June 30, 2020 at 8:33 pm #204767
“‘New Deal’ spending spree to boost Britain’s recovery. Johnson echoes Roosevelt with pledge of cash for hospitals, roads, rail and schools” was the front page headline in today’s Times.
Speaking of the government’s spending plans Johnson was reported as saying: “It sounds positively Rooseveltian. It sounds like a New Deal.” Elsewhere in the paper its Economics Editor, Philip Aldrick, reported him as saying; “This is the moment for a Rooseveltian approach for the UK”.
Aldrick described Roosevelt’s New Deal as “a programme of high-spending, big state Keynesianism to lift America from the pit of the Great Depression in 1933” (this is a bit of an anachronism since Keynes had not yet published his book providing a theoretical justification for policies such as Roosevelt’s).
Did the New Deal work? According to another journalist:
“Some argue that FDR, as the president was known, did not spend enough and that it was the Second World War that finally put the US economy back on track.”
Johnson of course is given to bombastic boasts and hyperbolic rhetoric but it looks as if the government is returning in a modest way to a Keynesian policy of trying to pump prime the economy:
Keynesianism didn’t work in the 1970s to revive the economy and it will be instructive to see it fail this time too.
Meanwhile the Labour Party doesn’t know which way to turn as the Tories have just stolen their clothes. Trump will be wondering what has come over his buddy too.June 30, 2020 at 8:48 pm #204768WezParticipant
Didn’t Hitler do the same for the German economy?June 30, 2020 at 8:55 pm #204769
Yes, Keynes was merely providing a theory to justify policies already pursued by left-leaning reformists… and others. Not that Johnson is planning to do anything as radical as either Roosevelt or Hitler, essentially not much more than implementing more rapidly spending plans that had already been drawn up.July 1, 2020 at 7:15 am #204781
Rather cruelly yesterday’s Guardian recalls Boris’s hero Churchill’s description of Roosevelt’s New Deal as “this war on wealth and business, this ruthless war on private enterprise”.July 5, 2020 at 8:42 am #204866
Some more stuff on Roosevelt’s New Deal.
“I want to save our system, the capitalistic system.” (Roosevelt 8 May 1935)
“He (President Roosevelt) is fighting to save the capitalist system, and not to destroy it”.— Sir Arthur Willert, Press Officer and Head of the News Department of the Foreign Office, in an article on American politics. (Times, 29 April 1936.)
Of course by “capitalist system” Roosevelt meant private capitalism as production for profit by private enterprises. That survived but how did the workers fare?
“When Roosevelt ran for reëlection in 1936, the unemployment rate was 16.9 per cent, almost twice what it had been in 1930. (…) When Roosevelt ran for the unprecedented third term [in 1940], unemployment was 14.6 per cent.“
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