Tuesday, November 27, 2007
Ancient history, or not
Posted by Harold Henderson on 11.27.07 at 06:10 AM
The past isn't dead. It isn't even past. Reviewing two recent books on the Great Depression and FDR's response to it, Benjamin Friedman in the New York Review of Books ($) adduces some numbers that call into question the right-wing revisionist historians' contention that FDR did nothing (or less than nothing) to end the nation's greatest economic catastrophe, and that only WWII saved us. From 1929 to March 1933, total economic production dropped steeply and repeatedly.
"March 1933 marked the bottom. Total production rose 11 percent in 1934, 9 percent in 1935, and then 13 percent in 1936 -- just enough to regain the level reached in 1929. But by then businesses in many industries had learned to make do with less labor, even if they now produced just as much." The one-year decline in 1937-38 was smaller and quickly ended.
World War II didn't start until 1939.
These numbers seem to be incompatible with the assertions that FDR's policies perpetuated the Depression and discouraged business innovation. Is there some good economic reason why they're wrong or irrelevant?
Comments (21)
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And actually for the purposes of this particular question WWII didn't really start until early 1941 (that is, the U.S. economy was not noticeably impacted by wartime spending until we'd begun ramping up to send material to the Brits). Friedman is basically correct: that particular right-wing meme about FDR has always pretty obviously been nonsense.
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Is there web site where we can be updated on wacky right-wing nut theories? /A web site without all the gassy bloviating of Rush Limbaugh or Bill ORLY, I mean.
H, While I certainly press that FDR made things worse, you don't quote enough information to disagree with you. Which part of his authoritarian mischief are you pumping here? Statistics? Blah...12 years of misery should be enough. JBP
In what way did FDR make things worse? This is the problem with you wing-nuts. You say stuff but you never back it up with any facts.
IMO FDR's biggest mistake was letting Joe Kennedy (patriarch of the political clan, due to his success as a bootlegger, inside trader, Nazi sympathizer) into his government and then appointing him to head the newly formed SEC, that is your classic appointing the fox to guard the henhouse. I highly recommend reading up on this not particularly well known chapter of American history, it has most certainly has had a massive impact on everyone.
Not sure how that qualifies as wing nut statement. I suggest you go read the books listed if you want a list of reasonably substantiated facts. The simple truth is that the Depression went on a long time. Roosevelt (and Hoover) did a lot of silly things like regulating the number of buttons on mens suits, and eliminating cost competition in chicken wholesaling, which aggravated the situation. JBP
Still no facts. Here's some GDP 1920-1940. http://www.answers.com/topic/gdp20-40-jpg Look where it changes! Here's another one! http://upload.wikimedia.org/wikipedia/commons/thumb/f/f4/Gdp29-41.jpg/425px-Gdp29-41.jpg Total Employment 1920-1940 http://www.answers.com/topic/us-jobs2040-jpg Look where it changes!
As a reviewer of a Schlesinger history noted, it sounds like things were so great in the Great Depression that you have to wonder why they still call it "The Depression" rather than "The Elation". JBP
Lame, John. The total-employment graph, given that it deliberately excludes the WPA, is probably the best single example of the stupidity of that anti-FDR myth.
That graph pretty much proves the point, the Depression went on a long time...only took 10 years to get back to level of 1930. If anyone thinks a 15% unemployment rate is a success after 8 years in office, I wonder why the current unemployment rate of 4.7% is considered such a failure after 8 years of Bush (see Nobel Winner Stiglitz article from earlier post) JBP
The current unemployment rate isn't what is considered the failure. Nice non-sequitor. The failure is taking a good-to-great economy and blowing it. And almost doubling the debt to do produce such a lame economy. Again, the question is: would you rather be living in the Bush economy or the Clinton economy?
Staying on topic here, the point John is not whether employment was good enough after two FDR terms but rather whether it was a great deal better than when he took office (in 1933 not 1930). Which, that graph makes clear, it was.
PB, I start in 1930 as the meddling policies of Hoover were pretty much the same as the meddling policies of Roosevelt, though FDR gave more attention to lunatic meanderings like reducing the supply of chickens, by mass slaughter. None of this worked very well. Shlaes book is pretty well thought out, if anecdotal. She is a good writer. Jim Powell's FDR's Folly is better for the statistical minded. They don't take that long to read. JBP
"I start in 1930 as the meddling policies of Hoover were pretty much the same as the meddling policies of Roosevelt" -- wonderful! The single funniest thing I've read all day, thanks John. Would be completely absurd logic even if the factual assertion (that Hoover and FDR had the same basic economic policies) was fundamentally accurate.
Go read the books yourself, then. My guess is that Shlaes and Powell have thought through this much more than Moon or Botts. JBP
I've read Powell's and am well versed in statistical analysis so can with confidence report that his signal to noise ratio is quite low. He writes pretty well though, and the book does reflect some quality thought: about how to spin data in support of the conclusion that he started out with. Haven't bothered with Shlaes since that book appears to be entirely anecdotal and hence not likely to be illuminating.
Well, Shlaes persuasively shows that Hoover and Roosevelt followed pretty much the same intreventionist path, with FDR making the good move of increasing the money supply. She also shows, quite well, the despotic nature of FDR's policies, and the mind numbing details that fouled up business planning, the stock market, labor markets etc. My rather simple read of Shlaes book is that the Depression went on a long time, and that regulating the number of buttons on mens suits did not help to end the Depression. JBP
