David Bernstein writes on THE GREAT
DEPRESSION in the Volokh Conspiracy:
"The book I am really looking forward to is the one that explains how FDR presided over
10 [sic] years of economic depression, and is celebrated for 'saving us' from same."
Something I've always wondered about, too. Why is Hoover infamous for presiding over
four years of Depression, not terribly uncommon in American history, while Roosevelt is
much-beloved for presiding over an unprecedented two more presidential terms of
Depression, while much of the rest of the world economy was recovering [edit: at a
faster pace]?
A very good thought. If I remember rightly, economists (E.Cary Brown?) have decided
that the New Deal spending was just too small to really have a Keynesian effect (WW II
is a different matter). That leaves the regulatory policies. Professor Bernstein notes
later in his post that the 1937 recession-in-a-depression was likely due to the New
Deal, and also that growth did turn from negative to positive once Roosevelt took
office. But besides the theory (due to Bernanke?) that the length of the Depression was
due to the dispersion of fired bank loan officers, the theory that it was because of the
New Deal ought not to be dismissed.
[ http://php.indiana.edu/~erasmuse/w/03.08.20a.htm ]
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