The latest right-wing radio talking point is that FDR prolonged the Depression. Also, I am reading “Traitor to His Class,” about FDR and the author points out that about when FDR took over the stock market was making a broad, if modest recovery. Also most panics (as recessions were then known ran for about X months, and the 1929 Depression was at about that natural turning point.
Is there any honest academic opinion that the New Deal kept us in depression longer?
The other thing this book points out for me is that the New Deal was not only about the government controlling Big Business. Just as much it was the introduction of Big Business into the government. ANy truth to this idea you think?
The hoary myth (that the “new Deal” ended the depression) is a hard one to shake. The fact is, most of the stuff attempted by FDR did not work: take the “national Recovery Act”-it was a useless program, that harked back to state control of industry. It cost a fortune, and eventually was sued, because the NRA gave the Federal Gov. the authority to set prices. Anybody who reads history will realize that price controls usually don’t work (since the days of Diocletian).
FDR actually continued a tight money philiosophy, and the economy responded-by slowing down. The recovery (which was well underway by 1933) was plunged into another recession in 1936. The only thing that solved the recession was the demands caused by WWII. By 1941, factories were hiring 9war orders), and the USA had virtually zero unemployment by 1942.
No, FDR didn’t prolong the depression. At worst his fiscal policies weren’t sufficiently bold and didn’t provide the necessary stimulus. But his other policies like leaving the gold standard helped stimulate the economy and his various relief policies helped reduce the suffering of those worst affected.
This article (pdf file) is a good short summary of the academic consensus on the Great Depression. It’s written by Christina Romer who is one of Obama’s advisers and a leading researcher on the Depression. http://elsa.berkeley.edu/~cromer/great_depression.pdf
I don’t buy that the recovery “was well underway by 1933.”
Certainly it wasn’t in agriculture, where the Dust Bowl conditions were worsening, not improving. Despite the massive crop failures, commodity prices were still at historic lows.
As for the stock market, it hit its historic low on June 30, 1932. It then rose slightly until early October before falling again. But the second drop began before Roosevelt was even elected. True, the market was rising when he took office, but it continued to rise afterward, so he certainly didn’t kill a recovery.
And, of course, any argument that FDR’s policies prolonged the Depression ignores the fact that it was a worldwide Depression.
I agree with Lantern that the worst that can be said is that his policies didn’t actually end the Depression, but that’s not only highly debatable, it’s a long way from saying anything he did prolonged it.
Well, not exactly. Germany, for instance, had already recovered from its depression before the Great Depression began in the U.S. (and before Hitler attained power).
I wouldn’t exactly say that. Germany had a recovery of some measure, but so did many countries. That recovery, however, was fragile and not nearly as big as what was required.
I’m not going to beat Roosevelt up too much here - frankly his opponents didn’t know what to do about the Depression either. They were proposing things like the Smoot-Hawley tariff that assuredly did not help matters.
Still, we would not employ most New Deal methods today for these problems - and Roosevelt has to be taken to task too for his hyperkinetic style of trying everything but not going whole hog into it - this uncertainty paralyzed business. They sat on investment until they could figure out what could pay off.
Roosevelt too has to be criticized too for the court-packing scheme and for the blatantly unconstitutional NRA.
In short - the man has to be taken in balance. Fair enough, I think.
Libertarians hate government.
Roosevelt expanded government and put it on the side of the people.
Roosevelt is considered by even libertarian think tanks as one of the three greatest presidents of all time but don’t tell that to modern day libertarians.
200 Wall Street Journal poll ranked FDR as 3 best of all time and GREAT. It was sponsored by the Federalist Society.
from their own website
Since we are now in a period of government growth and libertarians hate that, it becomes important to discredit FDR and his programs.
The folks in this famous cartoon were the ones calling Roosevelt “a traitor to his class.” I learned a lot about US history from that New Yorker cartoon book we had when I was a kid–although it took a few years for me to understand some of it. Both political “sides” were satirized, too.
(Pardon the levity. I’ll be back when I’ve read the book mentioned in the OP.)
I have not read the book in the OP, and likely won’t get around to it soon, but I have recently read The Forgotton Man by Amity Shlaes, which is another interesting look at the Great Depression and some of its personalities.
That’s not what I recall from my reading of the period. Germany had recovered from the hyperinflation that had affected them in the early 20s, but the stock market crash of 1929 hit Germany hard, because Germany was really heavily dependent on American investment, and after the crash, the US pulled its investment and loans from Germany. The German unemployment rate in 1928 was 8.4%, in 1930 was 15.3%, and in 1932, over 30%. Chancellor Bruening of Germany was nicknamed “the Hunger Chancellor” for the depression and his response to it.
FDR’s monetary policy was very good, his fiscal and regulatory policies were very bad. The best that can be said about his record economically is that it was not as bad as Hoover.
If you think about the actual policies that were implemented, they seem almost designed to worsen things. In a time where millions of people were undernourished the government payed farmers to destroy food. In a time of record unemployment, the government enacted a new tax on payrolls. In a time where millions struggled to make ends meet, the government threw retailers in prison for offering discounts.
We had depressions before but what made the Great Depression great was Hoover and FDR.
Once WWII was over, the world faced another possible depression-you had governments cancelling war orders, and millions of soldiers/sailors being discharged. So what kept demand up? My thory was that the 10 years of depression (ca. 1929-1940) was a time in which virtually no investments were made-houses were not built, roads fell into disrepair, and there was no highway system. The government started some massive programs after WWII (like the Interstate Highways System), which simulated the demand for cars (new cars hadn’t been built (except for government use) since 1941.
So maybe Obama is right-this country needs to go on another 15 year spending binge!
Roosevelt used to tell a joke that went something like this.
Mr. Astor woke up and read the Wall Street Journal and noted the date was Jul 7 (7/7). As his car came to pick him up he saw that the plate said 777. He went to his office on the seventh floor of a building on Seventh Avenue. So he called his bookie and put $700 on number seven at the seventh race at the local track. The horse came in seventh.
[Sarcasm]Of course Roosevelt prolonged the depression. There are numerous memos that he wrote to Harry Hopkins explicitly stating that was his goal and he would try one thing after another to continue the depression. It’s just that they cannot be found now and nobody ever saw them that talked. He eventually hit upon the idea of plunging the world into the most destructive war it had ever seen as a way of deepening the recession, and did this by pissing off the Japanese and giving them the codes to fly over Pearl Harbor, and then getting Prescott Bush and George Herbert Walker to lend Hitler the money to invade Poland. That it backfired, ended the depression, set the basis for the GI bill under Truman and the new middle class and ended fascism in Europe and Asia only shows how big a failure Roosevelt was. A good thing he didn’t overturn the pre-existing Soviet Union, or he that would be screwed up too. [/Sarcasm]
The answer is no, this is a crackpot theory making the rounds because the right-wing noise machine has nothing else to do until Obama is inaugurated. Roosevelt was the best president of the 20th century. He kept the country working and fed while depression swept and impoverished the globe, sweeping autocrats into power all over the place.
You mean like someone who would regulate every single aspect of economic life right down to whether you could choose your own chicken at the market - and who would attempt to jam the Supreme Court with additional sympathetic justices when he kept losing there?
Even Roosevelt’s fans have generally come to terms with his autocratic streak - perhaps it’s time you did as well.
