Challenge: America gets out of Depression several years before entering WWII

In OTL, the administrations of Hoover and Roosevelt failed to prevent and end the Depression until WWII. The US umemployment rate was under 4% in early 1929(I believe the best in the world), by 1932 it had fallen to 24.9% at its lowest(it stabilized at this point, relatively speaking) which made it in the middle of the pack among the more developed nations. However by 37 the US had an unemployment rate of just 13.2(middle of the pack), but by 38 it once again fell to 20%(one of the lowest rates in the first world). In 39 the US unemployment rate improved, but still remained above 15%(going about 20% at one point).

So with a POD of 1932, and without changing events in Europe or Asia/Pacific, how can the United States recover(Say, unemployment of under 8%) from the Great Depression at least 2 years before entering WWII?
 
Simple. Have a congress and administration installed in 1933 that believed in less government meddling and allowed the markets to self correct.
The Tories tried that in Britain. It didn't work.

Doing nothing will not correct the fundamental structural faults in the economy that led to the Great Depression.
 
The Tories tried that in Britain. It didn't work.

Doing nothing will not correct the fundamental structural faults in the economy that led to the Great Depression.
Well, by 1938 the American umemployment rate was nearly twice as high as the British unemployment rate. As a matter of fact by 1937 the UK unemployment rate was the same as it was in 1929.

And it should also be noted that the Smoot-Hawley Tariff created many of those fundamental structural faults.
 
Simple. Have a congress and administration installed in 1933 that believed in less government meddling and allowed the markets to self correct.

Which would have never happened or taken far longer. The whole "It was government meddling that did it" argument is a conservative bogey man. Less government meddling is what Hoover tried. Worked out great, didn't it?

Unemployment under FDR fell consecutively every year except the 1937-1938 recession, and that recession came about because FDR listened to the conservatives and attempted to balance the deficit and lower taxes, and it only ended when he went back to his policies and went even more into Keynesian economics.

Likewise, unemployment under FDR never rose higher than it was under Hoover, and it was not 15% in 1939 nor was it 20% in the 1937-1938 dip, etc., etc.. Those only include private sector jobs and completely ignore the public sector jobs created by the New Deal, and public sector jobs were the key part of the New Deal so that is very, very deceptive. The reason that is thought to be true by many detractors is because the Bureau of Labor statistics only recorded private sector jobs as "employment" before and during WW2, and that is where that data comes from. Now, you can tell those people that worked in the public sector under FDR that they were unemployed, but I think they'd disagree. And real GDP grew at an annual rate of around 9 percent during Roosevelt's first term and, after the 1937-38 dip, around 11 percent. Also, about 1/3 of the people listed as unemployed by those statistics had jobs and it was the New Deal that gave it to them.

So take your statistics, take out 1/3, and you start to get closer to the real picture.

http://www.slate.com/id/2169744

If you want a way to POD the Depression to be shorter in the immediate run, have FDR go full force into Keynesianism and full force into it sooner.
 
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Which would have never happened or Likewise, unemployment under FDR never rose higher than it was under Hoover, and it was not 15% in 1939 nor was it 20% in the 1937 dip.
Between this(at one point in April of 1939 the unemployment rate was over 20 percent. Given that the population was larger in 39 then 32 that leaves almost exactly as many total unemployed as when unemployment hit it's all time low.), your claim that Hoover did nothing(The Smoot Hawley Tariff, RFC, Federal Home Lone Bank Act, ERC, Revenue Act of 1932, ect) and that FDR over saw serious tax cuts(top rates increased by 15% and more during WWII) I would suggest getting your facts straight before entering this debate.
 
Don't get snippy with me.

Less government “meddling” is what Hoover did. Hoover was staunchly fearful of intervention and especially of helping the people and not the people via business or anything to not directly get involved with the people, and hence did not do anything of any real intervention until it was too late, and even his intervention was limited. To quote wikipedia “As the economy quickly deteriorated in the early years of the Great Depression, Hoover declined to pursue legislative relief, believing that it would make people dependent on the federal government. Instead, he organized a number of voluntary measures with businesses, encouraged state and local government responses, and accelerated federal building projects. Only toward the end of his term did he support a series of legislative solutions.”

And even if he did do some things (and I never said he didn‘t), he can clearly be criticized because he didn’t do enough, and FDR praised for doing enough. More intervention worked as we can see with FDR. Less didn’t as we can see with Hoover and the laissez fair orgy of the decades before that led the bubble to burst. And even if people were born between 1932 and 1939, it was not that many overall I would say (124,949,000 in 1932 to 131,028,000 in 1939; 6,079,000 increase. Unemployment was 24.9 percent in 1932, and 31,296,810 people were therefore unemployed. Were that the same percentile unemployment in 1939, 32,625,972 would have been unemployed. The only slight increase from the 1932 number in this counterfactual scenario is a sign that the increase in population between those years does not hold all that much impact on making unemployment look worse in the real Great Depression. However, in 1939 by the amount of unemployed there was (17.2%), 22,536,816 million people were unemployed; and that doesn't factor in public sector jobs under FDR which cuts out another third to give us a more real picture. So your population increase thing doesn't work.) and I don't think 1 to 7 year olds are a sizable portion of the work force.

Likewise, you apparently didn’t read what I had said on percentiles or the link I gave, so I suggest you read it again. Even if you offer some evidence that “at one point in April of 1939 the unemployment rate was over 20 percent” (which I await you to cite), you still need to take off 1/3 to get closer to the real data. Likewise, FDR did cut taxes and try to balance the budget -giving into conservatives and being eager early on to return to conservative budget principles- leading to the 1937-1938 recession.

Any way you look at it, when the government intervened and kept with Keynesianism or the New Deal to whatever degree, things got better, even if at varying degrees equal to the amount of intervention. When intervention was lessened, laissez faire and conservative practices used as a fall back, and Keynesianism ignored, things got worse.

Bottom line, if you want a quicker end to the depression, stop FDR from being eager to return to conservative budget principles, and have him understand Keynesian economics better so that he could follow them even more effectively. If you want a longer one, follow minimalist or non existent intervention.
 
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This one isn't really that hard. All you have to do is have FDR spend more and decide not to balance the budget following his re-election. If this happens, you don't have a Depression going into the Second World War, you have a normal economic situation.
 
This topic is sad.

Get people like Curtis, Hoover, FDR, and Ford as far away from power as possible and the recession of '29-'35 will be remembered as hard but survivable. The only problem is reviving the global economy, which no one politician can do, and it's the sort of thing that macro-historical events (such as WWII) will get in the way of.
 
Don't get snippy with me.

Less government “meddling” is what Hoover did.
Garner accused Hoover of trying to lead America down a road of socialism, and some of FDR's campaign promises included Cutting Government spending by 25%, cutting taxes, lowering tariffs, and balancing the budget. That should tell you alot about Hoover's Presidency.


Hoover was staunchly fearful of intervention and especially of helping the people and not the people via business or anything to not directly get involved with the people, and hence did not do anything of any real intervention until it was too late, and even his intervention was limited. To quote wikipedia “As the economy quickly deteriorated in the early years of the Great Depression, Hoover declined to pursue legislative relief, believing that it would make people dependent on the federal government. Instead, he organized a number of voluntary measures with businesses, encouraged state and local government responses, and accelerated federal building projects. Only toward the end of his term did he support a series of legislative solutions."
That doesn't factor in the Smoot-Hawley Tariff or Stimulus checks. I'd consider those two moves early and significant.

Less didn’t as we can see with Hoover and the laissez fair orgy of the decades before that led the bubble to burst.
It also lead to one of the greatest technological booms in history. I think that counts for something.

Any way you look at it, when the government intervened and kept with Keynesianism or the New Deal to whatever degree, things got better, even if at varying degrees equal to the amount of intervention. When intervention was lessened, laissez faire and conservative practices used as a fall back, and Keynesianism ignored, things got worse.
So, doesn't that mean that the New Deal spending failed to stimulate the private sector if the Unemployment rate dropped again after the government cut spending? So unless you expect the government to keep New Deal deficit spending up forever, it doesn't sound like it worked to me.
 
*sigh* To quote Henry Morgenthau Jr, Secretary of the Treasury for Roosevelt, “We have tried spending money. We are spending more than we have ever spent before and it does not work.” Clearly, spending needs to be limited in some extent, unless you want to tell me that the SECRETARY OF THE TREASURY didn't know what he was talking about.

Taxation also needs to be limited as well. Everyone fuels the economy, but not when they don't want to spend anything for lack of money.

The Smoot-Hawley Tariff Act not being passed in the US and similar things not being passed in foreign countries will also make a large difference. International Trade needs to continue, not be destroyed.

In short, it would indeed help for there to be a different Congress, one more willing to try to create incentives through less interference than to try to create jobs and fail to get unemployment below 20%.
 
*sigh* To quote Henry Morgenthau Jr, Secretary of the Treasury for Roosevelt, “We have tried spending money. We are spending more than we have ever spent before and it does not work.” Clearly, spending needs to be limited in some extent, unless you want to tell me that the SECRETARY OF THE TREASURY didn't know what he was talking about.

Why not? The Secretary of Treasury is not the Shadow of God on Earth, and Roosevelt and his cabinet didn't understand Keynesian economics.

In short, it would indeed help for there to be a different Congress, one more willing to try to create incentives through less interference than to try to create jobs and fail to get unemployment below 20%.

In my reality, it fell below 10% before the 1938 Recession. I presume you're posting from the one where Garner ended up president?
 
This was debated in the blogosphere a couple of months ago. I present the conclusion below.

depression_debate.jpg
 
Garner accused Hoover of trying to lead America down a road of socialism, and some of FDR's campaign promises included Cutting Government spending by 25%, cutting taxes, lowering tariffs, and balancing the budget. That should tell you alot about Hoover's Presidency.

Hoover frequently attacked FDR by saying that he would only make the Depression worse by raising taxes and increasing spending to fund his social-relief and welfare programs which should tell you a lot about Hoover as well. And both campaigns supported cutting expenditures at the outset from what I've managed to find -which could very well not be true- (though I wouldn't agree with 25% cut as accurate because I think government spending in the 30's was 20% and today its 35%, so to cut it 25% would make Hooverite spending too high for me to think its accurate), FDR did lower taxes on the middle class but kept them higher on the wealthy -my point earlier was that in 1937 he lowered them lower than he had them-, I believe he lowered the tariff and FDR abandoned balancing the budget early on because he felt the pledge was outweighed by the need for government activism*. Hoover believed in volunteerism to cure the nation's ills and letting the nation help itself to recover. I'm going to say that with most of his programs -at least until the end- Hoover either focused on the wrong things or when he focused on the right things, didn't go far enough. Hoover gave a base to build off of on many things, but a base is not enough. And however much of that is true, it only goes to show how FDR was cautious early on of what to do. And the success of doing compared to not doing or minimally doing should be evident.

That doesn't factor in the Smoot-Hawley Tariff or Stimulus checks. I'd consider those two moves early and significant.
Smoot was not focused on the people and was minimalist intervention in a situation of total collapse. He adjusted tariffs. So what. Every president throughout history has done that. It was not any great history making government action outside of the fact that it failed miserably. And he did do some things, but his problem was always that they were too constrained or focused in the wrong areas.

Smoot-Hawley Tariff -which FDR spoke out against- was business focused to curve output which was being over produced. And the "stimulus checks" (which could refer to any number of programs) were too little, too late when enacted.

Quote:

Hoover kept reciting his mantra, Prosperity is just around the corner. The RFC offered money for expansion to corporations when the problem was a lack of purchasing power among farmers, laborers, and the middle class. He said that in the long run a dole would destroy the spiritual fiber of those who received it.
FDR replied, "People don't eat in the long run. They eat three times a day." How would the spiritual fiber of American workers be improved by helplessly watching their families starve and shiver during the winter?


It also lead to one of the greatest technological booms in history. I think that counts for something.
You cannot correlate technological leaps with laissez faire outside of coincidence.

So, doesn't that mean that the New Deal spending failed to stimulate the private sector if the Unemployment rate dropped again after the government cut spending? So unless you expect the government to keep New Deal deficit spending up forever, it doesn't sound like it worked to me.
Read:

Now, you may say, wait: Those people really shouldn't count as employed—we're not interested in government make-work, we're interested in the real economy. Fair enough—and if you look again at
Historical Statistics of the United States, you'll see another measure of unemployment—private, nonfarm unemployment—measuring the real, industrial economy. And on that measure, unemployment again runs markedly lower under Roosevelt than under Hoover. John Maynard Keynes might have explained that the New Deal wasn't just offering make-work, it was stimulating the economy—and Shlaes in fact at one point says the same: "t functioned as Keynes ... hoped it would." Yet of all the possible ways to measure unemployment, Shlaes chooses the only way that hides the effect of New Deal relief programs and makes it look as though the economy performed as poorly under Roosevelt as under Hoover.


*I also question the validity of that JN Garner quote because all I can find it on is New Deal detractor sites and nothing of pure achedemia, which leads to to question whether its real or just some ideologue shoving words into the mouth of the dead.
 
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You cannot dismiss Smoot-Hawley with "whoopty-do."

It was a big damn tariff and caused an enormous trade war. Between that and the autarkic fascist regimes, the first global economy died.

(Read the book "The End of Globalization")
 
You cannot dismiss Smoot-Hawley with "whoopty-do."

It was a big damn tariff and caused an enormous trade war. Between that and the autarkic fascist regimes, the first global economy died.

(Read the book "The End of Globalization")

But I'm saying its "whoopy-do" as a government action of involvement in the grand picture because it was nothing revolutionary in intervention really, and when its trying to be framed like its Hoover's own New Deal.
 
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I don' think the blogosphere is a good place to look for a conclusion on this kind of subject.

Compared to here? I'd say it is a pretty damn good place. Unless we have a Nobel laureate hiding under the bed, or a handful of professors in the cupboards.
 
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