Revisiting the 1930s
1. Stephen Williamson gives a platform to Harold Cole and Lee Ohanian to defend a recent controversial op-ed.
most of the increase in per-capita output that occurred after 1933 was due to higher productivity – not higher labor input. The figure shows total hours worked per adult for the 1930s. There is little recovery in labor, as hours are about 27 percent down in 1933 relative to 1929, and remain about 21 percent down in 1939. But increasing aggregate demand is supposed to increase output by increasing labor, not by increasing productivity, which is typically considered to be outside the scope of short-run spending/monetary policies.
So, were the 1930s a jobless recovery? Recall that one of my favorite books of the past year is Alexander Field’s history of the 1930s as A Great leap Forward in terms of productivity.
[note: you may have seen this already, since Jim Hamilton and Tyler Cowen both linked to it. I am doing more posting on a delayed basis, so expect me to be “late” to pick up on a story. Also, Scott Sumner offers a rebuttal:
Hours worked went from being 27% below normal in 1933, to only 17% below normal in 1937, the cyclical peak.
He chides Cole and Ohanian for choosing 1939 as the endpoint for their analysis.]
2. Timothy Taylor expresses rare (for him) frustration with the view that Herbert Hoover was a budget balancer. It is a myth that dies hard.
For more on Hoover see a new paper by Steven Horwitz.