Letters: Different history of Great Depression
In his recent letter about the New Deal, Richard L. Bogaard describes a very different history than one told by historians or by most Hubbard County residents who lived in the 1930s. Historians agree with him that a problem contributing to the Great Depression was that common people lacked money to buy the goods that they needed. This difficulty, however, was not created by Franklin D. Roosevelt and a progressive income tax structure. Rather it reflected economic policies of the 1920s under FDR's three predecessors. When Roosevelt came into office, 25 percent of the labor force was unemployed and the total value of failed bank assets was 25 times higher than in 1929. His New Deal invested public dollars to provide relief to the starving, work for the unemployed, and a regulatory system that protected savings and gave laborers and farmers a better return on their labor. 62 percent of Minnesotans reelected him in 1936; nationally he carried every state but Maine and Vermont. FDR made some mistakes, but the 1937 recession reflected too rapid a reduction in public spending, not a stifling of private investment. The robust government that FDR led allowed the U.S. to mobilize and triumph in World War II.
From 1946 to 1981, a federal program of progressive income taxes and significant regulatory oversight, far from increasing the nation's debt, brought the U.S. a steady decline in the ratio of national debt to the gross domestic product. Ironically, during the presidencies of Ronald Reagan and the first George Bush, with their rhetoric of small government and trickle-down economics, this trend reversed resulting in a doubling of this ratio of indebtedness. When we look at our current dire circumstances and seek explanations through the experience of the 1930s, the more apt parallel is between the policies of Herbert Hoover and George W. Bush. When we seek solutions, President Obama is on the right track in looking at the New Deal.
Bert Ahern, Professor of History, University of Minnesota Morris