Souvenirs of War

Souvenirs of War 

            In 2019 Bernie Sanders gave George Washington University a speech about how he is the heir to Franklin Roosevelt’s revolutionary economic policies.[1] He has good reason to express himself as the next Roosevelt, given his popularity among the public. Much of the American public believe that the Great Depression was caused by fragile confidence that wrecked the US economy in 1929, but it was Roosevelt’s economic plans that saved the nation. His Keynesian policies, rarely challenged by historians due to his popularity in the United States. He rightly deserves credit for leading a nation in a time of war and building faith in a mostly isolationist public before the war. Nonetheless, it is necessary to challenge the interpretation of government economic oversight. It was not the fragile confidence in the economy that wrecked it in the economy, nor was it Roosevelt’s progressive policies that saved the US economy. Instead, it was individual actions that led to both the Depression and the economic golden age of the 1950s.

            The United States faced a small economic recession following World War I, but it was not the newly formed Poland by any means. The United States GNP grew at a rate of 4.7% from 1922 to 1929, and unemployment remained the same, around 3.7%.[2] Despite this success in the American economy, fundamentals came to play a larger role in the bust that occurred later in 1929. It is strange how much consumers' actions and decisions play in the role of the economy, but it was no different in the United States. Between 1922 to 1927, dividends and stock prices tended to move together. However, between 1928 to 1929, stock prices began to soar above the dividends. Therefore, managers did those earnings would not rise above the price of the stock.[3] Many might cite the Hawley-Smoot or foreign stock markets as the cause of the Depression, it was the Federal Reserve’s interventionist policies that drove the depression forward.[4] It is necessary to understand that the United States faced many recessions long before the Depression in 1929.


            It was not unusual that the government or its institutions had little involvement in recessions. President Ulysses S. Grant was often criticized for his failure to prevent or hinder the recession of 1873, but there was not a precedent set. Nor did even the most educated people quite understand how money works. The economy arguably recovered by 1876 without much government intervention. Historians should note the negative outcome the Federal reserve had on the economy when it did intervene in the economy. They would not be the only ones that attempted to prevent the economic collapse, but Franklin Roosevelt instituted many policies that attempted to reverse unemployment and poverty through new Keynesian policies.

           Many high school students describe and analyze the New Deal of the 1930s as they are supposed to believe reformed the economy for the better. It was not the Civil Conservation Corps, the Civil Works Administration, or the Social Security Administration that ended the Depression. Furthermore, the real declines in output in 1938 took many years of unprecedented growth to undo the damage already done.[5] It would also be incorrect to assume that World War II ended the Great Depression either. It was a series of individual actions that led to increased wealth in households across the United States. It first began with Roosevelt’s need for businesses to build weapons at the government’s expense. He wrote in the executive order, Establishing the War Production Board. In this executive order, Roosevelt stated the War Production Board must “Report from time to time to the President on the progress of war procurement and production; and perform such other duties as the President may direct.”[6] It led to massive employment among the American population. Most significantly, the war and limited consumer items forced people to save money. After the war, people were able to spend that money on many items or invest it in business opportunities.[7]

            The market self-corrects itself time and again. Government regulations and Keynesian economic policies provide little positive outcomes or sometimes none depending upon the regulation. What affects the American economy more than any other is individual decisions and actions in society that make or break an economy. It is trust in the dollar and investments that permit people to build wealth. After World War II, many people found more money in their pockets after finding employment in businesses. They improved their lives by investing in businesses and buying new consumer goods. Franklin Roosevelt needed those businesses to find innovative ways to mass-produce planes and tanks. They became souvenirs or a reminder that private enterprise works, and the government depends on this level of efficiency. Bernie Sanders should learn from these souvenirs—maybe he would not define himself as a democratic-socialist.

 

Primary Source

“Executive Order 9024 of January 16, 1942, Establishing the War Production Board.” The American Presidency Project, https://www.presidency.ucsb.edu/documents/executive-order-9024-establishing-the-war-production-board.

Secondary Sources

Gambino, Lauren. “Sanders lays out his vision for America: finish what Franklin Roosevelt started.” The Guardian, 2019. https://www.theguardian.com/us-news/2019/jun/12/bernie-sanders-2020-vision-fdr-democratic-socialism.

Romer, Christina D. "What Ended the Great Depression?" The Journal of Economic History 52, no. 4 (1992): 757-84.

Schweikart, Larry. “The Economic Impact of War on Business.” May 14, 2020, https://canvas.liberty.edu/courses/48885/pages/watch-the-economic-impact-of-war-on-business?module_item_id=5099992.

White, Eugene N. "The Stock Market Boom and Crash of 1929 Revisited." The Journal of Economic Perspectives 4, no. 2 (1990): 67-83.


[1] Lauren Gambino, “Sanders lays out his vision for America: finish what Franklin Roosevelt started,” The Guardian, 2019, https://www.theguardian.com/us-news/2019/jun/12/bernie-sanders-2020-vision-fdr-democratic-socialism.

[2] Eugene N. White, "The Stock Market Boom and Crash of 1929 Revisited," The Journal of Economic Perspectives 4, no. 2 (1990): 69.

[3] Ibid, 72-73.

[4] Eugene N. White, "The Stock Market Boom and Crash of 1929 Revisited," 82.

[7] Larry Schweikart, “The Economic Impact of War on Business,” May 14, 2020, https://canvas.liberty.edu/courses/48885/pages/watch-the-economic-impact-of-war-on-business?module_item_id=5099992.


[1] Lauren Gambino, “Sanders lays out his vision for America: finish what Franklin Roosevelt started,” The Guardian, 2019, https://www.theguardian.com/us-news/2019/jun/12/bernie-sanders-2020-vision-fdr-democratic-socialism.

[2] Eugene N. White, "The Stock Market Boom and Crash of 1929 Revisited," The Journal of Economic Perspectives 4, no. 2 (1990): 69.

[3] Ibid, 72-73.

[4] Eugene N. White, "The Stock Market Boom and Crash of 1929 Revisited," 82.

[7] Larry Schweikart, “The Economic Impact of War on Business,” May 14, 2020, https://canvas.liberty.edu/courses/48885/pages/watch-the-economic-impact-of-war-on-business?module_item_id=5099992.

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