I'm with Michael Darby on This One...
links for 2010-06-12

DeLong Smackdown of the Day for June 12, 2010: Robert Waldmann New Deal Unemployment Edition

Hoisted from Comments: Robert Waldmann writes:

I'm with Michael Darby on This One: As a certified angrybear, I thank you for the link (growl). As someone who used Lebergott's numbers without reading the footnotes, I suggest [i.e., wy didn't you do this already? you messed up] cutting and pasting the methodological footnote in which Lebergott assertst that it is reasonable to considert the WPA to be essnetially the same as Buchenwald, Dachau and the gulag (I am not exaggerating at all[1]). Lebergott's hatred of FDR or the New Deal or both drove him completely insane. This is of interest only to clinical psychologists except for the fact that interested polemicists treat Lebergott as if he were an economic historian....

[1] I quote Rauchway http://tinyurl.com/48j7cj:

Here’s what Lebergott had to say about counting unemployment in the 1930s:

These estimates for the years prior to 1940 are intended to measure the number of persons who are totally unemployed, having no work at all. For the 1930′s this concept, however, does include one large group of persons who had both work and income from work—those on emergency work. In the United States we are concerned with measuring lack of regular work and do not minimize the total by excluding persons with made work or emergency jobs. This contrasts sharply, for example, with the German practice during the 1930′s when persons in the labor-force camps were classed as employed, and Soviet practice which includes employment in labor camps, if it includes it at all, as employment.

Treating Lebergott as an economic historian is like treating Johah Goldberg as a political philosopher...

And here is Eric Rauchway bringing more snark:

(Very) short reading list: unemployment in the 1930s: [A]n economist named Michael R. Darby wrote an article with the delightfully self-explanatory title, “Three-and-a-Half Million U.S. Employees Have Been Mislaid.” What Darby did, you see, was read the notes.... id you catch that? People who painted murals for the WPA fall into the same category as internees in Mauthausen or the gulag. So they count as unemployed!

One could say a few things about that.

  1. Wow, that’s a lot of ideology to cram into a single data series;
  2. if you’re using the unemployment data to answer the question, “did the New Deal help people,” then this data set is going to give you the wrong answer, because it’s going to show people suffering unemployment who in real life had a job, as Lebergott says;
  3. but what if people in emergency work acted like the unemployed—i.e., they were looking for a job and
  4. what about the “real” economy—the private industrial economy—how did it do?

Now, as it happens it looks like the answer to (3) is, mainly they didn’t—people who had an emergency job acted like they had a job (perhaps because they had a job) and probably shouldn’t count as unemployed. (See Robert A. Margo, “The Microeconomics of Depression Unemployment,” NBER Working Paper no. 18, December 1990.)... [So] you might think: wow, the Depression was really bad, but the New Deal really helped... if faced with these alternatives, you chose data based on Lebergott’s assumptions, you would be presenting the data that showed the New Deal in the worst possible light, wouldn’t you.

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