Remembering 'The Forgotten Man'
Gillespie, Nick, Reason
Amity Shlaes, author of a new history of the Great Depression, talks about Franklin D. Roosevelt's baleful economic legacy, the growth of government, and the death of classical liberalism.
WITH THE POSSIBLE exception of the Civil War, no event has transformed American politics more fully than the Great Depression, From the stock market crash of z929 through U.S. entry into World War II, the country's economy floundered tragically, with the unemployment rate typically in the high teens. First under the misguided and generally ineffective policies of President Herbert Hoover and later under those of Franklin Delano Roosevelt, the federal government became increasing interventionist, at times attempting to dictate all aspects of economic production.
When accepting the Democratic Party's presidential nomination in 1932, Roosevelt proclaimed "a new deal" for the American people. Once in office, he began radically transforming the federal government while seeking to ameliorate the nation's woes. He pushed subsidies for farmers, changed the banking system, and created the National Recovery Administration, which regulated many aspects of business until it was declared unconstitutional in 1935. Through the creation of the Social Security system and related programs, Roosevelt vastly expanded the scope and size of the federal government and created the political world in which we live. The shift was so complete that even as vocal a foe of big government as Ronald Reagan, who started his political career as a New Deal Democrat, approvingly wrote to Congress in the early 1980s of the "nation's ironclad commitment to Social Security" and praised FDR'S visionary leadership in creating the program.
In her meticulously researched new history of the Depression, The Forgotten Man (HarperCollins), journalist Amity Shlaes describes the received catechism of the era: "Roosevelt made things better by taking charge. His New Deal inspired and tided the country over. In this way, the country fended off revolution of the sort bringing down Europe. Without the New Deal, we would all have been lost.... The attitude is that the New Deal is the best model we have for what government must do for weak members of society, in both times of crises and times of stability" But that conventional account, she writes, fails to capture "the realities of the period." Shlaes shows how both Hoover and Roosevelt "overestimated the value of government planning" and intensified and prolonged the very problems they were seeking to fix.
Told in a rich narrative style, The Forgotten Man follows dozens of historical figures through the Depression, weaving the stories of people as varied as American Civil Liberties Union co-founder Roger Baldwin, Alcoholics Anonymous creator Bill Wilson, power utility magnate (and failed presidential candidate) Wendell Willkie, and African-American evangelist Father Divine into a rich human tapestry. In this, the book calls to mind one of the Depression's landmark literary texts, John Dos Passos' U.S.A. trilogy (1930-36).
Shlaes is a columnist for Bloomberg and a senior fellow at the Council on Foreign Relations. A former member of the editorial board at The Wall Street Journal, she is also the author of The Greedy Hand: How Taxes Drive Americans Crazy and What to Do About It (2000) and Germany: The Empire Within (1991).
In June she was interviewed on C-SPAN's After Words program by reason Editor-in-Chief Nick Gillespie. What follows is an edited transcript of that program, which can be viewed online at reason.tv. Comments can be sent to email@example.com.
reason: Your book is subtitled "a new history of the Great Depression."What's new about your take?
Amity Shlaes: One of the important things about the existing argument is that it's all about Keynesianism, about whether government spending can cure the economy when it's ill. …