Jerry's Reviews > The Forgotten Man: A New History of the Great Depression

The Forgotten Man by Amity Shlaes
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Hoover and Roosevelt were alike in several regards. Both preferred to control events and people. Both underestimated the strength of the American economy. Both doubted its ability to right itself in a storm. Hoover mistrusted the stock market. Roosevelt mistrusted it more.


Many people, politicians especially, love to believe that the present is a time so different that the old rules do not hold. The problem is that it is rarely true, and usually an excuse to make the old mistakes over and over.

The first part of the book covers Hoover’s attempts to control the economy following the stock market crash, and how the economy seemed to be recovering until a new law was passed, and its unintended effects were to crash the economy again.

Shlaes is certainly no fan of Hoover:


And before a year would pass, Hoover had done damage that did matter on three fronts: by intervening in business, by signing into law a destructive tariff, and by assailing the stock market.

Hoover’s humanitarian policy sent a signal nationwide: do not lower wages. In the end, businesses had to choose between lowering wages and shutting down. Often, they shut down.


What there’s no real explanation for is why Roosevelt continued Hoover’s policies and expanded them by adding in some of Woodrow Wilson’s old policies. His NRA was an attempt to not just take over vast swaths of the economy, but to micromanage it to the point of smothering it.


In other industries, the NRA rules were equally specific. NRA code determined the precise components of macaroni; it determined what tailors could and could not sew. In the poultry industry the relevant line of code had barred consumers from picking their own chickens.

The argument was that they would help small business by eliminating competition.


But the policies ended up having the opposite effect.


A price set to suit a big firm, with its economies of scale, was low enough to drive a smaller firm out of business; a wage set high enough to meet Washington’s goals might be tolerated by a larger firm, but it killed off a smaller one. The NRA institutionalized cartels. And cartels were perceived by most citizens as one of the principal reasons the average fellow now had so much trouble.

The same day that it reported Mellon’s death, the New York Times carried a story on the consequences of the undistributed profits tax. Companies that had formerly sought to retain employees through downturns now no longer had the reserves to do so.

The AAA got its first serious negative publicity after Americans learned that a total of six million young pigs were killed before reaching full size over the course of September. “It just makes me sick all over,” one citizen would write, “when I think of how the government has killed millions and millions of little pigs, and how that has raised pork prices until today we poor people cannot have a piece of bacon.”


It was the chickens that eventually struck down the National Recovery Administration; forcing people to take the next chicken in line turned out to be something Jews in New York City refused to be a part of, and one group of Kosher poultry grocers took their case to the Supreme Court.

The main weakness of the book is the title. It isn’t clear throughout who the Forgotten Man is, or even if there is one. Every politician and potential politician used the term with a different meaning, and arguably still does today. There were certainly a lot of forgotten men in politics. Rex Tugwell? Wendell Wilkie? Or the men who got together to get themselves back on their feet together, such as Bill Wilson’s Alcoholics Anonymous groups, or Father Divine and his followers who attempted to break down racial barriers?

Rex Tugwell, after he left the Roosevelt administration, seemed to think that there were two classes of people in the country: one that was going to be forced to rely on Social Security, and one that wasn’t:


One reporter now asked him what he thought about getting a Social Security number. After all, the Social Security program payroll taxes were beginning and the numbers were a novelty for the country. Here Tugwell did blunder: “I’m out of that class,” he replied, confused. Taussig corrected the slip—Tugwell would be a salaried employee and get a number. He would get a number and would pay into the new program like all the rest.


This was also the period when the word “Liberal” was changing. Much of the book concerns Willkie’s journey from businessman to political candidate. Willkie was a long time Democrat and also one of the people wiring America for electricity. But the Roosevelt administration wanted to literally take over power generation, and fought through legislation and the courts to put the power companies out of business.

This culminated in Willkie’s attempt to run for President in 1938.


Revisiting that old liberalism, he could see that while Roosevelt might call himself a liberal, the inexorable New Deal emphasis on the group over the individual was not liberal in the classic sense. Liberalism had historically included liberal economics, and Roosevelt had turned away from that.

The manifesto spoke to Roosevelt directly. “In the decade beginning 1930 you have told us that our day is finished, that we can grow no more, and that the future cannot be equal to the past. But we, the people, do not believe this, and we say to you: give up this vested interest that you have in depression, open your eyes to the future and help us to build a New World.”

It was the most final, and strongest, rebuttal to the progressives that had yet been offered. Before a crowd estimated at 200,000, and with the weather 102 degrees in the shade, Willkie asked the public to think about what it meant to be an American liberal. Was a liberal merely a left progressive? Or was a liberal someone who believed in liberalism in the classic sense, in the primacy of the individual and his freedom? Willkie railed against Roosevelt’s “philosophy of distributed scarcity.” And he argued, speaking of both the United States and Europe, that it was “from weakness that people reach for dictators and concentrated government power…

“I am a liberal because I believe that in our industrial age there is no limit to the productive capacity of any man.”


Willkie did not, however, oppose all that Roosevelt had done—which makes sense, since Willkie had supported him as a Democrat.


In the case of Social Security, for example, Willkie was anxious that the system be adjusted so that the money paid by workers went exclusively to fund pensioners, and not be diverted to other government projects.


This is the proverbial sprawling epic. It follows the lives of many people from the beginning of the Great Depression to the beginning of World War II. As a result, there’s no sense of a deep understanding of any of them. Perhaps the most tragic is Andrew Mellon, who wanted to be forgotten, even to the point of wanting to keep his name off of the National Gallery he’d long been collecting for so as to donate to the United States. He continued stocking it and continued moving toward the donation even as federal lawyers tried to prosecute under the increasingly convoluted federal tax laws.

One of the photos included in the book is from President Roosevelt, who wrote to the Commissioner of Internal Revenue, “I am wholly unable to figure out the amount of the tax… as this is a problem in higher mathematics, may I ask that the Bureau let me know the amount of the balance due?”


Sometimes—when he knew the targets involved, or liked them—Roosevelt suggested that Jackson soften. And always, Roosevelt took care not to harm those with special power to harm him. Learning from Jackson of a possible action against motion picture combines, Roosevelt said, “Do you really need to sue these men?” and asked that they be brought in for a talk. But other times he egged Jackson on.
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Reading Progress

December 31, 2018 – Started Reading
December 31, 2018 – Shelved
January 26, 2019 – Shelved as: conviction
March 5, 2019 – Finished Reading

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