Friday, November 6, 2009

The Forgotten Man

Here's a NYT review of Amity Shlaes' recent book critiquing the Age of Roosevelt,

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 prĂ©cis 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.”

Seems the neo-cons after all these years still can't accept that government intervention was necessary during this time of crisis, still adhering to the old "market approach." It was a good thing Bernanke and Paulson didn't think the same way. The book is nicely packaged, which tempted me until I started reading amazon reviews.


20 comments:

  1. Yes, but Hoover liked to tinker with things like agriculture. He would arrange to feed the cattle but let the people starve because he didn't want to ruin their independence. So many of the comments in this book remind me of the far-right crowd I don't even know anymore which ones to highlight. Scary when you think of it.

    The profile of Paulson in Vanity Fair (I guess the subscription is paying off) shows a man who isn't quite sure what is going on but knows he has to do something. And is afraid that no matter what he does it won't be enough.

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  2. I guess Schlaes book predated October 2008.

    Bernanke is supposed to have studied the Depression in great detail and judging by his reactions in the wake of the banking collapses learned something from it, which is more than I can say for other Republicans. Bush seemed about as clueless as the day one of his secret service guys whispered into his ear that the US was being attacked while he was reading to elementary school kids in Miami. Bush had been forwarned of the types of monetary and banking policies Cheney and his cronies had in mind by Paul O'Neill, who subsequently stepped down, with Jack Snow coming in to minister over the whole thing. The guy I will never forgive is Greenspan, who should have known better.

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  3. And Greenspan, based on his comments later, was clueless.

    It seems like Schlesinger and others looking at this period should be mandatory reading for anyone in public office. The conservative playbook is right from the Mellon/Hoover experience and "the new era" of prosperity. That was the point of my comment earlier.

    If the Republican motives are to take the money and run -- I get it. And they have the power and control to do that. But when they claim to be blindsided by the consequences of their actions, then I really don't get it. Are they complete fools? I can't imagine Greenspan would admit to being shocked by the collapse if indeed he hadn't been.

    Thanks for getting the book conversation off the ground. Hopefully the others will catch up and chime in.

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  4. I think they knew good and well the "good run" would come to a band end, they just thought it might last a little longer. What gets me is that there are still those who think the markets can correct themselves on their own.

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  5. I found a good deal at Abebooks and ordered Kearns' No Ordinary Time. Probably better biographies available, but had no interest in Brands' bio after slogging through his take on TR.

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  6. Looking forward to reading her impressions on the relationship between FDR and Eleanor. I thought she did an excellent job on the relationship between Lincoln and Mary Todd.

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  7. It might be a nice complement to this one since so far this is basically political and economic. But then I think that's one reason I'm enjoying it so much. A refreshing change.

    I'm actually looking forward to looking at some of the other ones I have as well. Jean Smith recently wrote a big biography, for example.

    Came across the section on Chase last night -- why should the Russians have all the fun redesigning the future? Why indeed?

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  8. A friend agrees with you that the neo-cons et al. knew exactly what they were doing -- using the country as a giant piggy bank, in his words. And when it broke, they made sure they were the first to get paid back while the rest of us are still suffering.

    I think that 17.5% unemployment in today's Times is still relatively conservative given that people like me never show up on the lists. And there are a lot of us out there freelancing -- doing this, that and the other thing. Or trying to.

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  9. They don't count part-timers who need full-time work either. Do you know what the figure would need to be to call this a depression?

    It's not that easy finding part-time work either. I'd applied online to a law firm that needs a worker for weekend part-timer. When I saw that it was still unfilled last week, I sent my resume again. The HR person called me yesterday. I'd just been to a recruiter on Wed. about a full-time temp job and wondered why I'd applied for the part-time. They want someone who wants to stay part-time and isn't looking for full time. I couldn't lie.

    I have "No Ordinary Time" and haven't read it. Bought it a few years ago at the Strand used.

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  10. I think that's what the 17.5% takes into effect -- those who are underemployed and those who have given up. But I always wonder about people who live outside the traditional work/payroll system. Or people like me who are self-employed so are technically small business owners.

    Today I saw an architect I used to work with and he said he had been unemployed for a year, although he just had been hired as a building manager.

    I think the unemployment rate was 25% at the height (or depth) of the depression. But I think it's technically not about employment but growth (which sort of says something, right?).

    Gintaras will probably know more about this than I do.

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  11. Here's a good page on unemployment, GNP and other issues of the Depression,

    http://ingrimayne.com/econ/EconomicCatastrophe/GreatDepression.html

    Peak real unemployment was apparently 25%, although official figures were half that. It wasn't until 1941 that the official unemployment rate fell below 10%.

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  12. What hurt people the most during the Depression, especially the early stages, was that there was very little in the way of compensation to get them through the hard times. They were pretty much fucked. Today, there is a much broader safety net, thanks to many of the initiatives that FDR and the Democrats pushed through Congress at the time. But, it seems the Repugs would like us to go back to the Hoovervilles.

    I wonder if what they call these tent villages that have sprung up around the country, "Bush huts?"

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  13. Bushvilles:

    http://www.dailykos.com/story/2009/3/9/1167/76508/497/706312

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  14. Pretty sad sight. The other night on CNN or France24 they were showing persons living in the rainwater drainage tunnels under Las Vegas. Fortunately, it doesn't rain often.

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  15. There was an editorial in the Times the other day saying the $8,000 tax credit for first time homeowners (which is heavily lobbied by the real estate industry) should be used to stop foreclosures.

    Michael Moore calls for a moratorium on all foreclosures. As he shows with one foreclosure, everyone benefits if you can keep people in their homes.

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  16. "And the long-term unemployment rate — the share of the unemployed population out of work for more than six months — also continues to set records. It is now 35.6 percent."

    From today's Times:

    http://www.nytimes.com/2009/11/08/opinion/08sun1.html?8dpc

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  17. The foreclosures make no sense at all, as the banks are selling off the houses for a small fraction of their initial value. Better to work out short-term reductions on payments than to foreclose like they are doing.

    Obama appeared sensitive to this issue late in the presidential campaign, but hasn't done much that I've seen to address it.

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  18. I just did a google search and found an article in About.com that says that before the Great Depression, the word depression was used to apply to any economic downturn. Then, in order to differentiate the downturns of 1910 and 1913 from the Great one, the word recession was used. As you said earlier, unemployment figures are not used, but drop in GNP of 10% or more for two straight quarters is a recession.

    Months ago, I heard radio interviews (Leonard Lopate, I think of WNYC) with Robert Reich and I think Paul Krugman (separate interviews) in which they thought that this one is a depression. But the press would not want to call it that.

    With the latest figures, it is reported that unemployment is the worst since 1983. I kept my job in 1983 and in all other recessions since 1975, but this time I lost it.

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  19. Correction to my previous post, end of first paragraph:

    A drop in GDP (not GDP) of 10% or more for two straight quarters is a depression (not recession).

    The About.com article says that by this definition, the last depression in the U.S. was 1937-1938 with drop in GDP of 18.2%

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  20. Av, I think they should call these tent cities "bushtopias."

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