Free Markets, Free People
Very interesting read today by David Gordon in “Minding the Campus” (via Insty). In his piece he talks about the subject of history being at present in the best of times and in the worst of times, to mangle Dickens.
What am I talking about? Well, the blog in which Gordon’s article appears subs its title with “Reforming our Universities”.
Why is that important? We’ve talked about it in the past. It is where liberal America has set up shop for decades. And the effect is never been stronger than now. In fact, a lot of what you see as the changing attitudes in America can, I think – at least in part – be traced to academia.
Gordon notes its beginning:
This extraordinary bias began in the late 1960s with the anti-Vietnam war protests. Many participants, at least those who subsequently went into academia, have never gotten over it. Their fossilized views have made their own disciplines largely museums of dead ideologies. Another of the remarkable changes within the historical profession has been the growth of women’s history. With only a negligible representation in 1975, almost 10% of all historians today identify themselves as historians of gender and women’s affairs.
What bias is Gordon talking about? Well it’s a bias that he sees as “mangling history” to our detriment:
The evolution of the historical profession in the United States in the last fifty years provides much reason for celebration. It provides even more reason for unhappiness and dread. Never before has the profession seemed so intellectually vibrant. An unprecedented amount of scholarship and teaching is being devoted to regions outside of the traditional American concentration on itself and Europe. New subjects of enquiry — gender, race and ethnicity — have developed. Never have historians been so influenced by the methodology and contributions of other disciplines, from anthropology to sociology.
At the same time, never has the historical profession been so threatened. Political correctness has both narrowed and distorted enquiry. Traditional fields demanding intellectual rigor, such as economic and intellectual history, are in decline. Even worse, education about Western civilization and the Enlightenment, that font of American liberties, and the foundation of modern industrial, scientific and liberal world civilization, has come to be treated with increasing disdain at colleges and universities.
Now call me crazy, but you can see easily the effect of what Gordon is talking about today in the last election. Increasingly students (and that includes further down the academic chain in high schools) know less and less about our history and traditions and more and more about, well, women’s studies, gender studies, things which have little bearing on economic and intellectual history – for instance:
The problem with this is that it has helped force out many other kinds of historical enquiry. It is important to emphasize women’s role in society and in history. However, it is difficult to see how a feminist perspective could contribute very much to a purely economic history of the English industrial revolution (as opposed to its social consequences), or to a diplomatic history of Europe between the Napoleonic and the First World War. As a result, these kinds of studies are receiving ever less attention.
We all understand that women and minorities were mistreated. Got it. And we all know that was wrong, with 21st Century hindsight. But what happened back when all that bad stuff was going on, in terms of economic and intellectual history, is still critically important today.
Instead history’s “new focus” has helped bolster both the “victimization” and “entitlement” mentality:
Worst of all, women’s history has contributed to the current holy trinity of race, gender and class that dominates the historical profession. Under normal circumstances, the tight focus on victimization would soon fade. Since oppression studies explain so little, they soon become boring. But, as a part of a political chorus demanding ever-more extravagant entitlements for key voting groups, an essential part of the identity politics that is so destructive of national unity, the trinity is ensured a long life. Historians can grow tired of an intellectual movement. Politicians of a useful political tool, never.
There is also something else beyond the fanciful and fraudulent political and academic rhetoric of “equal opportunity – affirmative action.” That is jobs. Key voting groups designated as oppressed have been hired preferentially in the academy, most especially in the social sciences, including history. To justify these preferences, historians of gender and race must keep emphasizing oppression. How otherwise can their privileges be justified? Hence, the refiguring history to justify their positions in the professoriate.
We used to hear people laugh derisively when someone mentioned “political correctness”. But what you’re reading here is an example of political correctness run amok.
And it’s effect? Read James Taranto’s piece in the WSJ today. It’s an incredible example of political correctness gone nuts. I’m talking about Emily Yoffe’s answer to an obviously absurdly insensitive question addressed to her. However, her answer, among much of the left, is both appropriate and “correct”. It’s what they believe. It’s what they’ve been taught.
Will it get worse? Well, Gordon seems to think it will:
A remarkable generational change is also coming. Most of the historians in the declining fields, economic, intellectual and diplomatic history, earned their degrees more than 30 years ago. At the same time, more than 50% of the new PhDs are now trained in women and gender history, in cultural history (a watered-down version of social history), in world and African-American history. This is going to make an extraordinary difference in what kind of scholarship will continue to be undertaken, and how the past will be taught. The history profession, seemingly innovative and robust, is in fact intellectually debilitated, and sadly reduced in scope.
If you think it is bad in the history department, you’ve seen what is going on in the science department (
global warming climate change “science”).
Many have been hinting for years that the culture battle – the battle between individualism and freedom v. collectivism and entitlement- is being lost in academia. Gordon manages to put an exclamation point to the claim. One of the reasons our population knows less and less about economic and our intellectual history is because it has been waylaid and replaced with “disciplines” which stress entitlement and victimization.
Is it then a surprise when more and more of the population view themselves and this country through those lenses? And is it then any more surprising when they perceive government - more and more government – as the answer? Again, it’s what they’ve been taught.
Brian Dimitrovic, writing in Forbes, is another who takes a shot at Obama’s speech in Kansas (this is almost becoming a series considering the number of people ripping the speech on its economic ignorance) and posits that it is an example of abysmally incorrect economic history. The most obvious reason for the rewriting of that history by President Obama is centered in his ideology. If the history doesn’t prove what he says, President Obama doesn’t have a case. Dimitrovic, using the actual history of the periods Obama cites, shows Obama’s grasp of the history of those eras is as poor as the ideology he touts. Here’s the passage from the speech that Dimitrovic cites. We’ve cited it in previous posts, but Dimitrovic’s demolition of the premise is important:
[T]oday, we are a richer nation and a stronger democracy because of what [Teddy Roosevelt] fought for in his last campaign [of 1912]: [including] political reform and a progressive income tax.
Now, just as there was in Teddy Roosevelt’s time, there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune….If we just cut more regulations and cut more taxes – especially for the wealthy – our economy will grow stronger….
Now, it’s a simple theory. And we have to admit, it’s one that speaks to our rugged individualism and our healthy skepticism of too much government….And that theory fits well on a bumper sticker. But here’s the problem: It doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ’50s and ’60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory.
Now there are lots of opinions about economics, but like it or not, facts are facts. Those facts are readily available to those who seek them. By the way, Dimitrovic is a Harvard PhD and an economic historian, so this is right in his wheelhouse.
First is his contention that Roosevelt’s “progressive” ideas are what essentially saved the nation. That the intrusion it represented was necessary. Dimitrovic pretty much says that’s nonsense. In fact, he says, what happened then may be the reason we’re suffering now.
Let’s look at the past as it actually was.
There is one major inflection point in U.S. economic history. Before this point, growth was high, at about 4% per year for a century. Also in this period, there was remarkable price stability and so little unemployment that the nation had to import tens of millions of workers from abroad.
After this point, growth was moderate, at about 3% per year for the long term, with variations in the form of major depressions and recessions and a 23-fold inflation which had no like in the previous epoch.
This inflection point was 1913 – the very year which the reforms TR plumped for in his last campaign, the income tax and the Federal Reserve, came into being. 1913 marks the one secular shift in American economic history toward lower growth and more economic unpleasantness in the form of unemployment, inflation, and serial recession.
Had this nation grown at the 4%-rate achieved in the pre-1913 period, we would be twice as well-off today. As for inequality, unemployment and inflation are scourges to the working class, but not so much to the rich, and these are 20th- and 21st- century innovations.
That’s the actual history coupled with the economy’s real performance. The economy here worked pretty darn well before 1913 and we saw consistent growth that continued to lift all boats. After 1913, not as much. An entire percentage point of growth was, on average, was lost. The only real and significant difference – income tax and the Federal Reserve. What does economic history show happened after this inflection point where government intruded significantly?
As Dimitrovic points out, “lower growth and more economic unpleasantness in the form of unemployment, inflation, and serial recession.” And again, this isn’t a claim that government has no role in the economy as Mr. Black and White would like to claim. This is to point out that what he is attempting to sell with his rhetoric and in support of his premise that it is capitalism that has failed (and thus government is the answer) has no basis in fact. In fact, it appears the opposite is probably true.
Dimitrovic then turns to the 20th and 21st centuries and their history:
Now about that 20th-century, the only reason its record came in even respectably is that at certain junctures, decided efforts were taken to withdraw the impress of the institutions of 1913, the Federal Reserve and the income tax.
He lists a number of facts that contradict Obama’s contentions about the market. In fact, as Dimitrovic says, it was decidedly anti-progressive ideas which saved the 20th Century, for example:
The President says, “It didn’t work when it was tried in the decade before the Great Depression.” These would be the years 1921-1929, when on account of a tax cut put together in 1921, the economy boomed at 4.8% per year as unemployment and inflation (the latter recently on a 100% run) both collapsed. How does a president, in a major, prepared speech make such an indefensible factual error?
Next: “It’s not what led to the incredible postwar booms of the ’50s and ’60s.” No? The trough of the recession at the end of World War II was 1947, when the Republican majority in Congress conspired to win a tax cut over President Truman’s veto. Result: a 6-year run of 4.8% growth.
Note the question Dimitrovic asks in the last sentence off the first example. This isn’t something that would be difficult to find for a research staff. These numbers and facts exist and are out there. But they don’t fit the ideology. You either have to assume they didn’t research the claims or that they rejected the facts because the were inconvenient to the premise. It is hard to believe the didn’t research the claims, isn’t it? They’re pretty definitive claims. One would assume, listening to a President of the United States, they’re anchored in fact. Obviously they’re not. The question is whether this is true economic historical ignorance or willful economic historical revisionism?
Dimitrovic also includes an example of where tax cuts were resisted, and the result, and where they were instituted afterward and that result. Again, the facts seem to refute the President’s premise:
In 1953, when recession came, President Eisenhower resisted calls for another tax cut, and recessions came again and again such that Eisenhower left office in 1960 with a record of 2.4% annual growth on his watch. John F. Kennedy followed, as every schoolchild should know, with another big tax cut. The great 1960s boom ensued, with 4.9% growth from 1961 to 1969.
Also interesting are the parties of the presidents. The numbers, however, aren’t controversial at all. This has been a fact with which almost all of those who’ve followed politics for any length of time and have been interested in the effect of tax cuts on our economy are familiar. These aren’t obscure, little known facts. But they certainly have been facts that one side of the ideological spectrum have tended to ignore when trying to spin more government and not less. That is precisely what President Obama’s object was in his Kansas speech.
The reason for Dimitrovic’s rebuttal of the contentions and claims made in the speech is fairly easy to discern:
Two years ago, I happened to publish a book, Econoclasts, canvassing all this history. I also happen to know that the White House library has a copy.
It also explains his disbelief in what was said:
I have to wonder what historical scholarship the president and his speechwriters are consulting as they come up with their strange counter-narrative of American economic history. I truly don’t know what the books could be.
After all, when the major library bibliographical service, Choice, reviewed Econoclasts, it said the book “fills a gaping hole in the literature.” Has there been some new revisionist history of the effects of tax cuts since 1913 that validates the president’s new narrative? If so, no one’s ever heard of it.
Then again, you can find the stuff the President reiterated in Kansas here and there in left wing redoubts, Berkeley, California and the like – on bumper stickers.
But not in the history of the actual eras in question. In fact, precisely the opposite of the claims made by the President seem to be true. Government intrusion is what has dampened our economic growth. You can see the percentage amounts for yourself. The cycles of recession, unemployment and inflation are a result of more government, not the failure of the market. In fact, per Dimitrovic’s examples, every contention made by the President, which Dimitrovic highlighted, are demonstrably wrong.
The reason for the claims is obvious, however. The ideology of market failure and the demand for more government requires that history, whether it is accurate or not.
We have an old word for that – propaganda. The dishonesty being employed ought to make the current purveyor of that propaganda ashamed of himself. But there is certainly no sign of that being the case.
(Originally posted at Risk and Return)
I have been skeptical and so is James Bianco:
The problem in Europe is simple – they created a common currency – the euro. For years, the market erred. It thought that meant that every sovereign debt had the same rating as Germany. I was buying Greek bonds. I was buying Irish bonds. I was buying Italian bonds. But I thought I was buying German bonds. Then, a couple of years ago, I had an epiphany – no, I was not buying German bonds; I was buying Greece, Italy, and Ireland, or whatever, not Germany.
Those countries, recognizing that they could borrow into infinity because everybody thought they were lending to Germany, pretty much did that and expanded their welfare states to the point where they cannot pay their debts.
Germany has disappointed everybody with its intransigence, its unwillingness to “get with the program,” and endorse massive ECB bond buying and Eurobonds. Their reason? They believe they will be stuck with the bill. Of course, they are right, they will be:
If a Eurobond market comes with with strict discipline/rules on borrowing and paying debt back, it might work. Unfortunately no one will agree to a Eurobond market with strict discipline/rules.
If a Eurobond market comes with no discipline/rules, then it is just another way to trick the market into thinking they are buying German Bunds. It will “work” for a while as the crisis will ease until everyone borrows too much money and then comes back much worse.
I am not even sure it will work more than a few days at this point, but maybe. Either way it is not a solution, but a stop gap at best. It is also a stop gap that should not be attempted unless an actual endgame is in sight:
So how do you fix the Euro crisis? Unfortunately there are only three solutions and all are distasteful:
- Call off the union and go back to legacy currencies. This destroys the banking system who will be paid back with devalued/nearly worthless currencies.
- Massive austerity. This option is very unpopular among the electorates and will cause a bad recession/depression.
- Fiscal union. This is a nice way of saying Germany finally wins WW2. Is the rest of Europe now ready to take orders from Berlin? Didn’t they fight two wars to prevent this?
The only reason ECB printing keeps being mentioned is because the three options above are untenable and money printing is the only other thing they can think of. Money printing does NOT fix anything, it just makes the problem better for a while until it comes back worse than before.
Full Fiscal Integration: Since all other solutions put in place circumstances that are unstable and merely kick the can down the road, the fundamental flaw in the Euro needs to be addressed. That is the lack of a unified fiscal policy. The answer then is the end of sovereignty, the creation of a US of Europe. An obvious objection is that Germany wants to be a sovereign nation. We’ll skip this niggling little detail, but even if they didn’t want to remain sovereign do they want to harmonize laws and economic policy with Greece and some of the other PIIGS? West Germany just integrated with East Germany and the experience was traumatic featuring massive transfers to East Germans. The PIIGS will still not be competitive with Germany. That means internal adjustments (internal devaluation or austerity) to allow them to become more competitive for the PIIGS’ or massive transfers. Thus unifying the Eurozone under a single fiscal policy means massive transfers from Germany to the PIIGS to harmonize the welfare states and unify the debt and avoid austerity throwing the entire Eurozone into depression. Germans will pay for the debt in one fashion or another.
Cullen Roche points out that in the US we don’t worry much about the need for internal transfers between states to keep the system sound. Today that is true, though it has led to large conflicts in our past, playing a role in civil unrest, uprisings, the conquest of a continent and near destruction of its former inhabitants and the Civil War. Our unity was easier to envision and still born of blood and tragedy.
I am not saying unification of Europe would lead to such tragedies and conflicts. However, we need to ask if Germany (or really all the countries) want to make the internal transfers that make such a system work? Germans would pay a great deal, Greece and the other PIIGS would suffer internal austerity to the extent that they contribute to the economic re-balancing. Do Europeans, or most importantly the Germans, view themselves as a people who will be responsible for paying all the bills to integrate the Greeks and others?
Are Europeans ready to think about their home countries in the same way Texans think of Texas? Their state, but completely subordinate to the US? Will they be able to secede? We answered that question in the US with a war of incredible savagery and destruction. My guess is a unified Europe would be far less stable. They will not choose a civil war comparable to the US, but instead countries leaving over time as well as never entering the union. That leaves us with all the problems we have now still being there. Without a European populace overwhelmingly in favor of a true union this will not work. We would be faced with a PIIGS like crisis with every election and the possibility of secession in each of the former countries.
The necessity of creating a union where there is no possibility of secession, where citizens are more loyal to the European sovereign entity than their own countries is incredibly unappreciated. Half measures will not work. If Texas were to get upset about staying in our own Union it would not matter how overwhelmingly popular the idea of leaving was in the Texas legislature, the US military will ensure that Texas stays a subordinate state. We decided that issue in 1865 at the cost of well over 600k casualties.
If a similarly firm enforcement of Eurozone union is not agreed to (and setting aside a war to force union) then why should the market assume the system will remain intact? Why consider the bonds issued by the various states, or the Eurozone as a whole, deserve a AAA rating? My belief is that eventually the Eurozone will suffer other crises as states face local elections that wish to leave for one reason or another. Critically Eurobonds and fiscal Union make it easier for countries to leave, since the debt will be the Eurozone’s, not theirs. They can leave and stick the remaining members with the bill. That is an incentive which virtually ensures instability.
Treaties don’t matter if there is no enforcement mechanism, and all enforcement mechanisms at the end of the day have to have a credible belief in military force behind them to matter. Otherwise those who wish to exit can just thumb their noses at whoever stays behind. Has there ever been a successful union where the underlying members could leave? Not that I am aware of.
There are no good options, only more or less realistic ones.
You may have noticed that there was no podcast this week, and that there haven’t been any economic statistics reports this week. That’s because I had to travel to Houston, Texas this weekend to attend the funeral of my grandmother, Mildred Davidson. Many years ago, my grandfather bought their funeral plots at Brookside funeral home, and, though the family migrated out to California, we took them back home after their deaths. My grandfather, Paul E. Davidson, died in 2003. Now, he and my grandmother are finally together again.
When I returned for my grandfather’s funeral, I didn’t have a lot of time to do much beyond see some family, and go to his funeral. This time, I spent three days in Houston, and had time to travel back to all the places I remember from my childhood.
I was born in Houston, and grew up there. My parents divorced when I was two, and my father moved back to New Mexico, where he was from. I spent most of the year living with my mother, and summers with my father, mainly in Albuquerque, NM. So, I sort of have two homes, and two sets of people—entirely unrelated to each other—who saw me grow up. It’s kind of weird. But, Houston was the place I identify as home. So, I went back to the places I remember.
Below the fold is a picture-heavy story; part travelogue, part history. If you’re interested in all about finding out about me, or my past, this is it.
Trust me when I say I’d love to see the next government in Egypt be a democratic and modern one dedicated to freedom and liberty. But I don’t find myself to be particularly cynical when I say I don’t think that will happen at all.
Let’s start with Richard Cohen’s points as a good foundation for why I believe that:
Egypt’s problems are immense. It has a population it cannot support, a standard of living that is stagnant and a self-image as leader of the (Sunni) Arab world that does not, really, correspond to reality. It also lacks the civic and political institutions that are necessary for democracy. The next Egyptian government – or the one after – might well be composed of Islamists. In that case, the peace with Israel will be abrogated and the mob currently in the streets will roar its approval.
It not only lacks the civic and political institutions necessary for democracy, it has no history or tradition of democracy. Given all of that, I’m constantly amazed by those who see what they choose to interpret as “people’s revolutions” in places like Egypt as precursors to a sunny day in the bright light of democracy and freedom.
David Larison points to something Jeane Kirkpatrick once said decades ago after Iran fell to the Ayatollahs.
Although most governments in the world are, as they always have been, autocracies of one kind or another, no idea holds greater sway in the mind of educated Americans than the belief that it is possible to democratize governments, anytime, anywhere, under any circumstances. This notion is belied by an enormous body of evidence based on the experience of dozens of countries which have attempted with more or less (usually less) success to move from autocratic to democratic government. Many of the wisest political scientists of this and previous centuries agree that democratic institutions are especially difficult to establish and maintain-because they make heavy demands on all portions of a population and because they depend on complex social, cultural, and economic conditions.
As legitimate as the grievances against the Egyptian government are, it is entirely possible that whatever comes after Mubarak and his allies could be dramatically worse. We seem to forget that political change can also be change significantly for the worse, and that empowering a dispossessed majority can lead to economic catastrophe, ethnic and/or religious violence, and contribute to an overall decline in the public’s welfare.
Exactly. And for examples of the point, we once again turn to Jean Kirkpatrick:
In Iran and Nicaragua (as previously in Vietnam, Cuba, and China) Washington overestimated the political diversity of the opposition–especially the strength of “moderates” and “democrats” in the opposition movement; underestimated the strength and intransigence of radicals in the movement….
Many of us simply cannot see past the fact that history doesn’t much support the contention that something “good”, as in a government that will be good for its citizens and a friend to the US, will emerge in Egypt or countries like Egypt. One of the results of oppression and repression are the withering and finally death of democratic institutions – if any even existed to begin with.
And the promise of “free and open elections?” As common and predictable as sunrise. Free and open elections only guarantee you’ll see them once. After that, you’re more likely to see Venezuela, Zimbabwe and Lebanon than you are Canada, the United States and the UK.
It is having those “free and open elections” the second time, and the third, and fourth, etc. that develop the institutions we’re talking about. Holding an election after the overthrow of a government doesn’t make what follows a democracy anymore than writing a Constitution means anyone will live by it or uphold it.
Dictatorships in countries with no democratic traditions or institutions usually beget a dictatorship of a different form when the current strongman is overthrown. And even if the revolution makes an attempt at democratic progress, it usually gets subverted and taken over by the country’s next oppressor as soon as he and his followers gather enough power.
Obviously everyone would like to believe there can be exceptions to the rule and certainly it would be in our, Israel and the region’s best interests if that’s the case in Egypt. But that’s not what we should expect, and it damn sure isn’t that for we should be preparing. Instead, it appears we’re in the middle of repeating our own disastrous history of dealing with such problems. Here’s Kirkpatrick again, talking about Iran – see if you’re feeling a little déjà vu as you read it:
The emissary’s recommendations are presented in the context of a growing clamor for American disengagement on grounds that continued involvement confirms our status as an agent of imperialism, racism, and reaction; is inconsistent with support for human rights; alienates us from the “forces of democracy”; and threatens to put the U.S. once more on the side of history’s “losers.” This chorus is supplemented daily by interviews with returning missionaries and “reasonable” rebels.
As the situation worsens, the President assures the world that the U.S. desires only that the “people choose their own form of government”; he blocks delivery of all arms to the government and undertakes negotiations to establish a “broadly based” coalition headed by a “moderate” critic of the regime who, once elevated, will move quickly to seek a “political” settlement to the conflict.
Probably not. Seems, as history demonstrates, all this is as American as apple pie. From Reason:
Bob Shrum, perhaps best known for his masterful performance in shepherding John Kerry’s presidential race to…uh…it’s…conclusion, now sounds off about economic myths.
One of the most stubborn [myths] is what [John] Kennedy denounced at Yale—the notion that deficits are always evil and the balanced budget an inherent public good. This myth is now constantly exploited by do-nothing opponents of Obama’s recovery plan. On Sunday, George Stephanopoulos read a viewer’s complaint to Treasury Secretary Tim Geithner: “How do you justify printing money out of thin air?” Isn’t the inevitable consequence “hyperinflation?” Geithner calmly rebuked the cliché by pointing to the Federal Reserve’s capacity to counter inflation by raising interest rates once the economy is back on track.
Well, he’s cartainly right about that. The Fed can always just raise interest rates. It’s what Paul Volcker did as Fed Chairman in the late 70s and early 80s. If by “back on track” he means that we can have an unemployment rate of 12%, as we did in 1982, and a Fed Funds rate of 14%, then, I guess he’d be right. It certainly got rid of inflation.
After all, cutting spending now would accelerate, not reverse, the downturn, and trigger a spiral of declining federal revenues that could leave budget balancing out of reach no matter how deeply we cut.
And raising short-term interest rates by the Fed at some point in the future would…not?
This is elementary economics.
I certainly wouldn’t contradict that.
In reality, Roosevelt increased spending overall by 40 percent from 1933 to 1934, and the deficit by nearly a third. In the first five years of the New Deal, the gross domestic product rose more than 40 percent. The New Deal faltered not when FDR disdained conservative advice on deficits, but only when he briefly followed it. After Roosevelt drastically cut the deficit in his 1937 budget, the economy promptly tanked. When FDR reversed course, the economy turned around.
In reality, Roosevelt also increased tax rate; the top tax rate climbing from 63% to 79%. No doubt his conservative critics encouraged that, too. In other words, Roosevelt both decreased spending and increased taxes. In addition, there were new Social Security taxes in 1936 and 1937. And a new corporate tax on undistributed earnings went into effect in 1937, too. If only we had some way to know what effect tax increases have on economic growth!
Oh, and the Fed doubled reserve requirements on banks from 1936 to 1937.
I wonder–pure speculation of course–if significant tax increases and contractions in the money supply might have, in some mysterious way, contributed to the economic downturn of 1937-1938.
Sadly, we may never know.
In 1933, FDR blew up a London economic summit that sought to set fixed currency exchange rates, a virtual return to the gold standard that would have hobbled his economic strategy.
In other words, FDR was a unilateralist cowboy who intentionally flaunted international consensus for his own political ends, and, incidentally, reversed course a year later.
There was a lot more stuff going on in 1933-1940 than simply government spending. Not that you’d know it from reading Mr. Shrum’s amusing little article.