Quote: “No, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. ...I say after eight years of this Administration we have just as much unemployment as when we started.” – U.S. Treasury Secretary Henry Morgenthau, Jr.
U.S. Treasury Secretary Henry Morgenthau, Jr., in a private meeting at the Treasury Department, May 9, 1939. Morgenthau was lamenting the fact that government deficit spending did not have the intended effect (reducing unemployment).
Of course, we've been told, over and over, that FDR's government programs ended the Great Depression. Morgenthau's quote (and this chart, at right) are proof positive of the lies your teacher (and the cheerleader media) told you.
What ended the high unemployment of the Great Depression? WWII.
Are we ready for WWIII?
Edit 1: Added clarifying phrase "the high unemployment of" in the what "What ended the Great Depression?" question, above.
[U.S. Treasury Secretary Henry Morgenthau, Jr.]: No, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong, as far as I am concerned, somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises…
But why not let’s come to grips? And as I say, all I am interested in is to really see this country prosperous and this form of Government continue, because after eight years if we can’t make a success somebody else is going to claim the right to make it and he’s got the right to make the trial. I say after eight years of this Administration we have just as much unemployment as when we started.
Mr. Doughton: And an enormous debt to boot!
HMJr.: And an enormous debt to boot! We are just sitting here and fiddling and I am just wearing myself out and getting sick. Because why? I can’t see any daylight. I want it for my people, for my children, and your children. I want to see some daylight and I don’t see it…
—Transcript of private meeting at the Treasury Department, May 9, 1939, F.D. Roosevelt Presidential Library
Comments
#1 To me, saying WWII ended the
To me, saying WWII ended the depression begs the question: why did the WWII government spending work when the previous decade's worth of government spending didn't? Is it that FDR didn't spend enough? Isn't that what Paul Krugman is saying about Obama now?
I've heard the better explanation is that the fed.gov leviathan simply ended a lot of their regulations and other meddling in company operations. They got out of the way and let the companies do everything they could to make the war effort work.
#2 Another quote of the day, courtesy of Scott Locklin
#3 Mobilization, new tech, and other fallout from WWII
Here's an interesting perspective on the economic 'fallout' (benefits, actually) the flowed from our total mobilization in WWII:
http://scottlocklin.wordpress.com/2011/07/31/in-which-i-have-a-laugh-at-...
#4 Maybe some powerful people wanted war...?
Call me paranoid, but as some have pointed out, the early part of the 20th century can be described as a "fascist moment" in U.S. politics.
It's also been said that FDR wanted to get us into WWII. Why?
Is it that hard to imagine that some of the rich and powerful industrialists, along with some politicians, didn't really want the Depression to end unless it helped them reach their own personal goals?
Given the fascist slant in politics and public policy at that time, what do you think their goals might have been?
#5 WWII mobilized the workforce for war
Well, it occurs to me (I've not researched it, but it seems intuitively obvious) that WWII 'worked' to end the high unemployment of the Great Depression because it removed a bunch of unemployed people from the civilian workforce (young men and some young women), and mobilized the nation for war.
I've not checked into the regulations issue you raise, but it makes sense and if that's the case, it may have been a decisive factor. But would the Feds have ended all those regulations in the absence of the external threat?
The salient fact is that the massive unemployment during the Great Depression was not corrected by massive government spending programs and greatly expanded meddling (regulation) in the market during the '30s. Which was the main point I wanted to make. The "how and why" WWII signaled the end of the Great Depression in terms of metrics besides unemployment is probably a good subject for debate. It seems to me the timing isn't subject to debate, as it's pretty clear that unemployment dropped as WWII began.
The bit about WWIII was intended as a warning of what may come if we don't end this depression. Seems to me, and I think history proves, troubled politicians love foreign entanglements and states of emergency.
Addendum
The bad stuff happening over in Europe (Greece, for example) is one of the reasons I mentioned war. Europe seems to be heading for the cliff, and I don't know where that will end up.