Nouriel 'Dr. Doom' Roubini: 'Karl Marx Was Right' - International Business Times

Nouriel Roubini

In 1937, President Franklin D. Roosevelt, despite the fact that the first four years of massive New Deal fiscal stimulus had lowered U.S. unemployment from a staggering 20.6 percent during the Hoover Administration at the start of the Great Depression, to 9.1 percent, felt pressure from Congressional Republicans, and he — as current President Barack Obama did with the Tea Party-led House GOP in 2011 — gave-in to conservatives and cut government spending in 1937. The result? U.S. unemployment started rising again, and hit 12.5% in 1938.

via Nouriel 'Dr. Doom' Roubini: 'Karl Marx Was Right' - International Business Times.

This is exactly the point. You will also notice that this was before the US entered WWII. The New Deal was not all military Keynesianism. The New Deal was massive public spending that did work to bring down unemployment even though, per Charles Kadlec:

Secretary of the Treasury Henry Morgenthau in 1939 told the House Ways and Means Committee: "We have tried spending money. We are spending more than we have ever spent before and it does not work... We have never made good on our promise. I say after eight years of this administration we have just as much unemployment as when we started. And an enormous debt to boot!"

This Morgenthau quote is trotted out by the laissez-faire / deficit-hawk types even though it is flat wrong!

The worst thing we can do is repeat the exact same errors made against the New Deal. We've already spent way too little and have also not had the government spend it directly into the economy rather than handing it to banksters to sit on or use as hot money driving up commodities or manipulating currencies, etc., via wild international speculation.

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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