But . . . these days, don’t you have to take a test to make sure you’re not one of these people, before they allow you on the Internet? (I didn’t have to, but I first got on in 1981, so probably got grandfathered in.)

“This suggests a way we can all get along. What we do is set up a project—let’s call it the No Deal Counterfactuals Truth and Reconciliation Comission (NDCTRC) – that would, among other things, estimate how many more people would have died of starvation, of diseases made fatal by malnutrition or inability to afford health care, of being machine-gunned in protest marches on the White House turning ugly, of exposure from being homeless, of alcohol poisoning from being hopeless, etc., etc., if there’d been no New Deal.”

There are certain beliefs whose holders are reasonable judged to be ignorant, foolish or lying with evil intent. On another blog, I posted a comment that believing the phrase ‘Social Security is a Ponzi scheme’ is such a belief.

By now, ‘FDR prolonged the Great Depression [through implementing New Deal policies, as opposed to not implementing a stronger New Deal, and not backing off later on]’ is also such a belief. In the case of an economics professor, holding such a belief is an automatic conviction of lying with evil intent.

To begin with, the person who wrote all those posts is named Rauchway, not Lichtblau.

Also, this is false: “later unemployment figures do not take such workers into account.” Rauchway points out that the latest edition of Historical Statistics of the United States uses Weir’s unemployment series consistently.

Other points: Rauchway’s complaint about the WSJ writer is not that he discounts the drop in unemployment before 1938, but that he positively obfuscates it, by saying that unemployment “remained” at 20% in 1938, which isn’t true no matter what series you use (would he say that twenty-one years after the Armistice France and Germany remained at war?) And Krugman (and I think Rauchway) say that the recession of 1938 was caused by Roosevelt attempting to cut back on the New Deal.

This suggests a way we can all get along. What we do is set up a project—let’s call it the No Deal Counterfactuals Truth and Reconciliation Comission (NDCTRC) – that would, among other things, estimate how many more people would have died of starvation, of diseases made fatal by malnutrition or inability to afford health care, of being machine-gunned in protest marches on the White House turning ugly, of exposure from being homeless, of alcohol poisoning from being hopeless, etc., etc., if there’d been no New Deal.

The goal of NDCTRC would be to count the “laissez-faire economic recovery collateral damage” fatalities as “unemployed” for some number of years after their deaths, the number being subject to negotiation, calculation and careful economic modeling.

But just how does one estimate how long these notional dead should have been considered unemployed? I’d go for some estimate based on how many years they probably would have worked if they’d lived. But maybe that’s just my bias toward the New Deal talking. Those of certain other ideological persuasions are likelier than I to staff this Commission. They will undoubtedly prefer to base the estimate on how much shorter they believe the Great Depression would have been if nothing had been done, and on the assumption that it would have been possible to dig up dead people and size them for clean clothes suitable for interviews, to get them to fill out job application forms properly, to train them for new lines of work, and to make sure they understood that they would be unwelcome in polite society if they persisted in reproducing their own kind by chasing the luckier people who hadn’t died in the Lesser Great Depression down the street and biting them.

Of course, objections can (and very likely, will) be raised concerning the feasibility of this project, given how ideologically polarized even the No New Deal constituency is. Take the problem of ideal organization for the reconstitution of the “differently-viable” (don’t use the Z-word, please!) parts of the post-Lesser Great Depression workforce. Would it have been better organized as a government program? Or left to private sector? Or perhaps a faith-based program would have done the trick? I can see the whole NDCTRC formation process dissolving very acrimoniously over that one! With strong intellectual leadership, however, a philosophy of “let’s cross that bridge when we come to it” should prevail, great progress would be made, and this long, poisonous national debate could finally be brought to an amicable conclusion.

Keynes said the government in a depression could just spend money burying things and hiring people to dig them up, and it would still be better than doing nothing.

Oh yeah, and also those people and their families don’t starve to death or lose their access to health care. Some people consider that a plus – it preserves your labor force for higher post-recovery productivity.

However, if you try this when you’re not in a depression, either your nonproductive job program is ignored because everyone already has better productive jobs, or you actually compete with productive jobs for workers, causing a bidding war for labor and eventually, inflation – but overall production doesn’t increase because it can’t.

Ultimately, hiring people for genuinely nonproductive work (which the WPA is emphatically not, as has been pointed out several times in this exchange) isn’t that different from just giving money to people with no job, except that it interferes a bit more with their job-seeking efforts and is therefore a slightly inferior approach. But only slightly. Ideally (from a pure size-of-the-economy view, with no particular preference as far as distribution) you want to give them somewhat less money than they would make if they had a productive job, but still enough for them to feed themselves and otherwise contribute to aggregate demand.

 
P.S. There’s no reason people working for the government can’t produce value, if the government engages in value-producing activity. The fact that we have a tradition of not doing that (much) under normal circumstances doesn’t prevent us from doing it under extraordinary circumstances, and certainly doesn’t make it theoretically impossible. Government is somewhat inefficient at value-producing activity, but that inefficiency might be less bad than nobody attempting the activity at all, if that’s the alternative.

 
[*] Unless you deliberately keep raising the wages on the nonproductive work to prevent people from abandoning it for productive work. But now we’re well into the territory of actively malicious attempts to wreck the economy; sure, you might succeed, but is that really relevant to the subject of depression recovery?

That’s where you’re wrong. This was a message from the department of simple answers to stupid questions.

Lichtblau thinks treating people employed by the WPA as employed makes sense, because they did real jobs.

Tabarrok thinks treating people employed in “make-work” schemes by the government gives you artificially low unemployment figures, and points out that later unemployment figures do not take such workers into account. Thus, for Lichtblau to be consistent, he should treat, say, unemployment figures under George W. Bush as lower than they are right now treated.

Tabarrok moreover thinks that if Lichtblau’s methodology were used, then the government could easily and always make unemployment zero—just hire everyone in America to do something useless.

Lichtblau responds that, even though WPA employees are employed by the government, they did real work, and so should definitely not be counted as unemployed.

I get the sense that there’s rightness with both Tabarrok and Lichtblau. I agree with Lichtblau that the WPA employees did real work, and so should be counted as employed. But I agree with Tabarrok (and, I think Lichtblau might even agree with this) that you have to be very careful about counting just any government employees as employed for the purposes of measuring a country’s unemployment, because then the government could get away with a lot. So coming up with unemployment figures is an art, though an art one should consistently apply, not just to FDR, but also to later presidents.

There’s also a separate issue, which is that the WSJ and Schlaes like to point to 1938, a years in which unemployment was 20%, to cast doubt on the efficacy of FDR’s policies. Lichtblau points out that unemployment was 20% only because the person on whose figures Schlaes and the WSJ were relying didn’t count WPA employees. That seems like an important point.

Lichtblau also points out, however, that unemployment had gone down steadily from 1933-1937, and that Schlaes, WSJ, and (I guess) Tabarrok discount this. But this raises the question of why unemployment rose so much from 1937 (14%) to 1938 (20%), even though we’re using the same methodology for determining unemployment. This is why Taborrok et al. say that Lichtblau seems to be committed to there being two great depressions, one starting in 1933 and one starting in 1938.

As Bill O’Reilly would say, Tell me where I’m wrong.

I think of her all the time—but then, I live next to a construction site with plenty of 2×4’s . . .

http://www.thedailyshow.com/video/index.jhtml?videoId=187617&title=amity-shlaes

You should be heartbroken over this faux pas. What are your chances now of ever getting Kevin’s autograph on your dog-eared, magic-markered, “how true!”-margin-annotated copy of Dow 36,000? Zero, zilch, that’s what.

It’s not even that you’re being intolerably rude. As he astutely points out,

The truth is, the near-term future of this country depends more on Republicans than it does on Democrats.

So by pissing on their pet unscrupulous hacks, you’re making Republicans mad, and uncooperative, and therefore hurting the near-term prospects for America. Which hurts the long-term prospects for America. Which makes you a traitor. Unless you’re one of those meddlesome foreigners. In that case, you’d be a terrorist.