Category Archives: new deal denialist truth squadding
February 6, 2009, 3:45 pm
By Eric Rauchway
February 3, 2009, 4:41 pm
By Eric Rauchway
“… Odd, this neurotic tendency in the American business man. Can you account for it? No? I can. Too much coffee.”
“Coffee?”
“That and the New Deal. Over in America, it appears, life for the business man is one long series of large cups of coffee, punctuated with shocks from the New Deal. He drinks a quart of coffee, and gets a nasty surprise from the New Deal. To pull himself together, he drinks another quart of coffee, and along comes another nasty surprise from the New Deal. He staggers off, calling feebly for more coffee, and…. Well, you see what I mean. Vicious circle. No nervous system could stand it.”
Bertie Wooster’s Uncle Percy (with a brief assist from Bertie), in P. G. Wodehouse, Joy in the Morning. Which, I arbitrarily assert, is the best of the Jeeves/Wooster novels.
February 2, 2009, 9:02 am
By Eric Rauchway
Ronald Reagan liked to see himself in the parable of an optimistic boy who, facing a room full of manure, happily set to digging: “With this much manure around, I know there’s a pony in here someplace.”
But today we need a different parable. In this one a boy discovers a well-kept stable with a pony in it, contentedly munching hay. It’s a fine pony, though maybe in need of some brushing. There’s probably also a horse-pat in the bottom of the stall, because hey, it’s a pony. The boy fixates on these aesthetic drawbacks, and begins to complain loudly about them. A friend comes along, gives the pony a brush, grabs a shovel and removes the horse-pat and says, “there you go, son, your pony’s in fine shape.” Incensed that his complaints have been rendered irrelevant, the boy does not choose to enjoy the pony, but instead orders a cartload of manure from the local store and starts…
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February 1, 2009, 10:07 am
By Eric Rauchway
Do I delude myself in thinking Amity Shlaes is giving a bit of ground? In her latest effort to persuade us the New Deal was bad she admits, “Many of FDR’s initial plans did bring stability: His first Treasury secretary worked to sort out banks with the outgoing Hoover administration in a fashion so fair that an observer noted that those present ‘had forgotten to be Republicans or Democrats.’ By creating deposit insurance, FDR reduced bank runs. His Securities Act of 1933 laid the ground for a transparent national stock market. Equities shot up.” Which in fairness is not a concession I remember her making before.
But she’s still devotedly wrong. Today it’s the dollar devaluation that was a horror: “Using emergency powers, FDR yanked the country off the gold standard…. Some of the worst destruction came with FDR’s gold experiment. If he could drive up the price of gold by buying it, …
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January 30, 2009, 9:43 am
By Eric Rauchway
The post below is about half common-sense reasoning about the current crisis and half bloggy speculation about its effects on the higher-education biz. Much of it is brain dump, though there are a few useful links thrown in. You have been warned.
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January 29, 2009, 1:25 pm
By Eric Rauchway
Thank you, Dave, I’m so happy to have you do that. Once you’ve read Dave’s post, let me add a couple things:
1) Herbert Hoover was, in fact, a “progressive” within the 1910s definition of the word. But it’s famously true that there were many kinds of progressive. It’s also well known that some progressives supported the New Deal, while some opposed it.
2) To describe Hoover as an “interventionist” and therefore in the same mode as Roosevelt is just so profoundly stupid it’s hard to know what to say about it. As Dave points out, for much of his presidency Hoover’s “intervention” consisted of saying, “rah rah, go economy go!” And yes, when pressed to the very limit in an election year with a Democratic House Hoover backed the Reconstruction Finance Corporation in 1932. Even then, though, the RFC did not act nearly so aggressively as it did under Roosevelt, under whom it bought…
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January 28, 2009, 9:06 am
By Eric Rauchway
In the middle of a generally apposite article, Steve Lohr of the New York Times says, “During the 1930s, the unemployment rate fell somewhat under Roosevelt, but remained stubbornly high, averaging more than 17 percent for the decade.” Dean Baker caught this, and so does Cosma Shalizi via the email: you get an average 17% if you count people who had jobs as unemployed.1 Which, Baker notes, is not what you’d call “in keeping with current methodology”. Or, you know, helpful in trying to make sense of the situation.
Baker goes on: what the New Deal achieved was “still far from full employment, but it is less than half the 23 percent rate that Roosevelt faced when he took office.” And in saying that perhaps the New Deal could have done better, Lohr’s overall point is sound: bailing out the banks wasn’t good enough, you had also to get creditworthy people lining up to borrow. In the …
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January 21, 2009, 10:36 am
By Eric Rauchway
My friend Julian Zelizer of Princeton:
there were really three different economic goals in the First Hundred Days. The first was the goal with which we are most familiar–to revitalize the economy and move the nation out of the Great Depression. When we evaluate FDR’s success in meeting this challenge, the New Deal does not look very good.
The question one should ask here is, “professor, what’s your counterfactual?” Which is to say, what would “very good” look like? If the economy is at around 25% unemployment and most of the people still working are working part time and productivity has fallen off a cliff, things are pretty darn broken. How fast should they get fixed?
In real life—not in the counterfactual—they got fixed at reasonably quick speed. Christina Romer says they got better at a rate so “rapid” it was “spectacular”; Gauti Eggertson notes that 1933-37 saw
the…
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January 21, 2009, 10:03 am
By Eric Rauchway
January 17, 2009, 2:21 pm
By Eric Rauchway
Spending on WPA projects as a function of state population. Mainly for fun, and so I could learn me some graphical commands in R, but I thought y’all might like to see it.
Suggestions about improving the presentation are, as ever, welcome.
If you want to pursue the question of where New Deal money went overall, you might look at
Wallis, John Joseph. “The Political Economy of New Deal Spending Revisited, Again: With and without Nevada.” Explorations in Economic History 35, no. 2 (April 1998): 140-170.
Also, more generally on the allocation of public works expenditures,
Smith, Jason Scott. Building New Deal Liberalism: The Political Economy of Public Works, 1933-1956. Cambridge, Eng.: Cambridge University Press, 2006.
January 12, 2009, 10:37 am
By Eric Rauchway
This graph, from David Beckworth, is pretty hilarious. It’s unfair, but who minds unfair?
Thanks to commenter, uh, David Beckworth, for pointing this out.
I think what this picture best illustrates is the peril of getting drawn into a debate over the recovery question and the recovery question alone. The New Deal did a lot more than just set about a plan for recovery. For one thing, it saved some considerable number of people from starving, which is a nice thing. For another, it gave us a significantly reformed system of regulating economic downturns: a re-drawn Federal Reserve System, the FDIC, the SEC (which, prior to its gutting, was a pretty good thing), Social Security (which includes not only old-age but also unemployment insurance), and a variety of other similar measures. For yet another, it set about hauling the South out of poverty—a project at which nobody had…
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January 9, 2009, 1:44 pm
By Eric Rauchway
Several people ask of the WPA graphing question, why not use a log scale? Commenter Stinky (no, I don’t know who s/he really is) kindly supplies a graph showing just this. For my money, it speaks for itself—which is to say, it screams, “don’t use me!”
We want to accomplish two things: (1) show how very outsized a chunk of money went to highways and (2) show also meaningful distinctions among lesser expenditures.
The log scale permits (2) while pretty much wiping out (1), unless you know how log scales work. I don’t think the likely consumers of such a graph do really know. But I’m wrong, Stinky says.
January 5, 2009, 10:16 pm
By Eric Rauchway
On Friday, when I was in New York for the AHA, I also got to go around to the NPR studios and talk with some of my favorite radio hosts.
Doing a radio interview by phone is weird; there’s none of the normal intimacy you get in a telephone conversation. Doing a radio interview in studio is more natural, because you can see the hosts and get all the normal cues you get in conversation—but it’s still weird; you’re being timed, and monitored, and there’s a big microphone in your face.
Still, after we’d been talking for some time, it got to seem more natural. Which was probably about when I stopped making sense—if you’re jet-lagged from the redeye, and also sitting comfortably in pleasant company, you start to lose coherence I fear.
Anyway, here it is: what if there’d been no New Deal?
January 2, 2009, 8:18 pm
By Eric Rauchway
Kieran weighs in on the question of how to present the WPA data, following up on Duncan.
In effect, what I’ve done here is choose to break a different rule from Duncan. Instead of putting two scales on the same axis, I have made one axis discontinuous between panels, skipping values in order to compress the horizontal size. Hence the reminder at the top of each panel that you’re shifting up an order of magnitude each time. Despite the rulebreaking, there’s still some principle at work because instead of just putting a discontinuity right at the end (to incorporate the largest value) the panels are split consistently by powers of ten, and it makes sense to think of WPA expenditures as falling into groups like “stuff they spent billions on” versus “stuff they spent tens of millions on” or “stuff they only spent a few million dollars on” and so on.
I like this, too. I…
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December 31, 2008, 5:30 pm
By Eric Rauchway
Duncan Agnew, a professor in a university at the very edge of the American West, sends along this solution to the “Tufte I ain’t” problem. I like it. Thanks!
He says anyone can feel “free to use, reproduce, and display this figure in any way you wish, with or without attribution.” Happy new year!
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