Fox News: "Historians Pretty Much Agree" That FDR Prolonged the Great Depression

by: David Sirota

Wed Dec 24, 2008 at 19:46

I appeared on Fox News to discuss both the Blagojevich flap and the imminent economic recovery package from the Obama administration. You can watch the clip here. As you'll see, on that latter issue, Fox News is starting its campaign to stop Obama's big spending plan by stating - as assumed fact - that "historians pretty much agree" that Franklin Roosevelt prolonged the Great Depression, and that therefore, Obama shouldn't try another New Deal.

When I say Fox News' assertion about historians is patently false, they literally laugh at me as if I've said something so clearly untrue, something Americans supposedly assume is so obviously stupid, that it's worthy of ridicule.

The Depression issue was brought up by conservative pundit Monica Crowley - not surprising since this is the conservative talking point du jour ever since the "center-right nation" meme started looking idiotic and ever since fringe-right-wing bloviator Amity Shlaes published her since-discredited book claiming FDR essentially created the Great Depression. Crowley supported her the "FDR ruined the country" meme with the very authoritative-sounding statement that "based on all kinds of studies and academic work done on the great depression" she knows that the New Deal's "massive government intervention prolonged the Great Depression."

Of course, she doesn't offer up a single study or "academic work" as any kind of proof, and yet, when I say her assertion is absurd, Fox News anchor Greg Jarrett starts laughing at me - as if my assertion that FDR's New Deal helped end the Great Depression is so fantastical as to prompt guffawing. Jarrett proceeds to state that historians "pretty much agree" that FDR prolonged the Great Depression, and resorts to insisting that he knows that's true because "it's in the books" - whatever the hell that means. Indeed, Fox wants us to believe that what was only very recently the deranged propaganda of a handful of conservative political pundits is now such a consensus opinion among historians that to say otherwise is to evoke laughter.

Now, it's true - back in 2004, two UCLA professors published a little-noticed report claiming the New Deal's government intervention prolonged the Great Depression. But that assertion has been subsequently eviscerated by, ya know, actual data.

David Sirota :: Fox News: "Historians Pretty Much Agree" That FDR Prolonged the Great Depression
Here's University of California historian Eric Rauchway:

For a start, New Deal intervention saved the banks. During Hoover's presidency, around 20 percent of American banks failed, and, without deposit insurance, one collapse prompted another as savers pulled their money out of the shaky system. When Roosevelt came into office, he ordered the banks closed and audited. A week later, authorities began reopening banks, and deposits returned to vaults.

Congress also established the Federal Deposit Insurance Corporation, which, as economists Milton Friedman and Anna Jacobson Schwartz wrote, was "the structural change most conducive to monetary stability since ... the Civil War." After the creation of the FDIC, bank failures almost entirely disappeared. New Dealers also recapitalized banks by buying about a billion dollars of preferred stock...

The most important thing to know about Roosevelt's economics is that, despite claims to the contrary, the economy recovered during the New Deal. During Roosevelt's first two terms, the U.S. economy grew at average annual growth rates of 9 percent to 10 percent, with the exception of the recession year of 1937-1938...

Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms. In part, the jobs came from Washington, which directly employed as many as 3.6 million people to build roads, bridges, ports, airports, stadiums, and schools -- as well as, of course, to paint murals and stage plays. But new jobs also came from the private sector, where manufacturing work increased apace.

This basic fact is clear -- unless you quote only the unemployment rate for the recession year 1938 and count government employees hired under the New Deal as unemployed, which conservative commenters have taken to doing.

So, as Rauchway says, the hard data about bank closures, job creation and overall economic growth rates proves the regulations and spending of the New Deal helped end the Great Depression. In fact, Rauchway notes that the data actually suggests that the major, data-driven criticism of the New Deal is that it didn't spend enough money fast enough.

But, OK - let's say you want to cherry pick the unemployment numbers like a right-wing pundit. Let's say that, as Rauchway notes, you are a conservative dittohead totally comfortable dishonestly "quot[ing] only the unemployment rate for the recession year 1938 and count[ing] government employees hired under the New Deal as unemployed." Shouldn't you be blaming conservative ideology, and not New Deal-ism, for those numbers? After all, as Paul Krugman recently explained to a stunningly ignorant George Will on ABC News, 1937-1938 was the period Roosevelt dialed back the New Deal in the name of conservative demands that he stop spending:

By 1937 things were a lot better than they were in 1933. Then [FDR] was persuaded to balance the budget or try to and he raised taxes and cut spending and the economy went back down again and then it took an enormous public works program known as World War II to bring the economy out of the depression.

So with all of that data, let's go back to Fox News' main assertion: Is it really true that "historians pretty much agree" that the New Deal's government intervention prolonged the Great Depression? Of course not, as New York Times economics writer Daniel Gross says:

It was only with the passage of New Deal efforts--the SEC, the FDIC, the FSLIC--that the mechanisms of private capital began to kick back into gear. Don't take it from me. Take it from Federal Reserve Chairman Ben Bernanke, who wrote the following in Essays on the Great Depression: "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."...

The argument that the New Deal's efforts "perhaps had prolonged, the Depression," is a canard. One would be very hard-pressed to find a serious professional historian--I mean a serious historian, not a think-tank wanker, not an economist, not a journalist--who believes that the New Deal prolonged the Depression. (emphasis added)

In other words, it's the opposite of what Fox News says. "Historians pretty much agree" on one thing when it comes to Roosevelt: The New Deal helped end the Great Depression. But I would go even further than that, and agree with economist Brad DeLong who said that whether you are a historian or not - to argue what Jarrett and Crowley argued today is to publicly declare oneself as divorced from the facts as the most ridiculed conspiracy theorists. As DeLong says, "A normal person would not argue that the New Deal prolonged the Great Depression."  

But, then, these are not "normal people" - those making these arguments are right-wing automatons whose claim that we shouldn't look at actual data, we should simply accept the truth of their claims because they insist "it's in the books!" or they've supposedly seen "all kinds of studies and academic work" that proves their hysteria true.

Of course, the good news is what I said on Fox News before they cut me off: While the right's historical revisionism is dishonest, it's doing progressives a big favor.

If the right wants to try to stop a serious economic recovery package and financial regulations by trying to vilify one of the most popular presidents and popular policy programs in American history, then I'll say what George Bush once said: Bring it on. Every high school civics class teaches the broad truth about Roosevelt, the New Deal and how it helped end the Great Depression, and if the conservative movement has gone so off the deep end that they want to make crazy-sounding arguments that even high schoolers know are silly, then the progressive movement is in an even better position than we may have thought.

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I love it (0.00 / 0)
Attacking the new deal is what kept republicans out of power for 3 decades. It wasn't until they came up with a new (equally bullshit) talking point about tax cuts and economic growth that they were able to get in their view. If they want to regress, fine by me. Maybe they should start with attacking new deal programs like social security. See where the fuck that gets them.

But it is certainly irritating to hear revisionist history treated as fact on a 24 hour news network.

I totally agree (0.00 / 0)
since ABC, NBC, CBS, MSNBC, the NYT and a host of others treat revisionist history as fact all the time.  I believe we should put an end to all this.  Good point.

It is dangerous for a national candidate to say things that people might remember.
 - Eugene McCarthy

[ Parent ]
See, in right-speak, 'prolonged' (4.00 / 1)
can mean 'didn't end as quickly as theoretically possible.'

Say I break my leg. A doctor treats me, and the break heals in eight weeks--but could possibly have healed in six weeks. Hence, that doctor prolonged my suffering.

It's easy, once you know how!

Actually,... (4.00 / 4)
FDR DID prolong the depression.  He prolonged it by submitting a balanced budget in 1937, decreasing government spending at a time when the economy needed expansion.  I don't know if "historians pretty much agree" on this, but it's long been accepted by those who understand these things; Krugman has mentioned it a number of times recently.  So the lesson is the opposite of what Crowley thinks: Obama needs to spend MORE than FDR did, not less.

Scientists "pretty much agree"... (4.00 / 3)
Scientists "pretty much agree" that cutting down emission of greenhouse gases would prolong global warming, and theologians "pretty much agree" that the fundamental imperative of Gospel Christianity is cutting taxes on billionaires. Baseball experts "pretty much agree" that you can hit a baseball farther with the skinny end of the bat, and chicken farmers "pretty much agree" that chickens are furry mammals about the size of giraffes.

Apparently David Sirota was out to lunch for the Great Intellectual Consensus of the last 8 years, but if he pays careful attention to his fellow-pundits on Fox News, he can probably catch up.  

they are laughing at you David (0.00 / 0)
because they are too cowardly and hypocritical to laugh at Bush and the TARP billions he gifted to the corporate welfare and Bernanke and the $1 trillion-plus he spent on loans and purchases just to "get more money in the system". But a blogger who says we need spending to help the poor and middle class .. oh yeah and fix the infrastructure that we'd be sunk without, that gets insincere guffaws. If they could really face themselves in a mirror they would slink away and hide in shame but we all know that's impossible.

Great Job (0.00 / 0)
In that clip shredding their absurd talking points.

Wow! (4.00 / 2)
I mean, wow!

Yeah, FDR really sucked at the economy.... that's why he got re-elected three times...


The sad thing is that a lot of people will believe this crap... Oh, not the ones who were alive in the great depression, and not their sons and daughters... but, it's been a long time... and lots of people have no connection to the time period anymore...  They are the ones that can be persuaded to believe lies.

Wow!  This is just... wow!  Amazing!

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

I am wondering (0.00 / 0)
Yeah, FDR really sucked at the economy.... that's why he got re-elected three times...

When did they change the laws to restrict presidential elections to 2 terms? My hunch is after Nixon's Watergate scandal?

[ Parent ]
The 22nd Amendment: (4.00 / 2)
limits the president to two terms and it was passed, I believe, shortly after FDR died, during the Truman administration.

[ Parent ]
Not To Mention (4.00 / 3)
that the 1936 election, right when things were at there worst, according to these jokers, was the biggest landslide ever seen up to that time.

I guess they didn't realize what a terrible job FDR was doing.  They didn't have FOX News to explain it for them, so they had to rely on their own lying eyes.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
Fix News... (0.00 / 0)
I thought you did an excellent job, David and I have to give you tremendous credit for being able to put up with that insane network!  Personally, I don't have the patience or inclination to discuss anything with a Republican regardless of the situation...

Keep up the good work and I always look forward to reading your columns!

Facts are what the (0.00 / 0)
red-faced drunks agreed to around the punch-bowl when you were just a little proto-fascist in short pants, not what educated people who have actually examined the hard data and all sides of the controversies for validity say they are.  I'm amazed, David, that you can control your urge to slap these people.

But then, it's Fox.  Before you can be employed there, you first have to flunk an intelligence test.

Paul Krugman vigorously refuted this lie when George Will (4.00 / 3)
tried to sneak it by on This Week--on the second successive week (I believe that Robert Kuttner refuted it the other time), by explaining that the basis of this lie rests upon the fact that the depression did in fact get worse in the late 30's, after FDR foolishly tried to balance the budget by raising taxes and cutting spending with the depression still underway, and NOT because of his core New Deal programs, which, along with the massive expenditures of WWII, DID end the Great Depression.

Krugman just won the Nobel Prize in economics, and like Kuttner is a highly respected economist whom only a fool would tried to refute on matters pertaining to their areas of expertise, without also being experts in them themselves.

Will is a dishonest right-wing hack pundit who is an expert on baseball and using big words to sell small ideas to people too stupid to know that they're stupid.

Shlaes is a hack writer who was fired from the Financial Times soon after penning two op-eds praising Bush's performance during Katrina.

Crowley is just a stupid hack who used to get Richard Nixon his coffee and walk his dog.

I don't know, but I'm going with the bearded Jewish dudes.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

Krugman also had a chart... (4.00 / 1)
...on his blog of December 3, 2008 that shows the short late '30's slump clearly enough even for us visually-oriented readers.

This thing is devolving into one of Krugman's "Shape of World: Opinions Differ" news stories.  People are being presented with a "balanced" argument.

But whether they listen to Monica Crowley or to David Sirota, what people are hearing boils down to three words:  "Roosevelt," "prolong," and "Depression."

We need to bypass this "balanced discussion" with the truth stated in our own terms.

"Roosevelt's policies created the middle class America that we enjoyed and took for granted in the three or four decades after his death."  

"We only started to have serious ongoing economic problems when we let the Republicans begin dismantling Roosevelt's programs."


"Roosevelt's programs in the '30's prepared America for WWII.  The America of 1931 could not have fought WWII as successfully as the America of 1941 did."

[ Parent ]
Dude (4.00 / 1)
The country is getting it again, after 30 years of brainwashing. Funny how tough times and the prospect of doom and gloom concentrate the mind. FDR won the biggest war in world history. The only Repub who could claim that died over 143 years ago. He also, as you aptly noted, created the modern (and now crumbling, due to that 30 years of GOP malfeasance) middle class, out of the ashes of the previous GOP race to the bottom. The pony boys and girls at Fox and the WSJ op-ed page can keep on pimping their idiocy about how shiftless blacks and illegal aliens caused this meltdown, and FDR created the depression in his spare time. But regular people know what the GOP is about, and aren't buying it anymore. Remember, McPalin LOST, big time (if Obama was white, it would have been another '64). You can wrap dogshit in tinsel and designer wrap but it's still dogshit, and smells like it.

The Forgotten Man? More like the forgotten party. Barring a completely disasterous Obama administration, they will be nowhere for the next 10 years. Not that we should let it be as they continue to sell their lies. But the best advertising is success, and the worst failure. If Obama does ok, they'll be lost in the wilderness for some time, flailing about and desperately trying to pimp their latest bag o' crap to an uninterested public. Hell, Sprint just dropped Fox News from its cell phone TV lineup. They're pissing into the wind now.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

[ Parent ]
Okay (0.00 / 0)
So why are you appearing on Fox News?  I don't know if you've heard, but it's actually right wing propaganda.  Why do you want to add credibility to right wing propaganda?  

I think they were just laughing at the fact the agreed to appear on that show and acted like you would be given a fair chance to make your point.

missed oppurtunities (0.00 / 0)
I think you missed two oppurtunities:

1. burst out laughing when they said it.
2. directly challenge her on which academic studies


[ Parent ]
PLEASE not this again. I can't take it.  

[ Parent ]
They always throuw out talking points like (4.00 / 1)
"fdr prolonged the depression" at the last minute when David isn't going to have time to respond and the interviewer will be interrupting his response.  I myself don't view that as productive.

They always interrupt Dave and give the republican plenty of time to dominate the conversation.

My blog  

[ Parent ]
Bush and His Congressional Flunkies (0.00 / 0)
added $5 trillion to the national debt with nothing to show for it.  But when Democrats want to add in another $1 trillion or so to fix rotting infrastructure, that is not on for Republicans.

$41 billion (0.00 / 0)
Sure, it's not adjusted for inflation but that is the cost of the FDR pre-war deficits.  Compared to the $5 trillion of W look at the difference.  You could point to roads, post offices, schools, bridges, dams, rural electricity and a lot more from FDR.  Bush spends the money and our infrastructure deteriorates and we can't afford to rebuild a major American city after a disaster.

[ Parent ]
Now, Now, David! (0.00 / 0)
It's not that we can't afford to rebuild a major American city after a disaster.

It's that we really don't want to rebuild it.

Not and have all those people come back and live there again.

"You know what they say -- those of us who fail history... doomed to repeat it in summer school." -- Buffy The Vampire Slayer, Season 6, Episode 3

[ Parent ]
fox news is correct in only their eyes (0.00 / 0)
fdr did extend the depression, not in reality but in the sense that because all gop admins create an economic downturn of some degree, the right wing talking points always blame the left when the economy they inherit from the right isn't fixed immediately, even though it took years to ruin.
this reporting by the gop mouthpiece eventually will get many of their viewers to realize the error of watching what is obvious to most, that fox news is not news at all but the propaganda machine for the party that hates most americans and therefore hates america and everything it stands for. for those that continue to watch this poor excuse for a news channel they are relegated to the same status as the republicans, an isolated class of hateful anti-democratic individuals not worthy of being called citizens.
thanks fox news we couldn't have done it without you and your hate over love and common sense philosophy.  


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