The Forgotten Man: A New History of the Great Depression [Paperback]

This is a "revisionist" history of the Great Depression. The arguments are not new, but the financial crisis of recent years has made them topical. Academic critiques of the book can be found elsewhere. Anyone reading The Forgotten Man should give those a look, as her views, though widely held, are contentious.

For non-specialists the issue is whether the author has produced a readable book - she has - and whether her arguments and the evidence for them are clearly presented - they are. Basically she contends that the New Deal delayed a recovery from the "crash of 1929", that the market would, given time, have sorted itself out, and that the tycoons villainized by the left were heroes of business and progress. Only the war brought a return to better times - in one sense at least.

Shlaes takes us through the presidencies of Coolidge, Hoover and then Roosevelt. She has written interesting portraits of them and the other characters of these years. She maintains that a small group of left-wingers used the crisis of the 30s to penetrate the Democratic Party and offer solutions at a time when people were desperate for "something to be done". There are a few side-swipes at the personal lives of the New Dealers, perhaps less at the multi-millionaires.

She takes us through the political and legal conflicts as the New Deal as it was stalled in the courts. She goes through individual cases - chicken traders and bus boys - which I found fascinating, as I knew only the broad episodes of the times. Her discussion of the gold standard and the consequences of mineral tariffs I found harder, but I got enough of an idea of what she was trying to say.

In the end she did not change the opinions I started with, but it is no bad thing to look at the arguments of "the other side". It is a good book, if not quite the original amazing thesis that the publishers promote.

Prior to FDR becoming president, federal government actions seldom had much effect on the economy or the nation's culture. The exceptions were when the federal government waged war, tampered with the currency or the money supply, or indulged in social experiments (like Prohibition). Prior to Hoover, there was usually a social consensus that the government that did the least was best.

Amity Shlaes' anecdotal history of the Great Depression highlights the dangers that occur when government begins to intervene in the economy and social structure in too many ways, too quickly, and too intrusively.

One of the key mysteries of the Great Depression was why the U.S. economy was hit so much harder than the British one. Some economists argue that a more established economy will experience fewer perturbations during a global recession or depression because those concerned about safety will seek out the oldest financial markets. Ms. Shlaes suggests that the Americans meddled too much and scared off investments.

The book's title is drawn an example of flawed government legislation described by William Graham Sumner in 1883 where two parties seek to help a third party in a way that requires a fourth party to participate . . . but without considering the effect on the fourth party -- the forgotten man who "always pays." Interestingly, the book points out the many different people who were identified by politicians of the era as the forgotten man.

Ms. Shlaes' story focuses on the class warfare that FDR conducted against business executives, wealthy people in general, and shareholders . . . and how that class warfare encouraged those groups to behave in ways that made the depression deeper and longer lasting than it would have been without the class warfare.

The story of the Great Depression is told by following the lives of a number of people who were prominent as government leaders (such as Calvin Coolidge, Herbert Hoover, and FDR), members of government (such as FDR's brain trust and Felix Frankfurter), industrial and financial leaders (Andrew Mellon, Samuel Insull, and Wendell Willkie), Supreme Court justices, those involved in key law suits that challenged the New Deal, religious and social leaders (Father Divine), and those who addressed the social ills of the time more directly (Bill Wilson's founding of Alcoholics Anonymous). This approach makes for good reading, but light understanding.

Anyone wanting to attach causes to effects will be disappointed in the book. While many connections are suggested, the analysis to back up those connections is missing. Fans of FDR will feel like he is unfairly expected to be perfect. Those who are concerned about giving the most people a sense of being treated fairly will feel like that aspect of the book is underdeveloped.

Did FDR make mistakes? Yes. Did Herbert Hoover make mistakes? Yes. Did the Federal Reserve make mistakes? Yes. Did Congress make mistakes? Yes. But you knew that already.

The main benefit of this book is that you'll get to know the supporting cast from those times (especially those who were initially very impressed by the Soviet Union) much better than you would have otherwise. That will enrich your appreciation of the mental set and tenor of the times.

If you would like to know more about the history of public electrical power, you'll also find this book to be a helpful resource,