Earlier this week, I finished Amity Shlaes’ The Forgotten Man, a re-examination of the Great Depression that points out the errors in the commonly believed myth of that period in our nation’s history.
One example is the belief that Herbert Hoover was a straight laissez-faire President who did nothing to attempt to revive the economy. In fact, Hoover was an activist as President, and even before during his tenure as Secretary of Commerce. The primary difference between Hoover and FDR was that Hoover restricted his activity to the Constitutionally permitted powers of the federal government; FDR showed no such respect for the will of law.
Similarly, FDR and his Brain Trust are commonly believed to have selfessly focused solely on reviving America’s economy. But like another President who promised to focus like a laser beam on the economy, the objectives spread far and wide from the promised goal. In fact, FDR’s advisors were open admirers of Communist Russia who were seeking to remake America in an image they chose. The Great Depression was actually viewed as a great opportunity to remake America, rather than something that needed to be overcome.
It’s also claimed that FDR’s policies brought us out the Depression. Shlaes shows that the US went into a double-dip Depression, with the economy getting worse just when the rest of the world was growing again. Others acknowledge that fact, and claim that it was World War II spending that brought us out of the economic funk. To the extent that World War II helped us, it was that focusing on the international situation took FDR’s focus away from the domestic realm, allowing the economy to grow without further fetters being placed on it.
It’s also claimed that FDR was a decisive leader who charted a bold course. In reality, he frustrated his advisers with his indecisiveness. On at least one occasion, he even sent representatives to an international economic conference with differing instructions, resulting in parts of the American delegation negotiating against each other, angering the British Prime Minister. On another occasion, after a conference that achieved the goals he had set for it, he repudiated it, rejecting the agreement reached.
This book was excellent in dispelling a number of myths about the Depression and careful readers will note a number of policy prescriptions for the future that will allow us to avoid similar situations in the future.