Like many Americans, we learned about the Great Depression in high school and college. Most perplexing about that era was why it lasted as long as it did. After all, recessions today might limp on for a few months, but back then something was very different.
From a political point of view, it was even more perplexing to me about how FDR could get re-elected in 1936 as the depression just worsened. It was even bad in 1940 when he ran for his unprecedented third term. Clearly the man had charm. Had the mantra then been, “It’s the economy, stupid,” he would have been tossed from office in ’36 or ’40.
Now some new light is shed on these important questions about American history and the functioning of our economy. Amity Shlaes, a former Wall Street Journal editorial writer and economic commentator, has published The Forgotten Man, which is a long overdue exploration of the New Deal and the real, forgotten people behind the U.S. economy in those years.
She spoke at the Heritage Foundation about her book last week, and I was drawn to her remarks because of the lingering questions I have always had about that era. It’s clear that all the New Deal programs that gushed out of the Roosevelt administration did not have much of an impact on the economy. Ms. Shlaes writes that they in fact hindered the recovery that would have taken place otherwise. Make no mistake, she carries no brief for President Hoover either, but his errors of judgment in those days have been well described. Not so for the New Deal.
Ms. Shlaes looks at men and women who made a difference during the depression, but who had little to do with the New Deal. Her keen analysis shows that it was the economy itself that was the forgotten man of the 1930s, as FDR and his deputies strove to make social policy with little or no understanding about the economy. One of their goals was to nationalize government spending–often through the giant Public Works Administration–which was at that time mostly in the purview of the states. New Dealers didn’t understand the economy, so they ignored it.
You’ll have to read this book to see its full power. As reviewer Arnold Kling commented:
I would have thought that 1929 should have looked pretty good to people living in the depths of the Depression. But one of the many interesting lessons of Amity Shlaes’ new history of the Great Depression and Franklin Roosevelt’s New Deal is that many Americans, both inside and outside the Roosevelt Administration, thought of prosperity as an aberration. Instead, they saw hard times as the new norm.
It’s not hard to see the parallels with today. All sorts of bogus ideas are being floated by some running for President. We don’t need another charismatic president who doesn’t have a solid grip on how our economy works. We can’t afford a president in that respect who needs on the job training. Read this book to see the follies of the Great Depression and who some of the true heroes were.
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