Monday, November 01, 2010

Please make it stop

A friend of mine posts a query to my Facebook Wall:

I was listening to an Economist this AM on the radio [who is] part of a group of Economists who believe FDR's policies prolonged the Depression, rather than helped it. This goes against everything I learned in my vast High School and Community College experience. What's the real deal, Green?
Just to make sure, I calculated four year GDP growth by presidential term, going back to Hoover.  I count as a term as the period from inauguration to inauguration, so 1929-1933, 1933-1937, etc.

The three terms in which GDP grew fastest: FDR III, FDR I and FDR II.  Even if one removes III because of the special circumstance of World War II, he still gets the best two four year periods.  Do people really want to argue the counterfactual?  [BTW, #4 is Truman II, and # 5 is JFK-LBJ].

3 comments:

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  2. Richard,

    FDR apparently believed that the economy suffered from too much competition, and so he enforced price minimums. A good case can be made that policies like these prolonged the depression. (See National Recovery Administration)

    We don't have to say that "FDR was good" or "FDR was bad." Most economists think the FDIC was a good idea. I don't think there is widespread agreement on the effect of stimulus spending. Most economists today would probably agree that other policies, like price controls, were destructive.

    The Fed also had a major role, which makes GDP growth rankings by presidential term difficult to interpret.

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