Wednesday, June 27, 2007

FDR Means "Fading, Declining Reputation"

There was a very interesting op-ed, The Real Deal, in the Wall Street Journal by Amity Shlaes examining the legacy of FDR (her article is highlighting her upcoming book "The Forgotten Men". According to Shlaes:
Regarding the 1930s "there has been curiously little argument. The American consensus is ... that FDR saved democracy from fascism by co-opting the left and far right with his alphabet programs. Certainly, an observer might criticize various aspects of the period, but scrutiny of the New Deal edifice in its entirety is something that ought to be postponed for another era -- or so we learned long ago. Indeed, to take a skeptical look at the New Deal as a whole has been considered downright immoral."
Contrary to the standard hagiographies about FDR, Shlaes says:
The premier line in the standard history is that Herbert Hoover was a right-winger whose laissez-faire politics helped convert the 1929 Crash into the Great Depression. But a review of the new president's actions reveals him to be a control freak, an interventionist in spite of himself. Hoover signed the Smoot-Hawley Tariff Act, which worsened a global downturn, even though he had long lived in London and understood better than almost anyone the interconnectedness of markets. He also bullied companies into maintaining high wages and keeping employees on their payrolls when they could ill afford to do so. Perhaps worst of all, he berated the stock market as a speculative sinner even though he knew better. For example, Hoover opposed shorting as a practice, a policy that frightened markets at an especially vulnerable time.

The second standard understanding is that the Brain Trusters were moderate people who drew from American history when they wrote the New Deal. If their philosophies were left wing, then that aspect ought to be treated parenthetically, the attitude was. But the leftishness of the Brain Trust was not parenthetical. It was central.

This article reminded me of a great book that came out a couple of years ago entitled "FDR's Folly" by Jim Powell. Like Shlaes, Powell's examination of the New Deal was that FDR's policies, instead of helping to allieviate the effects of the Great Depression, actually exacerbated and made matters worse.

Powerline noted the link between the Shlaes article and Powell's book in a post yesterday and noted: "Building on the work of predecessors such as Jim Powell in "FDR's Folly, Shlaes brings a storyteller's gift to her challenge of the received version of the Great Depression."

Finally, for more on Powell's book, you can read a review of it from the Claremont Review of Books here. The short and sweet of it is:
"Jim Powell's FDR's Folly provides a useful reminder of the dangers inherent in embracing governmental solutions to social problems. Powell's book is quite instructive on what the New Deal did not achieve: economic recovery from the Great Depression. Indeed, FDR's folly, Powell argues, was precisely the prolongation of the Depression through ill-advised economic policies, most of which worsened the economic picture for millions of Americans."

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