Rauchway on the Great Depression and the New Deal

by Russ Roberts on December 1, 2008

in Great Depression, Podcast

The latest episode of EconTalk is Eric Rauchway talking about the New Deal and the Great Depression. I like (surprise) his emphasis on treating the New Deal as an emergent phenomenon rather than a master plan. The discussion and his book are a nice overview of what happened when, particularly in the 1920s, an era that gets less attention than the 1930s.

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indiana jim December 1, 2008 at 8:15 pm

From the "highlights":

"Things are getting better but hard to know if it was the war. Hard to generalize, one data point. Robert Barro podcast on disasters. These things come along once or twice a century, leading to ex post story-telling. People still care about and write about what caused and got us out of the Great Depression. Public myths change over time: Roosevelt got us out, war got us out."

Neither Roosevelt nor the war in literal terms "got us out" to my mind. What "got us out" was, in my view the reduced uncertainty that the war afforded US businessmen, which made INVESTMENT again a sane activity. With Roosevelt screwing around with his "emerging" DEAL (that is, see which way the wind is blowing and maybe alter policy that way), who wanted to invest. Today Obama's talk on 60 minutes of wanting to be like Roosevelt (in the sense of experimenting willy nilly with the economy with best of intentions) bodes ill for US investment going forward if OBAMA's economic advisors don't read this and wise him up quickly. In the words of the movie Tombstone's Curly Bill: "I ain't kidding neither." (If you don't know the movie and the reference (or at least can't get the point here), you have a greater than 50% chance of being clueless, so, in an expected sense my best advice to you is: nevermind.)

gappy December 5, 2008 at 11:27 am

Of all people, Rauchway is the one I least expected to be on EconTalk (after Krugman and Stiglitz). I again feel that the world of economic education is blessed to have a person like Russ Roberts interviewing every good economist (or historian) who's willing to be interviewed, from Shlaes to Rauchway, from Marglin to Lucas.

Everyone seems extremely opinionated these days. Everyone plays the expert on monetary theory, capital flows, and inflation. Unfortunately, readers of Cafe Hayek are no exception, and they seem reflexively against government spending. Nothing wrong with that, and I share the same reflex, but I try to fight it. I would suggest that we listen to Hayek's warnings. Especially regarding Macro, we now very, very little. Let's shed our pretensions of knowledge, and keep an open mind toward all policy proposals, by judging them carefully on their own merit.

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