A response to Andrew Wilson's op-ed "Five Myths About the Great Depression."
By Donald J. Boudreaux
Business & Media Institute
11/4/2008 9:02:11 AM
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To the Editor:
Andrew Wilson is right: the New Deal did not end the Great Depression ("Five Myths About the Great Depression," November 4). No less an authority than FDR's Treasury secretary and close friend, Henry Morganthau, conceded this fact to Congressional Democrats in May 1939: "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!"*
Indeed, FDR's market-suffocating policies are almost surely what put the "Great" in "Great Depression."
Sincerely,
Donald J. Boudreaux
* Burton Folsom, Jr., New Deal or Raw Deal? (New York: Simon & Schuster, 2008), p. 2.
businessandmedia.org
The great fact (as in GREAT Depression) that must be explained is the inordinate length of that severe downturn. Hoover's own policies -- contrary to popular myth -- were interventionist. Roosevelt's policies, reinforced by increasingly anti-private-property rhetoric from him and his advisers during the 1930s, ensured that the depression lasted far longer than it would otherwise have lasted. The facts are clear that unemployment (no matter how measured) remained high for the duration of the 1930s and capital investment abysmally low. As FDR's own Treasury Sec. Morgenthau conceded in 1939, it's difficult to square these facts with claims that FDR's policies worked well.
Posted by: Don Boudreaux | Nov 11, 2008 7:19:20 AM
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