In the comments, Randy voices what appears to be a myth about FDR’s economic policy:
I don’t recall where I heard about it, but FDR was pretty much making shit up as he went along. He’d wake up in the morning and basically throw darts at a dartboard to determine his economic policy. I think this is something that I heard on NPR – This American Life, pretty much hardcore left wing people.
Honestly, I don’t know a lot about the subject. I haven’t read any books on FDR or the Depression.
Please understand that this was a crisis situation, and they had to get out of it. The Republicans, just like today, had absolutely nothing whatsoever to offer. Hoover had sat on his fat ass for 3 whole years of the Depression saying over and over that we could not interfere in the sacred “Business Cycle.” My father lived through that era as a child, and he practically spit out those words “business cycle,” all the while waving his hands abracadabra like a magician when he told me about Hoover’s ideology. Indeed, Republicans of the day had turned “the business cycle” into a religious totem in the same way neoliberal idiots worship a fetish priest called “the invisible hand.”
It’s all crap. There is no magic in capitalism. Sure, it’s an engine, a powerful one at that, but unregulated it’s often more akin to a runaway freight train than anything else. No one quite knows what the unregulated market is going to do.
We do know it’s going to blow up from time to time, and maybe take the economy of the whole world down with it. Unbelievably, instead of seeing this as an obvious bug in desperate need of patching, this bug-virus aspect of capitalism is elevated to the status of a feature!
It’s as if Microsoft Word would totally blow up from time to time, destroying all your data, ruining the program itself and requiring a total reinstall. Instead of people screaming about this horrible bug, users would rave about the great auto-destruct feature, a glorious aspect of the great Microsoft World Cycle, a creation in destruction that beat all of the more stable word processors hands down. And everyone would rush out to buy the crazy program that sooner or later would Hiroshima all your data.
That’s what worship of the business cycle amounts to. No one even knows if it’s a cycle. Maybe the world economy gets progressively more and more fucked as these crashes happen. Nor does anyone know when the system will blow up. If capitalists could make a killing blowing up the system like they blew up the US financial markets, they’d probably be doing it all the time.
So there is no cycle, there is no magic hand. There’s just chaos, like a wild virus on the loose in the ecosystem that no one understands and no one knows what it will do next.
When we regulate capitalism, we take out some of the economic hurricanes and killer heat waves and thereby make the system more stable and easy to work with. But capitalists live for the killings and the crazy weather. The crazy weather that takes the gambling house down on top of the flush players grubbing through their winnings.
Republicans are the same now as they were then – insane.
Keynesianism was a new thing then, but most sane governments around the world relied on massive government stimulus deficit spending and public works projects to get out of the Depression. The greater the stimulus, the deficit spending and the public works projects, the quicker they came out of it. The Nazis came out of the Depression before anyone else with this same tried and true formula.
A lot of the projects FDR came up with were radical, even revolutionary, and no one knew if it was going to work or not. In a sense Randy’s anecdote is correct; FDR was throwing stuff up against the economic wall to see what would stick. But at least it was an activist economic regime, in contrast to the loser Republicans with their failed ideology, dead in the water then the same as today.
Republicans are just insane people. They must know that state stimulus deficit spending and public works projects are the way out of a deep depression, but they have always denied it and instead pushed for insane shit that only deepened and prolonged the Depressions. I don’t understand Republicans. They’re either liars or ideologues or insane, or maybe all three.