Recently I’ve been spending much of my time gobsmacked, as I listen to various right-wingers proclaim that the New Deal caused and/or prolonged and/or worsened the Great Depression.
As rewrites of history which completely contradict my master’s degree go, this one is bested only by “The Civil War was a draw,” and “The Constitution was actually written by Martians.”
Here’s an excellent article documenting the (surprisingly thin and easily refuted) evidence for the claim. And which raises a larger point in my mind: isn’t the rewriting of history exactly the reason we were supposed to be so scared of the Communists and Fascists all those years? So why exactly do we put up with it here?
Sigh….Again with the binary arguments about complex issues!
How’s this for common ground: the New Deal worked, in that it helped lift America out of the depression by creating jobs, injecting wealth into the economy and bridging the gap between the bust that followed the roaring 20s and the boom that World War II created. A cost of this effective program was a massive increase in the national debt which, among other things, set a horrible precedent that politicians could borrow gobs of money whenever they could convince the citizens that an emergency was afoot. This is evidenced by a series of debt expansions that made the New Deal look like spare change – Reagan, Bush’43, and Obama.
I’m sorry – I don’t see how this is so complicated/controversial…
Brian, the whole point of the “Illuminatus” tag is that I’m linking to outside articles rather than formulating an argument of my own. You can call me a lot of things accurately, but I’m having believing you think of me as simplistic.
Re the debt: correct me if I’m wrong, but aren’t you conflating the debt run up by WWII with the debt from New Deal programs?
Sorry – I don’t pay enough attention to the tags, I guess. I was under the impression that you were declaring the New Deal 100% good and 0% bad for the country. If you’re just passing along another’s opinion, I apologize.
re: the debt – no, I’m not conflating it. The debt from the New Deal was the “stimulus.” The debt leading up to the war was the “bailout.”
I think I’d be *very very* close to declaring the New Deal 100% good for the country — which is not to say that it was perfect, but that its benefits, and the change in attitudes it engendered, completely swamp its faults.
My commentary point was that not all of my posts can be 5,000 words. (Although apparently when I economize in the post, I’m forced to pay that time back in later threads….)
In any case, your comments aren’t making a whole lot of sense to me. The theory that the New Deal was bad because it encouraged debt is “controversial” because not everyone agrees with it. If you don’t see it as controversial, well, you’re dismissing everyone who doesn’t agree with you.
And I have no idea what you mean by “WWII is the bailout”, so have at it.
This, to me, illustrates the Beltway mentality perfectly. I say:
“the New Deal worked” and “a cost of this effective program was . . . ” and then end with “I don’t see how this is so controversial.”
You say, “I’d be *very very* close to declaring the New Deal 100% good” and “the theory that the New Deal was bad is “controversial” because not everyone agrees with it” and end with “If you don’t see it as controversial, well, you’re dismissing everyone who doesn’t agree with you.”
You’ll forgive me if I see this as a desparate need for everything to be either ~100% good or ~100% bad (and because I’m feeling particularly cynical tonight, everything Democratic is ~100% good and everything Republican is ~100% bad).
Perhaps what I should have said was that this wouldn’t be controversial if we lived in a country where we could discuss history in terms of pros and cons without the cons being viewed as dismissing everyone on the “pro side.”
The New Deal got us through the depression. It got us from “crisis” mode to “opportunity” mode. It also was the first of three or four huge increases in the national debt (so far). Before FDR, no one had the nerve to borrow that much money. So there were pros and cons.
As for stimulus and bailout, you’ve got me very cognizant of “the weeds” now, but here goes:
Stimulus is money spent to bridge the gap between the economic down cycle and the next up cycle. The New Deal was designed for, and accomplished, exactly that. A bailout is money poured directly into a struggling company/industry to keep them in business. The war bonds went directly to American manufacturers, an industry that had all but collapsed after the Depression and subsisted during the New Deal because all the new jobs were government jobs. After World War II, the capital improvements and expansion these companies enjoyed allowed for the “American century” of the 50’s.
Stop being so cynical. You actually explained yourself well and have me agreeing with you on a few points.
To rephrase more exactly: I see the New Deal (more accurately, the Second New Deal of 1936) as 100% good because I’m politically in favor of the social contract it made with Americans. I also think that the last 72 years have amply illustrated its value. If the “cost” of that is saying that we’re going to use debt financing, within reason, to improve the lives of Americans, then you say “bug”, and I say “undocumented feature.”
We are likely to be in agreement about the use of debt financing without reason, or as a long-term attempt to solve our problems with no plans to eventually pay back the principal. I also suspect that we are in huge disagreement as to what thresholds are useful in determining when to do this, and which programs to starve in the process. Let’s leave that for another time.
As for stimulus/bailout in WWII, your explanation is great. I disagree that war bonds were a bailout per se, in that the primary reason for war bonds was to allow us to rebuild our 1939 armament on a monthly basis, so there was a solid benefit to the nation over and above the stimulus it provided. That said, if there’s anything which proves the Keynesian argument about “digging holes and filling them”, this is it. Building stuff which you then blow up overseas has about as little knock-on effect for the economy as you can imagine.