As I wrote of the free enterprise critics of the New Deal, "they argued that government intervention intended to save the economy only prolonged and deepened rather than ameliorated the Great Depression." A classic example of what Hirschman called the "perversity thesis."/1
I highly recommend @rauchway's brilliant review of Amity Shlaes's book, in which he shows this "perversity" argument, which she repopularized, to be mistaken./2
slate.com/culture/2007/0…
slate.com/culture/2007/0…
Eric notes, for example, that "unemployment fell every year of the New Deal. Also, real GDP grew at an annual rate of around 9 percent during Roosevelt’s first term and, after the 1937-38 dip, around 11 percent."/3
I also recommend @jonathanchait's excellent review of the Schlaes book. /4
newrepublic.com/article/63351/…
newrepublic.com/article/63351/…
Eric Rauchway right calls this argument "a resurrection of the duPont critique of the New Deal, circa 1935" but such claims never disappeared. /5
In 2007, Rep. Mike Pence claimed (as quoted by Chait) that "it was the taxing and spending policies of 1932 and 1936 that exacerbated the situation." /6
As I wrote in my book, free enterprisers "proposed a policy of complete opposition, and...set the terms for future interpretations of [FDR's New Deal] as, if not the only cause of the Great Depression, a principal extender of it." /7
