Economic stimulus past and present

By Stewart Truelsen

There is one thing missing from the economic stimulus package signed into law by President Obama: a catchy title. The American Recovery and Reinvestment Act pales in comparison with the New Deal of some 75 years ago.

The economic mess the nation finds itself in also lacks a distinctive label. One hopes it won't turn out to be the Second Great Depression. The first one left a lasting impression on today's older Americans.

The federal government's response to the Great Depression, Roosevelt's New Deal, was a major chapter in Farm Bureau history. American Farm Bureau leaders led by president Edward A. O'Neal worked closely with the new administration in 1933 to craft the Agricultural Adjustment Act, which is considered the nation's first farm bill.

At the time one-fourth of Americans lived on farms. Not only were farmers hit by plunging income, but many local banks failed, wiping out savings. It was the worst time in U.S. farm history. Farm Bureau worked closely with the nation's leading agricultural economists to develop and incorporate ideas into farm legislation and lobbied for quick passage.

Farm Bureau also advocated inflating the money supply and making more credit available to combat the devastating effects of deflation, which had driven down commodity prices. Farm Bureau also played a major role in getting farmers to support the New Deal and sign up for its programs. Over the next few years, farm income doubled and hope was restored to rural America.

The Great Depression, New Deal and Agricultural Adjustment Act have all been analyzed many times over, and I hope we have learned from them. The seminal book on the stock market crash was written by John Kenneth Galbraith, who served for a time on the American Farm Bureau staff.

Although agriculture is not in the same dire position it was at the beginning of the Great Depression, the nation's economy is certainly at a critical stage. Farm Bureau applauds the broadband, renewable energy and tax provisions contained in the current stimulus act. Even without a catchy title, those provisions will represent a new deal for farmers, ranchers and all other Americans.

Stewart Truelsen is a regular contributor to publications for the American Farm Bureau.