Saturday, June 12, 2010

Unemployment: FDR v. Obama

In March 1933, when the Great Depression had driven the U.S. economy to rock bottom, the unemployment rate stood at 25 percent. One out of every four Americans who had had a job in 1929 was queuing in a bread line rather than working on an assembly line.

The unemployment rate remained at historically high levels throughout the following decade. Despite massive increases in federal spending under President Franklin D. Roosevelt's New Deal, 14 percent of the labor force still was unemployed in 1941...

Didn't the alphabet soup of work-relief programs the president subsequently launched - the Civilian Conservation Corps, the National Youth Administration, the Federal Emergency Relief Administration and especially the Works Progress Administration, to name just a few - create jobs for hundreds of thousands of unemployed Americans, providing them with sorely needed incomes without forcing them to suffer the stigmas of the dole?

The answer: The United States in the 1930s recognized that government-funded make-work jobs were not the same as real jobs...

The employment and unemployment statistics of the 1930s excluded people who would not be employed in the absence of public largesse.

People at that time recognized that someone who holds a job only because Congress has appropriated money for the position is not creating wealth but is merely the recipient of an income transfer. Those who at the time derided the WPA as "We Piddle Around" recognized the wasteful consequences of public profligacy.


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