Has Thomas Sowell Read the General Theory?

When I first read Steven Landburg criticize proposals to prop up aggregate demand, which started with:

Jason: I don’t think much of our audience will be familiar with Keynes’ “General Theory,” so let me try to boil down your argument to everyday language

I wrote:

Or is Steven saying such recessions do not occur in the first place? After all, he sees the problem not as an insufficiency of aggregate demand but as the need to let “unhealthy industries” adjust.

Maybe Steven was thinking about an allegedly respectable economist named Thomas Sowell who does not appear to have read the General Theory:

There are too many examples of government interventions that made things worse, the Great Depression of the 1930s being the most tragic. Those on the Left love to believe that the stock market crash of 1929 showed the failure of the free market and that the New Deal interventions in the 1930s saved the day.

Here we go again with the nonsense that FDR’s economic policies either caused a depression that preceded his Presidency by almost four years or that his policies made it worse. There has been a lot of great economics written on this but apparently Sowell has not read this either. But simply draw a graph given the propensity of the National Review nitwits to read anything of value. The graph shows real GDP and real investment (billions of 2000$) from 1929 to 1940. During the Hoover Administration, both fell dramatically. I guess Sowell does not realize that real GDP rose dramatically during FDR’s first term. Yes, we might have liked a faster recovery and we did have a 1937 recession. But the usual rightwing spin that Sowell sort of echoes is that FDR’s policies spooked investors. It does seem investment demand did cover quite remarkably after FDR became President – especially in light of this claim that his policies made things worse by spooking investors.