The Forgotten Man: A New History of the Great Depression

 

This 2008 book (now out in trade paperback) by Amity Shlaes has been  flying off of the shelves of D.C. book sellers.  Allegedly, both sides of aisle are deeply interested in this book.  Conservatives are giving the book high praise, e.g. “The finest history of the Great Depression ever written” – National Review.

I am guessing the contemporary interest in this book stems from the similarity in presidental events – FDR’s inheritance of a economic diaster following the stewardship of three Republican presidencies v. Obama’s inheritance of the economy from the two terms of G. W. Bush oversight [sic].

Amity Shlaes

Shlaes certainly has the conservative bona fides – she served on the Editorial Board of the Wall Street Journal, for example.  Her book takes an unmistakeable conservative re-interpretation of the New Deal.

To put it most simply, Shlaes believes that FDR declared war on business and set up New Deal entitlements, not to help the “forgotten man”, but to achieve political advantage.  Shlaes even provides what she claims is the origninal definition of the “forgotten man”.  According to Amity, the forgotten man is the one who pays the taxes conceived by special interest groups, and does so year after year, without complaint.

Suffice it to say that Shlaes has the conservative mantra down: “All taxes and regulations are bad, all business and free-markets are good!”  In fairness, though, Shlaes points out some very curious regulatory excesses practiced by the New Deal agencies.  FDR considered himself an experimenter and I think he would have admitted some of his experiments failed miserably.

I came away from the book, asking the question, “can there not be a balance of encouraging business, but also demanding business responsibility via regulation?”  I believe there can be, and I think President Obama is tryng to achieve this precarious balance.

Iggy Donnelly

15 Comments

Filed under Book Reviews, Economics, Elections, History, Obama, Political Reform, Populists, Republicans, taxes, The Economy

15 responses to “The Forgotten Man: A New History of the Great Depression

  1. lilacluvr

    I remember a time when there was also a balance between management and labor. There was also a feeling of everyone was on the company team and the CEO did not make an exorbitant salary while laying off thousands of workers.

    Republicans always shout their mantra of not wanting to pay taxes but yet these very same people are the ones wanting to give their businesses all the tax breaks and subsidies.

    If there are taxes no being paid, then where will the government get the money to give their beloved businesses their tax breaks and subsidies?

    And if Republicans truly believed in free markets and capitalism, then why are taxpayers even subsidizing any business?

    Republicans believe in a dog eat dog world except for when it comes to one of their own – then that certain little dog is to provided with a golden doghouse paid for, of course, by taxpayers.

    Hypocrisy??

    • jammer5

      Certainly it’s hypocrisy, but what is Obama doing about the main problem of business running Washington? We’re still bailing out the fatcats, and not demanding they pay for their excesses.

      Some banks have been allowed to pay back their share of the bailout. Excuse me? Allowed? Why not demanded? I’m sorry, but while I agree the Republicans have enjoyed a dog eat dog world, the Democrats are doing neither themselves, nor the taxpaying public, any favors by feeding the dogs.

      People should be in prison over this mess, and it ain’t happening. Why is that, if business is no longer controlling Washington? The only answer is, they’re not because business still controls Washington.

      • Yes, Jammer, I read your post. I thought it interesting that we were writing about related subjects.

        Were those businesses who used the “Credit Default Swaps” not doing what was legally allowed? Should they be punished or should whoever set up the regulations that permitted that be punished? Though, I don’t know, I am betting the problem came about from the Bush, et al. reluctance to regulate anything.

        Maybe we can agree that business does business better than the government does. And, government can do regulation better than business self-regulation.

      • lilacluvr

        You make a good point and I was not trying to say that only Democrats are the ‘righteous’ ones. Both political parties have alot to answer for, in my opinion.

        As for the Wall Street crisis that started last fall, I kept hearing everyone saying that we can’t let these big companies fail. On one hand, if that is true, then I guess we need to bite the bullet and try to save as much as we can to build on when we come out of this economic mess

        But if we are just going to save these companies and let them be run by the same buffoons that ran them into the ground- then what have we accomplished – other than to give these buffoons billions of dollars?

        I remember the political hell Obama took when he came out and tried to cap the CEO’s salaries at $500,000. I remember the political hell Obama took when he said that no CEO should be buying a new corporate jet or taking a trip to Las Vegas on the taxpayer dime.

        Every Con on the other blog ran with the idea that Obama was trying to ruin the aviation business – but they always forgot the last 4 words of what Obama said – on the taxpayer dime.

        Yet, these same people went out to teabag protest against all this spending but they still have yet to acknowledge that Obama was really against wasteful spending by saying those last 4 words – on the taxpayer dime.

        I agree with you that people should go to prison for this economic mess ; but, realistically, do I think they will – no.

        As for as people going to prison – when do you think we will ever see Bush and Gang held accountable for their roles in the run-up and management of the war? Again, realistically, probably not.

      • jammer5

        I agree that some should be held accountable, and the CDS mess should be a starting point. I don’t think anyone can sit back and say these people didn’t know they were using subterfuge to bypass federal insurance regulations. These are people who supposedly know money and regulations. And they basically flaunted the fact they were bypassing them.

        Yes, Bush and his cronies should be held accountable, but Obama is not ensuring that same thing won’t happen again. Let business run business, and if it fails, so be it. But also regulate it in order to protect the public from the business greed that brought the whole thing down . I just don’t see that happening.

        There is little, if any, protection for the blue collar taxpayers of this country out there. We need to change the attitude in Washington so we are protected.

  2. My father’s parents believed that FDR walked on water – almost literally. At the time of his presidency, FDR faced unprecidented (I think) scorn, that is nearly equal to the current hatred of wingnuttia. As an example there was a consistent rumor amoung republicans that FDR did not suffer from polio, but instead he had the “Jake leg”. The latter was neurological and motor disorder that came from drinking poorly made bathtub gin.

  3. lilacluvr

    Do you think alot of FDR’s popularity was because there were so many people hurting and he was throwing them a lifeline?

    In alot of ways, the same thing is happening today. So many people are hurting and Obama is seen as the president who cares about them and is trying to help them while the Republicans are all too busy with their trying to save those poor CEO ‘s keep their millions.

    History does tend to repeat itself, doesn’t it?

  4. lilacluvr

    I’ve often wondered if Obama is another Reagan, only in reverse.

    Obama is a gifted orator – so was Reagan.

    Obama champions for the working man – Reagan was definitely for the elite wealthy.

    Obama is black – Reagan was white.

    Obama is against unnecessary war – Reagan loved his missiles.

    Obama is for trickle-up economics – Reagan was for trickle-down economics.

    When I suggested my theory to a few of my Republican friends, they almost lost their teeth to think I could dare compare Obama to their beloved sainted Ronald Reagan.

    hey, it was fun watching their faces.

  5. djr4488

    “can there not be a balance of encouraging business, but also demanding business responsibility via regulation?”

    That is the million dollar question in my opinion. I think the answer is yes. Regulations shouldn’t be meant to “limit” business I think, rather though they should be in place to protect consumers. Of course, that does in fact limit business, but in a valuable way, at least in my opinion.

  6. lilacluvr

    Republicans tend to view regulations as a bad thing but isn’t life just a set of rules in most everything we do?

    The Ten Commandments could be viewed as regulations (rules) for moral behavior, couldn’t they?

    When we go to work for someone else, isn’t there a set of regulations (rules) we must follow to continue our employment?

    When we drive on the streets, aren’t there regulations we must follow to avoid being ticketed?

    Just exactly when did regulations became such a bad thing?

    In our society today when the dog eat dog world is so prevalent and even encouraged, there should be some regulations when businesses on Wall Street are taking peoples’ money and doing what they want with it.

  7. I have always thought of Obama as the anti-Bush. The anti-Reagan is an interesting thought, too.

    Does anyone remember the Bush/Rove plan to replace FDR on the dime with the Reagan likeness? Those dudes had some balls, I will give them that.

    Lilac, my father’s parents, both of them deceased now, said that before FDR it was not uncommon for old people to starve to death. After FDR and social security, that did not happen.

    • lilacluvr

      My grandmother lived through the Depression and she often told stories of how she and her siblings would run through some farmer’s orchard to get apples to have something to eat.

      Her brothers resorted to stealing some fresh apples off the branches but she was the youngest and it was her job to pick up the ones off the ground.

      My husband’s grandfather was a store owner when the Depression hit and he would extend credit to anybody that came into the store because he felt that was the ‘right’ thing to do. He eventually committed suicide because his creditors were after him for their money but they did not show him the same compassion he had shown to his neighbors.

      Unfortunately, in today’s world – if someone has to forego their daily fast food run – you would think it was the end of the world. And don’t even think about taking their cell phone away from them!

  8. jammer5

    The House committee has subpoenaed the Federal Reserve concerning The BoA takeover of Merrill Lynch. There are some serious questions being raised about what part both Paulson and Bernanke played in the takeover.

    According to New York Attorney-General Andrew Cuomo, Paulson and Bernanke may have strong armed BoA into the takeover, despite the fact BoA wanted to implement the MAC clause (basically get out of the deal). If this is true, the two could be brought up on serious charges.

    The whole thing is here: http://www.washingtonsblog.com/2009/04/former-chief-accountant-for-sec.html and makes for some very interesting reading.

  9. Pedant

    When I left Wichita, a good friend who sadly I could not talk into moving with me gave me a bunch of books, one of which was Water for Elephants by Sara Gruen. One of the characters in this novel suffered from Jake leg.

    So of course I claim expertise on this topic! 😉

    Jamaican Ginger Extract was a dirt cheap, bitter imported patent medicine that was 70-80% alcohol by weight. During the Depression the Feds stepped in and instituted regulations mandating a certain amount of solids in the extract. They did this to ensure extreme bitterness, thinking that the only option for manufacturers would be to increase the amount of natural ginger solids. And processed ginger solids are to bitter what Woody Guthrie was to folk music.

    The Feds were angling to force poor people to stop drinking so that Prohibition would be successful (rich people, of course, could travel to Canada or Europe or just move a few miles offshore on their boats and swill at will). Prohibition was in full swing, after all, and the Republics were in power.

    To get around the Feds, a couple importers got together and worked out a substitute for solid ginger. They added a plasticizer, tricresyl phosphate, which fooled the Feds and their solids test and also made the ginger extract more palatable.

    Trouble is that this stuff also caused Jake leg, known medically today as organophosphate-induced delayed neuropathy.

    People with the jake leg lost control of the muscles in their lower legs, especially in the lower calf. They could not make their toes rise above their heels as they strode — something we all take for granted is that when we walk our heels strike the ground first because we unconsciously and naturally keep our toes up — so their toes would strike the ground before their heels. To try to control their walk, then, those with Jake leg raised their knees unnaturally high and their feet tended to slap the ground anyway, toes first. That’s what was called the Jake walk, caused by Jake leg.

    It was an awful thing, an example of Federal regulation backfiring horrendously. Think of the triple whammy of shame: obviously you’d drink anything, obviously you were poor, and obviously children and many adults laughed at you whenever you walked.

    I’m a firm believer in business regulation (as is business in general, no matter what the GOP says), but effectively regulating business activity is very, very, very tricky.