Chupacabra Report

News that gets my goat..

The paper yesterday had a full page ad from The Cato Institute endorsed by hundreds of libertarian college professors. The text disputed Keynesian economic theory and opposed the stimulus plan before the Senate. No doubt some of the signees are knowledgeable on the subject, while others are no more qualified than me or my dog Joseph Stiglitz.
The Catos repeated an assertion we’ve been hearing from a lot of republicans lately; that The New Deal failed to ameliorate the Great Depression, and that only the country’s mobilization for World War Two put the U.S. economy back in business.

First I submit a comment that U.T. economist James Galbraith made this week on Amy Goodman’s show:

“Well, first of all, there is a grave understatement in those arguments about what the New Deal actually did. And that understatement is typically because the unemployment figures that many people are accustomed to using for the 1930s don’t count people who actually worked for the New Deal. This is Michael Steele’s distinction between jobs and work. But people who were building the Lincoln Tunnel or the Triborough Bridge or the aircraft carrier Yorktown are counted as work relief and not as employed, and there were many millions of those. And when you put them into the figures, you find that the New Deal actually reduced unemployment from 25 percent in 1933 to about—to less than ten percent in 1936. It went up again in ’37 and then came back down again to about ten percent before the war. So, a major, major improvement in unemployment did occur under the New Deal.”

And next I offer some stats from the Kent State history department, showing that in the fifth year of the Roosevelt administration, the Gross Domestic Product grew to ninety percent of pre-crash level.


GDP 1928 – 1941

Column two is actual GDP (in billions)
Column three is GDP (in billions of year 2000 dollars)

1928 $96.52 $812.60
1929 $103.60 $865.20
1930 $91.20 $790.70
1931 $76.50 $739.90
1932 $58.70 $643.70
1933 $56.40 $635.50
1934 $66.00 $704.20
1935 $73.30 $766.90
1936 $83.80 $866.60
1937 $91.90 $911.10
1938 $86.10 $879.70
1939 $92.20 $950.70
1940 $101.40 $1,034
1941 $126.70 $1,211


So now when you hear some hired liar on TV saying that the New Deal was a failure, you’ll know not to pay attention, and you might drop the program’s sponsor a line and tell them that you won’t be tuning in for any more propaganda. (You can get that here.)