Share on Google Plus Share on Twitter Share on Facebook Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 2 (2 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   1 comment

OpEdNews Op Eds

Busting myths that FDR prolonged Great Depression

By (about the author)     Permalink       (Page 1 of 2 pages)
Related Topic(s): ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

View Ratings | Rate It

opednews.com Headlined to H3 1/19/09

Become a Fan
  (8 fans)

Published on Monday, January 05, 2009.

If you're like me, you sometimes find yourself speechless when confronted with abject insanity.

If you're like me, for instance, you were dumbfounded when "Forrest Gump" beat out "Pulp Fiction" for best picture; when HBO's "The Sopranos" received more accolades than "The Wire"; and when George W. Bush insisted that Iraqi airplanes were about to drop WMDs on American cities.

So if you're like me, you probably understand why I was momentarily tongue-tied last week after running face-first into conservatives' newest (and most ridiculous) talking point - the one designed to stop Congress from passing an economic stimulus package.

During a Christmas Eve appearance on Fox News, I pointed out that most mainstream economists believe the government must boost the economy with deficit spending. That's when conservative pundit Monica Crowley said we should instead limit such spending because President Franklin Roosevelt's "massive government intervention actually prolonged the Great Depression." Fox News anchor Gregg Jarrett eagerly concurred, saying "historians pretty much agree on that."

Of course, I had recently heard snippets of this silly argument - right-wing pundits are repeating it everywhere these days. But I had never heard it articulated in such preposterous terms, so my initial reaction was paralysis - the mouth-agape, deer-in-the-headlights kind. Only after collecting myself did I say that such assertions about the New Deal were absurd. But then I was laughed at - as if it was hilarious to say that the New Deal did anything but exacerbate the Depression.



Afterward, suffering pangs of self-doubt, I wondered whether I and most of the country are the crazy ones. Sure, the vast majority of Americans think the New Deal worked well. But are conservatives right? Did the New Deal's "massive government intervention prolong the Great Depression?"

Ummm ... no.

New Deal revisionism

Upon deeper examination, I discovered that the right bases its New Deal revisionism on the short-lived recession in a year straddling 1937 and 1938. But that was four years into Roosevelt's term - four years marked by spectacular economic growth. Additionally, the fleeting decline happened not because of the New Deal's spending programs, but because Roosevelt momentarily listened to conservatives and backed off them. As Nobel-winning economist Paul Krugman notes, in 1937-38, FDR "was persuaded to balance the budget" and "cut spending and the economy went back down again."

You can credibly argue that the New Deal had its share of problems. But overall, the numbers prove it helped - rather than hurt - the macroeconomy. "Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms (while) the U.S. economy grew at average annual growth rates of 9 percent to 10 percent," writes University of California historian Eric Rauchway.

What about the New Deal's most "massive government intervention" - its financial regulations? Did they prolong the Great Depression in ways the official data didn't detect?

Nope.

Financial system rehab
According to Federal Reserve Chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corp. was "the structural change most conducive to monetary stability since ... the Civil War."

OK. If the verifiable evidence proves the New Deal did not prolong the Depression, what about historians - do they "pretty much agree" on the opposite?

Again, no.

Next Page  1  |  2

 


David Sirota is a full-time political journalist, best-selling author and
nationally syndicated newspaper columnist living in Denver, Colorado. He blogs for Working Assets and the Denver Post's PoliticsWest website. He is a Senior Editor at In These Times magazine, which in 2006 received the Utne Independent Press Award for political coverage. His 2006 book, Hostile Takeover, was a New York Times bestseller, and is now out in paperback. He has been a guest on, among others, CNN, (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon

Go To Commenting
The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Tax the Corporations and the Rich or Take Draconian Cuts -- the Decision Is Ours

Bush Used the IRS, FBI, CIA and Secret Service to Go After Opponents -- Where Was the Fox and GOP Outrage?

GOP: Recession's Foreclosure Victims "Want a Homeless Life"

Busting myths that FDR prolonged Great Depression

Pentagon & NSA officials say they want Snowden extrajudicially assassinated

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
1 people are discussing this page, with 1 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

Martin Weiss, in his January, 2009 issue of Safe M... by Mark Goldes on Tuesday, Jan 20, 2009 at 5:35:41 PM

 

Tell a Friend: Tell A Friend


Copyright © 2002-2014, OpEdNews

Powered by Populum