Amity Shlaes: On FDR, Shlaes Annotates Black

[Amity Shlaes, senior fellow in economic history at the Council on Foreign Relations and author of The Forgotten Man, is at work on the forthcoming biography of Calvin Coolidge, Coolidge.]

My friend Conrad Black takes up the topic of the New Deal’s economic success in a recent column for NRO. He seeks to demonstrate that Franklin Roosevelt is not to be blamed — or, so it seems, even criticized — for economic trouble in the 1930s. Conrad frames his attack around mywork. His rhetoric is so eloquent that some facts have escaped his attention. Herewith, a point-by-point reply.

(1) Conrad writes: “The argument that Roosevelt failed to end the Depression is too foamite-sodden for even so fiendishly persistent and endearing a pyromaniac as the delightful and otherwise rigorous Amity Shlaes to make any headway reigniting it.”

Roosevelt did fail to end the Depression, and we know that from common-sense measures. Most of us today define recovery as “getting back to where we were before.” Measures we use to gauge whether we have done that include unemployment, the absolute size of GDP or GDP per capita, and stock indices.

By these measures, FDR’s first term and most of his second were a flunk. Unemployment hung in the double digits during FDR’s first two terms. He won his third term in a quarter with one of the lowest unemployment rates of the decade, a still-atrocious 14.2 percent.

These data points come from the Bureau of Labor Statistics (BLS) and have been used by President Obama and Council of Economic Advisers chair Christina Romer. Some have contested them, pointing to another set of data, sometimes called “Darby” after its developer, scholar Michael Darby. His set offers a slightly different picture. Darby has a couple of years — but only a couple — where unemployment got below the 10 percent line, and then only barely. In other words, the difference between the first set and the Darby set is the difference between terrible and awful. (See tables 5.1 on page 77 and 8.1 on page 151 of Richard Vedder and Lowell Gallaway’s Out of Work.)

The economy did not recover until well into FDR’s second term. The Dow Jones Industrial Average did not reach its 1929 level until FDR had been in his grave for a decade.