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A New History of the Great Depression

By Amity Shlaes

Pub Date: June 12th, 2007
ISBN: 978-0-06-621170-1
Publisher: HarperCollins

Shlaes (The Greedy Hand, 1999, etc.), a senior visiting fellow at the Council on Foreign Relations and a columnist at Bloomberg, brings to the Great Depression a flair for revealing anecdotes and a debater’s moxie that slides into contrarianism.

According to the author, from the Great Crash of 1929 until 1940, government intervention made the Depression an unprecedented national calamity. While liberal historians unfavorably contrast Herbert Hoover with Franklin Roosevelt, Shlaes takes the former engineer to task for a similarity to his successor: an overestimation of the value of government planning. The result: the end of sizable gains, courtesy of tax-cutting policies, under Presidents Harding and Coolidge. All of this requires revisionism so massive that Shlaes' powers of persuasion become as hit-or-miss as the liberal programs she criticizes. She is at her best in detailing the decade-long disillusionment of a group of academics, journalists, trade-union leaders and liberal activists who sailed to the U.S.S.R. in 1927 to observe communism in action, including future FDR adviser Rexford Guy Tugwell, economist and future senator Paul Douglas and ACLU founder Roger Baldwin. Her profile of the Schechters—a pro-Roosevelt family of butchers who successfully overturned the National Industrial Recovery Act before the Supreme Court—demonstrates her point that the “forgotten man” was really the small businessman trying to survive without government aid. But Shlaes’ other examples suggest that it was the type—rather than the fact—of government intervention that was the real problem in the 1930s. The Smoot-Hawley tariff signed by Hoover, for instance, deprived businesses of foreign markets, but FDR’s Securities and Exchange Commission stabilized the economy. Equally problematic, Shlaes’ heroes come largely unblemished. While noting FDR’s politically motivated tax prosecution of Andrew Mellon, Treasury Secretary during the 1920s boom, she underplays Mellon’s culpability on conflict-of-interest charges.

<\b>Plucky, intellectual combat, but Shlaes neglects to counter the most telling arguments about GOP responsibility for the Depression.