February 6, 2009, 3:45 pm
February 3, 2009, 4:41 pm
“… Odd, this neurotic tendency in the American business man. Can you account for it? No? I can. Too much 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
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…
February 1, 2009, 10:07 am
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, …
January 29, 2009, 1:25 pm
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…
January 28, 2009, 9:06 am
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 …
January 21, 2009, 10:36 am
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
January 21, 2009, 10:03 am
January 17, 2009, 2:21 pm
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 5, 2009, 10:16 pm
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?