Mitch McConnell Is Wrong – The New Deal DID Work, and it Still Does
In leading the efforts of Senate Republicans to block economic stimulus legislation, Senate Minority Leader Mitch McConnell recently said “We know for sure that the big spending programs of the New Deal did not work”. This is just an outgrowth of the latest stupid Republican talking point: “Massive government intervention actually prolonged the Great Depression”.
Hmmm. This is a very important issue, not just because Republicans are using this revisionist history to block our economic recovery, but because it was this kind of anti-government clap trap that brought us to this state of affairs, and that will keep us there for many years to come if the American people are naïve enough to continue to fall for it.
Franklin Delano Roosevelt was re-elected President in landslides three consecutive times, and he is widely regarded by Presidential scholars as the second greatest President in our nation’s history. Those are quite some accomplishments for a President whose signature programs “did not work” and “prolonged the Great Depression”. Let’s take a look at these claims:
Our GDP under FDR
Let’s first look at GDP during FDR’s tenure:
This graph begins at approximately the time of the Stock Market Crash of 1929. You can see that GDP plummeted steeply following the Crash, during a period when Herbert Hoover was President. Hoover was a noted practitioner of laissez-faire economics, which means that he was adamantly opposed to government intervention to end the Depression – and indeed, he steadfastly avoided government intervention, no matter how bad things got.
FDR took office in March 1933. You can see from the graph that the steep slide in GDP was arrested in 1933, and began a steady rise in 1934, so that by 1940 it had nearly reached pre-Crash levels. All of this happened before we entered World War II.
Unemployment rate and job creation under FDR
Unemployment rate closely paralleled GDP during this time period – inversely:
Unemployment rate stood at nearly 25% when FDR took office. It declined steadily during his presidency, so that by 1939 it was below 18% – not good, but quite an improvement.
Let’s consider how that translated into job creation. This chart looks at job creation during the 20 presidential terms beginning with that of Herbert Hoover. Hoover’s presidency was the only one during which jobs were actually lost – though George W. Bush’s two terms came mighty close to that record. Job growth during this 80 year period exceeded 4% during only two of the twenty presidential terms – FDR’s first term (5.3%) and his third term (5.1%). Job creation during his second term (2.6%) was tied for 7th of the 20 terms. He died very early in his fourth term. Overall, job creation during the FDR presidencies was the most impressive of all presidents we have had since.
World War II
So often we hear from the right wing spinmiesters that “FDR’s New Deal didn’t end the Great Depression, World War II did”. It is true that we didn’t fully recover from the Great Depression until World War II. But the above discussion and graphs certainly show that great strides were taken towards ending the Depression prior to World War II. And it should also be borne in mind that the New Deal didn’t end with the onset of World War II. It continued through World War II and ran strong until the onset of the Reagan Presidency in 1981.
But let’s acknowledge that World War II also made a strong contribution towards ending the Great Depression (though it also greatly increased our national debt as a percentage of GDP, as can be seen from this chart). We need to ask ourselves how it did that. What did FDR’s New Deal and World War II have in common? They both greatly stimulated job creation in an economy that was characterized first and foremost by a very high unemployment rate.
So, what does this mean with regard to lessons for the future? When many millions of Americans are without a job, should we stimulate the economy through job creation of the type proposed by FDR in the 1930s and more recently by President Obama? Or should we stimulate the economy by going to war?
Let me ask that question another way. What kind of society are we if the only thing we care to spend money on to “increase our production” and create jobs is war? Keep in mind that the death and destruction that occurs during wars are not subtracted in the calculation of GDP, though all the military hardware that is produced is added. The choice between war or other means of stimulating our economy boils down to whether we want to stimulate our economy in a destructive and immoral manner versus a constructive and moral manner.
The next three decades
The New Deal didn’t just fade away after FDR’s death. Instead, due to its stunning success, most of its components lasted for decades. Largely as a result of this, we experienced for the next three decades what Nobel Prize-winning economist Paul Krugman calls “the greatest sustained economic boom in U.S. history”.
As a result of the labor protection laws enacted during FDR’s presidency, the percent of non-agricultural U.S. workers who were members of labor unions rose from 10% to close to 30% during his presidency and remained at that level for many decades, until the anti-labor policies of the Reagan administration resulted in a precipitous decline in union membership. The labor protection laws and other New Deal innovations, such as Social Security and unemployment insurance, were instrumental in alleviating poverty in our country and producing a vibrant middle class.
Median family income is one of the best indicators of the economic health of a people. This chart shows median family income levels, beginning in 1947, when accurate statistics on this issue first became available. Family income rose steadily (in 2005 dollars) from $22,499 in 1947 to more than double that, $47,173 in 1980. Then, with the onset of the Reagan Revolution, it came to a virtual standstill. For the next 25 years, except for some moderate growth during the Clinton years, there was almost no growth in median income at all, which rose only to $56,194 by 2005 (85% of that growth accounted for during the Clinton years).
The American people who lived during the Great Depression, the New Deal, and the “greatest sustained economic boom in U.S. history” knew what the New Deal did for them. And so did the Republican Party, which gave up on trying to fight it, for reasons that are made clear in a letter that President Eisenhower wrote to his brother on the subject:
Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are…. a few Texas oil millionaires… Their number is negligible and they are stupid.
Where are we going from here?
Our current economic status is largely the result of the progressive dismantling of the New Deal, which began with the Reagan Revolution in 1981 and went on for much of 28 years, with a break during the Clinton administration. For only two of those 28 years (1993-95) did we simultaneously have both a Democratic Congress and President.
And while George W. Bush was president they tried to destroy Social Security as well. If you want to know what would have happened if they had been successful in that, just ask one of the many millions of Americans who depend on it to keep their heads above water.
Campaign for America’s Future sums up our current situation very well:
Sen. McConnell is doing everything he can to resuscitate the failed conservative strategies that got us into this mess in the first place – more top-end tax cuts and as little investment as possible in projects that’ll put Americans back to work.
He's distorting President Obama’s bold plan to invest in America's future by ranting on the Senate floor that "the big spending programs of the New Deal did not work" and the bill is just "wasteful projects that would have minimal or no impact on job creation."
When Mitch and his band of conservative obstructionists open their mouths, they show that they don't know anything about history or creating jobs. What do they think is so wasteful?
Green jobs generating clean energy and energy-efficiency. Construction jobs building modern schools, high-speed rail, roads and bridges. Public service jobs, helping states keep their police, firefighters and teachers. High-tech jobs expanding broadband and healthcare technology.
We can expect this kind of obstructionist activity from Congressional Republicans for a long time to come. They want President Obama to fail and will do everything they can to see that happen.
Few Americans alive today lived through the Great Depression and the New Deal that did so much to alleviate it and put Americans back on the road to economic health. Those who didn’t live through those times need to know something about our history so that they aren’t fooled by Republican attempts to keep us in pre-New Deal, Gilded Age times.
Take FDR's New Deal through 1941 because we didn't enter the war in any large way until well into 1942. By 1941, unemployment was 9.9% and GDP was around 90% of 1929 levels. The New Deal absolutely worked.
"With the Naval Expansion Act of Congress passed on 17 May 1938, an increase of 40,000 tons in aircraft carriers was authorized. This permitted the building of Hornet and Essex, which became the lead ship of her class."
"The United States began building the North Carolina and South Dakota-class battleships in the late 1930s. Designed mostly within treaty limitations, these new battleships could steam at 28 knots (52 km/h), fast for a battleship, but not fast enough to keep pace with the aircraft carriers being planned.<3>"
Never in peace time had a Congress been so lavish in voting appropriations for Army and Navy and in interesting itself in the problem of national defense. This had been the keynote of the annual Presidential message, and there were few in Congress who opposed. Added impetus was given to the program of defense by the darkening skies of the international situation as it developed during the spring and summer."
From the economic point of view the year 1939 may be divided definitely into two periods. The first, extending from the beginning of the year until early summer, marked a steady decline in most phases of the nation's business activities. The second, beginning in the early summer, marked a reversal in the trend, a reversal undoubtedly speeded by the beginning of the European war early in September. By the year's end certain lines of business activity were approaching all time records."
"Under the direction of Secretary of the Navy Charles Edison, the design was finalized and a contract was signed with the shipyards in July 1939 for the construction of BB-61, BB-62, BB-63, and BB-64 (all Iowa-class battleships) along with BB-65 and BB-66, the first two ships of the Montana class of battleships."
"The Two-Ocean Navy Act, (a.k.a. Vinson-Walsh Act) was an American Act of Congress passed on July 19, 1940,<1> to increase the size of the United States Navy by 70%, making it the largest naval procurement bill in U.S. history.<1>
On June 17, a few days after German troops had entered Paris and effectively conquered France, Chief of Naval Operations Harold Stark requested four billion USD from Congress in order to increase the size of the American combat fleet by 70%; an additional 257 ships amounting to 1,325,000 tons. It was signed by President Franklin D. Roosevelt two days later.<1>"
23. I think we are both arguing that it was WWII more then...
the New Deal which brought the US out of the Great Depression.
"Between 1933 and 1939, the New Deal had resulted in nearly a doubling in federal spending and a 60 percent increase in the number of civilians working for the federal government. Even so, the entire federal budget for 1939 remained less than nine billion dollars, and fewer than one million civilians were employed in the federal bureaucracy. The demands of mobilizing for total war caused federal expenditures to skyrocket to nearly 100 billion dollars by 1945, while the number of civilians employed by the federal government reached nearly four million."
"In 1939, fewer than four million Americans paid federal income tax. Before the war ended, that number had increased to over forty-two million, and the dollar value of taxes paid by individuals had increased nearly twenty-fold."
By 1941, we were well on our way out of the Depression. We spent a lot of money on war and unemployment went down because of the number of soldiers, but that isn't economic recovery. WWII was a miserable economic time for people at home, there was all kinds of rationing. If you want to pretend those high GDP and tax numbers = economic stability, then why wasn't there even enough of things as simple as sugar and flour?
Then Republicans want to pretend JFK's tax cuts boosted the economy in the 60s, when the truth is he cut them because we'd paid off so much of WWII, which along with the highway bill and automobiles, boosted the economy. Not to mention, having an infrastructure in place, thanks to FDR, so we could help the world recover too. And let's not forget the GI Bill to educate troops and help buy homes.
WWII did not help our economy. We'd have been much much better off to not have that debt when the war ended. We could have done all the rest of the spending and gotten the same economic results without the suffering.
Edited on Fri Feb-13-09 08:40 AM by Time for change
Either way, it is quite clear that the New Deal went very far towards getting us out of the Great Depression. You both make a lot of important points. Undoubtedbly, both were responsible to some degree for getting us out of the Depression (though the war also was responsible for a massive increase in our national debt). As Kaleva points out, spending on WW II began long before we entered the war. And as you point out, spending accelerated greatly after our entry into it.
But I think that it is somewhat of a distraction to argue about which one -- WW II or the New Deal -- did more between the onset of WW II in September 1939 and our entry into it in December 1941. The period between September 1939 and Dec 1941 is a grey area, which is why most charts on the subject end in 1939. Right wingers will argue till the cows come home that WW II was more responsible after September of 39. Still, nobody can argue against:
1. Great strides in reducing unemployment were made long before the start of WW II, with a record of percent employment increase taking place during FDR's first term, which still stands today as the greatest percent increase in employment during a presidential term.
2. The New Deal was responsible for coninuing prosperity in our country, of unprecedented duration, for three decades after WW II ended.
3. With today's recession/depression we would be much worse off if some New Deal programs were not still in place.
4. War is a terrible way to improve our economy, and must be weighed against the vast amount of damage that it does, in destruction of life, livelihood, property, and international relations. There is always important work that needs to be done and can be done without going to war. To consider war as an acceptable means of improving our economy is absurd in the extreme.
Military Spending. There's nothing to argue about. Facts are facts. We were not spending large amounts of money on military spending in 1940. Period. Just because somebody has been deluded into thinking so by the right, doesn't make it a fact and doesn't mean you have to change your argument in order to humor them.
Republicans would be saying if FDR told the people to go shopping on December 8, 1941. Anything said by Republicans should be automatically dismissed as insane rambling. There are no sane republicans, let alone honest ones. Mitch McConnell's closet door needs opening.
4. Sadly, I fear McConnell stands a very decent chance of succeeding in sinking the bill.
Edited on Thu Feb-12-09 09:10 PM by Selatius
So many Americans have now been subjected to revisionist ideas that laissez-faire economic policies work since Reagan and deregulation that I fear they will simply believe it at face value that the New Deal didn't work. I guarantee roughly 40% of Americans believe in laissez-faire policies at the very onset of debate. The trick for the Republicans is getting the next 10 to 15% of Americans who are not informed enough to understand economics to fall for their ideas. If Reagan can do it, some other Republican in the future most certainly can.
This isn't to say that McConnell will succeed, but I believe that if FDR-era Democrats and FDR himself were running the show right now, McConnell would pose little more than a speed bump in their path and so would hacks like Rush Limbaugh.
Mitch McConnell is a chinless, snivelling, reptile-faced, slithering, dickspanking, vile, inhuman, defeated, curtain-jawed, face-begging-for-a-SwampRatting, babies-crying, cats-crying, asshole crawling, Rove-sniffing, Boehner-tag-teaming, married to the worst labor secretary in the past 30 years, giant-spectacled, free-trader stooge, Friedmanite, hog-humping, masturbates to pictures of cash, needs to be drop-kicked in his 12 inches of neck, cantankerous piece of bootshiner blowfish shit.
The shitty policies of three straight Conservative presidents are what prolonged the Great Depression. What a blatant revisionist history lesson this was from the likes of the human tortoise.
12. McConnell, Boehner, Shelby, Armey, Forbes and Ensign.
Watch your MSM. These six media whore assholes praised and paraded by the Corporate Nation Broadcasting Collective (CNBC for short) and others are leading this charge against the President. It's a new hunt similar to what they started 14 years ago with Clinton. Since Obama is pretty much scandal-proof, they have to go after his policies no matter who it ends up hurting.
This is so true. Many people only listen to TV, or right-wing radio. So what they see and hear, they think is the truth, but most are untruths(lies). They never bother to research for the facts. Hearing the right-wing talking points over and over reinforces these lies, especially when the media never corrects them for the truth.
6. McConnell is just parroting the RW talking points to rewrite history.
It does two things: One, it gets the sheep believing that the New Deal didn't help this country out of the GD.
Two: It switches the dialogue away from what party CAUSED the GD and the current economic mess we're in--and we know it was Republicans on both counts.
The GD started while Hoover was president--more than three years before FDR took office. The president before Hoover was Coolidge and before him was Harding. All three presidents were Republican and the Republicans controlled the U.S. House and Senate every year under those three presidents.
Before Obama, Republicans controlled the White House 20 of the past 28 years. While Clinton was president, he pursued and passed major policies that go to the heart of Republican ideology--NAFTA, GATT, welfare reform and banking deregulation, to name a few. Look at the mess we're in after a prolonged period of their policy.
7. Hey Senator!!! Ask some of the older residents of Kentucky
especially those who lived through those times and see if the New Deal worked? I bet they have the highest praise for FDR, especially the TVA and rural electrification. Get your head out of Rush Limbaugh's ass! Quit pleasuring the Heritage Foundation.
8. imagine how much worse this crisis would have been from the start
without FDIC insurance to prevent a run on the banks. think about unemployment insurance.... how that helps folks stem the tide while they try to find a job. there are so many more things that i don't remember, but probably still helped at least some.
Edited on Thu Feb-12-09 10:23 PM by abq e streeter
But its also the spinelessness and collaboration of the pathetic shell of what used to be a bold and strong Democratic party that has allowed this Reagan mythology to fester unchallenged to the point where millions upon millions believe in it and consequently, the danger of its resurrection is always present.
27. Thank you -- I am encouraged though that President Obama is making his case to the American people
and definitely is not playing along with the "Big government is bad" card. I sometimes get upset with what I see as his excessive "bipartisanship", but on the other hand he is pursuing vigorously a stimulus plan to put us back to work -- and Congressional Dems are supporting him in that effort. But I do agree with you that I would like to see them respond more aggressively to these blatant Republican efforts at revisionist history.
15. As Krugman & others have pointed out, the hiccup in the GDP growth rate
Edited on Thu Feb-12-09 10:42 PM by Stevepol
and the fall in unemployment that stands out in the charts coincided with FDR's decision in 1937, responding to REPUBLICAN CALLS TO BALANCE THE BUDGET, to cut some of the spending programs back that were working so well. After the effects of the cut-off of spending became clear, FDR resumed the spending programs and the GDP growth and unemployment fall resumed and continued apace.
For the purpose of this discussion, I think it's enough to stick with "wrong". I want moderates to read about this and sway their opinion. If I use terms like "filthy liar", accurate though it is, that will cause moderates to think I'm biased, and that will hurt the credibility of my message.
22. what's important is what limbaugh and sons have been saying for yrs
from 1000 stations, ignored by progressives.
all mcconell has to do, as he's been doing, is to repeat the GOP talking points and revisionism, knowing well that he rides the talk radio bandwagon. as long as he sticks to those talking points a US senator can be guaranteed that however absurd or false it is it has already been pounded into the earholes of a crowd the size of the one that voted for obama by the time the evening news roll around. and the the corp consolidated trad media loves it because their owners want the tax breaks and deregulation that the talk radio monopoly is so good at sellling.
the talk radio monopoly everything for the flat earthers. the sooner americans figure that out the better. until then the obstructionism will flourish and more time will be lost.
"When I was two years old, I came down with an infection that felt a lot like the flu. But after the fever passed, my left leg had gone lame. For two years my mother put me through a physical therapy regimen taught to her by the doctors at the Roosevelt Warm Springs Institute for Rehabilitation, founded by President Roosevelt in Warm Springs, Georgia. From age two to four, I was not allowed to walk or run. But after two years of my mother's care, I was able to have a normal life. A lot of kids at that time, in the 1940s, weren't so lucky. Some were paralyzed for life. Some were sentenced to the iron lung. Many died."
So this hateful idiot would rather spit in the face and trash the legacy and deeds of a man who, although very wealthy in his own right, opted to do for the people and even created an institution to help the lame including a toddler McConnell... The ungrateful McConnell chooses instead to be blinded by the sore-losership mentality of his knuckle-dragger party that is locked in time, idol-worshiping a dead bad actor, and obsessively clinging to a nonsensical epic fail ideology.
As a side note, I think people will be surprised about how many who lived through the Depression ARE still alive, and who ARE continuing to correct the propaganda one person at a time in an effort to put the truth out there. FDR was so popular back then that he would have been given a 5th term had he survived his 4th.
I urge you to pass big and bold economic recovery legislation as soon as possible. The final legislation from House-Senate negotiations should be as robust as possible to meet the challenge of an economy in crisis. Do not let conservative obstructionists like Sen. Mitch McConnell distort and delay this critical legislation any further. Our neighborhoods, cities and states need help immediately. Thank you.
both C-Span and C-Span 2 are nothing but those asses standing up and Blah Blah Blah against it My God Enough I wish Obama would pull it back replace it exactly how he wanted it in the beginning and demand a vote within a day or so. The bill went from 940 million down to 789 million and it's not enough for them. Nothing will ever be enough for them.
43. Repuclicans care nothing for the country, they are sickening partisans, if the Dems offer anything
Edited on Fri Feb-13-09 02:42 PM by GreenTea
to help the country the republicans will rally around to reject it, because the democrats might get credit for something that will help the country....Republicans plan is always fuck the country, just as long as the Dems don't get credit for helping out and making things better.
Mike Malloy is correct, the corporate, greedy, lying regressive republican party should be wiped off the face of the earth!!
48. Thank you -- You are absolutely right -- we must find a way to combat these talking points
As long as corporate America has a monopoly on the news that most people receive, this is going to be a great challenge. We have to get rid of the Telecommunications Act of 1996 so that we can destroy their monopoly.
47. Of course it is a pug lie....The New Deal and FDR are their worst
nightmare come true in so many layers of our lives it is unfathomable...FDR brought about change that worked beyond FDR's and this country's wildest dreams, long into the future and proved his trickle up (more like avalanche up) philosophy beyond a doubt. It definitively disproves the reason for the pugs existence, proven, beyond all shadow to be wrong, wrong, and wrong headed; An unmitigated disaster; A trickle down sham to further enrich the rich and rob from the middle class and the poor with nothing but grandiose promises in return. So of course the thugs are going to lie and try to rewrite history to make them appear to be right and the reason for their existence on firm foundations. They are now clearly mounting a propaganda campaign in a ridiculous, last ditch effort to catapult the lie that FDR was a failure and to hand out transparently ignorant talking points to the profoundly ignorant, their followers.
50. The fact that we are even debating FDR's success during
the depression means that not enough msm are correcting this dopes when they put forth their lies about the programs FDR put forward. I cringe when I hear these rethugs stating FDR extended the depression or as one idiot stated FDR started the depression.
51. The corporate news media are Republican allies
We need to understand that and work to disrupt their monopolies on the news. Repeal of the Telecommunications Act of 1996 would be a good place to start. Another hope is that the Internet evolves to a point where most Americans get their news from it.
The SUBhuman DROOLING KNUCKLE DRAGGING rightwing reactionary SH!T-F0R-BRAINS (isn't the terms "rightwing reactionary" and sh!t-f0r-brains" redundant?) reSCUMlican VERMIN don't care anything about truth but rather the SUBhuman DROOLING KNUCKLE DRAGGING rightwing reactionary SH!T-F0R-BRAINS reSCUMlican VERMIN do know about telling a LIE and then repeating the LIE over and over and over and OVER and OVER AND OVER AND OVER AND OVER...... until the LIE becomes accepted as a "fact".
55. What sourpuss Mitch and the pugthugs are trying to say and mask what they are saying is; The New
Edited on Fri Feb-13-09 08:51 PM by ooglymoogly
Deal did not work for them, the pugs and the less than 1% at the top, because it killed them then and is now rearing its mighty and glorious head to smite them again after their disastrous 8 (40 really) years of corporate welfare and the total theft of the treasury; Which they are trying to pass off in the chaos and confusion they have created, as capitalism; Which is about as close to capitalism as was the great train robbery; If the train held trillions and was hundreds of miles long. However they conveniently just diverted this train (the treasury) to offshore accounts.
59. The New Deal definitely helped. Only idiots or those with
ulterior motives claim otherwise. If those people do not realize that unemployment would have gone from 25% to 40% or more without the programs set up by FDR, then they are simply not being honest with themselves.
Anecdotally, my grandfather would have been homeless and penniless had he not been able to find work with the TVA and another project in California.
You don't see them turning down their paid holidays, sick leave, vacation time, social security benefits, disability, veterans benefits, overtime pay, etc., etc., etc. They know the loopholes and take advantage at every opportunity on every angle. The GOP has become a joke in my house and probably plenty of others. I wish the species would just become extinct already. They have become obsolete. Hopefully, a new, improved breed will take their place and we can get on with the business at hand. Which is...making this country work again by supporting its backbone..the American people.
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