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The First New Deal Ruined Energy Innovation

The First New Deal Ruined Energy Innovation

About the only disappointing aspect of Burton Folsom’s New Deal or Raw Deal is that it doesn’t go far enough in its critique of FDR’s rural electrification program.

The Roosevelt Institute claims, in all seriousness, that “while 90% of urban dwellers had electricity by the 1930s, only 10% of rural dwellers did and roughly 9 out of 10 farms had none,” as if electrons magically stopped flowing in the presence of barnyard animals and corn cribs.

But farmers used electricity before Roosevelt took office; they just produced or procured it themselves instead of taking it off a federally subsidized grid.

Strangely, pundits on the left continue to laud FDR’s Rural Electrification Administration even though it increased demand for electricity created largely by “dirty” sources, especially coal, while squelching demand for electricity generated by local, often green, means. 

To this day, South Dakota’s prairie remains dotted with the skeletons of farm windmills abandoned long ago thanks to the Rural Electrification Administration. 

This is not to say that all electricity from the grid was dirty, as some of it came from hydroelectric plants, like those along the Missouri and Niagara rivers, nor that all locally generated electricity came from green sources, as some of it came from fossil fuel–powered generators and flatulent mules. But the point here isn’t to count kilowatts; it is to point out what the New Deal cost us in terms of green-energy innovation.

Although, since the New Deal, farms in the United States decreased in relative terms and absolute numbers, they still number in the millions. And although farmers are notoriously “cash poor,” only a small number are “dirt poor.” 

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