instead the misery lasted for over 8 years of FDR’s Presidency.

Some people might call that the record of a Great President but to me it’s the record of someone who was unable to recognize the root cause of the problem and only had the problem solved through outside influences. That is not greatness.