Editorial note: In this piece, Professor Horwitz comments on Professor Eggertsson. We
hereby invite Professor Eggertsson to reply to Professor Horwitz, and would welcome
such reply for publication in the next or any future issue of the journal.
Great Apprehensions,
Prolonged Depression:
Gauti Eggertsson on the 1930s
Steven Horwitz1
ABSTRACT
[U.S. Treasury Secretary Henry Morgenthau, Jr.]: No, gentlemen, we have
tried spending money. We are spending more than we have ever spent
before and it does not work. And I have just one interest, and if I am
wrong, as far as I am concerned, somebody else can have my job. I want
to see this country prosperous. I want to see people get a job. I want to
see people get enough to eat. We have never made good on our
promises…
But why not let’s come to grips? And as I say, all I am interested in
is to really see this country prosperous and this form of Government
continue, because after eight years if we can’t make a success somebody
Econ Journal Watch
Volume 6, Number 3
September 2009, pp 313-336
1. Charles A. Dana Professor of Economics, Department of Economics, St. Lawrence University,
Canton, NY 13617.
Acknowledgements: The author would like to thank four referees for very helpful comments. I also
thank participants at the EJW conference at the American Institute for Economic Research in Great
Barrington, MA in May of 2009 for several great suggestions. Finally, I dedicate this paper to the
students in my Fall 2008 American Economic History course and Spring 2009 Great Depression
Senior Seminar at St. Lawrence. Many hours of discussion with them, and several sources they found
in their own work, have contributed significantly to this paper.
VOLUME 6, NUMBER 3, SEPTEMBER 2009
313
www.cuwai.com
else is going to claim the right to make it and he’s got the right to make
the trial. I say after eight years of this Administration we have just as
much unemployment as when we started.
Mr. Doughton: And an enormous debt to boot!
HMJr.: And an enormous debt to boot! We are just sitting he