Myth Busting: Debunking the “WWII Ended The Great Depression” myth.
February 9, 2009

 
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You’ve undoubtedly heard scores of Conservative idiots make the following claim:
 

“World War II pulled the U.S. out of The Great Depression, not FDR or his ‘New Deal’.”

 
In fact, last Friday (2/6) Senate Minority Leader Mitch McConnell (R-KY) repeated the ridiculous claim on the floor of the Senate (see video here. Advance to the 5 minute mark):
 

McConnell: “The Big Spending programs of The New Deal did not work. In 1940, unemployment was still 15%… What got us out of the doldrums that we were in during the Depression was the beginning of World War II.”


Okay, let’s stomp this annoying myth into the mud:
 
First part: “In 1940, unemployment was still 15%”. Notice his choice of date… 1940. Unemployment was actually LOWER in 1937 (14.3%), DOWN FROM 24.9% when FDR entered office in 1933. Unemployment INCREASED 0.7% between 1937 and 1940. Compare that to the Republican record under Bush: When Bush entered office in 2001, unemployment was 4.2%. Last week, the unemployment rate hit 7.6% after losing a record 600,000 jobs last month (Bush’s last month in office). THIS is the guy dispensing advice on job creation?
 
Second part: “What got us out of The Great Depression was World War II”. No. In fact, WWII was responsible for DELAYING our recovery, not causing it.
 
Under FDR and The New Deal, GDP (Gross Domestic Product) grew at an average 9.45% every year from 1933 to 1937… the slowest being 1937 as Europe grew concerned about Hitler possibly starting a war.
 
GDP 1933 to 1940

 
In 1938, as Hitler took control of Austria and threatened war with England if they denied him Czechoslovakia, America’s GDP actually FELL 3.4% (for comparison, last month when we lost 600,000 jobs, it was because GDP fell by 3.8%. Still think The War was “aiding” our economy in 1939?
 
GDP DID shoot up in 1940 and 1941… the two years before we entered the war (the Japanese didn’t attack Pearl Harbor and drag us into The War until December of ’41) as the United States sold weaponry to our (still financially sound) allies and we imported less from them, keeping more of our money here at home (however, GDP in 1940 was STILL less than in was in 1929, and there was no war in 1929 to account for it).
 
GDP grew greatly during The War, but Federal Spending made up an ENORMOUS amount of it (as much as 43.6% of our GDP was Federal Spending in ’43 & ’44). That would seem to suggest an extraordinary disconnect in Senator McConnell’s argument that Federal spending wasn’t responsible for economic growth but “The War” somehow was. It was only the Federal governments massive spending here at home on war production that was responsible for that growth. Someone please explain to me what the Good Senator from Kentucky is talking about when he says “WWII pulled us out of the Depression”. How? Job creation? Those jobs weren’t created by “Private Industry”. They were created by the government to power the Mighty American War Machine. Was it “exports”? Europe was going bankrupt after 5 long years of war (remember, the Germans occupied France and had Blitzed London to rubble. We certainly weren’t doing business with Germany and Japan, so where were all these dollars coming from that McConnell thinks “pulled us out of The Depression”? Australia?
 
And if “war” is so good for the economy, explain to me why the wars in Iraq and Afghanistan didn’t head off the mess we find ourselves in now? Like Bush, Hoover trusted the “Free Market” to save the economy. Federal spending increased only slightly between 1929 and 1933 as he kept the Federal Government out of the business of propping up business. And in fact, FDR actually spent LESS than Hoover his first year in office before it became obvious that that was the wrong way to go. And that roaring economy during The War that McConnell is so fond of quoting… who was President at the time? Say it with me: FDR… a man that learned the power of Federal Spending to create new industries.
 
No, the “Depression”, for all intents and purposes, was essentially “over” by 1939. Consider, that was also the year that two of the most expensive movies ever made (up to that point) hit the box-office: “Gone With the Wind” ($3.7million to make. Gross: $198.7million in the U.S. alone) and “The Wizard of Oz” (cost: $2.7million. Gross: $11.36million). Compare that to the highest grossing film of 1936: “The Great Zigfield”, which grossed a paltry $3million dollars. MGM spent as much to MAKE those two movies than most movies even made just three years before. You don’t spend that kind of money to make a movie unless you’re reasonably sure of making it back.
 
I think we can comfortably put this insipid Republican meme to bed. World War II wasn’t responsible for our recovery from The Depression, it delayed it.
 

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February 9, 2009 · Admin Mugsy · 6 Comments - Add
Tags: ,  · Posted in: myth busting, Politics

6 Responses

  1. Grant in Texas - February 9, 2009

    Reading my morning Houston Chronicle, I see the CATO Institute was able to find a couple hundred economists (out of thousands) from our nation’s colleges to protest the Obama “stimulus” saying that FDR’s programs didn’t bring us out of the Great Depression, that WWII did. But his PWA, CWA, and CCC did put millions into jobs that paid for shelter and food and were great safety nets.

    The reich loves to deride the National Endowment for the Arts (NEA) with Pat Buchanan recently reviving their favorite whipping boy, Robert Mapplethorpe who has been DEAD for 20 years and wouldn’t be eligible for any “stimulus” anyway. Plus he is only ONE artist out of tens of
    thousands. FDR put over 5000 artists, sculptors to work creating art for our nation’s public spaces….city halls, postoffices, train
    stations, plazas, etc. But to a Republican putting artists to work is “pork”.

    Elkhart, Indiana where Obama is speaking now is the RV capital of our nation for sure, which may not come back like it was in the time of
    cheap gas, but the second largest industry in Elkhart is Conn, Selmer, Ludwig, among other manufacturers there who make musical instruments.
    Keeping bands in our schools, supporting symphonies, etc. ALSO puts people to work. Most musicians never get invited to the Grammy Awards
    and they struggle daily to survive playing in small house bands and smaller symphonies. Already, tours are being canceled, attendance to
    such are hurting too as folks don’t have expendable income for entertainment or sports events.

  2. Grant in Texas - February 9, 2009

    The Cato Institute’s full page ad in my Houston Chronicle today can be seen in the pdf file linked below promoting the popular Republican meme of late that it was WWII’s military spending that did the job. Cato also implies that ONLY “tax cuts” will do the job!

    http://www.cato.org/special/stimulus09/cato_stimulus.pdf

    It appears some of the academic “experts” thought they had signed onto something worded a bit differently! CATO dishonesty?

    http://www.buzzflash.com/articles/analysis/603

  3. Grant in Texas - February 9, 2009

    Interesting opinion today in the Atlanta paper. So who has been the big spenders??? It’s been the Republicans.

    http://www.ajc.com/opinion/content/opinion/bookman/stories/2009/02/09/bookmaned_0209_2DOT.html

  4. Mugsy - February 11, 2009

    I found some additional insight with some more descriptive graphs at the following link to a more detailed report:

    The “FDR Failed” myth
    http://www.ourfuture.org/blog-entry/2009020603/fdr-failed-myth

  5. wallyb - June 24, 2011

    FDR entered office with the economy finally on the mend after Hoover’s big spending/taxing turned the 1929 crash into the great drepession. Love the laughable Hoover was lazzie-faire myth. Unemployment had already peaked at 25 percent and was on its way down by the time FDR took office in March of 1933. FDR’s idiot new deal programs and hording of gold delayed the recovery for nearly 3 years while creating a massive debt and screwing with the constitution as only Lincoln and Wilson had before. It was only after the supreme court ruled the horrible NRA and AAA programs unconstitutional in June of 1935 and January of 1936 – along with 4 harmful new deal programs – that the economy could finally gain breathing room for recovery. Even then it was an artificial recovery based on worthless wpa and such jobs and projects that added no real value or sustainable employment so naturally the economy tanked again. I’m not impressed with lowering unemployment from 24 percent to a still horrid 14 percent while continuing harmful economic conditions. We had quicker gdp growth and better job recovery after our 1876, 1892 and 1920 depressions than the 1936-37 recovery and unlike with the New Deal those recoveries were sustained and led to prosperity. Revisionists like to blame a tiny 1-percent gdp spending cut in government outlays for the Roosevelt recession of 1937-38. But the down turn had already began months before the budget plan. The idiot Wagoner Act that was wrongly ruled constitutional in 1936 caused the same wage-hike/lack of productivity issue that helped surge us into the depression in 1930-31 under Hoover. The market became very fragile due to uncertainty caused by pathetic regulations and what was going on in Europe. And of course the gold currency issue was a major problem, as was the Federal Reserve doubling reserve requirments that killed lending while interest rates sky rocketed. We still spent more in 1937 than we did any year before 1936, spending just wasn’t working. Lets not forget a huge tax hike as a result of the first social security tax also came with the 1937 budget, which hurt the economy. As for WW2 – it only temporarily halted the unemployment problem while creating the military industrial complex at a great cost in blood. We surged off the technology of the war and military industrial complex – like pretty much every time in history following major military build-ups/conflicts – but we didn’t recover until record spending cuts. Unemployment shot back up to 9-10 percent immediately following the war and it took the record spending cuts from 1946-48, going well beyond the WW2 roll back, along with the end to most of FDRs restrictions on businesses and a minor tax cut to get the private sector going and the economy booming. Of course, we also benefited greatly from our competition being in rubbles after the war, which greatly inflated our boom.

  6. Mugsy - June 25, 2011

    What a coincidence! Why *just* last week I was saying the same thing about Jimmy Carter and the “Reagan Recovery”.

    In case you can’t tell, that’s sarcasm. You might want to double-check the subtitle of this blog:
    “Recording history for those who seek to rewrite it.”

    Wally, I give you points for chutzpah, but please don’t try and claim that the reversal in unemployment after Hoover left office was Hoover’s doing. Under Hoover, unemployment went from 3.3% to 24.9%, and he didn’t institute any *new* policies just before he left for which you can credit the turn-around. You might want to review FDR’s “First 100 Days” for the policies that directly affected unemployment and the economy: (http://www.u-s-history.com/pages/h1851.html).

    While Hoover did raise taxes his final year in office, his *first* response to the ’29 crash was to CUT taxes. And the result? Unemployment did not go down. It went up. WAY up.

    Only *half* of the “National Recovery Act” was ruled unconstitutional: “that it violated the ‘Separation of Powers’ clause. But the WPA jobs program itself continued unchanged. Similarly, only the manner in which the “Agricultural Adjustment Act” was being paid for was ruled unconstitutional, not the Act itself. The funding mechanism for the AAA was changed and the program resumed the following year. Don’t try and suggest the programs *themselves* were ruled unconstitutional (like they were deemed “too Socialist”), because they weren’t.

    Like John McCain or Newt Gingrich denying things they said on National television, Conservatives have yet to figure out the miracle of film/video tape/YouTube. Don’t make claims easily debunked with a two-second Google search.

    And THAT’S why we have “Mugsy’s Rap Sheet” to “Record history for Conservative nitwits that try to rewrite it.”

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