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Old failures recalled: the New Deal

The New Deal didn't work. Why are we repeating it?

Here is a 270 word book review I wrote on Amity Shlaes' provocative recent work on the Great Depression, The Forgotten Man: A New History of the Great Depression (Harper Perennial 2008). I understand that Paul Krugman of the New York Times has got his knickers in a knot about this book, which suggests it might have even more to recommend it than I originally thought. ... . .
The Forgotten Man
by Amity Shlaes
This is an unexpectedly refreshing account of the Great Depression in the USA. Although this time is still just within living memory for some, this is a most topical refresher on this destructive and instructive era. It is not so much a history, as an interconnecting narrative of personal misadventures and muddles of both the great and the good.

Its title is not a reference to any particular person, as you can be forgiven for assuming. It is rather a reference to the recurring theme of “the forgotten man” from the time. This seductive label was variously appropriated and politically exploited by a series of genuine victims and propagandists to elicit sympathy or favour, during the long bleak decade that led into war.

The book is not without stylistic flaws, but it is an invigorating read nonetheless. Not the least because it confronts us with some stark challenges to the conventional received wisdom about the New Deal’s efficacy in dealing with the Depression. It is not a polemic and it does not explicitly assert a central economic thesis, but it has understandably generated some political controversy. It lets its series of personal histories, interspersed with a light smattering of selected economic statistics; draw you to your own conclusions, and they could be counter-intuitive for some reflexive Keynesians.

But you can just be enthralled at meeting Andrew Mellon, Rexford Tugwell, Father Devine, Samuel Insull and Wendall Wilkie and become outraged at the treatment meted out to Brooklyn’s Schechter brothers. And looming over it all, but given the scantest of treatments, is the other patron saint of modern economic stimulus, Franklin Roosevelt.

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