FDR and the numbers

JEFF JACOBY ("Money for nothing won't grow the economy," Op-ed, Feb. 1) wrote that Franklin Roosevelt's Treasury secretary, Henry Morgenthau Jr., felt that the New Deal had proved to be an economic disaster. I suppose that depends on how one defines "disaster." Under FDR's New Deal, the unemployment rate fell from 25 percent in 1933 to 10 percent in 1937. The annual growth rate in gross domestic product over these four years averaged 13.0 percent. It was only after conservative deficit hawks convinced FDR to cut spending in 1937 that the recovery stalled. Thus it is not surprising that Morgenthau made his spending-is-not-working comment in 1939, two years after New Deal spending had been cut.

As late as 1936, government spending had increased by 51 percent, and gross domestic product grew at 5.7 percent. In 1937, however, spending was cut by 10 percent, and GDP fell by more than 3 percent. Maybe these numbers are just coincidence. Then again, maybe if the trillion dollars that President Bush spent in Iraq had been spent elsewhere, things would be different in the United States.

Conservatives who have been making economic policy for the better part of the last decade have been wrong. Over and over. Why should anyone listen to them?

Eric Kane
Exeter, N.H.