In recent interviews, James Galbraith has been pointing to an odd twist in New Deal revisionism. Apparently, those economists who argue that the New Deal did little to address the Depression because unemployment remained high right up until the U.S. entered the war are using unemployment measures that don’t count the workers in the New Deal jobs programs as employed. Of course, those workers likely considered themselves employed; their wives (or husbands) and kids probably did too…
Galbraith has highlighted a paper by financial analyst Marshall Auerback, worth quoting at length:
The key to evaluating Roosevelt’s performance in combating the Depression is the statistical treatment of many millions of unemployed engaged in his massive workfare programs. The government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York’s Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown.
It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers,
rebuilt the country’s entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.
Even pro-Roosevelt historians such as William Leuchtenburg and Doris Kearns Goodwin have meekly accepted that the millions of people in the New Deal workfare programs were unemployed, while comparable millions of Germans and Japanese, and eventually French and British, who were dragooned into the armed forces and defense production industries in the mid-and late 1930s, were considered to be employed.
This made the Roosevelt administration’s economic performance appear uncompetitive, but it is fairer to argue that the people employed in government public works and conservation programs were just as authentically (and much more usefully) employed as draftees in what became garrison states, while Roosevelt was rebuilding America at a historic bargain cost.
If these workfare Americans are considered to be unemployed, the Roosevelt administration reduced unemployment from 33 per cent in 1933 to 13 per cent in 1936, to less than 10 per cent at the end of 1940, to less than 1 per cent a year later when the U.S. was plunged into the Second World War. If the federal workfare employees are accepted as employed, the corresponding numbers are 33 per cent, 7 per cent, 3 per cent and 0.5 per cent. Virtually all the genuinely unemployed received basic social benefit payments from 1935 on.
Read the whole Auerback piece here.