What are the lessons from the New Deal?

This week they put my Sunday column on the web on Friday; I was alerted by the ever-vigilant Mark Thoma.  The intro is this:

The traditional story is that President Franklin D. Roosevelt rescued capitalism by resorting to extensive government intervention;
the truth is that Roosevelt changed course from year to year, trying a
mix of policies, some good and some bad. It’s worth sorting through
this grab bag now, to evaluate whether any of these policies might be

If I were preparing a “New Deal crib sheet,”  I would start with the following lessons…

The conclusion is this:

In short, expansionary monetary policy and wartime orders from Europe,
not the well-known policies of the New Deal, did the most to make the
American economy climb out of the Depression. Our current downturn will
end as well someday, and, as in the ’30s, the recovery will probably
come for reasons that have little to do with most policy initiatives.

Read the whole thing.  For critical responses, perhaps you can try the comments section at Mark Thoma’s.  For reasons of space, it was not possible to specify that I was praising the proposed Obama middle-class tax cut.  I do not, however, think it will do much (if anything) to end the current recession, although tax hikes could make things worse.


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