Daniel Gross Has Had Enough of George Will
George Will is truly remarkable:
Daniel Gross: December 31, 2006 - January 06, 2007 Archives: ECONOMIC ROYALISM WATCH: George Will's sneering attack on the minimum wage is typically awful. The first paragraph contains so much blinkered willful misreading of history that it deserves a prize. Here it is:
A federal minimum wage is an idea whose time came in 1938, when public confidence in markets was at a nadir and the federal government's confidence in itself was at an apogee. This, in spite of the fact that with 19 percent unemployment and the economy contracting by 6.2 percent in 1938, the New Deal's frenetic attempts had failed to end, and perhaps had prolonged, the Depression.
Lets review a bit. Will seems to think that "public confidence in markets was at a nadir" in 1938. Um, no. Public confidence in markets reached a nadir in 1933, when half the banks in the country had closed, when Wall Street was essentially out of business, when the Dow stood at its appalling lows, when employment was about 25 percent. In 1933 -- before the New Deal -- there was no securities industry, no banking industry, no mortgage industry, no capital formation or lending of any kind. That year, an estimated 40 percent of home mortgages were in default.
It was only with the passage of New Deal efforts--the SEC, the FDIC, the FSLIC--that the mechanisms of private capital began to kick back into gear. Don't take it from me. Take it from Federal Reserve Chairman Ben Bernanke, who wrote the following in Essays on the Great Depression: "Only with the New Deal's rehabilitation of the financial system in 1933-35 did the economy begin its slow emergence from the Great Depression."...
The argument that the New Deal's efforts "perhaps had prolonged, the Depression," is likewise a canard. One would be very hard-pressed to find a serious professional historian--I mean a serious historian, not a think-tank wanker, not an economist, not a journalist--who believes that the New Deal prolonged the Depression.... My confidence in George Will is at a nadir.
A normal person would not argue that the New Deal prolonged the Great Depression. A normal person would require a case that he or she could point to of a country that (a) relied on market forces alone to generate recovery, and (b) recovered fully from its Great Depression. But George Will is not a normal person.
