[Editor’s note: Our good friend, awc, elaborating on this comment, sends along the following from the far eastern edge of the American West. Thanks, awc.]
Politico’s recent feature on Amity Shlaes’ The Forgotten Man is an example of one of my pet peeves: the evaluation of economic policy in terms of statistical factors like growth, the stock market, and unemployment rather than systemic qualities like equality. The piece discusses the popularity of the book among D.C. conservatives, briefing mentioning Professors Rauchway and Krugman, who have skillfully defended the efficacy of New Deal recovery policies. When Shlaes responds that she intended the book to question the ethics of the New Deal, not just its utility, Politico simply drops the pretense of debate. They ask neither scholars nor ordinary folks to evaluate her celebration of the poor beleaguered corporation. The result is an article that presumes that New Deal laws can be defended only as spurs to recovery, not as devices for promoting a better society.
This narrowly economic approach is worse than conservative; it’s ahistorical. New Deal staffers cared about raising wages, protecting workers, ending poverty, conservation, recreation, and a hundred other things aside from recovery. They didn’t view themselves as failures when the jobless rate rose. And while Republicans made significant gains in the 1938 elections, the overwhelming majority of Americans still endorsed the Roosevelt administration. Then and now, policy isn’t solely about GDP per capita.
The journalistic focus on utility is also phony. The press is fixating on a technical question, namely the effectiveness of government stimulus. While this discussion is inevitable, the Republican affection for Keynesian tax cuts suggests the real disagreement is moral. Today, historians usually defend the New Deal not just because it helped end the Great Depression, but also because it relieved human misery, promoted social equality, and strengthened the nation for its confrontations with Nazism and then Communism. Shlaes disagrees, and to her credit, she wants to have this argument. But journalists keep pulling the debate back to the unemployment numbers. They’re just looking for a policy that will return us to the status quo ante.
The Edge of the American West 
26 comments
April 27, 2009 at 11:02 am
Jonathan Dresner
I’ve argued elsewhere (Crooked Timber, etc.) that the New Deal also needs to be evaluated in terms of the political options available in the ’30s, including outright communism and outright fascism, and the increasing pressure to adopt extreme measures in response to the crisis. The New Deal didn’t just “save capitalism”; it saved democracy.
April 27, 2009 at 11:14 am
Jason B.
Excellent post.
April 27, 2009 at 11:32 am
Levi Stahl
Then there’s also all the stuff the New Deal gave us, the roads and dams and parks and trails. Seventy-five years later, I’m still taking advantage of those.
I remember thinking when Shlaes’s book was published, “That’s annoying: a disingenuous and ahistorical attack on the New Deal. At least it won’t really have much of an impact outside the right wing, since they’re the only ones interested in refighting that battle.”
I never dreamed that years later, I’d see ordinary people reading it on the subway, and Eric would have to spend all this time doing intellectual garbage pickup. Gah, that’s depressing.
April 27, 2009 at 11:33 am
green apron monkey
Mostly right, but Shales mangling of the numbers is important too.
Also the Republican love of tax cuts is not, in any sense, Keynesian.
April 27, 2009 at 11:52 am
Carl
Sorry if I’m stating the obvious, but it’s worth remembering that when conservatives seem to be reducing these discussions to mere economics it’s not because that’s all they care about but because they think all of the other stuff ought not to be the business of gov’t. The libertarian kind think the free market would do a better job of it and the true conservative kind think untampered traditions would do a better job of it.
April 27, 2009 at 12:21 pm
eric
I quite agree with you, awc, on not letting the terms of debate get boiled down to recovery alone — but if you can win on recovery, too, then why not take the hat-trick?
April 27, 2009 at 12:52 pm
AWC
I apologize for missing that post, and I certainly agree you’ve done heroic work!
But it bothers me that journos keep returning to the same debate, not only because the Keynesian issue is settled, but also because it presumes everyone was happy in 1928 (or 1999). In fact, Harry McClintock wrote the song, _Big Rock Candy Mountain_, before the crash. Distribution matters.
April 27, 2009 at 1:27 pm
eric
Distribution matters.
Dude, I don’t think that song is about what you think it’s about.
April 27, 2009 at 1:55 pm
sero
1. I (try) to avoid using the term “moral.” Moral relativism is a bane on the academy, but morality–subjectively defined–can facilitate systemic inequalities and conservative frameworks. I won’t bore anyone with examples in history or current events.
2. If I assume that altruism is in my self-interest (out of the Hobbesian state of nature?), then the ascription of meaning to both is important. Hence analysis of the New Deal must include both and I concur.
3. I believe that culture and economics are inevitably intertwined in any case. Perhaps Marx came to the same conclusion (commodity fetish) as did scholars of the present “working class.”
4. I’m not quite sure that the New Deal promoted social equality. Recent studies on gender and race (especially pre-FSL) seriously bring that argument into question. Again, unclear as to what social equality means. I really have to disagree unless the terms are explicitly defined and motivations for authorship are clear.
5. One major worry I have about “morality” (culture?) and “economics” debates are that it takes studies, self-analysis, and a great deal of time to figure out why the two merge. Most people (experience in conferences, seminars, and meetings) initially separate them into categories of analysis, and then criticize each other accordingly.
Except for #4, just my two cents/opinion.
April 27, 2009 at 3:03 pm
AWC
Wow! I had suspected as much, as I’ve read a bit about hobos, and actually taught Jack London’s _The Road_ this semester. But I wasn’t sure.
While the song’s origins after the Panic of 1893 definitely deflates my point, its popularity in the prosperous 1920s suggests the reality of a rich but unequal society.
But perhaps I could have used a better example.
April 27, 2009 at 5:00 pm
Walt
You feel bad because you picked an example that doesn’t 100% fit the point you’re trying to make? You’d make a shitty Amity Shlaes.
April 27, 2009 at 5:46 pm
Jason B.
You’d make a shitty Amity Shlaes.
We should all hope for so much.
*I know what Walt was saying. I’m no Rethuglican.
April 27, 2009 at 5:52 pm
sero
I agree with Walt…I think proving affect with examples is a tricky business. I also think distinguishing between emotions and political economy–as well as determining where and when they intertwine and overlap–is an even trickier business.
April 27, 2009 at 5:53 pm
Tyler Blalock
This whole thing makes me wonder:
Are there any criticisms of the effectiveness of the New Deal which are valid? If so, why does the New Right keep trotting out these statistical tricks?
April 27, 2009 at 7:16 pm
sero
Again, the pre-FLS Works Progress Administration (no mandate for integration until 1938) as well as other New Deal policy terminology such as “independent breadwinners,” which excluded female domestic workers. But I think the public can safely assume that Krugman, Rauchway, and even the Obama Administration assess New Deal policies with present integrationist application in mind. That is, any New New Deal policies must ostensibly accord with civil rights legislation.
Barring that issue, I have no idea. Numbers are often more persuasive, I guess. Although the “New Right” could also use affect (standard of living, perhaps?) to prove that the New Deal in no way improved national temper during the Depression. Examples are a tricky business, and emotions v. emotions can become quite subjective.
April 27, 2009 at 7:21 pm
AWC
I would make a shitty Shlaes indeed, for that and many other reasons.
My question is this: how jealous are the other wingnuts? I mean, the woman’s tractatus has sold a billion copies. How soon before we see copycat volumes from Hugh Hewitt and Jonah Goldberg?
April 27, 2009 at 7:36 pm
saintneko
GDP per capita is a horrible measurement of society because such a large percentage of that goes to such a small amount of people – the GDP may be high per capita but the way it’s distributed I’m working my ass off to make less than .1% of society super rich.
April 27, 2009 at 7:36 pm
eric
I eagerly await the take on Reconstruction as failure of big gummint.
April 27, 2009 at 8:28 pm
Walt
I think they’re genuinely grateful to Shlaes to puncturing the myth of the New Deal. They really believe the stuff that they say, so I suspect that they think she’s struck a mighty blow for Truth. I don’t really understand their worldview, so I don’t know why they opt for Shlaes over Milton Friedman (for example), but somehow she does the minimum necessary to reconcile the historical evidence with their preconceived notions.
April 27, 2009 at 9:49 pm
Michael Turner
Also the Republican love of tax cuts is not, in any sense, Keynesian.
Whoa. The specifically Republican love of tax cuts as a party platform plank, maybe–it’s their perennial economic panacea. But tax cuts can be a legitimate ingredient in a Keynesian formula for recovery. Greg Mankiw is a New Keynesian–a former student of Christine Romer’s, in fact–but was certainly Republican enough to be CEA chair for a while under Bush. Last year he hoped openly that tax cuts alone would be enough of a stimulus for this slump. This wasn’t entirely theoretical doublethink on his part, even if it was probably absurdly optimistic (or maybe disingenuous, but let’s not go there right now.)
Keynes himself lectured FDR in no uncertain terms about taxes, in his (still insufficiently famous, it seems) open letter to FDR, in 1933:
Now, interestingly, Americans generally favor economic stimulus, but there’s something slightly, well, “Republican” in the kinds of stimulus they favor. When asked
50% tax cuts, 41% said spending. If you look at the polling on stimulus generally, no clear picture emerges, probably because most people have no clear picture, making the responses very dependent on how the questions are worded.
This is a dangerous situation–opinion can be easily swayed, toward bad policy, and for no good reason.
Now, I believe tax cuts for businesses, at this point, would not make much difference (especially with so many businesses reporting losses, leaving nothing much to tax anyway.) But I can see a good political reason for a conspicuous gesture in that direction: to wrest the ball away from the GOP. Keynes himself pointed in this direction.
In his private letter to FDR, in 1938 (key parts of which were admirably “translated” by eric here, not so long ago), Keynes wrote this:
It is not difficult to see how the editorial pages of the Wall Street Journal work even now toward a “surly, obstinate, terrified mood” among the business class. Cutting business taxes might have very little economic leverage for recovery, but there would be some value, at least; more important, the political value of it for the Obama administration could be overwhelming, insofar as it “tames” business opinion and aligns somewhat with popular opinion. Certainly we don’t want to see Obama up against a GOP/Blue Dog coalition stalling the added spending still needed to close the output gap, repeating the sorry history of 1937/38; certainly we don’t want Amity Shlaes trumpeting on talk shows that Keynes himself warned against whipping the business class into a “surly, obstinate, terrified mood,” and that the Obama administration only ignored the lessons of history.
April 28, 2009 at 11:57 am
herbert browne
Huh! Pretty funny to think of “The Big Rock Candy Mountain” as the anthem of the NAMBLA faction of late 19th Century fruit tramps…
About this “loans vs taxation” thing, why not give businesses a break on taxes on their profits, and simultaneously institute a 50% capital gains tax on investments that are made & gains realized in less than a year… say, 6-8 months… and spank the house flippers & program-trading hedge fund hosers that take advantage of the MYTH that they’re “investors”, when they’re essentially doing a “Vegas-on-Wall Street” boogie? A set-up like that won’t affect those who realize cap gains from dividends & ACTUAL INVESTMENTS, after all.
Another thing that really bothers me about our national outlook on the economy is that, Do we want to continue to promulgate an economy that essentially serves 5% of the world’s population & enables it to “account for” 25% of annual worldwide resource conversion? (& I do acknowledge the argument that “if I’m not growing sensemilla in my backyard, well, my neighbor will do it- & He’ll get all the loot”…)
^..^
April 29, 2009 at 7:57 am
Barry
By now ‘The Politico’ should be regarded as a GOP false-front organization; the only question in any article should be *how* they’re lying or BS-ing.
April 30, 2009 at 11:04 am
green apron monkey
Some times Keynesians like tax cuts, but that doesn’t make everyone who wants a tax cut a Keynesian. The theories that compel Republicans to argue for tax cuts morning, noon and night are anti-Keynesian. Even Mankiw, who is a New Keynesian, does not typically make his tax cut arguments from aggregate demand standpoint.
(The same symptoms can be exhibited by different diseases, no?)
April 30, 2009 at 11:50 am
bitchphd
Late, but seconding that “wow!” about the Big Rock Candy Mountain.
And how weird–now we can add to the “hoboes love being hoboes!” weirdness of that song the weirdness of the “hoboes are pedophiles!” idea. So hard for hoboes to get a break.
April 30, 2009 at 9:10 pm
Ralf Heinritz
As far as I remember Peter Temin showed t(in the 70s) that the New Deal did not work in the sense it had been supposed to work, ending the Great Depression. That it did a lot of useful stuff is an other point. It was supposed to have done this thing, no use talking about other stuff. The GD was ended only with WW2, this is as certain as anything can be in history. Another question is, if the depression would not have been much worse without the new deal.
April 30, 2009 at 9:20 pm
Tyler
Ralf:
How did WWII save the economy, if not by intensifying government spending and government involvement in the economy? In other words, wasn’t the WWII spending spree an intensification of much of the stimulus policy of the New Deal? If you take the position that only WWII mobilization ended the Depression, it seems that you are committed to the view that the New Deal did not go far enough early enough – a mistake which was remedied by the war policies of the same president and party which advocated the New Deal. Of course that makes sense, since it is much easier to defend war spending increases than other kinds of spending.