FreedomTalks

Looks to be a pretty quiet day here in Washington. Most people are still recuperating from the holiday and waiting till after New Year’s to get back into the swing of things. 

Fortunately, this gives us time to catch up on our history, courtesy of the Wall Street Journal and Amity Shlaes. In today’s column, she debunks the myth of public sector jobs. 

The New Deal government indeed spent a lot. Nowadays Congress considers a 1% increase in the budget tantamount to treason, or nirvana, or both. President Roosevelt had no time for paltry 1% changes. He nearly doubled the federal budget in his first term. The idea, as the New York Times put it, was for Washington to do work that could “not be undertaken by private industry.” 

…What really stands out when you step back from the picture is not how much the public works achieved. It is how little. Notwithstanding the largest peacetime appropriation in the history of the world, the New Deal recovery remained incomplete. From 1934 on–the period when the spending ramped up–monetary troubles were subsiding, and could no longer be blamed alone for the Depression. The story of the mid-1930s is the story of a heroic economy struggling to recuperate but failing to do so because lawmakers’ preoccupation with public works rather got in the way of allowing productive businesses to expand and pull the rest forward. [emphasis added]

Shlaes also reminds us that this is still a concern today. No small number of Democratic politicians – and, she notes, Mike Huckabee – are still interested in trying to build infrastructure and jobs through the public sector, rather than setting the market free.  Make sure to read the whole thing.

This entry was posted on Monday, December 31st, 2007 at 9:50 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.