TW: Am learning more than I ever wanted to know about Depression era politics and economics, for obvious reasons. But an emerging, or more accurate re-emergent, conservative meme is that FDR's policies had little to do with the recovery from GD 1.0 and things really were in the crapper until WWII provided the greatest stimulus package of all-time (at a cost considerably higher than mere dollars of course, which btw would be a great concept for those same conservatives to ponder, but I digress). Nobel laurate Krugman corrected George Will on Sunday. In addition Brad Delong addressed the issue in his blog (am spending much time these days in economic blogs now too, they are interesting if challenging to decipher and generally depressing).
From Delong (econ prof from Univ. of Cal):
"I have never been able to make any sense at all of the right-wing claim that the New Deal prolonged the Great Depression by creating a "crisis of confidence" that crippled private investment as American businessmen feared and hated "that Communist Roosevelt." The crisis of confidence was created by the stock market crash, the deflation, and the bank failures of 1929-1933. Private investment recovered in a very healthy fashion as Roosevelt's New Deal policies took effect.
The interruption of the Roosevelt Recovery in 1937-1938 is, I think, wel understood: Roosevelt's decision to adopt more "orthodox" economic policies and try to move the budget toward balance and the Federal Reserve's decision to contract the money supply"
From Surowiecki at New Yorker referencing the Delong piece:
"The lesson of the Great Depression, in other words, is not that when the economy sinks into a deep hole, the government would do well to sit on its hands."
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