The Forgotten Man [Kindle Edition]

Amity Shlaes (Author)

Editorial Reviews

From Publishers Weekly

This breezy narrative comes from the pen of a veteran journalist and economics reporter. Rather than telling a new story, she tells an old one (scarcely lacking for historians) in a fresh way. Shlaes brings to the tale an emphasis on economic realities and consequences, especially when seen from the perspective of monetarist theory, and a focus on particular individuals and events, both celebrated and forgotten (at least relatively so). Thus the spotlight plays not only on Andrew Mellon, Wendell Wilkie and Rexford Tugwell but also on Father Divine and the Schechter brothers—kosher butcher wholesalers prosecuted by the federal National Recovery Administration for selling "sick chickens." As befits a former writer for the Wall Street Journal, Shlaes is sensitive to the dangers of government intervention in the economy—but also to the danger of the government's not intervening. In her telling, policymakers of the 1920s weren't so incompetent as they're often made out to be—everyone in the 1930s was floundering and all made errors—and WWII, not the New Deal, ended the Depression. This is plausible history, if not authoritative, novel or deeply analytical. It's also a thoughtful, even-tempered corrective to too often unbalanced celebrations of FDR and his administration's pathbreaking policies. 16 pages of b&w photos. (June 12)
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From Booklist

Its duration and depth made the Depression "Great," and Shlaes, a prominent conservative economics journalist, considers why a decade of government intervention ameliorated but never tamed it. With vitality uncommon for an economics history, Shlaes chronicles the projects of Herbert Hoover and Franklin Roosevelt as well as these projects' effect on those who paid for them. Reminding readers that the reputedly do-nothing Hoover pulled hard on the fiscal levers (raising tariffs, increasing government spending), Shlaes nevertheless emphasizes that his enthusiasm for intervention paled against the ebullient FDR's glee in experimentation. She focuses closely on the influence of his fabled Brain Trust, her narrative shifting among Raymond Moley, Rexford Tugwell, and other prominent New Dealers. Businesses that litigated their resistance to New Deal regulations attract Shlaes' attention, as do individuals who coped with the despair of the 1930s through self-help, such as Alcoholics Anonymous cofounder Bill Wilson. The book culminates in the rise of Wendell Willkie, and Shlaes' accent on personalities is an appealing avenue into her skeptical critique of the New Deal. Gilbert Taylor
Copyright © American Library Association. All rights reserved

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Product Details

• Format: Kindle Edition
• File Size: 1535 KB
• Print Length: 498 pages
• Page Numbers Source ISBN: 0060936428
• Publisher: HarperCollins e-books; 1 edition (October 13, 2009)
• Sold by: HarperCollins Publishers
• Language: English
• ASIN: B000ROKXXI
• Text-to-Speech: Enabled
• Average Customer Review: 3.9 out of 5 stars  See all reviews (359 customer reviews)
• Amazon Best Sellers Rank: #21,223 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
  • #64 in Kindle Store > Kindle eBooks > Nonfiction > History > Americas > United States > 20th Century

More About the Author

Amity Shlaes is completing two books, a biography of Calvin Coolidge, "Coolidge", for HarperCollins, and FORGOTTEN MAN GRAPHIC, a graphic version of "The Forgotten Man" for adults. The artist is Paul Rivoche.
Miss Shlaes is a senior fellow in economic history at the Council on Foreign Relations. Bloomberg carries her syndicated column. Readers know her work also from the Financial Times, where she was senior columnist for half a decade 2000-2005), and the Wall Street Journal, where she edited op eds and served on the editorial board, eventually concentrating on economics(1983-2000). Over the years Miss Shlaes has appeared in a variety of other publications, from Commentary Magazine, the American, and Foreign Affairs to the New Republic, Forbes, Fortune, the (London) Spectator, the American Spectator, Cosmopolitan and the New Yorker. She is also a commentator for "Marketplace," the radio show.

Miss Shlaes started out her career in the foreign policy area, writing about East Europe. Her first book, "Germany: The Empire Within" appeared in 1991 (Farrar, Straus and Jonathan Cape). In the later 1990s, while at the WSJ, Miss Shlaes penned a national bestseller on the tax code, "The Greedy Hand" (Random House). In 2002 Miss Shlaes was J.P. Morgan fellow at the American Academy in Berlin, where she undertook work on her current book, "The Forgotten Man." "The Forgotten Man" first appeared in 2007 (HarperCollins/Jonathan Cape). The paperback edition (HarperPerennial) contains a timeline and other material for teaching. Both editions are national bestsellers. In December, 2008, the Japanese edition of TFM was published by NTT. TFM appeared in Chinese in 2009. In 2011, it appeared in Italian and German.

In 2008, 2009 and 2010, Miss Shlaes taught "The Forgotten Man" at New York University's Stern School of Business. She is the recipient of the Frederic Bastiat Prize of the International Policy Network, the Warren Brookes Prize (2008) of the American Legislative Exchange Council, as well as a two-time finalist for the Loeb Prize (Anderson School/UCLA). In 2009, "The Forgotten Man" won the Manhattan Institute's Hayek Prize.

Miss Shlaes is a magna cum laude graduate of Yale College and did graduate work at the Freie Universitaet Berlin on a DAAD fellowship.

Customer Reviews

Most Helpful Customer Reviews

781 of 880 people found the following review helpful:

5.0 out of 5 stars Brings You Back to the 1930's, June 15, 2007

By 

Arnold Kling (Silver Spring, Md USA) - See all my reviews
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This review is from: The Forgotten Man: A New History of the Great Depression (Hardcover)

The Forgotten Man (TFM for short) is not a polemic. It is not an argument for a particular theory or economic interpretation of the Depression. Instead, the author steps back and lets the story tell itself. She has sifted through memoirs and contemporaneous accounts in order to carry the reader back into the mindset of the 1930's. She focuses on a diverse selection of protagonists from that period, including opponents of Roosevelt like Andrew Mellon and Wendell Wilkie as well as members of Roosevelt's "brain trust" like Paul Douglas and Rexford Tugwell. Note that in the context of that time, "trust" meant the same thing as cartel (as in anti-trust laws). Roosevelt was claiming that with his advisers he had cornered the market on brains. If so, then after reading TFM, my sense is that there was not much value in this particular monopoly.



I came away with three major conclusions.



1. For better or worse, much of the country saw the Depression as something akin to a natural disaster, and people accordingly lowered their expectations for their standard of living.



2. Economic ignorance among policymakers was much worse than I had realized. I was steeped in the myth that the reason the Depression was so bad was that only Keynes had the answer, and he had to overcome the resistance of "the classical economists," such as Irving Fisher. But the differences between Fisher and Keynes seem small when compared to the differences between the policymakers and both economists. In physics, it would be like watching an academic debate over the meaning of quantum mechanics while policymakers are unable to grasp the simple concept of gravity.



3. The struggle over economic policy in the 1930's was really an episode in the long, historical conflict between business participants in the market and anti-business academics. Roosevelt gave free rein to the professors, until the start of the Second World War led him to realize that he would need the tycoons to help mobilize to defeat Hitler. I suspect that one reason that Roosevelt and the New Deal come off so well in the conventional wisdom is that history books are written by professors, not by entrepreneurs.



I should stress that these are my own views, and that TFM is much less prone to making generalizations and drawing conclusions. Readers with a variety of backgrounds and predispositions can appreciate the book and learn their own lessons.

343 of 415 people found the following review helpful:

5.0 out of 5 stars Beware of the Elites, June 15, 2007

By 

David Thomson "Second Rate Eric Hoffer Imitator" (Houston, TX USA) - See all my reviews
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This review is from: The Forgotten Man: A New History of the Great Depression (Hardcover)

Amity Shlaes has written an enormously important book. She offers abundant evidence that both the Republican Hoover and the Democrat Roosevelt unwittingly worsened the Great Depression. They opted for policies preventing the economic system from self-correcting. These two American leaders foolishly relied on the advice of elites infatuated with the Soviet Union. They essentially thought that the graduates of our best schools should manage the country. To be blunt, the elites were supposed to be our benevolent dictators.

Pay particular attention to Shlaes analysis of the Schechter brothers' confrontation with intellectual thugs associated with Harvard University. The author never mentions the vastly overrated works of Arthur M. Schlesinger, Jr. Nonetheless, The Forgotten Man is something of a direct attack on the late historian's less than admirable scholarship. Did Franklin D. Roosevelt save our nation? He admittedly may have done so in our fight against the fascists during WW II. Roosevelt's attempts to manage the American economy, however, almost destroyed our democratic institutions. The road to hell is sadly often paved with good intentions. We should learn form history---and never let this happen again. Regular citizens must be willing to check and balance the behavior of those most inclined toward arrogant ego-tripping and power seeking. The Forgotten Man deserves three cheers. You should obtain a copy immediately.

184 of 223 people found the following review helpful:

5.0 out of 5 stars What were the actual effects of New Deal policies?, June 27, 2007

By 

Jim Powell (Westport, Connecticut) - See all my reviews
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This review is from: The Forgotten Man: A New History of the Great Depression (Hardcover)

For offering a critical view of FDR's policies in her terrific new book THE FORGOTTEN MAN, Amity Shlaes has been taken to task by those who say that his charisma helped lift American spirits and get us through the Great Depression. FDR certainly had charisma, but what were the effects of his New Deal policies?

Dozens of economists, including two Nobel Prize winners, have evaluated the consequences of New Deal policies. Empirical research at many universities raises suggests that the New Deal actually prolonged the Great Depression. Consider some key questions like these:

1. Why did FDR triple federal taxes during the Great Depression? Federal tax revenues more than tripled, from $1.6 billion in 1933 to $5.3 billion in 1940. Excise taxes, personal income taxes, inheritance taxes, corporate income taxes, holding company taxes and "excess profits" taxes all went up. FDR introduced an undistributed profits tax. Consumers had less money to spend, and employers had less money for growth and jobs.

2. How much net benefit did the New Deal provide ordinary people who paid most of the costs of the New Deal? For instance, the biggest New Deal welfare programs were funded before 1936, when federal excise taxes on beer, wine, cigarettes, soft drinks, chewing gum, radios and other things purchased by millions of ordinary people, generated more revenue than the federal personal income tax and the federal corporate income tax combined. According to the standard reference work HISTORICAL STATISTICS OF THE UNITED STATES FROM COLONIAL TIMES TO THE PRESENT, in 1936 the federal government collected $674.4 million from the personal income tax, $753 million from the corporate income tax and $1.5 billion from excise taxes. Despite big income tax hikes, the federal excise tax continued to be the single largest source of federal revenue until after the United States entered World War II. So FDR's New Deal was mainly financed on the backs of the middle class and poor people who bought things subject to the federal excise tax. To hear one of FDR's "Fireside Chats," Americans had to pay a federal excise tax on a radio and a federal excise tax on the electricity needed to run it.

3. Why did FDR discourage investors from taking the risks of funding growth and jobs? As Robert Higgs (Independent Institute) pointed out, frequent tax hikes (1933, 1934, 1935, 1936) created uncertainty that discouraged investment, and FDR further discouraged investors by denouncing them as "economic royalists," "economic dictators" and "privileged princes," among other epithets. No surprise that private investment was at historically low levels during the New Deal era.

4. Why did FDR channel government spending away from the poorest people? Research by Gavin Wright (Stanford University), Robert Tollison (Clemson University), John J. Wallis (University of Maryland), Jim F. Couch (University of North Alabama), William F. Shughart II (University of Mississippi) and others documented how political influences skewed New Deal spending away from the poorest people. The South, America's poorest region, received significantly less than would have been the case if New Deal spending were allocated according to the amount of poverty. More New Deal spending went to political "swing" states in the West and East, where incomes were more than 60% higher.

5. Why did FDR make it more expensive for employers to hire people? By enforcing above-market wages, introducing excise taxes on payrolls and promoting compulsory unionism, the New Deal increased the costs of employing people about 25% from 1933 to 1940 -- a major reason, as Richard K. Vedder (Ohio University) and Lowell E. Gallaway (Ohio University) showed, why unemployment averaged 17 percent during the New Deal era. Demanding that employers pay above-market wages created incentives for employers to introduce more machines, go with part-timers or independent contractors or otherwise avoid expanding full-time payrolls.

6. Why did FDR destroy all that food when millions were hungry? FDR promoted higher food prices by creating scarcity -- paying farmers to plow under some 10 million acres of crops and slaughter and discard some 6 million farm animals. The New Deal food destruction program mainly benefited big farmers, since they had more food to destroy than small farmers. This policy and subsequent New Deal programs to pay farmers for not producing victimized the 100 million Americans who were consumers. As William E. Leuchtenburg (University of North Carolina) reported, "Only the war rescued the New Deal farm program from disaster."

7. Why did FDR make everything more expensive during the Depression? Americans needed bargains, but FDR signed the National Industrial Recovery Act to establish some 700 industrial cartel codes that forced consumers to pay above-market prices for goods and services. Moreover, FDR banned discounting by signing the Anti-Chain Store Act (1936) and the Retail Price Maintenance Act (1937). During the New Deal, Americans were actually prosecuted for cutting prices!

8. Why did FDR break up the strongest banks? George Benston (Emory University), Eugene White (Rutgers University), Lester V. Chandler (Princeton University) and others showed how FDR's banking laws had different consequences than what had been intended. FDR broke up the strongest banks, which had diversified with both commercial banking and investment banking. FDR's federal deposit insurance didn't stop bank failures. Rather, New Deal federal deposit insurance undermined the incentives of bankers to manage their businesses prudently, and it transferred the cost of bank failures to taxpayers who, among other things, had to pay the $500 billion tab for the S&L debacle during the 1980s. About 90% of depression era bank failures occurred because of unit banking laws that prevented small banks from diversifying through branches. Canada, free from branching restrictions, didn't have a single bank failure during the Great Depression.

9. What was the point of New Deal securities laws that made it harder for employers to raise capital and didn't help investors to do better? Employers desperately needed to raise capital, but FDR authorized costly regulations for issuing stocks. These regulations impeded the raising of capital. As George J. Stigler (University of Chicago) and Greg A. Jarrell (University of Rochester) showed, the average rate of return from new stock issues failed to improve after the SEC was established. Since securities fraud reduces the rate of return for investors, the SEC's failure to increase the rate of return implies either (1) that there couldn't have been much fraud before the SEC was established, or (2) that the SEC has been ineffective. Supposedly the SEC's primary mission has been to protect investors. Yet for decades, the SEC enforced price-fixing on Wall Street by preventing securities firms from discounting their commissions.

10. How did the Tennessee Valley Authority become a drag on the economy? FDR taxed 98% of the American people who didn't live in the Tennessee Valley, then used this revenue for the TVA power-generating monopoly, exempt from federal and state taxes and regulations. Like other big public works projects, the TVA mainly provided jobs for well-paid engineers, heavy equipment operators and others with technical skills. The TVA was slow to produce electricity - the first TVA dam wasn't finished till three years after the TVA law was passed, most TVA dams were finished after the Great Depression was over, and many TVA dams provided power for war-related government projects, not poor farmers. To the extent that the TVA-subsidized electricity affected poor farmers, it gave them an incentive to remain in farming. Battelle Memorial Institute senior scientist William U. Chandler reported that non-TVA Southern states such as North Carolina and Georgia experienced faster growth of jobs and incomes than TVA states, because there was a faster exodus out of farming and into manufacturing and services, which offered higher incomes. In any case, to improve their lot poor farmers needed tools like tractors and hay bailers, powered by internal combustion engines rather than TVA electricity. As for flood control, the TVA seems to have flooded more acreage (behind the dams) than it protected from flooding (below the dams). According to economist John Moore, the TVA flooded an area about the size of Rhode Island. Thousands of people, including black tenant farmers, were forced out of their homes.

11. Why did FDR disrupt companies employing millions? In 1938, FDR authorized an unprecedented barrage of antitrust lawsuits against about 150 employers and industries. There were lawsuits against the milk, oil, tobacco, shoe machinery, tires, fertilizer, railroad, pharmaceuticals, school supplies, billboards, fire insurance, liquor, typewriter and movie industries, among others. But the antitrust crusade was a flop. The government won few cases, and they dragged on as long as 13 years. FDR's antitrust crusade disrupted a depressed economy, making it harder for employers to recover and provide more jobs.

More than 6 decades have passed since FDR died, and it's past time to consider the New Deal in light of the consequences of his policies.
There's a substantial economics literature about the consequences of New Deal policies, steadfastly ignored by political historians who continue to build their narratives with personalities, speeches, correspondence and other traditional sources, and ignore evidence from outside their field, even when writing about a major economic event like the Great Depression.

In THE FORGOTTEN MAN, Shlaes has dramatically connected findings about New Deal policies with the lives of ordinary... Read more ›