The Election of Barack Obama gave new life to the GOP’s 70-year campaign to discredit the New Deal. As in other areas, such as the recent denial that 9/11 even happened on President Bush’s watch so as to claim no terrorist attacks during his administration, facts need not get in the way of a good talking point. Below are a few bullet points to address some of the most common arguments, along with a few charts on point.
(1) FDR CAUSED THE GREAT DEPRESSION
“When (President Franklin) Roosevelt did this, he put our country into a Great Depression[.] . . . “He tried to borrow and spend, he tried to use the Keynesian approach, and our country ended up in a Great Depression. That’s just history.” – Rep. Steve Austria (R-OH) (2011)
- There was a reason the out of work set up camps called Hoovervilles.
- The Stock Market Crash took place in October 1939 – 7 months into the Hoover Presidency.
- GDP would fall -8.6%, -6.5% and -13.1 over fiscal year 1930, 1931 and 1932 respectively.
(2) FDR EXACERBATED THE GREAT DEPRESSION
Whether you happen to have liked Franklin Delano Roosevelt’s policies, and there’s a number of them I still think exacerbated the Great Depression – Sen. John McCain (R-AZ) (2009)
- Not unless McCain means makes it better, then the answer is clearly no. See Chart 1 Below.
(3)ONLY WWII GOT US OUT OF THE DEPRESSION.
The only issue is that FDR did not get us out of the Great Depression. It was World War II. Just draft a million or so jobless young men and his unemployment problem was “cured” – Texas Tea Party (2011)
- FDR posted six years of high growth prior to the onset of a “war economy”
- I don’t recall Reagan or any other Republican icons coming anywhere close to 63 percent growth over a four year period
- See Chart 2 and 4 below.
(4)THE NEW DEAL DID NOT ADDRESS THE UNEMPLOYMENT PROBLEM
A variation of Myth #3.
- Unemployment fell 10.6 points during the first four years of the New Deal (Fiscal 1933-37).
- The only reason is that it did not continue to fall was because FDR cut spending to appease the Republicans which resulted in a brief double-dip recession. See Chart 3 Below.
- Some on the right try to disguise this by counting those employed by the New Deal as unemployed since they are not private sector employees.
- Finally, the right is too busy calling FDR a Socialist that they would not dream of giving him credit for saving the jobs of the Mr. Potters of this world. That’s right, bank failures dropped from 5,453 in 1932-33 to only 35 in the following two years.