Teaching Lies about the Great Depression and New Deal

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Without question, the Roosevelt Administration of the 1930s marked a period of substantial modifications in American governance and the role of the President. Typically, curricula speak with awe and wonder as students learn about the “Fireside Chats” that the 32nd President gave over the radio or his “Alphabet Soup” policies that were designed to steer America out of the dark shadow of the Great Depression. But were the policies of President Roosevelt really the driving factor that set America out of the worst depression the nation has ever seen? Moreover, are children learning a false economic history akin to critical race theory?

Despite the October 1929 market crash and the accompanying Great Depression of the 1930s being sometimes cited as evidence of capitalism’s failure, it is far from evident that the financial sector’s fall caused widespread poverty. Statistically, after “Black Tuesday,” the rate of unemployment hit its peak at 9% two months later, then commenced a general downward trend, decreasing to 6.3% in June 1930. During any time of the year after the market crash, unemployment actually never surpassed 10%. 

When it comes to classrooms, however, this fact is never mentioned. Rather, curriculums often lambast President Hoover for his inaction. In teaching materials released by the University of Hawaii, Hoover is blamed for being “incompassionate” and his “modest steps were not enough.” However, it was these “modest steps” which were unparalleled at the time, and which sunk the U.S. economy to record lows. 

However, following a sequence of massive and unparalleled policy measures, the jobless rate surged above 20% for 35 months in a row. Such intrusions originated under President Hoover with the Smoot-Hawley tariffs—the harshest levies in over a century— which were designed to curtail importation, allowing more American-made items to be marketed, resulting in more jobs for domestic laborers.

On the contrary, the economy experienced a decline in 1921 that was originally more catastrophic than the recession experienced in the year after the October 1929 stock market catastrophe, as unemployment was almost 12% during President Harding’s first year in office. Nonetheless, Harding did nothing apart from slashing government expenditures as tax receipts fell—exactly the reverse of what Roosevelt would eventually urge. The next year, unemployment declined to below 7%, and the year after that, to under 2.5%.

Although this may seem worth teaching to children, this triumph of the American economy only nine years prior is often forgotten. While the “Roaring Twenties” led to a higher standard of living for the average American, this fact is often substituted to discuss the presence of income inequality despite higher levels of Americans having access to luxury goods

Even with these failings of government intervention, Franklin D. Roosevelt stated the following: “The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”

Unsurprisingly, after becoming president in 1933, he tried numerous policies. Yet, as all actions do, these policies have unintended consequences. If market participants cannot construct dependable preconceptions about the timeframe and implementation of the new government policies, this strategy leads to skepticism, which might end up making individuals reluctant to spend their income. 

During the Great Depression’s uncertainty, the pace of currency circulation plummeted, and some have attributed this to the unprecedented duration of years it took for the situation to improve. Of course, President Roosevelt blamed the Great Depression on citizens whose “products of their hands had outgrown the purchase capacity of their pocketbooks” rather than himself.  

A commonly used history textbook for AP U.S. History presented the roots of the 1930s Great Depression in the following manner: “What caused the Great Depression? One basic explanation was overproduction by both farm and factory. Ironically, the depression of the 1930s was one of abundance, not want. It was the “great glut” or the ‘plague of plenty.’”

Nonetheless, America’s current economic productivity is many times that of the Great Depression, and also many times that of the 18th and 19th centuries, when others had comparable conceptions. In truth, the reason the Great Depression is known as such today is due to the aforementioned policies of President Roosevelt.

According to a study by the University of California, Los Angeles, “[t]he fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened.”

Despite these findings, school curricula often attribute the New Deal to being pivotal to ending the Great Depression. Of course, this does not come as surprise from states such as California and New York, but such claims are also present in Florida and North Carolina. Likewise, classroom materials from the Library of Congress also provide a rosy picture of Roosevelt’s handling of the downturn.

In sum, the Great Depression should not be a lesson to students on how a government can resolve conflicts in the economy. Rather, the contrary is evident as policies by Presidents Hoover and Roosevelt only made matters far worse in the United States economy. Thus, when teaching students the history of the Great Recession, the moral of the story should be that interventions in the market have adverse consequences, even if well intentioned. Moreover, President Roosevelt should not be taught as the heroic figure as he has been enshrined, but rather a politician without an understanding of economics. 

Daniel Elmore
Daniel Elmore is the Data & Analytics Coordinator at the Chalkboard Review.