New Office Art, or 1933 Pro-Roosevelt Editorial Cartoons Support Setting a Monetary Price-Level Target

New offices for the Roosevelt Institute means we get new stuff for the walls.  And the kind people at the FDR Presidential Library sent us some 1930s editorial cartoons I want to share with you.

First off, my wall is painted with Idea Paint, which makes it act like a White Board.  Draw on the walls with dry erase markers and then just wipe it off.  It is amazing.  A month in it is working great.

I want to show two Roosevelt editorial cartoon posters.  First off:

In light of debates on the Ron Paul candidacy, there’s a lot of talk about Federalism and the left.  Sign me up for this kind of liberalism, with FDR moving the states around like puzzle pieces.

Each state has an accomplishment or a goal on them.  There’s a lot of debt relief and debt related issues in the state pieces, from “Debt Adjustment” to “Farm Mortgage Act” to “Home Owners Mortgage Relief.”  Check out the rest:

Also check out this amazing editorial cartoon, from Pulitzer-Prize winning editorial cartoonist John T. McCutcheon.  It shows FDR as an architect planning pillars for the economic recovery.  It was in the Chicago Tribune on October 25th, 1933:

Without peeking, what would you guess are the Seven Pillars of the Edifice of Recovery in the cartoon?  The seven key reforms that this cartoon (and the audience) understood as the way out of the Great Depression that the New Deal was going to bring?

You may have guessed unemployment relief or public works.  But did you guess that a monetary price-level target was one of them?  Check out #7:

Love it – 1930s editorial cartoons calling for dovish monetary policy.

It’s funny imaging McCutcheon trying hard to fit “After Commodity Price Level Is Restored, A Dollar With Unchanging Purchasing and Debt-Paying Power” into the corner of his cartoon.  But it was an important part of the Roosevelt administration.  Many of the original fireside chats were about restoring the price level and economists believe this set an important monetary expectation that boosted the New Deal’s recovery.

Notice that Pillar 7 isn’t “Buy $X amount worth of Y” (like QE does) but “set the level.”  It’s not a floor or a step but a destination.  The cartoonist understands that the administration must do whatever it takes across all available monetary tools to get us to the targeted destination.

Makes you wish liberals today took monetary policy and the setting of expectations more seriously, doesn’t it?  Ages before Michael Woodford, my man Franklin Delano Roosevelt knew what was up with expectations.

Bonus.  Here’s the cartoon that McCutcheon was awarded the 1932 Pulitzer Prize for Editorial Cartooning for, titled “A Wise Economist Asks a Question.”

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5 Responses to New Office Art, or 1933 Pro-Roosevelt Editorial Cartoons Support Setting a Monetary Price-Level Target

  1. Andrew says:

    So odd that these would be published in the Trib, given McCormick’s politics. I know a number of his writers had political differences with him and sneaked some things by him, but I am surprised that these escaped his notice.

  2. Pingback: FT Alphaville » Further reading

  3. Anders says:

    Is there actually evidence of it having been monetary policy, rather than fiscal policy, which supported aggregate demand in the 1933-1936?

    Sure, going off the gold standard was a necessary first step; but the idea that monetary stimulus (and therefore a credit expansion) is more important in explaining FDR’s recovery than fiscal stimulus just seems hard to swallow.

  4. lewy14 says:

    What is the “targeted destination”, exactly?
    What is the price level you’d like to see set? Which “commodity”? Do we need, e.g., to set a target for farm products? Copper? Oil? I don’t think so.

    So do we set a target on real estate? And if we did, what would that do to the price of oil, and hence the economy?

    I think you’re on the hook to answer this because when you say “Makes you wish liberals today took monetary policy and the setting of expectations more seriously, doesn’t it? ” I think you have to fill in what those expectations ought to be.

  5. Pingback: The Fed should follow FDR | PARTISANS

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