Jonathan Tobin writes over at Commentary:
Jonah Goldberg’s book Liberal Fascism got an unexpected boost on Tuesday in David Leonhardt’s Economic Scene column in the New York Times.
Leonhardt and other liberal economic writers have been flailing away at Amity Shlaes’s history of the Great Depression, The Forgotten Man, for stating what historians have understood for decades: that Franklin Roosevelt’s New Deal didn’t work. But now that Barack Obama has decided to try and spend his way out of our current economic difficulties, FDR’s policies must be exhumed and defended. Indeed, according to Leonhardt and others, Roosevelt’s main flaw was that he didn’t spend enough. I’ll leave the dissecting of these bad arguments to Shlaes, but I found it fascinating that in the course of Leonhardt’s latest piece on this issue, he saw it fit to prove the genius of stimulus spending by pointing to the example of the Third Reich.
That’s right. Leonhardt believes that Adolf Hitler’s building of the autobahn, facilities for the 1936 Olympics, and other public works projects such as monuments to the Nazi Party “helped Germany escape the Great Depression faster than other countries.” Unmentioned by Leonhardt was Hitler’s vast expansion of the German military (long before the United States expanded its own armed forces) as well as the wealth that accumulated to various official arms of the state from the theft of Jewish properties. Later in the same piece, Leonhardt also lauds America’s World War II mobilization as showing the genius of a stimulus, though he fails to mention that along with all the tanks, planes, and ships that were built, nearly 15 million Americans were also under arms during the war. That helped lower unemployment too.
This doesn’t mean that Barack Obama is a card-carrying socialist or that he is plotting a rerun of Nazi Germany. What it does mean is that there is a slippery slope in arguments that assume statist economies and systems are a good thing. There is a price to be paid for putting so much power in the hands of government. Americans rightly tried to steer away from the excesses of the New Deal (such as the National Recovery Administration which arrogated to itself the right to decide virtually everything about the American economy). We repeat those mistakes or go further only at the peril of our prosperity and our liberties.
I’m fine with Tobin’s general point, but there’s one clarification I’d make. The New Deal in fact involved a great deal of military spending before the National Socialists in Germany began their re-armament in earnest around 1935. From the book:
Many New Deal agencies, the famous “alphabet soup,” were mostly continuations of various boards and committees set up fifteen years earlier during the war. The National Recovery Administration was explicitly modeled on the War Industries Board of World War I. The Securities and Exchange Commission was an extension of the Capital Issues Committee of the Federal Reserve Board. The
Reconstruction Finance Corporation was an updated version of the War Finance Corporation. FDR’s public housing initiative was run by the architect of World War I–era housing policies. During the war,
public housing had been a necessity for war laborers. Under FDR, everyone became in effect a war laborer. Presumably it is not necessary to recount how similar all of this was to developments in Nazi Germany.
But it is worth noting that for the first two years of the American and German New Deals, it was
America that pursued militarism and rearmament at a breakneck pace while Germany spent relatively little on arms (though Hitler faced severe constraints on rearmament). The Public Works Administration paid for the aircraft carriers Yorktown and Enterprise as well as four cruisers, many smaller warships, and over one hundred army planes parked at fifty military airports. Perhaps one reason so many people believed the New Deal ended the Depression is that the New Deal’s segue into a full-blown war economy was so seamless.