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The "FDR Failed" Myth
The current recession will soon become the longest since the Great Depression. The U.S. is losing over 500,000 jobs each month, and a new president, elected overwhelmingly, is pleading for unity and urgent action on a scale not seen since the New Deal.
At such a moment, it is imperative to expose a dangerous popular myth regarding the efficacy of President Roosevelt’s actions: that it was not the programs of the New Deal, but only the placing of the nation on a wartime footing years later, that restored the health of the nation’s economy.
This belief, though widely held, cannot stand up to even the most basic economic analysis. Yet the mainstream corporate media, which abound with anti-government ideology, seek to reinforce this myth. Just this past Sunday, The Washington Post featured on Page One of its Outlook section an article by Amity Shlaes headlined “FDR Was a Great Leader, But His Economic Plan Isn’t One to Follow.” Underscoring Shlaes’s made-up claims, the Post ran the continuation of her piece under the title: “FDR’s Plan Failed to Spark Real Growth.”
In it, Shlaes, having passed over the anything-goes policies that led to the financial crash in 1929—and, to a great extent, the devastating economic losses that occurred between 1929 and Roosevelt’s 1933 inauguration—also completely leaves out any specific data on gross domestic product, incomes, consumer spending, production, investment or jobs even for the New Deal period she presumes to explain. Indeed, her pitch is based entirely on emotional misrepresentation.
The basic economic facts from the 1930s—according to the Department of Commerce, the Federal Reserve, and other official sources—are fundamentally different from the unsupported claims put forward by Shlaes and prominent in popular myth. The monthly data for industrial production show a near three-year collapse under President Hoover, ending when FDR came to office in March 1933. Production rocketed by 44 percent in the first three months of the New Deal and, by December 1936, had completely recovered to surpass its 1929 peak.
