Jon Chait delves into an interesting hypothetical:

I think that’s correct. It’s also a useful lesson for liberal who compare President Obama with President Roosevelt. The latter’s political success owed an enormous debt to the fact that he took power after the economy had hit bottom and begun to rebound. Indeed, Obama’s situation is more like an election that took place in 1929, leaving him to take the oath of office in early 1930, just as the bottom was falling out.

I think that at the same time pundits are embracing the worthy goal of political fatalism, they’re also getting dangerously close to embracing a kind of economic fatalism as well. Governments don’t control the economy, and Presidents don’t fully control the government, but the Great Depression wasn’t just about a “bottoming-up” followed by a “rebound” policy choices mattered. In particular, soon after taking office FDR took the United States off the gold standard thus initiating a round of expansionary monetary policy. Then in 1937, he initiated fiscal retrenchment and the Fed initiated monetary contraction—the economy fell back into recession. Then in 1939-41 monetary conditions reversed again and the US began a fiscal ramp-up to prepare for war and the economy grew again.

The link between abandoning the gold standard and exiting the Depression is not a coincidence:

I think it’s at least plausible to argue that had Herbert Hoover followed Japan’s lead and swiftly abandoned the golden fetters of monetary orthodoxy, that the economy would have been growing again by 1932 and there’d have been no FDR and no New Deal. I don’t think Obama had a comparable option to dropping the gold standard available to him, and House losses in 2008 were likely unavoidable under any plausible economic scenario, but there are a variety of things he could have done that would have made a difference economically and politically.

From Mike Tomasky’s excellent article on trying to mitigate progressive disgruntlement by understanding the messiness of real history, a slice of the Secret History of the New Deal:

It’s worth noting, for example, that the second act to become law under the New Deal, after the Emergency Banking Act, which was a progressive piece of legislation, was a conservative bill, the Economy Act. It cut salaries of government employees and benefits to veterans, the latter by 15 percent. Arthur Schlesinger, in The Coming of the New Deal, writes that literally an hour after signing the banking act, Roosevelt outlined this bill to congressional leaders, saying the next day and sounding more than a little like some Robert Rubin progenitor had been whispering in his ear: “For three long years, the federal government has been on the road toward bankruptcy.” (And maybe one had: Schlesinger notes that Roosevelt’s budget director, Lewis Douglas, was certainly no Keynesian.) Just imagine Obama having tried something like that, alienating both veterans and AFSCME within a week of taking office. The Economy Act was opposed by many liberals in the House, so FDR turned to conservative Democrats and Republicans, who passed it.

Of course to argue “other presidents have done bad things so it’s okay for Obama to do bad things” would be illogical. But it is worth maintaining perspective. There’s never been a president who did the right thing all the time. On the big picture, FDR made his peace with segregation and LBJ led us into Vietnam. But if you look at the history in detail, you see many smaller fights and betrayals that were the subject of much passionate fighting at the time they occurred. Stepping back further, this stuff gets smoothed out and drops from view.

Via Tyler Cowen, economic historian Alexander Field makes the case that the 1930s was the decade in which we saw the most technological progress:

Because of the Depression’s place in both the popular and academic imagination, and the repeated and justifiable emphasis on output that was not produced, income that was not earned, and expenditure that did not take place, it will seem startling to propose the following hypothesis: the years 1929–1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history. The hypothesis entails two primary claims: that during this period businesses and government contractors implemented or adopted on a more widespread basis a wide range of new technologies and practices, resulting in the highest rate of measured peacetime peak-to-peak multifactor productivity growth in the century, and secondly, that the Depression years produced advances that replenished and expanded the larder of unexploited or only partially exploited techniques, thus providing the basis for much of the labor and multifactor productivity improvement of the 1950’s and 1960’s.

I think a phrase like “the most technologically progressive” period is hard to define properly. But there’s no disputing the fact that there was substantial technological innovation during the Depression (refrigerated trucking as we know it, to cite just one example, arose during this period) and a ton of productivity growth. You can tell about the productivity increased by the fact that GDP had fully recovered to its 1929 peak by 1936, was clearly higher in 1937, remained above ’29 levels throughout the 1938 trough, and then was higher still in 1939 and 1940 even though the unemployment situation remained bad for much of this period, and absolutely terrible during the ’37-’38 recession-within-a-depression:

I assume that part of the story here is that the Roosevelt administration implemented labor market policies that had the effect of pushing real wages up in what they thought was an anti-deflation measure, rather than letting them fall in a way that would have encouraged more employment. This should have given employers and workers incentives to try very hard to make labor-hours as productive as possible.

Jonathan Chait has a great piece on Amity Shlaes and The Forgotten Man. Best line: “The experience of reading The Forgotten Man is more like talking to an old person who lived through the Depression than it is like reading an actual history of the Depression.”

The most important point, however, is how closely contemporary conservative rhetoric is coming to resemble Hoover’s prescriptions:

Pence has insisted that The Forgotten Man proves “that it was the spending and taxing policies of 1932 and 1936 that exacerbated the situation.” Sanford, for his part, offered this fiscal diagnosis: “When times go south you cut spending. That’s what families do, that’s what businesses do, and I don’t think the government should be exempt from that process.” That is, of course, a perfect description of the paradox of thrift, only put forward as the solution rather than the problem. Governor Tim Pawlenty of Minnesota insisted that “we can’t solve a crisis caused by the reckless issuance of debt by then recklessly issuing even more debt,” and called for a balanced-budget amendment to the Constitution, which would of course massively exacerbate the present crisis. It is 1932 again in the Republican Party. [...]

But now we have come to a time when leading Republicans and conservatives–not just cranks, but the leadership of the party and the movement–once again sound exactly like Herbert Hoover. “Prosperity cannot be restored by raids upon the public Treasury,” said President Hoover in 1930. “Our plan is rooted in the philosophy that we cannot borrow and spend our way back to prosperity,” said House Minority Leader Boehner in 2009. They have come to this point by preferring theology to history, by wiping Hoover’s record from their memories and replacing it with something very close to its opposite. It is Hoover, truly, who is the Forgotten Man.

Brad DeLong takes the view that “Had John McCain won last November, very few of the New Deal denialists would be out in public–instead, the Republican legislators and their tame intellectuals would be enthusiastially rallying behind McCain’s tax cut-based Keynesian fiscal stimulus package right now.” I’m not nearly so sure that’s right. Recall that McCain was touting a spending freeze as the solution to the economic crisis while on the campaign trail, already to the general acclaim of the congressional right-wing.

Here’s some Gallup findings that are fun to think about:

Young people, like people who know what they’re talking about, rate Lincoln as Top President. Middle-aged people, meanwhile, are hard-core rightwingers—they put Reagan at the top and have an unusual aversion to FDR. Old people, by contrast, love FDR. The really weird thing here, that you also see in a lot of other polls, is a truly bizarre level of Kennedy-love. If conservatives want to say that Ronald Reagan was a better president than Lincoln or Roosevelt or the oddly underrated George Washington, then we’ll just need to agree to disagree. But I can’t imagine a coherent ideological viewpoint that would justify the high ratings Americans over-35 give to Kennedy.

Now of course if you could take the Kennedy-Johnson years as a whole, then divide them up into one presidency that was dominated by Vietnam and another one that’s responsible for Civil Rights and the Great Society, then you’d have one shitty president and one great president. A lot of people seem to have basically decided to divide things up this way and call the shitty president “Johnson” while the good president is called “Kennedy.” That, however, doesn’t have a great deal to do with reality.

CNBC had a segment last night in which Cato’s David Boaz and CAP’s Heather Boushey debated whether Ronald Reagan or FDR would make the best model for Barack Obama. It’s striking that the host starts out by saying that “FDR and Reagan both faced similar crises in their presidencies” even though they didn’t, in fact, face similar crises. Reagan faced a situation when the inflation rate was very high. This led the Fed to raise interest rates and strangle the economy in an effort to choke inflation. That worked, but it created a big recession. This is nothing like our current recession, where we’re trying to ward off the possibility of deflation:

Heather makes this point straight out of the gate. At this point, the anchor seems to agree that her intro was totally off-base, but it makes you wonder why she said it in the first place. Boaz, meanwhile, agrees that the situation doesn’t resemble the situation Reagan faced, but then just says we need Reaganite policies anyway! Which I suppose is a pretty good encapsulation of libertarianism’s one-note approach to public policy.

But the fact remains that these are different situations and the differences are important. We shouldn’t just emulate what FDR did. But that’s because some of the things FDR did were bad ideas. What we need is to do something similar to what we would advise FDR to do if we had a time machine. To model our approach on what worked in Depression-era policymaking (not just in the U.S., but abroad) and that avoids what didn’t work or what was counterproductive. The Reagan era is just irrelevant. Reagan did some good things, like remaining relatively steadfast in the face of the short-term pain caused by Volcker’s interest rate policies. And he did a lot of bad things. But you don’t want to emulate either of those things because the situation is different.

Bruce Bartlett has a very nice column on the real lessons of the New Deal:

One reason why Republicans strenuously oppose the Obama administration’s fiscal stimulus plan is because it repeats the errors of Franklin D. Roosevelt. To them, the New Deal was mainly about vastly expanding government spending and deficits, which Republicans believe made the Great Depression worse rather than better. Therefore, doing so again in the present downturn will also lead to failure.

The true New Deal legacy, however, is more complicated. Serious mistakes were indeed made. In particular, the National Industrial Recovery Act was fundamentally ill-conceived and retarded economic recovery. But in terms of fiscal policy, Roosevelt’s error wasn’t that he spent too much, but that he didn’t spend nearly enough.

Right. I think the right-wing’s view that the New Deal was, on net, a bad thing is mistaken. But it’s certainly true that the New Deal featured some bad ideas. And the day Barack Obama proposes organizing the economy into cartels that will be able to exercise enough market power to force retail prices up, I hope John Boehner will go on Fox News and ring the alarm bells. But in fiscal policy terms, the best evidence from the 1930s and 40s suggests that fiscal expansion can work—but that when faced with really big problems it needs to be really big in order to work.

Eric Rauchway has a nice brief overview of the historical context of Social Security’s founding and it’s significance in the broader sweep of American history.