A debate here between James K. Gailbraith and Leo Panitch on the 1930s New Deal, the Great Recession, and prospects for a New “New Deal.” Some of the comments of Panitch are debatable, however, though he is right that 1930s Keynesianism was rather timid.
1930s Keynesianism was rather timid.
ReplyDeleteMeh. This can be and usually is grossly overstated, e.g. by Cristina Romer. Have seen some good papers out there criticizing this outlook. The error is to look at the deficits, which are results of policies, rather than the policies themselves and the extent to which they conquered the real and very sizable problems, unemployment above all.
If one spends rationally, for normal, sane economic purposes, directed at those to whom it should be directed, the result is so spectacularly beneficial that it is hard to get much of a deficit out of it, even if you try, because economic activity is stimulated so much that revenue rises quickly too.
War spending is much less efficient, much more inflationary than New Deal type spending. Alain Parguez has some good stuff that imho is more accurate than usual. Yes, too little, but much less than later know-it-alls pronounced. And compared to what earlier and later generations and leaders achieved? The good guys of the 30s look pretty good.