The Forgotten Man: A New History Of The Great Depression (2007) - Plot & Excerpts
The Forgotten Man is a very interesting book. I found it fascinating that liberalism of the 1930’s stemmed from the former Soviet Union’s communism. In the 1920’s a group of academics and union men traveled to visit Stalin and Trotsky. Stalin welcomed them and put on an impressive show for them. They left Soviet Russia convinced of its superiority. The academics included Rex Tugwell (of Columbia University), Paul Douglas (of the University of Chicago), Stuart Chase and John Brophy. These men were very influential in Franklin Roosevelt’s political development.To solve the Depression FDR tried experimenting with the economy. He unwisely never listened to a former President Calvin Coolidge’s advice to leave the economy alone. FDR was brilliant in diplomacy but not so in economics. Most of what he proposed was overturned by the Supreme Court. He unwisely tried to implement a court packing scheme in order to have his policies passed. It turned not only a lot of his current Supreme Court but some of the public against him. He was fortunate that he outlived some of the Justices. So he was able to appoint like minded judges that passed some of his programs.FDR used dirty tricks to divert the nation from a bad economy. One tactic was to persecute the rich and successful of the 1920’s. One such person was Sam Insull who was responsible for electrifying Chicago. He created the first use of electricity in the country. FDR’s team searched for anyway possible to find a law violation by their intended target. Mr. Insull was forced to flee the country in order to avoid an unfair prosecutorial terror by the Roosevelt team. They did pay him a backhanded compliment by copying his system and using it in the Tennessee Valley Authority public electrification of the South. In fact the TVA’s director David Lilienthal became so powerful that he challenged other private power producers. Wendell Willkie was one such person. Willkie ran a very successful power company. He was one of those unique people that never angered and seemed impossible for him to make enemies. It is the same skill that President Warren Harding also had. The year followed by the same year’s unemployment rate and the Dow Jones Industrial Average follows directly under the name of the chapter after each chapter. It starts with 1927 where the unemployment rate was just 3.3% and the Dow Jones Industrial average was 155. In 1929 the unemployment rate grew to just under 5% but the Dow Jones also grew to 343. In 1931 the unemployment rate skyrocketed to just 17.4% and the Dow Jones dropped to 140. In 1933 the unemployment rate grew to a whopping 22.9 % and the Dow Jones dropped to lowly 93. 1934 saw a slight drop in the unemployment rate to 21.2 % while the Dow rose slightly to 100. In 1935 the unemployment rate rose slightly again to 21.3% but the Dow also slightly rose to 119. 1936 however showed a decrease in unemployment to 15.3% while the Dow also increased to 182. 1937 also improved slightly with a 15% unemployment rate and a Dow at 179. However the economy dipped again in 1937 with a 15.1 % unemployment rate but the Dow staggered at 179. And in 1938 unemployment rose again to 17.4% while the Dow dropped to 121. 1940 showed a slight improvement with a lower unemployment rate of 14.6% and a higher Dow of 151. So, if you compare FDR’s economy in 1940 to President Coolidge’s economy explained in the 1927 data you see a much better economic picture when the economy flourished under Coolidge.Interestingly enough that FDR’s Japanese Interment camps never harmed FDR’s status among historians. In fact, Roosevelt hired Dorothea Lange to photograph the camps under The War Relocation Authority. Her team produced 13,000 photographs which horrified her and her husband so much that they drafted letters to explain the injustice for Roosevelt. The photos were impounded and just recently released. Here is a list of New Deal programs:Agricultural Adjustment Act tAAA t1933 tProtected farmers from price drops by providing crop subsidies to reduce production, educational programs to teach methods of preventing soil erosion. Civil Works Administration tCWA t1933 tProvided public works jobs at $15/week to four million workers in 1934. Civilian Conservation Corps tCCC t1933 tSent 250,000 young men to work camps to perform reforestation and conservation tasks. Removed surplus of workers from cities, provided healthy conditions for boys, provided money for families. Federal Emergency Relief Act tFERA t1933 tDistributed millions of dollars of direct aid to unemployed workers. Glass-Steagall Act tFDIC t1933 tCreated federally insured bank deposits ($2500 per investor at first) to prevent bank failures. National Industrial Recovery Act tNIRA t1933 tCreated NRA to enforce codes of fair competition, minimum wages, and to permit collective bargaining of workers. National Youth Administration tNYA t1935 tProvided part-time employment to more than two million college and high school students. Public Works Administration tPWA t1933 tReceived $3.3 billion appropriation from Congress for public works projects. Rural Electrification Administration tREA t1935 tEncouraged farmers to join cooperatives to bring electricity to farms. Despite its efforts, by 1940 only 40% of American farms were electrified. Securities and Exchange Commission tSEC t1934 tRegulated stock market and restricted margin buying. Social Security Act tt1935 tResponse to critics (Dr. Townsend and Huey Long), it provided pensions, unemployment insurance, and aid to blind, deaf, disabled, and dependent children. Tennessee Valley Authority tTVA t1933 tFederal government build series of dams to prevent flooding and sell electricity. First public competition with private power industries Wagner Act tNLRB t1935 tAllowed workers to join unions and outlawed union-busting tactics by management. Works Progress Administration tWPA t1935 tEmployed 8.5 million workers in construction and other jobs, but more importantly provided work in arts, theater, and literary projects.Source: Feldmeth, Greg D. "U.S. History Resources" http://home.earthlink.net/~gfeldmeth/... (31 March 1998).In 1935 the Supreme Court rejected the NRA because they believed it was a right reserved for the States.The AAA was also declared unconstitutional in 1936.
This is an excellent history of the Great Depression that has changed a lot of minds, including my own. In school, we were all taught that Hoover was a "free market/laissez faire" fundamentalist and that when the crash of 1929 happened he sat back and said the market will fix itself. We were then taught that FDR came in and rescued the United States with his New Deal programs. While this version of history is "feel good," it couldn't be further from the truth. In reality, Hoover was an interventionist president and when the economy went into recession in 1929, he jumped into action stating that the government must "do something."Hoover gathered business leaders and got them to agree to not hire or fire anybody and to not lower wages. What they ended up doing was pretend like the crisis just wasn't happening. While price controls were harmful, the stake through the heart of the American economy was the Smoot Hawley Tariff, the largest tariff increase in American history. The next year imports and exports dropped 61% respectively. This is when the recession turned into a depression.FDR was elected president on the basis that Hoover wasn't doing enough. FDR's cabinet members were collectivists that looked toward communist Russia as inspiration. They set out to change the United States from a country that believed in equal opportunity to one that believed in equal outcome. Some of FDR's programs could be considered good and healthy for the economy, such as unemployment insurance. The bulk of the New Deal programs however were very harmful to the United States.The National Recovery Agency, also called the NRA, was a central planning board that planned the economy from the top down. This was similar to how things were being done in communist countries. Instead of having the market set prices, bureaucrats decide how much pork should be produced in the next year and what the prices would be. At one point, the Roosevelt administration wanted the price of pork to be higher so they forced farmers to slaughter their pigs in order to raise prices, at a time when people were going hungry. For those of us who understand economics, we know that no government agency can set the prices or supply of any good because there are too many factors making it impossible to plan for the future. This is why the USSR had frequent shortages and surpluses. The market is the best way to determine the supply and demand of goods and services because the organization happens from the bottom up.Thankfully the Supreme Court decided that the NRA was unconstitutional.The take away from this book is that the New Deal programs did little to help the United States get out of the depression because it created an environment of uncertainty. When an individual or business cannot predict the government's actions, they will wait and see what will happen next. Many economists and historians are now saying that the New Deal made the depression last 7 years longer than it would have.Another thing to keep in mind is that there was a recession in 1921 under Calvin Coolidge. Coolidge could be considered a free market/laissez faire president as he was very hands off and didn't believe that the president was an imperial figure. The economy recovered in a year. What people need to understand is that there will be boom times and bust times. When its bad, there's nothing you can do but wait for the market to make corrections. Trying to social engineer an economy to make sure it never feels any pain is not only impossible but it is also immoral. In 2009 we are on the cusp of making the same mistakes that FDR/Hoover made by having the government intervene in the economy. Economists agree that the reason for our current recession is that Americans were spending more money than they had. The Federal reserve was not using good monetary policy by keeping interest rates artificially low which stimulated a housing boom. Fannie Mae and Freddy Mac were getting loans to people who otherwise would be unable to afford it. In other words, government intervention is the reason for our current crisis.The solution being put forth by both Republicans under George W. Bush and Democrats under Obama is that the federal government must borrow trillions of dollars and spend to get the economy going. So to get out of a crisis caused by overspending, we need to spend more. Obviously there are holes in this logic. The only thing that is for certain is that our future generations are going to live a life under the heavy hand of government with 50+% tax rates. Nothing the government does will get us out of this slump but it is possible they can make things worse. After reading The Forgotten Man, I'm not hopeful that the people in government know what they are doing. Nobody knows how to spend your money better than you.
What do You think about The Forgotten Man: A New History Of The Great Depression (2007)?
Readable but a little dense--it's never taken me 3 weeks to read 400 pages before. This sounds like the kind of book that would only be of interest to a history nerd, but with the current situation it's an absolutely imperative read for all voters. We're all fed one version of the Depression and the New Deal as inevitable and necessary, respectively, and that war was the only thing that shocked us out of it. Reading this book forces you to realize that the Depression didn't have to be either Great or really a Depression, but the panicked populace pushed politicians (haha) into interfering, and the results landed us into a black hole of poverty that we were over a decade recovering from. The parallels between the economic conditions and the political scene between then and now are too frightening to ignore. The realization that demagogues and whiners who can't take a bit of belt tightening could push us into the same situation very, very easily is ghastly, but we can't afford to ignore the possibility. Learn from history, don't repeat it!
—Rebecca
This was a wonderful history of the Great Depression from a policy-making/political standpoint. It really illustrates that if the politicians would have stuck to free market principles the Great Depression would not have been so great. But instead, they jumped on the Soviet bandwagon and tried to implement Socialist programs. FDR relied on advisers that visited the USSR and saw the sanitized version of Communism that Stalin wanted them to see; they even visited with Stalin! It destroys the myth that Hoover made the Great Depression worse by using capitalism. He made the Great Depression worse by implementing anti-business policies at a time when we needed business to grow more than ever. This book also crushes the myth that FDR was the savior of the country because of New Deal programs. In fact, the book begins by showing that there was a depression within the depression caused by FDR's New Deal ideas discouraging businesses/individuals to save money and by over-regulating some industries and trying to make other industries government owned. It is written like a history book, but for the most part it was easy to read. I read it at the computer with wikipedia open though because she makes references to people and events that I guess are common knowledge (?), but doesn't explain who or what they are. Overall, a book I learned a lot from and a book that confirmed my suspicions about the validity of what I learned about the Great Depression in history classes.
—Camille
I started listening to this audiobook because I had slim pickings available at the library and had been thinking about the stock market crash of 29 and how I'd never really learned in concrete detail what had caused it. The first couple of chapters, when weeding out the libertarian stuff, were a wealth of information about the fiscal development of Hoover and the nation in general, as well as the first couple years of the depression. Then, we get to RooseveltI was willing to give it a chance, to learn more about the 30s, a time that I didn't make it to in AP US History thanks to a long time focused on Jacksonian Democracy. And then she referred to the administration's efforts in The Hundred Days as being brought about in part by "the restlessness of the invalid" but mostly due to "a grandeur of spirit" ...and I was done.
—Jess
