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Summary
Summary
In The Forgotten Man, Amity Shlaes, one of the nation's most-respected economic commentators, offers a striking reinterpretation of the Great Depression. She traces the mounting agony of the New Dealers and the moving stories of individual citizens who through their brave perseverance helped establish the steadfast character we recognize as American today.
Author Notes
Amity Shlaes is a senior fellow in economic history at the Council on Foreign Relations and a syndicated columnist at Bloomberg
Reviews (7)
Publisher's Weekly Review
This breezy narrative comes from the pen of a veteran journalist and economics reporter. Rather than telling a new story, she tells an old one (scarcely lacking for historians) in a fresh way. Shlaes brings to the tale an emphasis on economic realities and consequences, especially when seen from the perspective of monetarist theory, and a focus on particular individuals and events, both celebrated and forgotten (at least relatively so). Thus the spotlight plays not only on Andrew Mellon, Wendell Wilkie and Rexford Tugwell but also on Father Divine and the Schechter brothers--kosher butcher wholesalers prosecuted by the federal National Recovery Administration for selling "sick chickens." As befits a former writer for the Wall Street Journal, Shlaes is sensitive to the dangers of government intervention in the economy--but also to the danger of the government's not intervening. In her telling, policymakers of the 1920s weren't so incompetent as they're often made out to be--everyone in the 1930s was floundering and all made errors--and WWII, not the New Deal, ended the Depression. This is plausible history, if not authoritative, novel or deeply analytical. It's also a thoughtful, even-tempered corrective to too often unbalanced celebrations of FDR and his administration's pathbreaking policies. 16 pages of b&w photos. (June 12) (c) Copyright PWxyz, LLC. All rights reserved
Booklist Review
Its duration and depth made the Depression Great, and Shlaes, a prominent conservative economics journalist, considers why a decade of government intervention ameliorated but never tamed it. With vitality uncommon for an economics history, Shlaes chronicles the projects of Herbert Hoover and Franklin Roosevelt as well as these projects' effect on those who paid for them. Reminding readers that the reputedly do-nothing Hoover pulled hard on the fiscal levers (raising tariffs, increasing government spending), Shlaes nevertheless emphasizes that his enthusiasm for intervention paled against the ebullient FDR's glee in experimentation. She focuses closely on the influence of his fabled Brain Trust, her narrative shifting among Raymond Moley, Rexford Tugwell, and other prominent New Dealers. Businesses that litigated their resistance to New Deal regulations attract Shlaes' attention, as do individuals who coped with the despair of the 1930s through self-help, such as Alcoholics Anonymous cofounder Bill Wilson. The book culminates in the rise of Wendell Willkie, and Shlaes' accent on personalities is an appealing avenue into her skeptical critique of the New Deal. --Gilbert Taylor Copyright 2007 Booklist
New York Review of Books Review
IN the 1930s, the Schechter brothers ran a chicken business in Brooklyn. The name Schechter is derived from the Yiddish word for "butcher," and this is what the brothers did: they slaughtered chickens and sold them to shops. The brothers seemed to be typical immigrants, at once struggling and succeeding. But in 1934, they became famous thanks to Schechter Poultry Corp. v. United States. Only months after Franklin Roosevelt had signed a code regulating the chicken business, the brothers were accused of violating it. Prosecutors said they had sold an unfit chicken, one with an egg lodged inside it, and had also tried to undercut their competitors' prices. It was the latter charge that cut to the core of the new law. With the Great Depression under way and deflation causing economic ruin, the Roosevelt administration had outlawed "destructive price cutting." The brothers were found guilty, given a harsh fine ($7,425) and sentenced to between one and three months in jail. They fought back, however, all the way to the Supreme Court, and they won. In a unanimous ruling the court found the code to be an unconstitutional expansion of federal authority. On the day of the ruling, Justice Louis Brandeis took aside one of Roosevelt's aides and told him, "This is the end of this business of centralization." The National Recovery Administration, the agency that had gone after the Schechters, soon dropped hundreds of similar cases and closed its doors. The story of the Schechters remains a powerful one, even if it did not mark the end of centralization. By outlawing chicken discounts, Roosevelt overreached, much as he later did in trying to pack the Supreme Court (motivated by decisions like Schechter). But beyond that, his economic meddling failed to accomplish his larger goal of ending the Depression. The "sick chicken case" thus became a useful précis of the argument that the New Deal's reputation deserves to be more complicated than it is. No wonder, then, that Amity Shlaes, a former editorial writer at The Wall Street Journal, now at the Council on Foreign Relations, has made the brothers heroic figures in her book "The Forgotten Man: A New History of the Great Depression." Her argument is somewhat more subtle than the usual critique from the right. She sees both Roosevelt and his Republican predecessor Herbert Hoover as inveterate economic tinkerers. Hoover, the engineer turned politician, never lost his instinct to fix things and, as a result, signed the disastrous Smoot-Hawley tariff bill. His biggest sin, and Roosevelt's, was a "lack of faith in the marketplace," Shlaes writes. "From 1929 to 1940, from Hoover to Roosevelt, government intervention helped to make the Depression Great." The book opens in 1937, eight years after the stock market crash, with a story about another Brooklyn resident, a 13-year-old boy named Williant Troeller, who hanged himself in his bedroom one evening. His father was unemployed, and William, as a New York Times headline reported, "Was Reluctant About Asking for Food." For all the frenzied activity of Roosevelt's first term, the country had yet to emerge from its slump. It wouldn't fully do so until the war spending of the 1940s. The length of the Depression is one of Shlaes's two main criticisms of the New Deal. The victims of Roosevelt's centralization campaign are the second: the Schechters; titans like Andrew Mellon, who were also hounded by prosecutors; shareholders; and corporate managers, including a utilities executive named Wendell Willkie. The book's title is an ironic allusion to these victims. In a 1932 campaign speech, Roosevelt referred to "the forgotten man at the bottom of the economic pyramid." But the phrase had a very different origin. In the late 19th century, the philosopher William Graham Sumner had used it to describe the average citizen "coerced," as Shlaes writes, "into funding dubious social projects." With 75 years of hindsight, surely we can all agree that Roosevelt's vision was imperfect. Yes, he helped build many pillars of the modern economy - Social Security, the Securities and Exchange Commission, the modern Federal Reserve and more. He also understood the folly of Hoover's protectionism and pursued a more open trade policy. And his public works slowly, if unevenly, provided employment (As the historian Eric Rauchway has noted in Slate, Shlaes exaggerates joblessness in the 1930s by counting many people who worked in relief programs as unemployed.) Welfare state: Homeless men line up for a place to sleep, New York, 1930. But other attempts to fine-tune the economy truly did fail. From today's vantage point, the worst of them may have been farm subsidies, which essentially live on, giving a handout to agribusiness while raising the cost of food for everyone else and hurting poor farmers around the world. Roosevelt did not seem to grasp that the judgment of millions of businesses and consumers - that is, the market - was, more often than not, better than the judgment of a single man. Given what had happened in 1929, this blind spot was perhaps understandable, but it's a fair point of criticism. The great challenge for his critics has always been to come up with an alternate vision that might plausibly be said to have done more good with fewer downsides. Shlaes likes the model offered by Willkie, the Republicans' 1940 presidential nominee, in which the New Deal would have been scaled back and business would have filled the void. She builds her case mostly by implication, through a series of sketches of self-starters who embodied what the free market could have accomplished. There is Bill Wilson, for example, the stock trader who founded Alcoholics Anonymous and in the process "taught Americans that the solution to their troubles lay not with a federal program but within a new sort of entity - the self-help community," as Shlaes puts it. Mellon shows the power of charity by donating his unrivaled art collection to the country, thereby creating the National Gallery. Even the Good Housekeeping Seal of Approval has a role to play, as an example of how the private sector once took care of quality control. Roosevelt, however, preferred government institutions like the Food and Drug Administration. IN a way, Shlaes's book has come just a little after its time. In the early years of George W. Bush's presidency, conservative critiques of the New Deal served a larger political purpose, as a rationale for the administration's attempts to remake Social Security. Those plans failed, of course, mostly because they found little support among voters. There is a historical parallel here. Roosevelt may be an icon now, but he faced enormous opposition when he was president. Americans at the time heard the arguments that he was insufficiently capitalist. They saw his missteps and, above all, they lived through the long Depression. Yet in four separate elections, when given a choice between his ideas and those of his critics, they overwhelmingly chose his. Based on what followed - the great economic boom of the postwar years - it is hard to doubt their decision now. They understood that the Good Housekeeping Seal of Approval wasn't quite up to defeating the Great Depression. Among Roosevelt's supporters, evidently, were a family of chicken butchers in Brooklyn named the Schechters. "Their major political concern in the 1930s was anti-Semitism," Shlaes's appendix quotes one of their descendants as saying. "They believed that if Roosevelt had not solved the problems of the Depression, the U.S. could have gone the way of Nazi Germany." The Schechters apparently voted for Roosevelt every time he ran. From Hoover to Roosevelt, Shlaes writes, government intervention helped make the Depression Great. David Leonhardt writes the Economic Scene column for the Business Day section of The Times.
Choice Review
Shlaes (editorial board, Wall Street Journal) fails to deliver on the promises of her subtitle: this book presents nothing new, nor can it be classified as historical scholarship. The work is a retread of common criticisms of the New Deal appearing recently, such as Jim Powell's FDR's Folly (2003). The author's weak argument is that both Herbert Hoover and Franklin Roosevelt extended the Depression by intervening in the economy. Shlaes largely bypasses positive accomplishments of the New Deal such as the work of the Civilian Conservation Corps, National Youth Administration, and the Public Works Administration--not to mention the end of child labor--as she focuses on such controversial aspects as the National Recovery Administration, court packing, Rexford Tugwell, and the persistence of unemployment at the end of the 1930s. The author provides no primary research--only anecdotal evidence from selectively chosen secondary sources. This book cannot be recommended because it provides nothing new and suffers strongly from bias. For a balanced view of the Great Depression by an actual historian, one should see the first half of David Kennedy's Pulitzer Prize-winning Freedom from Fear (CH, Oct'99, 37-1118). Summing Up: Not recommended. K. J. Volanto Collin County Community College District
Guardian Review
The original Forgotten Man was the creation of the 19th-century Yale economist William Graham Sumner, who wrote of this social paradigm that "he works, he votes, generally he prays - but he always pays". Franklin Roosevelt, however, was more interested in the migrant Okie fleeing the dust bowl, the jobless factory worker, the man at the bottom of the economic heap. It was this forgotten man, rather than the over-burdened taxpayer, whom his New Deal set out to rescue. The mission of Amity Shlaes, a Bloomberg columnist with libertarian tendencies, is to bring the focus back to Sumner's taxpayer. This is a story of the days when the Wall Street crash made most people believe capitalism had failed. Communism or maybe even fascism (Oswald Mosley went fishing with Roosevelt in the late 1920s) seemed to offer a possible alternative to the silent laissez-faire of Coolidge in America and Baldwin in Britain. Earnest delegations visited Mussolini and Hitler as well as Stalin to examine modern methods of organising the state. Most persuasive of all was the idea that government could manage capitalism to ameliorate its excesses and ease - or even end - the pain of its failures. Adam Smith's invisible hand could be supplanted by a beneficent one. It was not about left or right. The very distinction seemed irrelevant. The Republican President Hoover laid the foundations for Roosevelt's New Deal. Hoover's response to the 1929 crash had been partly orthodox economics - deflation and tariffs - but he was readily attracted to the new ideas of government intervention in major capital projects. The important distinction between Hoover and early Roosevelt was at first largely one of degree. And even later, as it looked to the Supreme Court to end Roosevelt's centralising tendencies and willingness to compete directly with private enterprise, the right accepted that government had a role to play. The depression devastated international trade and finance systems and wrought a peculiarly personal kind of crisis across America. People might still have jobs, but in many cities there was literally no cash. Instead, they resorted to barter. A few introduced their own currency. Meanwhile, first world war veterans demanding an advance on their pensions were set alight in their tents. By the election of 1932, Roosevelt alone seemed to have the answer, and in his first 100 days he set about proving it. With his "brain trust" of outside experts, FDR transformed the way federal government did business, centralising power at the expense of individual states. The scale of his ambition is still breathtaking: new towns were created, vast cooperative farms were tested, trade unions were given statutory rights (including the closed shop), and workers won a minimum wage and the promise of a pension. Thousands of out-of-work writers and photographers were employed to portray the daily life of America's towns and cities and evangelise for the New Deal. Roosevelt floated the dollar, reformed the banking system and, with the Securities and Exchange Commission, assaulted Wall Street's short-selling millionaires. Electrification became the symbol and the battleground of this new style of government. Cheap power would stimulate consumer demand in the new manufacturing industries, transform farm production and raise the standard of living. Roosevelt believed that only the public sector could deliver the long-term finance that would electrify America. The private sector, in the form of the future Republican presidential candidate Wendell Willkie, argued that it was no place for government. When the Supreme Court agreed, Roosevelt said the judges were too old for the job and demanded a court that reflected the nation's desire for action. It makes heady reading. For Shlaes, however, it is an attack on the American dream from which America has yet to recover. The malevolent ghost of FDR still stalks Washington and the White House, tying George Bush's hands as he tries to cut Medicare or benefit entitlements. Shlaes warns that Washington is creating another forgotten man today, the young generation whose enterprise and initiative are fatally handicapped by tax and red tape. Against Roosevelt, she contrasts the munificence of private individuals such as the long-serving treasury secretary Andrew Mellon. Even in the 1930s his great industrial enterprises produced for him an annual income in the millions, as the nation learnt when he was prosecuted for tax evasion. Some of his vast private wealth Mellon used to buy pictures from the Hermitage, flogged off to the highest bidder by a bankrupt Soviet regime and ultimately given to the nation by Mellon and housed in a national gallery that he built and endowed. In a different paradigm of rugged American individualism and self-help, Schlaes cites the story of Bill Wilson, sometime Wall Street trader, drunk and, in January 1939, founder of Alcoholics Anonymous. There is little that Shlaes feels government can do for individuals that individuals cannot do better for themselves, although she rightly chastises Roosevelt's failure to promote an anti-lynching law. But too often analysis only faintly disguises polemic - a shame, for as Gordon Brown prepares, he says, to devolve power to the people, it would be good to have a readable analysis of where government works and where it does not. Sadly, this is probably not one for the new prime minister's reading list. Anne Perkins' A Very British Strike is published by Pan. To order The Forgotten Man for pounds 23 with free UK p&p, call Guardian book service on 0870 836 0875 or go to guardian.co.uk/bookshop Caption: article-perkinsdepression.1 The mission of Amity Shlaes, a Bloomberg columnist with libertarian tendencies, is to bring the focus back to [William Graham Sumner]'s taxpayer. This is a story of the days when the Wall Street crash made most people believe capitalism had failed. Communism or maybe even fascism (Oswald Mosley went fishing with Roosevelt in the late 1920s) seemed to offer a possible alternative to the silent laissez-faire of Coolidge in America and Baldwin in Britain. Earnest delegations visited Mussolini and Hitler as well as Stalin to examine modern methods of organising the state. Most persuasive of all was the idea that government could manage capitalism to ameliorate its excesses and ease - or even end - the pain of its failures. Adam Smith's invisible hand could be supplanted by a beneficent one. It was not about left or right. The very distinction seemed irrelevant. The Republican President Hoover laid the foundations for Roosevelt's New Deal. Hoover's response to the 1929 crash had been partly orthodox economics - deflation and tariffs - but he was readily attracted to the new ideas of government intervention in major capital projects. The important distinction between Hoover and early Roosevelt was at first largely one of degree. And even later, as it looked to the Supreme Court to end Roosevelt's centralising tendencies and willingness to compete directly with private enterprise, the right accepted that government had a role to play. - Anne Perkins.
Kirkus Review
Shlaes (The Greedy Hand, 1999, etc.), a senior visiting fellow at the Council on Foreign Relations and a columnist at Bloomberg, brings to the Great Depression a flair for revealing anecdotes and a debater's moxie that slides into contrarianism. According to the author, from the Great Crash of 1929 until 1940, government intervention made the Depression an unprecedented national calamity. While liberal historians unfavorably contrast Herbert Hoover with Franklin Roosevelt, Shlaes takes the former engineer to task for a similarity to his successor: an overestimation of the value of government planning. The result: the end of sizable gains, courtesy of tax-cutting policies, under Presidents Harding and Coolidge. All of this requires revisionism so massive that Shlaes' powers of persuasion become as hit-or-miss as the liberal programs she criticizes. She is at her best in detailing the decade-long disillusionment of a group of academics, journalists, trade-union leaders and liberal activists who sailed to the U.S.S.R. in 1927 to observe communism in action, including future FDR adviser Rexford Guy Tugwell, economist and future senator Paul Douglas and ACLU founder Roger Baldwin. Her profile of the Schechters--a pro-Roosevelt family of butchers who successfully overturned the National Industrial Recovery Act before the Supreme Court--demonstrates her point that the "forgotten man" was really the small businessman trying to survive without government aid. But Shlaes' other examples suggest that it was the type--rather than the fact--of government intervention that was the real problem in the 1930s. The Smoot-Hawley tariff signed by Hoover, for instance, deprived businesses of foreign markets, but FDR's Securities and Exchange Commission stabilized the economy. Equally problematic, Shlaes' heroes come largely unblemished. While noting FDR's politically motivated tax prosecution of Andrew Mellon, Treasury Secretary during the 1920s boom, she underplays Mellon's culpability on conflict-of-interest charges. Plucky, intellectual combat, but Shlaes neglects to counter the most telling arguments about GOP responsibility for the Depression. Copyright ©Kirkus Reviews, used with permission.
Library Journal Review
Revisionist history from Bloomberg syndicated columnist Shlaes, who argues that federal intervention helped prolong the Great Depression. (c) Copyright 2010. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Excerpts
Excerpts
The Forgotten Man A New History of the Great Depression Chapter One The Beneficent Hand January 1927 Average unemployment (year): 3.3 percent Dow Jones Industrial Average: 155 Floods change the course of history, and the Flood of 1927 was no exception. When the waters of the Mississippi broke through banks and levees that spring, the disaster was enormous. A wall of water pushed down the river, covering the area where nearly a million lived. Commerce Secretary Herbert Hoover raced to Memphis and took command. Hoover talked railroads into transporting the displaced for free and carrying freight at a discount. He commandeered private outboard motors and built motorboats of plywood. He urged the people who were not yet flooded out, such as the population around the Bayou des Glaises levee, to evacuate early, then rescued with the trains those tens of thousands who had ignored his warning. He helped the Red Cross launch a fund drive; within a month the charity had already collected promises of more than $8 million, an enormous figure for the time. Several hundred thousand ended up in new refugee camps, many planned, right down to the latrines, by Hoover and his team. Hoover asked governors of each state to name a dictator of resources--he used the word "dictator"--and the governors complied. The dictators then managed the dysentery and the hunts for the missing along the floodwaters in their states hour by hour. He and the Red Cross sent the refugees to concentration camps--a phrase not so freighted then as it is today--at Vicksburg, Delta, and Natchez. One hundred thousand blankets from army warehouses were shipped to warm the refugees. Things felt calmer on Hoover's watch. By mid-May, though the flooding was far from over, the anecdotes began to compete in the news with the reports of tragedy. Northerners read in Time magazine that a town called Waterproof, Louisiana, had not proven waterproof, and that its switchboard operators were still working--albeit from new posts, high up above the waters, on scaffolding. Not far from Memphis, Tennessee, bootleggers had also set up shop on high, in treetops. New babies were receiving flood names--Highwater Jones, Overflow Johnson. Now from Memphis, now from Little Rock, now from the Sugar Bowl, the itinerant flood manager, Hoover, wired or broadcast his analyses of the meaning of the disaster. Such flooding, he said, "is a national problem and must be solved nationally and vigorously." But the commerce secretary also spent a lot of time reassuring. The waters might hide the land, the crops might be lost, but the mood was now hopeful. More than any single figure, Hoover was succeeding in making Americans feel that the South would be all right again. Hoover was already so famous that his name was a verb--to Hooverize, after the efforts in food rationing that he had led from a post as Washington's food administrator at the end of World War I. Americans recalled that he had led the humanitarian drive to feed occupied Belgium during the war. Now Hoover had outdone himself--and on a home territory whose geographic area covered more than Belgium's. What the public liked about Hoover was their sense of him as guardian, that he would protect them and what they had. If Hoover could win the presidential election the following year, then he might hold back whatever waters of adversity threatened. He was a Republican, like the sitting president, Calvin Coolidge. He would pick up where Coolidge left off--though he might update things, for everyone knew that Hoover, a mining engineer, could do amazing things with technology. One of Hoover's neatest feats--and he pulled it off right around the time of the flood--was to acquaint the public with an early version of television. "Herbert Hoover made a speech in Washington yesterday afternoon. An audience in New York heard and saw him," the New York Times wrote in awe, adding that Hoover had "annihilated" geographic distance and commenting in a headline: "Like a Photo Come to Life." It was not yet modern television but wired images and the telephone combined. Still, the idea took hold in the minds of the reporters. Under Hoover, it was easy to believe that the 1920s were merely the American beginning. The idea of philosophical continuity from Coolidge to Hoover seemed ironic to one man: Calvin Coolidge himself. The two were party allies. Hoover had loyally campaigned for Coolidge in 1924--indeed, had helped to defeat a Coolidge opponent in 1924 in California to clear the Republican presidential nomination for Coolidge. But Coolidge did not especially like Hoover. In the very period when the Mississippi waters were rushing, in fact, Coolidge's press spokesman had taken an explicit shot at Hoover, telling reporters that the commerce secretary would not be considered for the job opening if the secretary of state happened to retire. The differences between the men had started with small things. Hoover was a fly fisherman. Coolidge fished with worms. Hoover liked the microphone. Coolidge shied away from it. After a landslide presidential victory in 1924 Coolidge had sent a clerk to read aloud his State of the Union address. Hoover ignored politics for the first thirty-five years of his life. Coolidge held his first office, that of city council member in Northampton, Massachusetts, at the age of twenty-eight, and had rarely been out of government since. Hoover was a mining engineer; Coolidge was a country lawyer. Hoover was a worldly American, a blend of regions and cities, the most successful in his field of his generation. He believed in the Anglo-American gold standard, not only because it had made him rich but because he had seen firsthand how it kept the world running, like a grandfather clock. Coolidge was a pure New Englander who seemed to re-create New England wherever he went. The very concept of "overseas" was a bit vague to Coolidge. The typical Republican of his day, he supported tariffs in the belief that they strengthened the United States. His failure to recognize the consequences of his policies, both abroad and for his country, was his greatest shortcoming. The Forgotten Man A New History of the Great Depression . Copyright © by Amity Shlaes. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold. Excerpted from The Forgotten Man: A New History of the Great Depression by Amity Shlaes All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.Table of Contents
| Cast of Characters | p. xi |
| Timeline | p. xiii |
| Introduction | p. 1 |
| 1 The Beneficent Hand | p. 15 |
| 2 The Junket | p. 47 |
| 3 The Accident | p. 85 |
| 4 The Hour of the Vallar | p. 105 |
| 5 The Experimenter | p. 147 |
| 6 A River Utopia | p. 173 |
| 7 A Year of Prosecutions | p. 189 |
| 8 The Chicken Versus the Eagle | p. 214 |
| 9 Roosevelt's Wager | p. 246 |
| 10 Mellon's Gift | p. 284 |
| 11 Roosevelt's Revolution | p. 296 |
| 12 The Man in the Brooks Brothers Shirt | p. 318 |
| 13 Black Tuesday, Again | p. 334 |
| 14 "Brace Up, America" | p. 352 |
| 15 Willkie's Wager | p. 366 |
| Coda | p. 385 |
| Afterword to the Paperback Edition | p. 391 |
| Acknowledgments | p. 397 |
| Bibliographic Notes | p. 401 |
| Selected Bibliography | p. 421 |
| Index | p. 439 |
