Daniel Gross of Newsweek: Pwned

This is actually kinda funny. It’s a response by a “serious  professional historian” to a hack journalist who claimed in Newsweek that NO serious professional historians believed that FDR prolonged the Great Depression with his New Deal policies.

Off the top of my head, I can name “several serious professional historians” who would probably argue (and argue strongly) “that the New Deal prolonged the Depression.” In addition to myself, they include Jonathan Bean of Southern Illinois University, Brad Birzer of Hillsdale College, Brad Thompson of Clemson University, Jeffrey Hummel at San Jose State University, Larry Schweikart of the University of Dayton , Michael Allen of the University of Washington at Tacoma, Ralph Raico of Buffalo State College, Burton Folsom of Hillsdale College, David Mayer of Capital University in Columbus, John Moser of Ashland University in Ohio, and Paul Moreno of Hillsdale. All have doctorates in history from top-ranked universities.

This is just off the top of my head. If you want additional names, please feel free to call me at 205-348-1870.

Classic.

As for the merits of whether FDR prolonged the Great Depression with his New Deal policies, see this interview with Amity Shlaes, author of The Forgotten Man.

One of the important things about the existing argument [that FDR rescued America] is that it’s all about Keynesianism, about whether government spending can cure the economy when it’s ill. Scholars have overlooked the cost of uncertainty in an economy, what we would now call the “unknown unknowns.” Both the Hoover and Roo­sevelt administrations (but especially the Roosevelt administration) were so unpredictable. That hurt the economy very much, and when I went back and saw the extent I was astounded. Uncertainty is a factor that I thought needed to be explored. There were lots of people who said, “I will not invest ’til I know what’s going to happen.”

During the Depression, you heard the phrase “bold, persistent experimentation” all the time. We’ve been taught that was good. Somebody had to do something, was what we learned. But what I saw was this enormous cost, especially during the second half of the 1930s.

There’s a second thing too. I look at the government’s action using the lens of public choice theory. Very simply, public choice says that government is no better or worse than a business, it’s a competitor. Sometimes I use a crustacean image; The government is like a lobster. It will eat anything, it wants to survive, it will compete with anything, and it can be a cannibal. When you look back at the ’30s using the public choice lens, what you discover is the extent to which the Depression wasn’t about a virtuous government and bad business people. Rather, it was about people in office competing with the private sector for power. Much of the struggle described in the book literally inhered in the power business: utilities. There’s something about power that attracts strong people. And of course the government wins and the private sector loses in the form of the Tennessee Valley Authority, which was created in 1933.

Think about that. People in office (government) competing with the private sector for power. When Obama proposes a trillion dollar taxpayer funded stimulus package, he’s taking money out of the private sector in the form of a tax. Money taxed is money not spent in the private sector. The way out of any economic downturn is to have the private sector spending its money to make things, hire people, and invest. When you tax people to fund government make work programs, all that stuff is not happening and the economy will continue to lag.