Amity Village Horror
I was going to write about this, but I see that the shrill one is there before me --- and carrying a whole lot more credibility than I have in such matters):
When you hear claims that the New Deal made the depression worse, they often come directly or indirectly from the work of Amity Shlaes, whose misleading statistics have been widely disseminated on the right.
Now, Ms. Shlaes has found a new target: John Maynard Keynes. There’s a lot to critique in this piece, but this one takes the cake:
But the most telling fact about the new rush to spend is that its advocates have insisted on invoking the New Deal. They tend to gloss over the period when the phrase, “We are all Keynesians now,” was actually first uttered: the mid-1960s. (Uttered by Friedman, in fact, though he meant only that we all work in the terms of the Keynesian lexicon.)
The Great Society of that period was the ultimate Keynesian experiment, and it didn’t work very well.
Grr. Keynesianism says that deficit spending can help create jobs when the economy is depressed. The Great Society wasn’t deficit spending, it wasn’t intended to create jobs, and the economy of the 1960s wasn’t depressed. It was social engineering; we can talk about how well or badly it worked, but it had nothing whatsoever to do with Keynesian economics.
Now, LBJ did engage in some Keynesian economics: namely, he imposed a contractionary fiscal policy in the form of a tax surcharge in an effort to cool an overheating economy. Alas, pretty soon we’ll have all the usual suspects saying that the Great Society proves that Keynesian economics doesn’t work — after all, the “experts” told them so.
One of the things I always find most amazing about conservatives is their propensity to greet any defeat with total defiance and inverse reasoning. Hence, we have a situation where free market fundamentalism, the right wing economic creed, has been tried for several decades and has now proven to be a bust, just as it was back in the 1920s, the last time they tried it.
The reaction among the conservatives is not shame or even rationalization. It's to look you in the eye and babble, "I know you are but what am I." In the face of a crisis that demands the kind of intervention that we know is the only hope to prevent a more cataclysmic result along the lines of the great Depression, these people are saying that the lessons of the Great Depression aren't just different from what we thought they were, they are the opposite of what they actually are. And then they trot out some bizarroworld conservative revisiosnist to "prove" their point, which the media happily embrace in their never ending quest to be "fair and balanced."
"Revisionist" Amity Shlaes, the new toast of wingnutville who conveniently blames Roosevelt for the depression, is the Laurie Myleroie of conservative economics. Just thank your lucky stars that John McCain didn't win the election or she wouldn't just give Stephen Moore and Glen Beck thrills up their legs, her book would undoubtedly be one of the bibles guiding the administration through this crisis. It's not like they don't have a record.
Update: Henry Farrell at Crooked Timber provides another excellent example of Shlaes' intellectual incoherence. And of course her perfect bizarroworld column defending Phil Gramm's comment that this is a nation of whiners is another one. Great gal.