I’ll Take a Double Helping of That “Failed” New Deal

George Will is still carping about how the “first New Deal” didn’t work [emphasis in original]:

This morning on ABC’s This Week, conservative columnist George Will echoed the false right-wing meme that FDR’s New Deal policies made the Depression worse:

Before we go into a new New Deal, can we just acknowledge that the first New Deal didn’t work?

As Nobel-laureate Paul Krugman wrote recently in the New York Times, “There’s a whole intellectual industry, mainly operating out of right-wing think tanks, devoted to propagating the idea that F.D.R. actually made the Depression worse. So it’s important to know that most of what you hear along those lines is based on deliberate misrepresentation of the facts. The New Deal brought real relief to most Americans.”

Krugman observed that the true short-comings of the New Deal policies resulted from the fact that they were not bold enough over the short-term:

[T]he truth is that the New Deal wasn’t as successful in the short run as it was in the long run. And the reason for F.D.R.’s limited short-run success, which almost undid his whole program, was the fact that his economic policies were too cautious. […]

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.

4 Responses to “I’ll Take a Double Helping of That “Failed” New Deal”

  1. Mark says:

    The thing is that it really depends on which aspects of the New Deal that you’re talking about. (See, e.g., here: http://www.nytimes.com/2008/11/23/business/23view.html?_r=2&partner=permalink&exprod=permalink). The New Deal was about a lot more than just social safety net programs and the FDIC, both of which were either good things or not disastrous things. If you’re talking about FDR’s price controls, his attempts to cartelize industry (read: create de facto monopolies), and his agricultural subsidies (with which we are still dealing today), amongst other things, then you are talking about some pretty significant failures from both a practical and moral perspective (to say nothing of the court-packing scheme, which liberals today ignore far too easily).
    Conservatives and libertarians (myself included) may have a tendency to focus too much on these clearly negative aspects of the New Deal (some of which were repealed by the time the economy finally started to recover in 1941 or so). But liberals and progressives equally focus too much on the positive aspects of the New Deal while ignoring the negative.

  2. Chief says:

    If you lived through the New Deal or had parents who graduated from high school in 1930 (I had the latter), you would know that the successes of the New Deal far outweighed the failures as they affected the common citizen. The court packing scheme did not affect the everyday citizen.

    The economy really did not take off until WW2 and the increased war production. But the whole host of 3 and 4 letter agencies that put people to work, meant that people had money to spend and that trickle eventually turned into a stream.

    I’m sure there are a who lot of 3 letter agencies that I haven’t heard of but the WPA (Works Progress Administration) and the CCC (Civilian Conservation Corps) and one that paid artists to go around and paint pictues of the USA. Check out Pie Town, NM in that regard.

  3. Mark says:

    Chief:
    Without getting into the issue of whether things like the WPA and CCC helped in the long run (I think they probably did), the fact is that it’s impossible to know for certain whether FDR’s policies were a net positive or a net negative in the short run – as with all political questions, we don’t know what things would have been like had he chosen a different course. We do, however, know that the Depression was a global phenomenon and that many other countries recovered more quickly than the US. That said, I am more than willing to concede that some aspects of the New Deal, such as the various public works projects and social safety net programs, did much good.

    However, much of that good was counteracted by things such as agricultural subsidies and price supports (leading to the unconscionable effect of people starving in the cities while crops were burned on the farms), which come straight from the Department of Economic Illiteracy and, at least with respect to the subsidies, have left us with a legacy that we are still trying to overcome.

    The court-packing scheme is not something that should be poo-pooed as being something that the average person did not care about – the long term effects of that scheme were tremendous, including limitations on the due process clause and – as importantly – the explicit politicization of the judiciary. That is like poo-pooing the Bush Administration’s abuse of signing statements because the average citizen doesn’t care too much about them.

    This is not to say that I think that the New Deal was an abject failure – too many economists whom I respect say otherwise. But it is to say that there is a legitimate argument to be made that the New Deal caused more harm than good in the long run.

  4. PirateRo says:

    What I find useful in the New Deal is that, indeed, significantly more worked than not. I believe he didn’t go as far as he could have.

    I also am conservative, however, that said, I also acknowledge that from a position of just pure greed, if someone falls, we need to help them up. It doesn’t help that we have millions of poor people who can’t do for themselves and there is no mechanisms to provide a means for these people to easily advance themselves to a point of being productive.

    It isn’t enough for me that I am successful. I want eveyone to be the same. I certainly don’t want this from any altruistic perspective. Again, it’s pure greed – it helps me become more successful and it helps everyone move quickly.

    I fail to see any reason to cling to an economic system of any kind that fails to provide for everyone. I fail to see a reason to cling to any system that creates success at the expense of failure of another group. In fact, it’s a formula for disaster.

    The courage behind the New Deal was a willingness to do something. Was it perfect? Of course not. Is anything? However, it was significantly better than doing nothing while people starved to death living in the street. It was seriously better than allowing growing ranks of poor and starving people who aren’t simply going to disappear and who will eventually tire of their position and move to take what they deem is their due.

    Remove the reasons for people to be terrorists – by ensuring the means for them to provide for themselves comfortably and easily, for instance – and you eliminate terrorism. James Martin said as much in his book The Meaning of the 21st Century.

    Clinging to an ideology or dogma because we somehow can’t have something better or can’t even begin to imagine something better is a ridiculous waste of time and effort. It serves no one, conservative or otherwise. Worse would be not having something because it affects the rich. Ridiculous. It is a pointless, useless perspective that simply leads to the use of force to effect change. History is rich will examples.

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