Monday, June 29, 2009
WW II didn't end the depression
As I note in this book review, few people any more believe that the New Deal ended the Depression, but lots of people believe that the depression was ended by World War II. Robert Higgs, author of the classic "Crisis and Leviathan," in his new book, "Depression, War, and Cold War," knocks that one out of the water. Not only was unemployment reduced mainly by the military draft, production and spending on non-military items was flat or falling throughout the war. We only got significant economic growth beginning in 1946, when most of the wartime controls and restrictions were lifted.