The ERA was replaced by the Works Progress Administration (lampooned by critics as "We Piddle Around"). The WPA is the model for the stimulus bill just passed. All those supposedly "shovel ready" projects (which we know will not actually be ready to go for a year and often longer than that) are the 21st century versions of the roads, bridges, schools, and airports built by the WPA. Did it work? Folsom does not deny that some worthy projects were completed by the WPA. But at what cost? Every dollar spent by the WPA had to be collected in taxes from other citizens. Those lost tax dollars might have been used to fund private projects that would have achieved the same ends, perhaps at lower cost. Economist Henry Hazlitt noted at the time, "For every public sector job created by the bridge project a private job has been destroyed somewhere else."The New Deal has been canonized by historians. Folsom reminds us that it was a series of political decisions by very politically minded men. Political motives often determined where federal money was spent. The New Dealers wanted to relieve suffering. But the suffering of those in solidly Democratic states like the Deep South was less urgent to them than that of those living in swing states like New Jersey and Pennsylvania. WPA workers often complained of pressure to contribute to the Democratic Party. Journalist Lorena Hickok noted that Pennsylvania was "honeycombed with politicians all fighting for the privilege of distributing patronage."
As economic policy, the New Deal was a dismal failure. But here's what keeps Republicans up at night: As a political strategy, it proved very effective.