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AEI President Arthur Brooks answers the question from MSNBC’s Matt Miller, “What do we do when huge forces beyond our control shape our destiny?”

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Nick, Klein’s post is interesting. But I have a problem with it you don’t address. Liberals just can’t make up their minds about the Great Depression. All they seem to really know for sure is that FDR is responsible for ending it. For decades, liberals—including the writers of textbooks, mainstream journalists, et al—insisted that the New Deal simply ended (or helped end, if you want to get persnickety) the Great Depression. But there are few economic historians or economists who think that traditional narrative is remotely plausible.

For starters, the National Recovery Administration—the heart of the early New Deal—was an unmitigated disaster. Also, it gets complicated because people mean all sorts of things by the New Deal. And many of the things we most associate with the New Deal, like Social Security, had little to nothing to do with fighting the Great Depression.

Over time, Milton Friedman and others showed that the monetary history of the 1930s was much more important to the story than the pictures in our civics textbooks or the clips from old newsreels. The sophisticated liberal position was that the New Deal helped, but it didn’t go far enough with Keynesian stimulus and that only came with World War II (this is Paul Krugman’s position). Recently Larry Summers proclaimed: “Never forget, never forget, and I think it’s very important for Democrats especially to remember this, that if Hitler had not come along, Franklin Roosevelt would have left office in 1941 with an unemployment rate in excess of 15 percent and an economic recovery strategy that had basically failed.”

In recent years liberals have grown more defensive as the argument has shifted to whether or not FDR prolonged the Great Depression.

Here’s how I began an essay for National Review on the subject a while back:

“A normal person,” the liberal economist Brad DeLong recently pronounced, “would not argue that the New Deal prolonged the Great Depression.” New York Times financial columnist and Newsweek contributing editor Daniel Gross is even more emphatic. “One would be very hard-pressed to find a serious professional historian—I mean a serious historian, not a think-tank wanker, not an economist, not a journalist—who believes that the New Deal prolonged the Depression.” David Sirota, an activist-journalist, writes on the Huffington Post: “Every high school civics class teaches the broad truth about Roosevelt, the New Deal and how it helped end the Great Depression, and if the conservative movement has gone so off the deep end that they want to make crazy-sounding arguments that even high schoolers know are silly, then the progressive movement is in an even better position than we may have thought.” And in his syndicated column, he adds that any argument otherwise is “abject insanity.”

Sirota’s point about high-school civics classes helps explain the vitriol. The glory of the New Deal is, for liberals, settled dogma. To question it is akin to casting doubt on geocentrism in the 14th century. Worse, it is an attempt to erase liberalism’s most usable past.

Significantly, FDR has recently become more relevant and popular among “progressives” than he’s been for a generation. In 2006, Nancy Pelosi reportedly said that three words prove the Democrats aren’t out of ideas: “Franklin Delano Roosevelt.”

Anyway, getting back to Klein. I have no idea if the argument he makes is right. It might be. Or it might be simply part of the answer. It’s certainly worth thinking about. But a few things are obvious. First, if FDR devalued the dollar on purpose in order to boost exports, that’s no defense of the New Deal. He could have done that without putting dry cleaners in jail and cartelizing big business. Second, if he did it on purpose, blind luck is a better explanation than some liberal technocratic expertise. Remember, this is the guy who set gold prices based on his lucky numbers. And his “bold, persistent experimentation” had far more failures than successes. Third, if Executive Order 6102 ended the Great Depression, then it follows that all of those wonderful things that New Deal voluptuaries routinely cite as the success and the glory of the New Deal did not end the Great Depression. And if that’s case, maybe we don’t need a new New Deal after all.

Ezra Klein has a post arguing that Hitler and FDR ended the Depression (h/t RCM):

The two policies … key to the recovery were FDR’s decision to sign Executive Order 6102 and Hitler’s decision to overrun Europe.

Executive Order 6102 sounds pretty bizarre when you explain it. Remember that in the 1930s, dollars were backed by gold. Your dollar was worth what it was worth because the American government was committed to giving you a certain amount of gold in exchange for it. In Executive Order 6102, FDR forced every American to turn in almost all of their gold at a price of about $20 an ounce. Then he said that gold would stop being worth $20 per ounce and begin being worth $33 an ounce. This meant a massive devaluation in the dollar, which sounds bad, but actually meant a huge stimulus: our exports became cheaper and more popular, which in turn meant we created jobs because we needed more people to manufacture stuff that we could export.

As for Hitler, the more he did to threaten Europe, the more Europeans did to safeguard their money in the event of a Nazi invasion. That meant investing in American stocks and bonds, which expanded the amount of money in our economy, which lowered interest rates and increased expectations for future inflation (and eased fears of coming deflation), and gave consumers and businesses reasons to invest.

The post is interesting and worth reading in full.

Ezra says this interpretation of how the U.S. got out of the Depression is shared by conservative/libertarian economists including Greg Mankiw and to some extent Milton Friedman.

I’m pretty sure Friedman did not share this view. Regardless, the efforts to give FDR credit for rescuing the nation from the Depression would be more persuasive if they at least addressed Robert Higgs’s powerful essay on why the Depression lasted as long as it did and Roosevelt’s role in prolonging the Depression. I’m not saying Higgs has everything exactly right, but he strongly undercuts the case that FDR got the nation out of Depression.