"When (President Franklin) Roosevelt did this, he put our country into a Great Depression. [...] He tried to borrow and spend, he tried to use the Keynesian approach, and our country ended up in a Great Depression. That's just history."
That's just ludicrous.
Blaming FDR (who took office in 1933) for the Depression (which started in 1929) is utter nonsense, and Austria did make a partial correction. He no longer blamed FDR for causing the Depression, only for exacerbating it: "Roosevelt's attempt to use significant spending to get us out of the Depression did not have the desired effect." This is also untrue, but is an attractive belief to conservatives due to their hatred of FDR and misunderstanding of economics. Jonathan Chait's "Wasting Away in Hooverville" at TNR examines the importance of Amity Shlaes' book The Forgotten Man in conservatives' fantasies about FDR, Keynes, and the Depression:
The conservative movement has invested enormous effort in crafting a political mythology that gratifies its ideological impulses. The lesson they learned from Ronald Reagan is that ideological purity is not only compatible with political success, but is also the best path to political success. They dutifully applied this interpretation to everything that happened since--George H.W. Bush, then Newt Gingrich, and then George W. Bush all failed because they deviated from the true path--and to all that happened before. Nixon failed because he embraced big government. Kennedy succeeded because he was actually a proto-supply-sider.
From such a perspective, Roosevelt casts a long and threatening shadow over the conservative movement. Here was a case of a wildly unpopular conservative Republican, Herbert Hoover, who gave way to an unabashed liberal Democrat who won four presidential elections. Shlaes goes to great pains to explain away this apparent anomaly. In this instance, she does produce an internally coherent argument. It is, alas, wildly ahistorical.
Historical revisionism is nothing new for them, although reprising the ideological rigidity and political timidity that dramatically worsened the first few years of the Depression is a dangerous course given the situation in which we--and the rest of the world--now find ourselves. They've been running around like Henny Penny for 75 years crying that "Socialism is coming," and it's no more true now than it was then:
Though Hoover himself continued to assail the New Deal as calamitous socialism right up to his death in 1964, from 1936 on the party remained in the hands of men who understood that the New Deal had built an enduring base of support and could not be directly assailed.
But now we have come to a time when leading Republicans and conservatives--not just cranks, but the leadership of the party and the movement--once again sound exactly like Herbert Hoover. "Prosperity cannot be restored by raids upon the public Treasury," said President Hoover in 1930. "Our plan is rooted in the philosophy that we cannot borrow and spend our way back to prosperity," said House Minority Leader Boehner in 2009. They have come to this point by preferring theology to history, by wiping Hoover's record from their memories and replacing it with something very close to its opposite.
Let us hope that they fail as ignominiously this time as well.