Historical myths and economic fallacies are stubborn. They are also easily repeated. Perhaps one of the most stubborn myths—and other myths related to it—is that Roosevelt’s New Deal policies brought about economic recovery from the Great Depression. (Other related myths would be that the Great Depression was caused by unbridled capitalism, Hoover’s economic non-interventionism, and that WWII pulled America out of the Great Depression because big government war spending stimulated the economy and solved unemployment). Quite amazingly, even people who admit that they don’t remember much of what they learned in school are often able to repeat historical myths and fallacies verbatim.
Every once in a while, though, when a myth is confronted with key facts to the contrary, people often engage in fallacy-hopping—jumping from one fallacy to another when one no longer works in a particular instance. When someone does not passively accept the statement that FDR’s New Deal brought about economic recovery, but instead demonstrates anti-recovery, those ideologically committed to the myth will often hop to the next argument: FDR’s New Deal gave people “hope.”
When confronted with the facts that, by simply examining a few mainstream economic measures—unemployment, GNP, personal consumption, and private investment—it is obvious that the New Deal was a failure. In fact, worse than a failure, the New Deal was counterproductive and a hindrance to recovery. The relevant data regarding unemployment, GNP, personal consumption, and private investment are illustrated below (thanks to Dr. DiLorenzo’s How Capitalism Saved America, pp. 180-185):
(Higgs, Regime Uncertainty, p. 566)
(Higgs, Regime Uncertainty, p. 565)
FDR, the New Deal, & Hope
If New Deal proponents and/or defenders recognize the economic shortcomings of the New Deal, they have a few options if they want to remain committed to the New Deal (and the interventionism that the New Deal serves to justify). One option is the unfalsifiable and unfounded claim that the economic situation would have been much worse had the New Deal not been implemented. A second option—a bit bolder—is to claim that the New Deal simply did not go far enough and that what was needed was the wartime spending of WWII to truly “stimulate” economic recovery. A third option is to change the goal—from economic recovery and stabilization to a vague sense of hope.
This argument is now pervasive. In fact, even Republicans and conservatives often defend the New Deal, argue for the need for government intervention in the economy, and use the “hope” argument. (In fact, conservatives are often worse on this issue because, while they may denounce the New Deal, they often argue that the big government spending of WWII extracted America from the Great Depression). In a pamphlet for a DC tour company for students, I once read a thought/discussion question: “In what ways did FDR bring hope to the American people?” Note the loaded question—the assumption built in is that FDR brought hope to the American people, then students are left to fill in examples. Further, here is a sample of the hope argument:
When hope was a dying ember, [FDR] succeeded brilliantly in restoring faith in democratic institutions and establishing a legacy of innovation. (Jonathan Alter, The Defining Moment: FDR’s Hundred Days and the Triumph of Hope, pp. 332-333)
The New Deal did not end the Great Depression, but it did provide Americans with a renewed sense of hope and a belief that democracy could respond to the challenges of the crisis. (Kennedy, Freedom from Fear: The American People in Depression and War, 1929-1945)
Of course, “hope” could be defined as a subjective impression that involves confidence about the future. However, supporters of FDR and the New Deal only began to switch to the “hope” argument after it became evident that the New Deal brought about no economic recovery. If, however, economic recovery is the stated goal and the New Deal was allegedly needed to bring economic recovery, then replacing the goal of economic recovery with “hope” is dishonest. Unless we mean the type of “hope” Peter Griffin put in the homeless man’s change cup, then it is not accurate to say that FDR gave the American people hope.
This would be akin to a doctor providing cancer treatment to a patient. The goal(s) of the cancer treatment are cancer mitigation and/or recovery, if possible. If the patient worsens after the treatment, the doctor could make the claim that it would have been worse or that the treatment did not go far enough, however, it would be unlikely that the argument would switch to claim that the doctor provided “hope.” Even if he did, if the cure worsened the disease, the doctor provided false hope.
Thankfully, there were those at the time and since who contradicted this narrative with the facts. For example, John T. Flynn—a major critic of Roosevelt—was described the following way by Ralph Raico in his “John T. Flynn and the Myth of FDR,”
The mantra, “Roosevelt cured the Depression,” exasperated Flynn. (Now it is often replaced with the banal and much more cautious: “He gave the people hope.”) Didn’t anyone care about facts? he demanded. The “first” New Deal came and went, then came the “second” New Deal, in 1935—and still the Depression, unlike every previous downturn, dragged on and on. Flynn pointed out that in 1938 the number of persons unemployed totaled “11,800,000—more than were unemployed when Roosevelt was elected in 1932” (his italics).
A more recent example is by Stephen Moore, written in the introduction of New Deal or Raw Deal: How FDR’s Economic Legacy has Damaged America (2008), deals with the “hope” argument well,
The greatest and most enduring economic myth of the twentieth century is the idea that Franklin Roosevelt’s New Deal pulled America out of the Great Depression…. The most damning indictment of FDR’s New Deal agenda is that it did not do what it set out to do: end the Great Depression. Ask anyone over eighty, and he or she will probably say that FDR cared about the working man and gave the country hope. Maybe so, but that is not a sound economic plan…. Empathy is all well and good, but it does not create jobs or businesses or wealth…. The top tax rate under Roosevelt soared to almost 80 percent and then 90 percent, thus smothering any possibility of recovery…. Even the programs that are said to be the glittering examples of public policy success don’t shine so brightly any longer. Social Security was built on a Ponzi scheme where future generations would pay for the costs of the expansive benefits paid to earlier ones. “Pay as you go” worked like a dream when there were forty workers per retired person, but now looks like an Enron accounting fraud to today’s young workers—every two of whom will eventually subsidize every one retiree…. The irony of the New Deal is that this agenda, based on good intentions to help the poor and unemployed, caused more human suffering and deprivation in America than any other set of ideas in the twentieth century. (pp. xii-xvi, emphasis added)
