We talked earlier about Richard Cohen’s latest column, but reader F.B. flagged two paragraphs from the print piece that warrant another look.
History proves [government stimulus] works — it’s how the Great Depression ended — but Republicans will not acknowledge it.
The Depression in fact deepened in 1937 when Franklin D. Roosevelt tried to balance the budget and was ended entirely by World War II, which, besides being a noble cause, was also a huge stimulus program. Here, though, is Sen. Richard Shelby mouthing GOP dogma: Stimulus programs “did not bring us out of the Depression,” he recently told ABC’s Christiane Amanpour, but “the war did.” In other words, a really huge stimulus program hugely worked. Might not a more modest one succeed modestly? Shelby ought to follow his own logic.
Did Shelby really say that? Actually, yes.
I went back and looked at the transcript, and Robert Reich was trying to explain to the far-right Alabama senator why the focus should be on jobs. “Senator, what’s wrong, if I may ask, what’s wrong with a new WPA program or a Civilian Conservation Corps for the 6 million unemployed who’ve been unemployed for more than six months?” Reich asked. “Why not put them to work?”
Shelby replied, “WPA did not bring us out of the depression. The war did. We look back at the stimulus, nearly a trillion dollars gone down the drain.”
Shelby, I should mention, is the ranking member of the Senate Banking Committee, where he uses his post to kill important nominations to the Federal Reserve’s Board of Governors because he thinks he understands economic policy so well.
It didn’t come up in the ABC interview, but I’d love to ask Shelby and other conservatives who believe this why, exactly, World War II ended the Depression once and for all. I mean that literally — if the war gave the economy a massive boost, and everyone agrees that it did, how did this happen?
Shelby may find this confusing, but the war helped the economy because the government was spending like crazy. Indeed, during the war, policymakers spent an enormous amount of money, imposed extremely high tax rates, and took on massive debts — and the economy soared.
By Republican reasoning, this should have been impossible. But reality is pretty stubborn.
As for Shelby’s assertion that the 2009 stimulus was “nearly a trillion dollars gone down the drain,” it wasn’t nearly a trillion dollars, and it didn’t go down the drain — the Recovery Act took an economy that was shrinking and made it grow. There are as many as 3.6 million Americans with jobs today who wouldn’t have otherwise had them were it not for Democratic stimulus effort.
