IMHO it’s a ridiculous notion, but it’s popular among laissez-faire conservatives.
Below are several graphs from various distinguished economists that I think make very apparent the value of FDR’s New Deal programs. But first, here’s a quick chronology to keep in mind:
Real Gross Domestic Product
Nobel Prize winning economist Paul Krugman shows that US production grew as a result of New Deal programs. Note the brief downturn in 1937-38 when FDR tries to balance the budget.
Unemployment
Professor of History Eric Rauchway charts how unemployment decreased quite significantly under FDR’s New Deal programs. Click here to read more about how unemployment was calculated in the 1930s.
This shows total employment over a longer period.
Private Investment
Economist Brad DeLong shows that private domestic investment increased under the New Deal. DeLong offers as further reading: Sumner H. Slichter (1938), “The Downturn of 1937,” Review of Economics and Statistics 20:3 (August), pp. 97-110.
EconoSpeak explains that Net Investment remained positive throughout the New Deal.
Notice how the graphs correspond to the time line. Obviously FDR’s New Deal did not make the Great Depression worse.
I’d just also add that the arguments for and against government spending derive from profound ideological tensions that run to the heart of our society. In modern times, this tension is perhaps best represented by John Maynard Keynes and Milton Friedman.
Tags: Brad DeLong, Eric Rauchway, FDR, Great Depression, John Maynard Keynes, Milton Friedman, New Deal, Paul Krugman
January 30, 2009 at 10:49 pm |
Rush Limbaugh, Glen Beck, Bill-O O’Reilly, and the other right-wing hack crowd can get away with their historical revisionism for one specific reason–their listeners are historically illiterate. This is an issue beyond just the right-wing, but it affects that audience, allowing these pied pipers of hate, to lead their followers around by their noses.
Speaking of history, and why I so appreciate your post. I’m listening to Nick Taylor’s http://www.nicktaylor.us/ “The Enduring Legacy of the WPA: American Made (When FDR Put the Nation to Work) on CD in my travels for work. So much of the book parallels what’s happening at our current historical juncture.
Hoover, much like GWB, was clueless about life in America for the other 99 percent. Rather than address the growing joblessness, hunger, and destitution, Hoover incredibly, in 1932, makes the following statement to the press about the economic vortex America was sinking into: “What Americans need is a good joke every ten days.” (my paraphrase) Talk about disconnected. He also was obsessed about deficit spending, along with his Republican cohorts in Congress. Then, along came FDR. While no man/administration is perfect, he recognized the hopelessness and dire straits of the times and put Americans back to work and gave them hope again.
Think you could find a Limbaugh groupie (or a follower of Obama) that could put our current mess into any kind of historical context?