What do we make of the latest job numbers? The unemployment rate dropped from 9.5 percent in June to 9.4 percent in July — the first monthly drop during the Obama presidency. Supporters of the administration will crow that their spending programs may at last be taking hold; critics will cite the overall unemployment jump from roughly 8 percent to 9.4 percent during 2009.
Two points need to be made. First, unemployment numbers fluctuate from month to month. During FDR’s reign, for example, unemployment dropped from 18.7 percent in January 1936 (an election year) to 18.0 percent in February. It was 16 percent in July and 14 percent in November, when voters stampeded to the ballot box to give FDR a triumphant reelection, carrying 46 out of 48 states. But what happened later?
In January 1939, unemployment was back up to 18.7 percent; it rose to 19.3 percent in February and 20.7 percent in April. The next month, Henry Morgenthau, the secretary of treasury, announced, “We are spending more than we have ever spent before and it does not work.” The so-called job creation of 1936 was a mirage. Massive government spending did not — and could not — create jobs or prosperity in the long run.
Second, even if unemployment does start to decline steadily this year, the larger point is that the growth of government means a lessening of individual liberty. You have less control of your life, and bureaucrats have more. Would it be desirable to live in a country with only 1 percent unemployment — as Germany and the USSR sometimes had in the 1930s — but have almost no ability to earn and accumulate property and wealth?
The current efforts to centralize power in Washington must be resisted because they substitute the authority of the state for our individual autonomy over the direction of our lives. Only secondarily should we oppose massive spending because it does not work.
– Burton Folsom blogs at BurtFolsom.com and is a professor of history at Hillsdale College. His latest book is New Deal or Raw Deal? (Simon & Schuster, 2008).