[Marxism] WWII ended the Great Depression, not New Deal economics | Louis Proyect: The Unrepentant Marxist

Louis Proyect lnp3 at panix.com
Tue Dec 11 07:05:33 MST 2018


My views on these matters were first put forward in a blog post titled 
“Did World War Two End the Great Depression”, written in September, 
2011. It cited a Paul Krugman Op-Ed piece written in 2008 and titled 
“Franklin Delano Obama?”. Krugman made the case that “What saved the 
economy, and the New Deal, was the enormous public works project known 
as World War II, which finally provided a fiscal stimulus adequate to 
the economy’s needs.” With respect to the public works projects 
mentioned by Al Ronzoni, Krugman described them as “largely offset by 
other factors, notably a large tax increase, enacted by Herbert Hoover, 
whose full effects weren’t felt until his successor took office.”

In Krugman’s view, FDR was someone who “thought he was being prudent by 
reining in his spending plans.” Sounds rather like Obama, doesn’t it? In 
fact, Krugman’s op-ed was a cautionary tale warning Obama, the supposed 
new FDR, not to be as tightfisted with government-funded recovery 
programs as occurred during the New Deal unless he wanted to take “big 
risks with the economy and with his legacy.”

Well, given the high costs of another world war (after all, those 
H-Bombs can make a real mess of things), Obama didn’t even create a 
public works program—the only option open to him. In fact, as I have 
argued, Obama was inspired more by Herbert Hoover than FDR. As someone 
who relied heavily on U. of Chicago economists, he was not likely to 
embark on a new New Deal despite all the advice he got from Paul 
Krugman, The Nation Magazine, Huffington Post, et al.

full: 
https://louisproyect.org/2018/12/11/wwii-ended-the-great-depression-not-new-deal-economics/


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