More myths from the Great Depression [updated]
You can never have too many articles pointing out the many myths of the Great Depression:
- that President Herbert Hoover was a laissez-faire Republican who clung to the idea that markets were basically self-correcting (he wasn't; he was a meddler).
- that the stock market crash in October 1929 precipitated the Great Depression (it didn't, the problems occurred much earlier.
- that where the market had failed, the government stepped in to protect ordinary people (it didn't, it made things worse).
- that greed caused the stock market to overshoot and then crash (it wasn't greed that caused the boom, it was inflation of the money supply).
- that Franklin Rooselvelt's "enlightened government" pulled the nation out of the worst downturn in its history (it didn't: FDR's over-taxing, over-regulation and the regime uncertainty created just made things worse).
Paul Walker at Anti Dismal hosts the latest timely rejoinder to the myth Big Government Rescue. I loved the excerpt of Franklin Roosevelt's Treasury Secretary in May 1939, recognising failure after ten years of big-government failure:
"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"
Roosevelt tried everything in the big-government handbook, everything that's being talked about today including stimulus spending, welfare increases and massive public works, and it all failed -- everything except taking his hands off. By November 1937, when other economies were recovering and the American economy was entering a 'depression within the depression,' FDR was tearing his hair out, complaining to his cabinet, "I'm sick and tired of being told by Henry [Morgenthau] and everybody else what's the matter with the country while nobody suggests what I should do."
"This," says historian John Flynn,
"settles for history the fact that after seven years in the White House Roosevelt had made no impression on the depression, that he had merely proved the unemployed with doles -- a poor and meagre substitute for jobs -- and now in the presence of the seemingly ineradicable shadow of depression, he blamed his advisors."
But still the myths survive.
UPDATE: Putting a human face on the American Depression is blog reader and movie-maker Frank Thomas (website here), who's just sent me this YouTube presentation of his brother's song 'Pennyland.'
In Thomas's words, "This is not meant as a political statement, but rather as an attempt to put a face on something that so often appears academic."