CNBC blog continues the dishonest attacks on FDR

Over at CNBC blogs,
Andrew B. Busch
of BMO Capital Markets repeats the falsehoods of Amity Schlaes that Bonddad and I thoroughly debunked a few weeks ago. Busch says:

The truly disturbing aspect of the stimulus fiasco is the Congressional belief that they are acting like Keynesian economists and are invoking the name of FDR to validate their actions....

As far as the comparison to FDR, I think everyone should be very careful to emulate him.

The New Deal was actually a combination of socialism and cartelization of industry with price controls. These policies failed to stimulate growth and helped plunge the economy into the "Depression within a Depression" in 1937. It wasn't until these polices were reversed and the NRA was relegated to a minor role in the government that growth returned in 1938. The other major issue was the Federal Reserve. They mistakenly stuck to the gold standard and was forced to raise reserve requirements that cut off the legs of the recovery.

Wrong. As Bonddad and I showed in our series about the Great Depression, the New Deal:

- had the fastest growth rates of any recovery in the 20th century
- returned GDP to its 1929 levels by 1937
- returned personal comsumption to its 1929 levels by 1937
- returned total private investment to 1929 levels by 1937.

The dishonest critique of the Great Depression is based only on the fact that the Dow Jones Industrial average "only" returned to its 1927 high, not the bubble heights of 1929, and that unemployment only declined 60%-75% from 1933 to 1937 and after the 1938 recession, in 1939. As one 94 year old caller at NPR said, people at the time knew that FDR had greatly improved their lives. That's why they re-elected him.

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she was on Lou Dobbs too

and he completely soft peddled the interview as if her book is valid.

I think there has to be somewhere, some corporation or some sort of high power demands to put some of these idiots on TV and soft peddle their economic fiction.

Take Ann Coulter. I mean why would anyone, anywhere, even a conservative take more than 30 seconds to listen. it's just mini-skirt shock jock bullshit.

Same with this book so how can these people pull in half a million or million peddling their fictional products as if they are worth more than the recycling bin?


I think if you study the shorter time periods for when the growth occured during the 1930s, you can see a more accurate depiction of why the growth occurred.

When the New Deal was deemed unconstitutional and their programs ended, this is when you had a spurt in growth between 1935-37.

More importantly, you miss the aspect of private investment which didn't return to it's 1929 levels until 1952. This was because of the uncertainty created over who would retain the rights to private property.

While you have your total numbers for the 8 year periods correct, you miss the 2 year period between 1935-37 when the economy recovered because the NRA was reduced to a minor bureau.

Don't let facts get in the way of your ideology

From the St. Louis Fed:

1933-01-01 56.4 (FDR takes office in March)
1934-01-01 66.0 +17.0% growth
1935-01-01 73.3 +11.6% growth
1936-01-01 83.8 +14.3% growth
1937-01-01 91.9 + 9.4% growth

You are entitled to your own ideology. You are not entitled to your own facts.

Let me know if you want me to adjust for inflation. I'd be delighted.

yet another fantastic blog/article title

your comment title pretty much sums up 95% of the problems in the United States economic policy. It's not supposed to be a religion or a beliefs, it's supposed to be affirming, utilizing the actual historic and statistical results to verify the policy accuracy and success.


Please. We debunked the "private investment didn't return to 1939 levels" in the following article: