Hard Times | The Nation


Hard Times

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Shlaes is, of course, correct that the New Deal failed to restore economic health. She is also right that the Roosevelt Administration was far from consistent or coherent in its attempts to cope with the Depression, although she does not really address (as historians like Alan Brinkley have) the changes in the New Deal over the decade. Roosevelt and his advisers relinquished the ideas about the destructive force of capitalist competition that the ill-fated National Recovery Administration was meant to tame and took up a Keynesian program of managing consumer demand to ensure economic health. Shlaes's arguments about the reluctance of businessmen to invest during the Depression years actually echo those of Roosevelt during the recession of 1937--the President and some of his advisers blamed a "capital strike" for the rising unemployment of the late 1930s. (Others argued that the attempt to balance the government budget that year was responsible, a thesis Shlaes does not mention.)

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Kim Phillips-Fein
Kim Phillips-Fein teaches American history at the Gallatin School of Individualized Study at New York University. She...

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But in the end there is little historical evidence for her larger claim that the New Deal made the Depression worse and that without it, the crisis would simply have passed. After all, the catastrophe of the 1930s was halted not by private industry but by the massive public spending generated to fight World War II--an outlay of government resources far greater than anything Roosevelt had initially imagined. The fall in unemployment during the buildup to the war seemed proof of the central principles of Keynesianism: the private economy cannot always spend its way out of a depression; sometimes public spending is needed to stimulate growth. The experience of the war seemed to validate the New Deal, not disprove it. If anything, it suggested that Roosevelt should have gone further--that the New Deal was compromised by his timidity, not his radicalism. Does Shlaes seriously think that the Depression would have melted away if only Calvin Coolidge had been President? Was Alcoholics Anonymous really an alternative to the New Deal?

And if the New Deal was such a failure, why did it produce one of the most enduring political realignments of the century? In particular, how did Roosevelt win the loyalty of millions of voters, many of whom had never voted before? Shlaes dismisses FDR's electoral success by arguing that he was a master of cynical politicking. She suggests that he won re-election in 1936 (taking every state in the nation except Maine and Vermont) because he invented a "new kind of interest-group politics." Roosevelt "made groups where only individual citizens or isolated cranks had stood before," gave those groups financial benefits and won votes for it. Social Security and the Wagner Act, in her mind, were little more than crass bids to win working-class support in the 1936 election. But she does not really reckon with the obvious counterargument: that Roosevelt's electoral success reflected support for the New Deal in a larger ideological and political sense--that people gave their endorsement to the broad project of providing working-class people with minimal economic security during downturns that no policy-maker fully understood how to control. For the New Deal was not only about stimulating the economy; it was also an attempt to alleviate the sufferings of the poor, the aged and the unemployed, a goal that many New Dealers saw as distinct from restoring economic growth. They wanted to rescue capitalism (Roosevelt often seemed surprised by how much hostility businessmen expressed toward his program), but they also wanted to change the way that it worked.

In the end, the Depression itself cannot help but intrude on Shlaes's optimism about the free market. Now and then, a few characters besides Mellon and the Schechters and Father Divine appear in her account, like the young couple from New York City who retreated to a Catskills cabin in 1931 to starve to death because they were too ashamed to beg, and the 13-year-old boy who hanged himself in Brooklyn in 1937 after watching the gas in his family's home get shut off, a story Shlaes uses to begin her book. The economic breakdown of the 1930s made faith in the benevolence of business almost impossible during the decade. Shlaes may interpret these stories as demonstrating the failures of the New Deal, but at the time people saw them as evidence of the limits of the market.

For Shlaes, the New Deal was a scheme hatched by well-meaning reformers to carry out their good intentions and grand schemes, paying for their "big projects" with the tax money of the common man. But during the 1930s, millions of forgotten men became involved in politics themselves. The entire New Deal project, as Shlaes presents it, was carried out from above, by the President and the gang of intellectuals and dreamers gathered around him. But American society was shaken during the decade by political explosions: the birth of the Congress of Industrial Organizations, the eviction protests and hunger marches and sit-down strikes, the growth of the Communist Party and other radical groups. Economic depression does not always lead to political mobilization--but in the 1930s, it did. (Reading The Forgotten Man, you'd never know that the vibrant and tragicomic world of radical idealism, delusion and commitment memorably chronicled by writers like Edmund Wilson and Alfred Kazin ever existed.) The law professors and economists and the generation of old Progressives who worked with Roosevelt to craft New Deal legislation did so under pressure from people who in ordinary times might have stayed away from politics but who found themselves during the Great Depression facing economic circumstances that their local and community institutions could not ameliorate, that their old faiths in self-reliance could not contain. Because Shlaes interprets the New Deal as little more than the experiment of a jaded political class, she cannot really look at the popular protest of the decade, let alone assess the ways it shaped legislation.

Throughout the 1940s and '50s, conservatives openly criticized the New Deal. Today, it is unusual for an author like Shlaes to devote much attention to the decade of the Depression. The New Deal is more often invoked by liberal writers, who describe the political economy of the 1950s and '60s--which the New Deal helped to create--as an example of the kind of mixed economy that might produce a more egalitarian society today. Frequently it is remembered uncritically as a kind of political pastoral, an image quite different from the one people on the left and even liberals held during the years that followed the end of World War II. Then, many liberal writers criticized the postwar order. John Kenneth Galbraith excoriated the self-absorbed mass consumption of the "affluent society," in which the public sector was devoted primarily to stockpiling weaponry for the fight against Communism. Michael Harrington reminded a complacent nation of the continued reality of poverty. New Left scholars pointed out the ways that corporations were able to seize hold of liberal institutions, while the civil rights movement made clear how little the New Deal had done to confront racism. It is only in recent years, as the minimal protections of liberalism have been rolled back, that the New Deal has started to enjoy such uncritical acclaim. But its contemporary enthusiasts--see Robert Kuttner's recent The Squandering of America for one interesting example of the genre--actually have something in common with Shlaes, as surprising as that may seem. To treat the New Deal primarily as a legislative toolkit or as a set of policy initiatives means abandoning the very culture of outrage that matters most about the 1930s. To paraphrase historian Lizabeth Cohen, it means making the very people who truly made the New Deal once more into forgotten men.

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