The Forgotten Man by Amity Shlaes

This is a history of the Great Depression until 1940. The “forgotten man” of the title is the man whose pocket gets raided when A decides B is in need. The term was rebranded by Roosevelt, of course.

This is not a polemical book, despite what you may have heard. It does not attribute malevolence to Roosevelt or even to his advisers. It simply tells the story of what happened, highlighted by some of the less well-remembered characters: Tugwell, Wilke, Father Divine, and so on.

However, because the textbooks do have it wrong, I'm going to grouse a little.

The textbooks claim that Roosevelt steered the country out of the Great Depression, but the timeline says otherwise. He and his advisers liked tinkering, and some of their policies (demanding that wages not be lowered, for example) had predictably problematic results. Other nations had gotten out of the slump well before, and the US still hadn't recovered as of the start of the war.

Roosevelt was a great leader during the war, and a skillful politician before it. He created the special interest group paradigm that marks the Democratic party to this day. His notion of what the proper role of government should be was a function of his time, perhaps. Unfortunately many people of that era longed for governments to do everything and give men pride again; and we know where that led.

What did he do wrong? He fell for the “laws will make it so” line with things like the wage freeze. He played inconsistent games with the money and gold supply, ending up taking the country off the gold standard altogether; which had ripple effects. He played up class warfare, blaming the rich for being rich, demanding “undistributed profits” taxes, and then blamed them again for not investing. He was willing to pack the Supreme Court to back up his wide-ranging and unconstitutional control of the economy. He'd overlook inconsistent enforcement of the laws if he could attack his targets. He spent money like water. He spoke in private as though he was happy to let the economy fall in disorder for a few months if it meant getting additional authority.

What did he do right? He meant well. Some of the regulations were badly needed. Some of the make-work projects filled genuine needs. For a while, at least, it was encouraging to think that somebody was doing something. And he had clear sight about the dangers of the national socialists. For that he must be forgiven a great deal. (Until the dangers started to come very near the Republicans were isolationists)

There was yet a second contest among Roosevelt's men. It was between those who sought the cooperation of larger businesses and those who wanted to attack them. In New York, Berle considered that a solution might be guaranteeing wages in certain industries, “beginning with housing.” Such a plan, Berle reflected in his diary, “probably also means taking over the railroads,” was well as, perhaps, government “taking over both housing and construction.” He realized that would be an unparalleled infringement on private property. “But,” he wrote with a diarist's sigh, “I do not see that it can be helped.” Balancing the budget would likewise have to go out the window.

That probably sounds familiar. Just change the industry names...

What saved the US economy was the war, followed by the reconstruction when the only undamaged industrial power left had the whole world for a market.

I emphasize the “didn't fix the Depression” theme here because the received wisdom is carelessly wrong; but that's not the way the book reads. Do you want to know how a couple of kosher chicken distributors met the NRA in the Supreme Court? It was also the era that saw Gone With the Wind and Alcoholics Anonymous appear, and sulanilamide.

Read it.