Conservative critics of President Franklin Roosevelt have argued for decades that his New Deal not only failed to end the Great Depression but actually prolonged it - proof, they say, that big, expensive government programs don't work and deep government involvement in the economy can make economic downturns worse. Their argument often ends with the declaration that it was World War II, not the New Deal, that revived America's economy.

Republican lawmakers and conservative pundits have resurrected this line of attack on FDR's economic policies over the past few months as they sharpened their criticism against Democratic calls, led by President Barack Obama, for a massive stimulus package to try to halt the economy's free fall - an idea that to many conservatives looks like a new New Deal.

"We know for sure that the big spending programs of the New Deal did not work," Senate Minority Leader Mitch McConnell, R-Ky., said Feb. 6, to cite one recent example. "And, it's widely agreed among economists, that what got us out of the doldrums that we were in during the Depression was the beginning of World War II."

Amity Shlaes, senior fellow for economic history at the Council on Foreign Relations and author of "The Forgotten Man: A New History of the Great Depression," has emerged as the intellectual leader of the latest effort to paint the New Deal as a bad deal. She credits some of Roosevelt's reforms - the Federal Deposit Insurance Corp. and the Securities and Exchange Commission, for example - for stopping bank failures and bringing some stability to the economy, but she contends that the New Deal ultimately added five or six years to a depression that should have ended much sooner.

It was Roosevelt, according to Shlaes, who turned the depression he inherited from President Herbert Hoover into the Great Depression.

The New Deal's experimental and arbitrary nature, Shlaes says, created uncertainty and concern among business people and investors about what the government might do next. U.S. Sen. Kay Bailey Hutchison, R-Texas, echoed Shlaes' point in a column published last weekend in the Austin American-Statesman. "Many economists conclude that the New Deal fostered uncertainty, which was salt in the wound of the U.S. economy," Hutchison wrote.

In addition to the uncertainty, New Dealers waged a war on business to justify their actions, Shlaes wrote Feb. 1 in The Washington Post, attacking "not merely those guilty of white-collar crimes but the entire business community - the 'princes of property,' FDR called them." The New Deal, then, in Shlaes' view, was a "lethal combo of spending and retribution" that hindered the economy's revival.

As she writes in "The Forgotten Man," "The story of the mid-1930s is the story of a heroic economy struggling to recuperate but failing to do so because of perverse federal policy."

Dispute over jobless rate

It's true that Roosevelt's policies did not bring the economy back to pre-Depression levels.

"Economically speaking, if that's the narrow ground on which you're standing, it's fair to say that the New Deal did not accomplish the goal of ending the Depression," says H.W. Brands, a history professor at the University of Texas and author of "Traitor to His Class: The Privileged Life and Radical Presidency of Franklin Delano Roosevelt."

This doesn't mean the economy didn't get better during the 1930s, however. Compared with where various economic indicators were during the Depression's depths in 1932 and 1933, some things improved dramatically.

"If you look at the basic figures, real GDP starts going up, more or less immediately on Roosevelt taking office, and it continues to go up through his first term," says Eric Rauchway, a historian at the University of California-Davis and author of "The Great Depression and the New Deal: A Very Short Introduction." "The speed of growth during this period is really quite rapid."

The economy had entered a recession in August 1929, and the stock market crashed two months later, in late October. In 1930, the first full year of what was to become the Great Depression, the national unemployment rate was 8.9 percent, according to the U.S. Department of Labor's Bureau of Labor Statistics - bad, but not yet catastrophic. The next year, however, the economy worsened significantly and got worse still in 1932, the last complete year of the Hoover administration. Unemployment bottomed out in 1933 at 24.9 percent before improving slightly during each full year of Roosevelt's first term.

The unemployment rate reversed course in 1938, jumping from 14.3 percent the year before to 19 percent, before falling steadily thereafter. The Japanese attacked Pearl Harbor on Dec. 7, 1941, and in 1942, the first full year of America's involvement in World War II, the unemployment rate fell to 4.7 percent. The war was on; the Depression was over.

Critics frequently cite the unemployment rate's tepid response to Roosevelt's policies as evidence of the New Deal's failure. If the New Deal was the rousing success that its liberal supporters claim it was, they argue, why were so many Americans still out of work several years into the New Deal?

Controversy surrounds the official 1930s unemployment rates because they do not include those Americans employed by the Works Progress Administration, the Civilian Conservation Corps and other New Deal work programs. The standard practice at the time was to count "emergency workers" as unemployed; their employment was considered relief, not work.

A paper published in 1975 by Michael Darby, an economics professor at the University of California-Los Angeles, challenged that "conceptual error." Darby argued that the New Deal's "emergency government labor force worked on qualitatively different terms" than those provided by previous, smaller work-relief efforts. In short, what is building roads, schools, parks and bridges - full-time, at competitive wages - if not employment?

Darby's revised jobless rate falls to 10.1 percent by 1936 - a 15 percentage point improvement during FDR's first term. Like the official rate, Darby's rises in 1938 to 12.5 percent before falling afterward, hitting 6 percent in 1941.

With either set of numbers, the jobless rate steadily improves during FDR's first term but then rises again in 1938. Why?

Prematurely optimistic that the corner had been turned, and pressured by deficit hawks in his administration and in Congress, Roosevelt tried to balance the budget in 1937 by cutting New Deal programs and raising taxes - a violation of the new deficit-spending theories of British economist John Maynard Keynes then gaining favor. The result, many experts say, was a yearlong recession within the Great Depression.

Unemployment is only one economic measure. Others, such as gross domestic product, which increased nearly 50 percent during FDR's first term, follow a similar pattern. They fall sharply during the Hoover years and rise slowly but steadily during FDR's first term. They fall again in 1937-38 and then move upward as World War II approaches.

Doing nothing wasn't an option

The Great Depression was unlike anything anyone had ever experienced. No one really knew quite what to do. Roosevelt and his administration improvised and, yes, they experimented, relentlessly. The New Deal remained a work in progress, one sometimes bound by old assumptions about government spending and by a president who sometimes lost his nerve when it came to deficits.

In an article published in The American Prospect, Rauchway wrote that "the New Deal was never fully Keynesian" - it never went "far enough fast enough" and therefore wasn't fully stimulative until World War II. It is a little odd, then, that conservatives use the war as the exclamation point in their argument against the New Deal, for what is total war - with its nationalized industries, astronomical deficits and government-ordered manufacturing projects - if not the mother of all stimulus plans?

Rauchway also wrote that "any smart historian of the 1930s is a New Deal critic," and he agrees that some programs probably did slow the economy during FDR's first term. The National Recovery Administration, for example, which tried to bring together labor, industry and government to set prices and wages, "might have been a drag on recovery," Rauchway says. "But this doesn't indict the entire New Deal."

Any perceived economic sluggishness during the 1930s is perhaps more a sign of how deep the Depression was, and how far out of the abyss the economy had to climb, than it is a failure of the New Deal. "If you're saying that the New Deal slowed down the recovery, you have to be saying that you expected an even more rapid rate of growth" than the often impressive, double-digit growth that occurred, Rauchway says.

The assertion that the New Deal prolonged the Depression is difficult to disprove because, as Brands says, "there was a New Deal," and it begs the question: As opposed to what?

The fact is, "it is inconceivable that FDR would have come into office and just done nothing," Rauchway says. "When people are literally starving, you don't do nothing. You do something and hope it will work."

Brands considers the economic argument too narrow. "During the New Deal, more was at stake than the state of the economy," he says.

There was widespread admiration for Italy's dictator Benito Mussolini on one hand and for the Soviet Union's Joseph Stalin on the other. There were hugely popular socialist and fascist demagogues calling for radical change, rumors of business-led military coups, and despair about American democracy and capitalism.

In the midst of this chaos, Roosevelt "caused Americans to think that American democracy still had a future," Brands says.

"Roosevelt really proved to be the best friend the wealthy ever had precisely because he did make it possible for capitalism to revive," Brands says. "If not for Roosevelt there might seriously have been either a fascist in power or an out-and-out socialist who would have nationalized everything in sight."

jseaborn@statesman.com; 445-1702

Part of this article originally was written for Grapeshot, Insight's blog: www.statesman.com/grapeshot.

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