Tyler Cowen with lessons for today from FDR and the Great Depression:In short, expansionary monetary policy and wartime orders from Europe, not the well-known policies of the New Deal, did the most to make the American economy climb out of the Depression. Our current downturn will end as well someday, and, as in the ’30s, the recovery will probably come for reasons that have little to do with most policy initiatives.(HT Jonathan Adler)
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The New Deal was working somewhat when FDR became too worried about the deficits and raised taxes and pulled back on spending. That caused another downturn.
Then of course WWII came and created the largest public work program ever.
But what the New Deal did was more than just the raw economics; it held the country together politically at a time when other countries were turning to far more radical solutions. That political and psychological component cannot be understated.
There's a reason why FDR is consistently ranked by historians among our greatest Presidents, and why he has a memorial in Wash DC.
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