I’ve seen this quote a couple hundred times too many:
We are spending more money than we have ever spent before, and it does not work. After eight years we have just as much unemployment as when we started, and an enormous debt to boot.
It comes from Harry Morgenthau, FDR’s secretary of the treasury, via Burton Fulsom’s flawed history. It’s a darling of conservative pundits who want to say that government spending cannot reverse an economic downturn. Indeed, their whole case against government spending seems to hinge on this one moment, a supposed moment of clarity from Morgenthau.
Government spending would not in itself be the problem. It increased dramatically through the 1940s. But as easy as it is to argue in its favor, I’ve yet to read some dissection of Morgenthau’s statement … something that puts it in context to show that it is a less powerful assesment that conservatives would think. Indeed, the passage lacks any depth, and reads more like exasperation rather than reflection, and given that Morgenthau often disagreed with Roosevelt on spending (though not necessarily on its application), there is plenty of room for a historian to debunk the conservative interpretation.
Morgenthau, at the very least, represented the concerns of American businessmen that the goals of the New Deal were not clearly defined, and the consequential costs were excessive. Were they temporary or permanent? According to HW Brands, Morgenthau confronted Roosevelt with this issue, claiming that recent declines in productivity reflected businessmen’s frustration with Roosevelt’s opacity. FDR relished his caginess, refusing to choose between temporality and permanence, and preferring to keep that information from those whom he felt opposed his policies. Eventually, Roosevelt would associate economic security with stable democracy.
This is only a small bit of context. Beyond this moment, there is little evidence of Morgenthau’s sustained opposition to the New Deal, or that his proclamation was a blanket judgement of New Deal policies. But the bigger problem is that this is one quote, one full of ambiguities (what else was said at the same Congressional committee hearing?). Ultimatley, there are more fruitful ways to use history of the Great Depression to bolster their arguments. This isn’t it.