Escape to Chengdu

I wonder if the answer to this 1998 question on an AP U.S. History exam has changed since Republicans began revising high school history books:

18. The recession of 1937 was primarily caused by:

a) overextension of easy credit and high inflation.

b) excess business speculation in the rebounding stock market.

c) failure of New Deal programs to effectively lower unemployment and restore faith in the economy.

d) overregulation of key national industries, resulting in massive lay-offs.

e) premature tightening of credit and cutbacks in spending for New Deal programs.

Answer: E) The recession of 1937 stemmed primarily from changes in government policy based upon Roosevelt’s mistaken belief that the Depression had been overcome. Although employment, wage, and production figures had shown steady improvement since the enactment of New Deal legislation in 1933, none of those statistics had yet reached 1929 levels, an indication that despite improvements the economy had still not reached former levels of prosperity. Roosevelt became convinced that the trends started by the New Deal could now sustain themselves, and began cutbacks in New Deal spending which would allow him to restore a balanced federal budget. At the same, the Federal Reserve Board tightened the money supply to curb rising inflation. The double-hit was too much for the nation’s still fragile economy and it began a new collapse. Unemployment rose by another 5 percent, to over 19 percent. Businesses and banks again began to feel the pressure and industrial activity diminished across the nation. Alarmed by the drastic downturn, Roosevelt reversed himself and requested that Congress restore spending cuts in New Deal programs and resume running a federal budget deficit to restore health to the national economy.

Back in 1998, acknowledging that the New Deal was prematurely cut back by anxious politicians and that it lead to another economic collapse wasn’t a controversial position - it was just another part of high school history books. I’m afraid to find out what they’re teaching kids now…