Thursday, November 04, 2010

The myth of wartime prosperity

I noticed the David Broder column arguing that what really ended the great depression was prosperity brought on by wartime spending and frenetic government activity. As Wendy Honett points out on, however (with links I would have had to spend more time tracking down; thanks), Robert Higgs and others have documented that WWII did not bring on prosperity but the illusion thereof. Of course unemployment declined as hundreds of thousands and then millions were drafted into the military, but the real indicators of prsoperity didn't kick in until around 1946, when most wartime economic restrictions were eliminated in one fell swoop.

As Robert Higgs himself put it to Wendy: "if you mix one part historical superficiality, one part economic confusion, and one part sheer immorality, you get the combination that qualifies a journalist to become known as the dean of the Washington press corps.” I did a review of Bob Higgs's book on the myth of wartime prosperity, but I can't find it this moment in the register archives.

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