Some events from the past can be inconvenient to those who would rather they had not happened that way. There is always the option of merely ignoring historical reality, but increasingly in vogue with some is the selective re-telling of what had been accepted for so long as fact, safe in the knowledge that those who lived through those times are safely out of the way.
Thus the approach of occasional Tory and MEP Daniel Hannan, with the added zest of abuse, as he stresses that those of contrary view have not been properly educated. Dan’s chosen period for revision is the years following the Great Crash of October 1929, where he trots out the lame idea that Franklin Roosevelt somehow prevented economic recovery in the USA.
This comes after the gaping omission of what happened in the aftermath of the Crash: Herbert Hoover and his administration effectively did nothing. A budget surplus was run. No intervention was made. And the economy continued to decline. By the time Roosevelt became President, unemployment was at around 25%. No intervention led to no recovery.
Hannan does get one thing right when he tells of the loosening of monetary policy by the Federal Reserve in the late 1920s, but fails to reveal the full picture: this was at the urging mainly of the British, following Churchill’s disastrous return to the gold standard in 1925 which had effectively increased the price of many UK exports by 10% and therefore hobbled the economy.
He also skips over the devaluation of Sterling by exiting from the gold standard – by around 17% - which helped those export industries, although much trade had already been lost for good. Even then, the UK economy did not return to significant growth for three more years, and most of that growth was in the South East. Dan can sneer at the Jarrow marchers, but that was reality on Tyneside in 1936.
And the idea that Roosevelt held back recovery is bunk: the assumptions underpinning the study he references include growth rates which border on the heroic. The reality is that the US economy recovered steadily, until the clamour for a balanced budget – with Dan’s favoured cuts – induced a slump in 1937, which in turn affected the UK economy the following year.
All of this is well enough known for Hannan’s frequent riffing on this theme to be easily dismantled. But he keeps on telling his selective history, whingeing about those “half educated graduates who predominate the world’s legislatures and television editorial conferences”, while the reality – that they are in step and it is he who is not – passes him by.
As such, his repeat hatchet job on Keynes fails. No change there, then.