When the gods dance...

Wednesday, September 5, 2012

New Deal and blimps

New Deal toyed with airship drops

Harry Hopkins©Getty

Harry Hopkins: only half-joking

From Mr Patrick Renshaw.

Sir, Samuel Brittan (“Come on Bernanke, fire up the helicopter engines”, August 31) says that both Ben Bernanke and Milton Friedman raised the possibility of raising aggregate demand in an ailing American economy by dropping currency notes from aircraft like helicopters. There is an earlier example of such bold thinking.

In 1933, in the early days of Franklin Roosevelt’s New Deal, arguing that the only way to revive an economy at the point of collapse was by stimulating aggregate demand, his adviser Harry Hopkins pointed out only half jokingly that money dropped all over America from airships would be spent at once and so start economic growth.

In fact, the federal government in 1933 appropriated $3.3bn (more than it had spent on everything in any of the previous 15 years) on public works alone, which did more than anything else to drive gross domestic product up and unemployment down between 1933 and 1937.

Patrick Renshaw, Sheffield, UK


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