While it is certainly true that historians and economists are still debating the actual causes of the 1929-1939 Great Depression, some lawmakers and political pundits today are nevertheless making bold and ludicrous claims about what happened back then to support their agendas. Even so, it is still possible to come to a general agreement about some of the positive results of Franklin Delano Roosevelt’s New Deal programs despite the partisan bickering.
This timeline shows the date of each relevant event of the 1920’s and 30’s. Many of the country’s financial problems began even before the 1929 Stock Market Crash.
FDR was elected in 1932 and took office in 1933, when the depression was already three years old, but that fact has escaped the notice of many today. As the website Think Progress explains,
In recent days, conservatives have been trying to block the economic recovery package by arguing that government spending will wreck the American economy. As an example, they point to FDR and the Great Depression. Earlier this month, for instance, Sen. John McCain (R-AZ) inaccurately argued that the New Deal “exacerbated the Great Depression.” In a new interview with the Columbus Dispatch, Rep. Steve Austria (R-OH) joined in:
“When (President Franklin) Roosevelt did this, he put our country into a Great Depression,” Austria said. “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.”
The Columbus Dispatch then notes, “Most historians date the beginning of the Great Depression at or shortly after the stock-market crash of 1929; Roosevelt took office in 1933.” As Dean Baker has explained, “Roosevelt’s New Deal Agenda lowered the unemployment rate from 25 percent in 1933 to 10 percent in 1937.” The economy turned bad again when the “Blue Dogs of the Roosevelt era won sway and got Roosevelt to cut spending and raise taxes.”
Other Republicans are also misrepresenting history, including Senator John McCain
McCain Claims FDR ‘Exacerbated The Great Depression,’ Calls For Counterproductive Balanced Budget Provisions»
Sen. John McCain (R-AZ), a top Senate critic of President Obama’s economic recovery plan, has been complaining that the package “has no provisions to put us on the path of a balanced budget.”
McCain is pushing an alternative plan that he says would achieve this by enacting automatic spending cuts after the U.S. again experiences “positive economic growth.”
Appearing on Hugh Hewitt’s radio show last night, McCain repeated his complaint that Obama’s stimulus plan wasn’t “putting us on a path to a balanced budget.” Later in the interview, he also argued that President Franklin Delano Roosevelt’s policies “exacerbated the Great Depression“:
MCCAIN: The job of the presidency, in my view, is to give people hope, give people hope. 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, but he gave the fireside chats, and gave people hope and optimism for the future. I think that’s, there’s no problem that America can’t prevail over, because we’re still the greatest nation in the world.
The reality is that FDR neither started the Great Depression nor deliberately extended it, though his 1937 attempt to balance the budget (at the insistence of Republicans) did serve to cause a brief rise in the unemployment rate. As Steve Benen of Washington Monthly points out, ‘It’s especially ironic to tie these two misguided observations together — the only time FDR exacerbated the Great Depression was when he tried to balance the budget.”
The New Deal eased the hunger, despair, freezing conditions, and abject poverty of millions, while creating programs that continue today. According to populist author and radio commentator Jim Hightower, the New Deal even saved capitalism as a system. The New Deal created far more than the hope that McCain referenced. What was truly novel about the New Deal, however, was the speed with which it accomplished what previously had taken generations. FDR’s administration acted quickly to help Americans, America, and the world. During the entire New Deal era, public criticism and debate were never interrupted or suspended; in fact, the New Deal brought to the individual citizen a sharp revival of interest in government. From 1932 to 1938 there was widespread public debate on the meaning of New Deal policies to the nation’s political and economic life. Historians generally credit the New Deal with establishing the modern foundation of a sense that government should concern itself with the common good. Some New Deal critics argued that the indefinite extension of government functions would eventually undermine the liberties of the people. President Roosevelt insisted that measures fostering economic well being would strengthen liberty and democracy.
The author, economist and New York Times columnist Paul Krugman notes the lasting success of these programs.
About the New Deal’s long-run achievements: the institutions F.D.R. built have proved both durable and essential. Indeed, those institutions remain the bedrock of our nation’s economic stability. Imagine how much worse the financial crisis would be if the New Deal hadn’t insured most bank deposits. Imagine how insecure older Americans would feel right now if Republicans had managed to dismantle Social Security.
Today, our nation faces a new economic crisis, which may well be a depression, though very few are calling it that. Many are comparing the two eras, however, and even President Obama regularly says things like this :
The situation we face could not be more serious. We have inherited an economic crisis as deep and as dire as any since the Great Depression. Economists from across the spectrum have warned that if we don’t act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits. More people will lose their homes and their health care. And our nation will sink into a crisis that, at some point, we may be unable to reverse.
The economists sounding that alarm include Paul Krugman from the New York Times, who not only worries about a depression,
Well, my general view is that this isn’t your father’s recession; it’s your grandfather’s recession. And the experience with pre-WWII recessions may be a useful guide. I’m not just talking about the Great Depression; some earlier experiences may in some ways be equally or more relevant.
but also prescribes New Deal programs to help us recover :
This history offers important lessons for the incoming administration.
The political lesson is that economic missteps can quickly undermine an electoral mandate. Democrats won big last week — but they won even bigger in 1936, only to see their gains evaporate after the recession of 1937-38. Americans don’t expect instant economic results from the incoming administration, but they do expect results, and Democrats’ euphoria will be short-lived if they don’t deliver an economic recovery.
The economic lesson is the importance of doing enough. F.D.R. thought he was being prudent by reining in his spending plans; in reality, he was taking big risks with the economy and with his legacy. My advice to the Obama people is to figure out how much help they think the economy needs, then add 50 percent. It’s much better, in a depressed economy, to err on the side of too much stimulus than on the side of too little.
In short, Mr. Obama’s chances of leading a new New Deal depend largely on whether his short-run economic plans are sufficiently bold. Progressives can only hope that he has the necessary audacity.
The same politicians and commentators who re-write history to blame FDR for a depression that started well before his presidency are using the same tactics to blame President Barack Obama for the current crisis, which was accelerated by President Bush’s tax cuts and corporate welfare and can not possibly be solved by more of the same. It is time for them to acknowledge what actually caused the Great Depression, and what eased the United States out of it. Spending and social programs are needed again to stimulate and save the economy, and the nation needs infrastructure improvements in order to keep us competitive and efficient in the global economy. The stimulus plans and social programs of the New Deal DID work, in spite of what the partisan politicians and their friends in the media would lead us to believe.