Another Argument about a Pig
The American right is currently making yet another effort to show that FDR’s policies did nothing to ameliorate or end the Depression. Their argument, which has the virtue (for a conservative) of a lack of originality, is that it was only World War II that decisively ended the economic slump. I leave it to the economic historians to reprint the relevant graphs and charts that show that things did get markedly better in the wake of the first years of the New Deal, but I want to highlight the essential contradiction of the Republican argument. The first part of their argument is a claim that deficit spending, i.e. Keynesianism, doesn’t work, but the second part of their argument is that it does. War, after all, goes one better than Keynes’ recommendation that the government pay people to dig holes and then fill them up again. It simply blows holes in things all over the place. At the very least, the rightists ought to address the question of how the war ended the Depression if it wasn’t by ending the demand deficit.
In fact, the Republicans are perfectly aware that government deficit spending benefits the economy during times of recession. They just prefer military spending, if not outright war, as the vehicle of stimulus. There is also another peculiarity about their version of Keynes. They haven’t gone along with the second half of the Keynesian prescription: running a surplus when times are good. In my lifetime, only the Democrats have followed that suggestion.