Conservatives, Liberals, and the Great Depression

Just a quick post to share something I find kind of funny. Most of you probably won't, but I'll share it anyway. :)

I was in two facebook status/comment discussions at the same time. With one person I was arguing that government spending did in fact have an impact on the economy and the idea of a stimulus was a good thing. With the other person, I was defending the argument by Republicans that there is plenty of non-economic focused spending in the stimulus bill that shouldn't be there. Then in unison ... they both bring it up - The Great Depression.

Person 1 paraphrase: The Great Depression showed that government intervention works - FDR was a hero.

Person 2 paraphrase: The Great Depression showed that government intervention didn't work - FDR was a goof. We would have recovered much quicker without him.

Hilarious. Same event, and two completely opposite views ... so I did what anyone would do - I googled it. Turns out the real economists are split pretty evenly on this as well. The cause of the Great Depression is generally agreed upon (Money Supply, Gold Standard, etc.) The reasoning for why it took us over 12 years to recover is not. Very good arguments have been made both ways by people smarter than me. It's hard to argue with the fact that we did recover ... eventually. It is also hard to argue with the fact that it was the worst (most prolonged and painful) recovery ever. Oh yes ... and that most all the other countries in the world suffering through the same depression recovered much quicker.

Another interesting note: FDR was viewed at that time much as Obama is now, and Hoover was viewed much as Bush is now. FDR could do no wrong. I ran into a Will Rogers quote, he basically said that FDR was idolized so much that he could burn down the white house and the public would say 'great, look at that, we started a fire!'. Hoover was thought to be market driven and relaxed on government-intervention but his actions in office were anything but. This reminds me of Bush talking about fiscal responsibility and spending a whole bunch of money.

So the lesson here in my humble opinion is to beware of group-think. We all have a certain opinion, then we read things that mostly match that opinion. Look at anyone's blog roll to see this - generally not much diversity there. As we read more, we begin to lean even more in that direction. Eventually we think one side is right and the other side is wrong when the truth usually lies somewhere in the middle. If living in China taught me anything, it is that we as humans are not the independent thinkers we claim to be - we are very much a product of the information we take in.