Monday, December 15, 2008

Necessary referencing

To provide some context, clarification and sourcing from some of the data used in my letter, here is a collection of writings, graphs and pertinent data.

Paul Krugman ...

Now, 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.

That said, F.D.R. did not, in fact, manage to engineer a full economic recovery during his first two terms. This failure is often cited as evidence against Keynesian economics, which says that increased public spending can get a stalled economy moving. But the definitive study of fiscal policy in the '30s, by the M.I.T. economist E. Cary Brown, reached a very different conclusion: fiscal stimulus was unsuccessful "not because it does not work, but because it was not tried."

Edge of the West ...

The problem is, Tabarrok quotes the old, bicentennial edition of HSUS. And in that edition, you find Lebergott’s unemployment data, which was assembled before Michael Darby, Robert Margo, and David Weir’s work. As Tabarrok should know, and as readers of this site do know, in the current edition of HSUS, when you look for an unemployment time series, you find Weir’s ...

"For 1931 to 1943, I accept Lebergott’s employment estimates as accurate, except for a major conceptual conflict regarding the classification of federal emergency relief workers. Darby challenged the standard classification followed by the census, the CPS, and Lebergott that counted such workers unemployed. Lebergott has argued eloquently that counting them as unemployed is a more accurate depiction of the failure of the private economy to generate unemployment. Margo has found that the labor supply behavior of relief workers shared some characteristics of both employed and unemployed workers, and suggests that at least some should probably be classified as employed. In the absence of a clear basis for distinguishing employed from unemployed relief workers, I agree with Darby that counting all relief workers as employed is more consistent with modern theoretical interpretations of unemployment, so I include them as government workers."

Edge of the West ...

This phrase, "after almost a decade of governmental 'pump priming,'" is a problem, too, because it means "after all this pump-priming". But that's not right. As E. Cary Brown long ago wrote, and as most economic historians know,

"Fiscal policy, then, seems to have been an unsuccessful recovery device in the ’thirties—not because it did not work, but because it was not tried."

Which is to say, there was never enough spending to achieve the desired effect. People who know about the New Deal know this—know about Roosevelt’s reluctance to implement direct relief programs, know about the dissolution of CWA in 1934, know the WPA came only in 1935, know that Roosevelt cut it back in 1937-38, know that Keynes wrote Roosevelt in February of 1938 to criticize him for insufficient relief spending for this very reason.

People who don’t know these things are ignorant; people who know these things and say otherwise owing to constraints of space or audience are misleading; people who do so in an outright dishonest way that uses extra words to conceal the facts are lying.


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