on 4 March 2015
On the plus side this handy and readable book provides a useful review of the New Deal, its personalities and the frankly unhinged policies that it spawned; for example, was it really wise to destroy food when people could barely afford to eat?; did it make sense to imprison a laundry man for charging 5c too little to clean a pair of trousers? - and so on.
All this is useful, because too often, especially in the mainstream media, we are fed a monotonous diet of New Deal propaganda.
On the other hand, the book does contain a serious flaw, in that it uncritically accepts the Milton Friedman monetarist view of the depression; namely that if only the Fed had been a bit more expansionary, all would have been well.
But how can a government agency creating new claims on goods and services without any corresponding production - in other words 'money out of thin air' - be of any assistance to economic growth? Not surprisingly, the author does not say.
So yes, by all means read this for an accessible discussion of the New Deal, but look elsewhere for some economic background to the 1929 depression.
on 13 December 2007
Roosevelt rose to power promising to respond to the depression that had sent the US economy into a tailspin. However such was his sheer ineptitude he managed to prolong it so that it became the greatest downturn in US history.
Time and time again FDR and his arrogant underlings were driven by ideology to impose obstacles to the economic recovery of the country. In an era where unemployment was rife New Deal policies made it almost impossible for businesses to employ more staff. New Deal demagogues made it clear that businesses were the enemy and were then mystified as to why investment plummeted.
In an era of chronic banking weakness the New Dealers demonised the strongest banks and encouraged the smaller more precarious ones to continue as they were. With unemployment sky high the New Dealers introduced labor laws that strongly discouraged businesses from expanding. With food shortages widespread FDR's agriculture policies resulted in food being burnt rather than sold. With black unemployment especially high Roosevelt introduced laws enabling compulsory unionisation, with the unions free to block blacks from joining. Almost every New Deal policy had the result of prolonging and deepening the depression.
This was accompanied by some outrageously authoritarian tactics by the administration, for example jailing business people for violating the price fixing agreements that were brought in, in one case a dry cleaner was imprisoned for three months for the 'crime' of charging five cents less to clean a shirt than the price government had fixed. They really did believe that they had both the ability and the right to micromanage the economy in this manner.
Towards the end of the book Powell goes away from the purely factual accounts of the New Deal failure to speculate on what would have happened if it had not been for the New Deal, if FDR had not managed to diminish the world's greatest democracy so thoroughly could the rise of fascism and communism worldwide have been avoided? It is an interesting question.
As a quick note about the previous review of this book on the 10th of July 2007, the writer of that review has clearly not read this book and is simply advertising her political prejudices by pretending to have done so. Anyone who thinks that Powell is engaged in partisan point scoring has plainly not read the book as he is almost as devastating about Hoover's errors such as imposing tariffs and tax rises and his criticism elsewhere of other Republicans such as Theodore Roosevelt and George W. Bush are on record.
on 10 July 2007
At first of all I thought that this book was intended to be comical, but on closer inspection I realised that it was not. Are we really to believe that by assisting needy Americans (in Cleveland 50% of the population were unemployed), FDR worsened a crisis that Hoover had failed to get to grips with, offering only insufficient action to a problem that had engulfed the world? I think not. Republicans are funny, because they're so wrong.