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With the mainstream media pounding us with the notion that President Obama is somehow the new FDR and the stimulus bill is the new WPA, it’s worth noting that there are a lot of economists and historians that think FDR’s policies prolonged the Great Depression rather than alleviated it. Amity Shlaes has written one of the newer books expounding on this theory and she has a good editorial in Bloomberg summarizing the arguments.
FDR tried big stimulus spending programs too, but the stock market didn’t climb back to it’s pre-1929 levels until the mid-1950s under Eisenhower’s leadership. And there are four crucial differences between today’s economy and the U.S. economy in the 1930s. When FDR took office the United States was the world’s leading exporter, its leading manufacturer, its leading creditor, and we produced 100 percent of the energy we used here at home. Today, the U.S. is the world’s leading importer, we’ve outsourced the majority of our manufacturing to low cost countries, we are the world’s leading debtor, and we import 70 percent (about $1-trillion a year) of our petroleum supplies.