Tom McLaughlin

A former history teacher, Tom is a columnist who lives in Lovell, Maine. His column is published in Maine and New Hampshire newspapers and on numerous web sites. Email: tomthemick@gmail.com

Wednesday, June 15, 2011

Teaching the Dismal Science


Attitudes toward President Obama have changed drastically since last year here in western Maine. I just finished correcting my final batch of about six dozen elderly interviews which I’ve been assigning to students around here for thirty years. There will be no more since I’ll become a former history teacher after Friday. Students select someone seventy years old or older. ask the twenty questions I give them, and then ask ten they make up themselves. One assigned question asks who their favorite president was and why. The other asks who their least favorite president was and why.

Answers to the first question have always varied widely with no president getting a majority. However, a plurality each year for the entire thirty years has gone to Franklin Roosevelt. As for why, the typical answer has always been that “He got us out of the Depression.” Last year, President Obama got quite a few endorsements for favorite president - about fifteen or so if I remember correctly. Most people said things like: “He’s turning the economy around,” or “He’s going to help the little guy,” or “He’s very smart.” This year, however, only three people indicated that Obama was their favorite president. Instead, he got about fifteen votes for least favorite - second only to Richard Nixon.

For the past three years or so, George W. Bush was selected by about fifteen people for least favorite president but he was only mentioned three times this year. Evidently people in western Maine hold Obama responsible for our weak economy, even though he’s has been blaming Bush for nearly three years now. The bloom is definitely off the Obama rose if my informal annual polling is any guide.

One lesson from all this is that James Carville’s “It’s the economy, stupid” advice to his client Bill Clinton in the 1992 campaign sustains today. More recent histories like Amity Schlaes’s “The Forgotten Man,” question the enduring myth that President Roosevelt “got us out of the Depression.” She makes a strong case that his New Deal policies worsened and prolonged the Great Depression rather than ended it. Roosevelt surrounded himself with big-government control freaks who were fervent believers in the ideas that came to be known as Keynesian economics after the late British economist John Maynard Keynes. They borrowed and spent with the notion that they were priming an economic pump, or jumpstarting an economic engine which would rev up under their hyper-regulatory direction. They went off the gold standard and set the value of money by fiat. The Federal Reserve went along, just as it is going along with Obama’s new-New Deal now.

None of it worked, but Roosevelt seemed to be doing something. He convinced enough people in his fireside chats that happy days were here again, even if they weren’t. President Obama and his economic team are using the same tactics and getting the same results. Keynesian economics didn’t work for Roosevelt and they didn’t work for Johnson, Nixon, Ford, or Carter either. What’s it called when someone tries the same thing over and over, expecting a different result?

Reagan, by contrast, believed in the ideas of Frederick Hayek, who suggested that government should stay out of business affairs and let markets work things out. My students studied the conflicting economic ideas of Keynes vs Hayek this year and how they’ve played themselves out in the 20th century. John Papola and Russ Roberts put together a clever rap video outlining the conflicting ideas of the two economists, the refrain of which states: “They’ve been going back and forth for a century. ‘I want to steer markets [says Keynes];’ ‘I want them set free [says Hayek].’”

My students loved it so much they were singing it in the hallways by their lockers after class and showed it to their parents on Youtube. Then last month, an equally clever Round Two was produced. Lots of ideas were packed into the lyrics and imagery in each and both moved very fast, but they were great motivators in my quest for students to learn principles of what many refer to as the “dismal science” of economics.

My hope is that at least some of my charges will go away with a conceptual understanding of what government’s role in the economy should be. Maybe that will at least partially offset the enduring myth that Keynesian economic policies worked under Franklin Roosevelt.

Voters, meanwhile, are trusting their own judgement on how those ideas are working out under President Obama. Let’s hope that’s reflected in the 2012 election results.

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19 Comments:

Anonymous Anonymous said...

In another 80 years bitter cons will be whining about the "myth" of Obama pulling the country out of recession.

Once again it won't work as the general population will have as high regard for Obama as they do for Roosevelt....what’s it called when someone tries the same thing over and over, expecting a different result?

6/15/11, 9:11 AM  
Anonymous Anonymous said...

Boy, this column has the feel of a real rush job. Imagine how eager Tom must have been to get away from his column about his gender issues. What a drubbing he took!


Name withheld to for fear of wackos burning a cross in my yard.

6/15/11, 9:15 AM  
Anonymous Anonymous said...

I wouldn't want anyone to actually engage their brain and reason with he facts. FDR's plan was a total failure and economists say so. If it weren't for WWII we'd still be in a slump---just like Japan is now. When FDR took office there were 10 million unemployed. Eight years later there were 11 million unemployed. Just describe ONE case where a nation spent their way to prosperity--just one. Obama is an economic midget---or he has other plans.

6/15/11, 9:59 AM  
Anonymous Anonymous said...

Great piece, Tom. You will always be the educator!

Congratulations on your accomplishments, and on entering a new phase in your life!




Show Low Yaqui

6/15/11, 10:53 AM  
Anonymous Part 1 said...

Did you hear FDR prolonged the Great Depression?

By David Sirota

Conservatives' newest talking point -- designed to stop Congress from passing an economic stimulus package -- is breathtaking.

If you're like me, you sometimes find yourself speechless when confronted with abject insanity.
.So if you're like me, you probably understand why I was momentarily tongue-tied last week after running face-first into conservatives' newest (and most ridiculous) talking point: the one designed to stop Congress from passing an economic stimulus package.

During a Christmas Eve appearance on Fox News, I pointed out that most mainstream economists believe the government must boost the economy with deficit spending. That's when conservative pundit Monica Crowley said we should instead limit such spending because President Franklin Roosevelt's "massive government intervention actually prolonged the Great Depression." Fox News anchor Gregg Jarrett eagerly concurred, saying "historians pretty much agree on that."
Of course, I had recently heard snippets of this silly argument; right-wing pundits are repeating it everywhere these days. But I had never heard it articulated in such preposterous terms, so my initial reaction was paralysis, the mouth-agape, deer-in-the-headlights kind. Only after collecting myself did I say that such assertions about the New Deal were absurd. But then I was laughed at, as if it was hilarious to say that the New Deal did anything but exacerbate the Depression.

6/15/11, 12:19 PM  
Anonymous Part 2 said...

Afterward, suffering pangs of self-doubt, I wondered whether I and most of the country were the crazy ones. Sure, the vast majority of Americans think the New Deal worked well. But are conservatives right? Did the New Deal's "massive government intervention prolong the Great Depression?"

Ummm ... no.

On deeper examination, I discovered that the right bases its New Deal revisionism on the short-lived recession in a year straddling 1937 and 1938. But that was four years into Roosevelt's term -- four years marked by spectacular economic growth. Additionally, the fleeting decline happened not because of the New Deal's spending programs, but because Roosevelt momentarily listened to conservatives and backed off them. As Nobel-winning economist Paul Krugman notes, in 1937-38, FDR "was persuaded to balance the budget" and "cut spending and the economy went back down again."

To be sure, you can credibly argue that the New Deal had its share of problems. But overall, the numbers prove it helped -- rather than hurt -- the macroeconomy. "Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms [while] the U.S. economy grew at average annual growth rates of 9 percent to 10 percent," writes University of California historian Eric Rauchway.

What about the New Deal's most "massive government intervention" -- its financial regulations? Did they prolong the Great Depression in ways the official data didn't detect?

Nope.

According to Federal Reserve chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression." In fact, even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corp. was "the structural change most conducive to monetary stability since ... the Civil War."
OK -- if the verifiable evidence proves the New Deal did not prolong the Depression, what about historians -- do they "pretty much agree" on the opposite?

Again, no.

As Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."
But that's the critical point I somehow forgot last week, the truism we must all remember in 2009: As conservatives try to obstruct a new New Deal, they're not making any arguments that are remotely serious.

6/15/11, 12:19 PM  
Anonymous Anonymous said...

This is another great example of the University of Marylands study that showed the more one watches Fox News the more ignorant they are about world events.


As Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."

As conservatives try to obstruct a new New Deal, they're not making any arguments that are remotely serious.

6/15/11, 12:21 PM  
Anonymous Anonymous said...

Tom must keep Faux News on 24 hours a day.

How else to explain such staggering levels of ignorance.

Tom would go around squacking about how Clinton wasn't able to balance the budget if Faux told him so.

I'm beginning to wonder if his next column will be about how the south won the Civil War.

6/15/11, 3:27 PM  
Anonymous Anonymous said...

None of these folks have the answer either.

Carry on Tom!

6/15/11, 5:13 PM  
Anonymous Emannuel Goldstein said...

"The Federal Reserve went along, just as it is going along with Obama’s new-New Deal now."

Actually you can blame the federal reserve for taking control in 1913, when they snuck the deal through during Xmas recess. It's not that the fed went along as much as it the fact that the fed dictates. The fed tells the president what to do. Period. That has never been more obvious than now. Essentially, via the fed, which is a private conglomerate of private banks, the world banking famies took control of the country. No more gold standard. Fiat currency printed by the fed and lent to us at interest !!!!!
At interest !!! There a reason Thomas Jefferson, et al, were opposed to this idea and fought it many times. We are, and have been, under the control of the global bank cartel for a long time.

There s no economic policy that can get us out of this short of ending the fed and going back to a gold standard.
Stop letting these bankers use this country, and it's military, to bankrupt and control the middle east.

6/15/11, 7:14 PM  
Anonymous Winston Smith said...

You want to watch the most informative half hour cartoon you've ever seen? The watch the link below.

Great Stuff!!

Tom--should've showed your kids this. PLease watch.

http://www.youtube.com/watch?v=tGk5ioEXlIM

In fact--i urge all who read this to watch the half hour episode explaining the economic collapse.

6/16/11, 4:31 PM  
Anonymous Anonymous said...

Wow! David Sirota, a progressive talk radio guy. Reason, please. I personally believe that the Austrian school of economics as taught at the von Mises Institute has it right. Bernanke, Krugman, Gross are all keynesian economist and social progressives. What would you expect? I still wait for that ONE country that spent their way to prosperty.

Yes, when you do the right thing early, the pain is severe but short. When you don't do it, the pain is devastating.

6/16/11, 7:23 PM  
Anonymous Anonymous said...

Wow! Dismissing the message because you dislike the messenger.
How about the comments by historians, Federal Reserve Chairmen, and conservative economists:

"Excepting 1937-1938, unemployment fell each year of Roosevelt's first two terms [while] the U.S. economy grew at average annual growth rates of 9 percent to 10 percent," writes University of California historian Eric Rauchway.

According to Federal Reserve chairman Ben Bernanke, "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."

even famed conservative economist Milton Friedman admitted that the New Deal's Federal Deposit Insurance Corp. was "the structural change most conducive to monetary stability since ... the Civil War."

Newsweek's Daniel Gross reports, "One would be very hard-pressed to find a serious professional historian who believes that the New Deal prolonged the Depression."

6/17/11, 9:02 AM  
Anonymous Wnston Smith said...

http://www.youtube.com/watch?v=tGk5ioEXlIM

All should take the time and pass it on

6/17/11, 12:22 PM  
Anonymous Anonymous said...

To the author of;
"Name withheld to for fear of wackos burning a cross in my yard."

Keep in mind you liberal puke that it was the Southern Democrats who started the KKK and not the GOP. Further more it was the GOP and not the Dems who Passed the legislation to give the Oppressed slaves and their offspring later the laws that gave them the freedoms they have today. What have the Dems given? Welfare and the minimum wage? People are waking up to your crap and it only takes an simple honest mention of it now and again to bring it home.
Yell louder you liberal fools, your arguement is weak here!
Wasn't that you all at the Carrol county Democrats that I saw in pictures at Senator Robert Birds (I.E.Democrat and KKK recruiter) Funeral a few years ago?
Once again i say it but it's like throwing pearls to swine; Look at the corruption in your own back yard as the Tea Party does in it's back yard with the establishment GOP and then you will have the right to Piss and moan.
Goebbles was right back there in Nazi Germany and you people have learned it: "Tell a lie enough times and it becomes the truth". you dems have now brought it to a new level...Do it in force over a short Period and and it becomes like a blitzkrieg which will overwhelm the opposition. If only you would use your power to get the corruption out of your own party !!! But instead you have to tear down.

Name withheld for fear of being put on the Obama Watchlist....and you already know it exists...want proof?

6/19/11, 5:27 PM  
Anonymous Henry Paulsen said...

To the last anon wussy: keep repeating your trash (and listening to it over and over on Faux News) and you are going to end up really believing it...oh wait, you do already?!?

lol

Is the reason you were your white hood also because you are in fear of being put on some list?

Why are the most hateful blowhards always too chicken shit to have people know who they are?

6/20/11, 8:35 AM  
Anonymous Anonymous said...

henry; I noticed you didn't show me where the Dems voted over the GOP to give the Blacks their rights. I noticed you didn't deny that Democrat Robert Bird was a KKK Recruiter. I noticed you didn't disprove anything I said except to call me a hater. The only thing I hate Skippy is Your retoric and your lack of ability to to prove me wrong! Yell louder Skippy, and call me a hater, Your arguement is weak here. LOL

6/20/11, 7:16 PM  
Anonymous Anonymous said...

Henry; I decided to take you for your word and watch NBC for a while and the first thing I saw was them Issuing an appology for taking it apon themselves and deleting "GOD" out of the Pledge of Allegiance they were broadcasting.Why is it that you LIBS promote Tolerance with all and yet go off your Flippen Rocker and start calling them derogatory names when someone has an oppinion that differs from the Socialist Party line? By the way, If you must know my name, It's Deshawn. I'll withhold my last name for fear of being put on the Obama Watch list.

6/21/11, 8:32 AM  
Anonymous Anonymous said...

Sorry I'm late back to the party,(been away.) I told you all the people you quote are Keynesian and Friedman commented on the FedResv not FDRs policy. Check this Washington Post col. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/30/AR2009013002760_2.html by Amity Shlaes, a senior fellow in economic history at the Council on Foreign Relations, is the author of "The Forgotten Man: A New History of the Great Depression." She quotes FDR's Sec. of Tr.Henry Morgenthau (said to the House Ways and Means Committee in the late 1930s.) "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 . . . and an enormous debt to boot." Every factual economist I've read says FDR did what BHO is doing and sank the economy. I repeat, where is the ONE country that spent their way to prosperity?

This argument should be based on reality, but is usually based on ideology. BHO will do the wrong thing again and cut spending AND raise taxes (just as FDR did) and drive the country into a second depression.

6/29/11, 4:35 PM  

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