Conrad Black mounts a rousing defense of FDR in his NRO contribution. He asks for rigor in the economic discussion and deems me (The Forgotten Man), Holman Jenkins (of the Wall Street Journal), and Jim Powell (FDR's Folly) unrigorous. We'd all first like to thank Conrad for not calling us "wingnuts" or any of the other colorful appellations various people have hurled rather than get to the substance. But to reply to Conrad point by point:
Conrad says: "Herbert Hoover had made the worst possible selection of policy options: higher taxes and tariffs and a shrunken money supply."
Reply: Agreed. But note well: Gov. Franklin D. Roosevelt of New York, the electoral California of its day, tried to outhawk Hoover in attacking inflation. During the 1930 election, FDR accused Hoover of conducting an "orgy of inflation." It took until 1933 for Roosevelt to come to the view that there was too little money, and even then, he vacillated, helping to cause the depression-within-the-Depression of 1937-1938.
Conrad says: Under Hoover, "there was no direct relief for the unemployed. They could beg, steal or starve."
Reply: Conrad's statement suggests the unemployed did not get relief. They did. They just did not get relief as a class.
For example, Hoover signed the Emergency Relief and Construction Act in July 1932. Grants under this law were made to multiple states. Murray Rothbard, probably not one of Conrad's favorites but a valuable analyst nonetheless, tots up federally funded public relief expenditures and finds $308 million worth in 1932. That's the equivalent of about $4.5 billion today.
In addition, states doled out millions in relief on their own. For example, in late 1932 the New York Times reported that the State Unemployment Relief Commission of Rhode Island had distributed nearly $2,500,000 in state funds for the assistance of "about 60,000 men women and children in twenty two towns and cities." In New York State, lawmakers in 1931 created the Home Relief Bureau, which paid cash to towns to support the indigent. Recall that before Roosevelt, states and towns were more important than the federal government. State relief, Red Cross relief, and church relief all prevented begging, stealing, and starving.
The non-government contribution was also important, as David Beito points out in From Mutual Aid to the Welfare State. Millions of Americans belonged to fraternal-aid societies, such as the Loyal Order of Moose and the Odd Fellows, which helped the poor right into the 1930s. To ignore that is to use today's framework to judge another period.
Conrad says: In the early Depression, the unemployment rate was "approximately 33 percent, more than four times what it is now (not the 25 percent the revisionist Right now claims)."
Reply: Not sure where Conrad is getting his numbers. There are two main sets of data. The revisionist Right of which Conrad seems to disapprove is using not obscure figures but official Bureau of Labor Statistics data, compiled by Stanley Lebergott. These series are known as Lebergott/BLS data, with unemployment getting to 25 percent under Hoover and an average of well above 15 percent for the 1930s. Another set of data, prepared long ago by Michael Darby ("Three and a Half Million U.S. Employees Have Been Mislaid," NBER paper), shows unemployment lower under Hoover, 23 percent at the end of his term, and also lower (averaging 14 percent) for the 1930s.
Conrad appears to be using different data sets at different points, shifting to suit the line of his argument. If he believes unemployment in the early 1930s to be 25 percent or above, that is Lebergott-ish. Lebergott/BLS show unemployment at close to 25 percent towards the end of Hoover — though in discussions, higher figures have been mentioned. These sets are fairly commonly cited. President Obama, for example, talked about "25 percent inching up to 30 percent." Last we looked, President Obama was not the "revisionist Right."
In any event, if Conrad likes that Lebergott set, he should stick with it, and for the rest of the 1930s, Lebergott does show unemployment averaging above 15 percent. If Conrad doesn't like that data set, because he believes unemployment was really lower in the 1930s, then he should use Darby's data set.In any event, it would be good to know Conrad's source for this line: "If the federal workfare employees are accepted as employed, the corresponding numbers are 33 percent, 7 percent, 3 percent, and 0.5 percent."
Conrad says: "The Third New Deal, in 1938, involved a massive return to workfare programs, whereupon economic progress resumed."
Reply: It is true that the economy turned up in 1938. However, the causality that Conrad sees, many of the rest of us do not see. Consider: 1938 was the year when it became clear that that Republicans would begin to make gains (as they did in the midterm elections); it was also clear, that year, that FDR was ending his war on business to focus on his impending war against Hitler and Japan. And 1938 and 1939 were also the years when Roosevelt's advisers began to insist that he give up on his abuse of business and stimuli.As the despairing Treasury Secretary, Henry Morgenthau, told the House Ways and Means Committee in May 1939:
We have tried spending money. We are spending more money than we have ever spent before, and it does not work.... I want to see the 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 [sic] years of this administration, we have just as much unemployment as when we started... and an enormous debt to boot.
Conrad suggests that the U.S. recovery under FDR was impressive. It was not. Four measures tell the story. The Dow — it never came back to pre-crash levels. Unemployment — it never came back either. Nominal GDP per capita — it never came back. Real GDP per capita — it came back only in 1939 or 1940.
Conrad suggests that FDR prevented the U.S. from going fascist. My own research suggests this argument is a stretch. There were rough figures and rough snapshots (Huey Long, Father Coughlin, Sit Down Strikes). For most of the 1930s, most of America was simply waiting for the Depression to be over, and certainly not making revolution. The left-leaning European writer Odette Keun described something she found shocking: "Broadly speaking, Labor in America is conservative. It is one of the most flabbergasting discoveries I have made."
To be sure, many historians, yours truly included, agree with Conrad when it comes to FDR's leadership in World War II.At the Council on Foreign Relations, where I am a fellow, I will be co-hosting, with Dean Thomas Cooley of NYU/Stern, a "Second Look" conference on March 30 to permit scholars to present the multiple studies that suggest the New Deal and Great Depression are worth taking a look at from every angle. The great shame here is that Conrad would have added much to this event, and yet he cannot attend.
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