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FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression Hardcover – September 23, 2003

by Jim Powell (Author)

4.6 309 ratings

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“Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929—33. Truth to tell–as Powell demonstrates without a shadow of a doubt–the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government. Powell’s analysis is thoroughly documented, relying on an impressive variety of popular and academic literature both contemporary and historical.”
–Milton Friedman, Nobel Laureate, Hoover Institution

“There is a critical and often forgotten difference between disaster and tragedy. Disasters happen to us all, no matter what we do. Tragedies are brought upon ourselves by hubris. The Depression of the 1930s would have been a brief disaster if it hadn’t been for the national tragedy of the New Deal. Jim Powell has proven this.”
–P.J. O’Rourke, author of Parliament of Whores and Eat the Rich

“The material laid out in this book desperately needs to be available to a much wider audience than the ranks of professional economists and economic historians, if policy confusion similar to the New Deal is to be avoided in the future.”
–James M. Buchanan, Nobel Laureate, George Mason University

“I found Jim Powell’s book fascinating. I think he has written an important story, one that definitely needs telling.”
–Thomas Fleming, author of The New Dealers’ War

“Jim Powell is one tough-minded historian, willing to let the chips fall where they may. That’s a rare quality these days, hence more valuable than ever. He lets the history do the talking.”
–David Landes, Professor of History Emeritus, Harvard University

“Jim Powell draws together voluminous economic research on the effects of all of Roosevelt’s major policies. Along the way, Powell gives fascinating thumbnail sketches of the major players. The result is a devastating indictment, compellingly told. Those who think that government intervention helped get the U.S. economy out of the depression should read this book.”
–David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom

The Great Depression and the New Deal. For generations, the collective American consciousness has believed that the former ruined the country and the latter saved it. Endless praise has been heaped upon President Franklin Delano Roosevelt for masterfully reining in the Depression’s destructive effects and propping up the
country on his New Deal platform. In fact, FDR has achieved mythical status in American history and is considered to be, along with Washington, Jefferson, and Lincoln, one of the greatest presidents of all time. But would the Great Depression have been so catastrophic had the New Deal never been implemented?

In FDR’s Folly, historian Jim Powell argues that it was in fact the New Deal itself, with its shortsighted programs, that deepened the Great Depression, swelled the federal government, and prevented the country from turning around quickly. You’ll discover in alarming detail how FDR’s federal programs hurt America more than helped it, with effects we still feel today, including:

• How Social Security actually increased unemployment
• How higher taxes undermined good businesses
• How new labor laws threw people out of work
• And much more

This groundbreaking book pulls back the shroud of awe and the cloak of time enveloping FDR to prove convincingly how flawed his economic policies actually were, despite his good intentions and the astounding intellect of his circle of advisers. In today’s turbulent domestic and global environment, eerily similar to that of the 1930s, it’s more important than ever before to uncover and understand the truth of our history, lest we be doomed to repeat it.

Print length

352 pages
Language

English
Publisher

Crown Forum
Publication date

September 23, 2003
Dimensions

6.25 x 1.25 x 8.75 inches
ISBN-10

0761501657
ISBN-13

978-0761501657
See all details

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Editorial Reviews

From the Inside Flap

"Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929-33. Truth to tell - as Powell demonstrates without a shadow of a doubt - the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government. Powell's analysis is thoroughly documented, relying on an impressive variety of popular and academic literature both contemporary and historical."
Milton Friedman, Nobel Laureate, Hoover Institution

"There is a critical and often forgotten difference between disaster and tragedy. Disasters happen to us all, no matter what we do. Tragedies are brought upon ourselves by hubris. The Depression of the 1930s would have been a brief disaster if it hadn't been for the national tragedy of the New Deal. Jim Powell has proven this."
P.J. O'Rourke, author of Parliament of Whores and Eat the Rich

"The material laid out in this book desperately needs to be available to a much wider audience than the ranks of professional economists and economic historians, if policy confusion similar to the New Deal is to be avoided in the future."
James M. Buchanan, Nobel Laureate, George Mason University

"I found Jim Powell's book fascinating. I think he has written an important story, one that definitely needs telling."
Thomas Fleming, author of The New Dealers' War

"Jim Powell is one tough-minded historian, willing to let the chips fall where they may. That's a rare quality these days, hence more valuable than ever. He lets the history do the talking."
David Landes, Professor of History Emeritus, Harvard University

"Jim Powell draws together voluminous economic research on the effects of all of Roosevelt's major policies. Along the way, Powell gives fascinating thumbnail sketches of the major players. The result is a devastating indictment, compellingly told. Those who think that government intervention helped get the U.S. economy out of the depression should read this book."
David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom

The Great Depression and the New Deal. For generations, the collective American consciousness has believed that the former ruined the country and the latter saved it. Endless praise has been heaped upon President Franklin Delano Roosevelt for masterfully reining in the Depression's destructive effects and propping up the
country on his New Deal platform. In fact, FDR has achieved mythical status in American history and is considered to be, along with Washington, Jefferson, and Lincoln, one of the greatest presidents of all time. But would the Great Depression have been so catastrophic had the New Deal never been implemented"

In FDR's Folly, historian Jim Powell argues that it was in fact the New Deal itself, with its shortsighted programs, that deepened the Great Depression, swelled the federal government, and prevented the country from turning around quickly. You'll discover in alarming detail how FDR's federal programs hurt America more than helped it, with effects we still feel today, including:

How Social Security actually increased unemployment
How higher taxes undermined good businesses
How new labor laws threw people out of work
And much more

This groundbreaking book pulls back the shroud of awe and the cloak of time enveloping FDR to prove convincingly how flawed his economic policies actually were, despite his good intentions and the astounding intellect of his circle of advisers. In today's turbulent domestic and global environment, eerily similar to that of the 1930s, it's more important than ever before to uncover and understand the truth of our history, lest we be doomed to repeat it.

About the Author

JIM POWELL, editor of Laissez Faire Books, has been a senior fellow at the Cato Institute since 1988. He is the author of the bestselling book The Triumph of Liberty, which the Wall Street Journal called “a literary achievement,” and he has written more than 400 articles for the New York Times, the Wall Street Journal, the Chicago Tribune, Money magazine, Reason, and numerous other national publications. A world-renowned historian, Mr. Powell studied under Daniel Boorstin and William McNeill at the University of Chicago, and he has lectured across the United States as well as in England, Germany, Japan, Brazil, and Argentina. He lives in Connecticut.

Excerpt. © Reprinted by permission. All rights reserved.

The Great Depression has had an immense influence on our thinking, particularly about ways to handle an economic crisis, yet we know surprisingly little about it. Most historians have focused on chronicling Franklin D. Roosevelt’s charismatic personality, his brilliance as a strategist and communicator, the dramatic One Hundred Days, the First New Deal, Second New Deal, the “court-packing” plan, and other political aspects of the story. Comparatively little attention has been paid to the effects of the New Deal.

In recent decades, however, many economists have tried to determine whether New Deal policies contributed to recovery or prolonged the depression. The most troubling issue has been the persistence of high unemployment throughout the New Deal period. From 1934 to 1940, the median annual unemployment rate was 17.2 percent.1 At no point during the 1930s did unemployment go below 14 percent. Even in 1941, amidst the military buildup for World War II, 9.9 percent of American workers were unemployed. Living standards remained depressed until after the war.2

While there was episodic recovery between 1933 and 1937, the 1937 peak was lower than the previous peak (1929), a highly unusual occurrence. Progress has been the norm. In addition, the 1937 peak was followed by a crash. As Nobel laureate Milton Friedman observed, this was “the only occasion in our record when one deep depression followed immediately on the heels of another.”3

Scholarly investigators have raised some provocative questions. For instance, why did New Dealers make it more expensive for employers to hire people? Why did FDR’s Justice Department file some 150 lawsuits threatening big employers? Why did New Deal policies discourage private investment without which private employment was unlikely to revive? Why so many policies to push up the cost of living? Why did New Dealers destroy food while people went hungry? To what extent did New Deal labor laws penalize blacks? Why did New Dealers break up the strongest banks? Why were Americans made more vulnerable to disastrous human error at the Federal Reserve? Why didn’t New Deal securities laws help investors do better? Why didn’t New Deal public works projects bring about a recovery? Why was so much New Deal relief spending channeled away from the poorest people? Why did the Tennessee Valley Authority become a drag on the Tennessee Valley?

Curiously, although the Great Depression was probably the most important economic event in twentieth-century American history, Stanford University’s David M. Kennedy seems to be the only major political historian who has mentioned any of the recent findings. “Whatever it was,” he wrote in his Pulitzer Prize–winning Freedom from Fear (1999), the New Deal “was not a recovery program, or at any rate not an effective one.”4

It’s true the Great Depression was an international phenomenon—depression in Germany, for instance, made increasing numbers of desperate people search for scapegoats and support Adolf Hitler, a lunatic who couldn’t get anywhere politically just a few years earlier when the country was still prosperous. But compared to the United States, as economic historian Lester V. Chandler observed, “in most countries the depression was less deep and prolonged.”5 Regardless whether the depression originated in the United States or Europe, there is considerable evidence that New Deal policies prolonged high unemployment.

FDR didn’t do anything about a major cause of 90 percent of the bank failures, namely, state and federal unit banking laws. These limited banks to a single office, preventing them from diversifying their loan portfolios and their source of funds. Unit banks were highly vulnerable to failure when local business conditions were bad, because all their loans were to local people, many of whom were in default, and all their deposits came from local people who were withdrawing their money. Canada, which permitted nationwide branch banking, didn’t have a single bank failure during the Great Depression.

FDR’s major banking “reform,” the second Glass-Steagall Act, actually weakened the banking system by breaking up the strongest banks to separate commercial banking from investment banking. Universal banks (which served depositors and did securities underwriting) were much stronger than banks pursuing only one of these activities, very few universal banks failed, and securities underwritten by universal banks were less risky. Almost every historian has praised FDR’s other major financial “reform,” establishing the Securities and Exchange Commission to supervise the registration of new securities and the operation of securities markets, but in terms of rate of return, investors were no better off than they were in the 1920s, before the Securities and Exchange Commission came along.

FDR didn’t do much about a contributing factor in the Great Depression, the Smoot-Hawley tariff which throttled trade. Indeed, he raised some tariffs, while Secretary of State Cordell Hull negotiated reciprocal trade agreements which cut tariffs only about 4 percent. FDR approved the dumping of agricultural commodities below cost overseas, which surely aggravated our trading partners.

FDR tripled taxes during the Great Depression, from $1.6 billion in 1933 to $5.3 billion in 1940.6 Federal taxes as a percentage of the gross national product jumped from 3.5 percent in 1933 to 6.9 percent in 1940, and taxes skyrocketed during World War II.7 FDR increased the tax burden with higher personal income taxes, higher corporate income taxes, higher excise taxes, higher estate taxes, and higher gift taxes. He introduced the undistributed profits tax. Ordinary people were hit with higher liquor taxes and Social Security payroll taxes. All these taxes meant there was less capital for businesses to create jobs, and people had less money in their pockets.

In addition, FDR increased the cost and risk of employing people, and so there shouldn’t have been any surprise that the unemployment rate remained stubbornly high. Economists Richard K. Vedder and Lowell E. Gallaway, in their 1997 study Out of Work: Unemployment and Government in Twentieth-Century America, reported: “New Deal policies (and some Hoover-era policies predating the New Deal) systematically used the power of the state to intervene in labor markets in a manner to raise wages and labor costs, prolonging the misery of the Great Depression, and creating a situation where many people were living in rising prosperity at a time when millions of others were suffering severe deprivation. . . . Of the ten years of unemployment rates over 10 percent during the Depression, fully eight were during the Roosevelt administration (counting 1933 as a Roosevelt year).”8 Vedder and Gallaway estimated that by 1940 unemployment was eight points higher than it would have been in the absence of higher payroll costs imposed by New Deal policies.9

Economists Thomas E. Hall and J. David Ferguson reported, “It is difficult to ascertain just how much the New Deal programs had to do with keeping the unemployment rate high, but surely they were important. A combination of fixing farm prices, promoting labor unions, and passing a series of antibusiness tax laws would certainly have had a negative impact on employment. In addition, the uncertainty experienced by the business community as a result of the frequent tax law changes (1932, 1934, 1935, 1936) must have been enormous. Since firms’ investment decisions very much depend on being able to plan, an increase in uncertainty tends to reduce investment expenditures. It should not be a surprise that investment as a proportion of output was at low levels during the mid-1930s.”10

Black people were among the major victims of the New Deal. Large numbers of blacks were unskilled and held entry-level jobs, and when New Deal policies forced wage rates above market levels, hundreds of thousands of these jobs were destroyed. Above-market wage rates encouraged employers to mechanize and in other ways cut total labor costs. Many New Deal policies were framed to benefit northern industries and undermine the position of employers in the South, where so many blacks worked. “New Deal labor policies contributed to a persistent increase in African American unemployment,” reported economist David E. Bernstein.11

When millions of people had little money, New Deal era policies made practically everything more expensive (the National Industrial Recovery Act), specifically maintained above-market retail prices (the Robinson-Patman Act and the Retail Price Maintenance Act) and above-market airline tickets (Civil Aeronautics Act). Moreover, FDR signed into law the Agricultural Adjustment Act, which led to the destruction of millions of acres of crops and millions of farm animals, while many Americans were hungry.

New Deal agricultural policies provided subsidies based on a farmer’s acreage and output, which meant they mainly helped big farmers with the most acreage and output. The New Deal displaced poor sharecroppers and tenant farmers, a large number of whom were black. High farm foreclosure rates persisted during the New Deal, indicating that it did almost nothing for the poorest farmers. Historian Michael A. Bernstein went farther and made a case that New Deal agricultural policies “sacrificed the interests of the marginal and the unrecognized to the welfare of those with greater political and economic power.”12

The flagship of the New Deal was the National Industrial Recovery Act, which authorized cartel codes restricting output and fixing high prices for just about every conceivable business enterprise, much as medieval guild restrictions had restricted output and fixed prices. That FDR approved contraction was astounding, because the American people had suffered through three years of catastrophic contraction. With the Natio...

Product details

Publisher ‏ : ‎ Crown Forum; 1st edition (September 23, 2003)
Language ‏ : ‎ English
Hardcover ‏ : ‎ 352 pages
ISBN-10 ‏ : ‎ 0761501657
ISBN-13 ‏ : ‎ 978-0761501657
Item Weight ‏ : ‎ 1.05 pounds
Dimensions ‏ : ‎ 6.25 x 1.25 x 8.75 inches

Best Sellers Rank: #818,200 in Books (See Top 100 in Books)
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- #26,622 in United States History (Books)

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R. Schwartz

Economic Orthodoxy verses Social Achievements

Reviewed in the United States on October 29, 2005

Verified Purchase

FDR was the BEST U.S. PRESIDENT

Powell is a misguided economist.
"Too many of us have forgotten, or never learned, what kind of country America was under the conservative rule that preceded the century of liberal reform. And too many of us have no idea whose ideas and energy brought about the reforms we now take for granted." Joe Conason, Big Lies, p. 3

A bias but excellently written book. While it exposes the many of the downfalls of a socialistic economy within a capitalistic framework, its one sided bias fails to address the social issues and for this I remain a left and socialistic thinker. This is because while many of Powell's arguments against the New Deal are valid, as in relief to swing states and anti-trust paranoia, the solutions to the economic problems at the very end of the book, I do not agree with. The book itself is a very convincing and I think adequately backed up with factual analysis, but it fails to balance between economic liberty and government regulatory provisions for the oppressed and the environment. Instead it advocates the old capitalism with a two-class oppressive system. It is important to understand both sides of this situation. To claim socialism is valueless trash is ignorant and to condemn all free market economy is equally ignorant.

This book tells of the economics of FDR and the New Deal, of its attempt to reform economic liberty into government controlled equalitarian practices and its negative impact on free market capitalism. "Whenever there is dictatorial power over an economy, whenever economic liberty is denied, people are sure to be suffering agonies of the damned." p. 266

What Powell convincingly employs is that of the policies of the FDR and the New Deal is its economic control, preventing the economy from recovery, and even further, in reforming the economy to inferior performance, with high taxes, tariffs (the Smoot-Hawley Tariff from Hoover), unfair anti-trust suits, mandatory union membership (allowing them to dictate and monopolize), all this crushing private investment, severely diminishing the benefits of a free market. It was here individual rights, private property and economic liberty were fiercely attacked.

What Powell does not speak of, and this is just as important, is the extremity of the social ills that permeated the American culture prior the 1929 crash - its ills from it's inception up until the New Deal. And this is why it is important to have both sides of the story! Howard Zinn's Peoples History tells of the peoples struggles, the social side of this story from severe repression, that of the wealthy and the oppressed, and the tremendous economic and civil struggles of the working people and the poor, which only improved under years of revolutionary fights - this is where unions are crucially important. Powell misses this in his analysis, however this book is on economics more than anything else and it gives the other side of the story in the abuses of dictatorial government - of government monopoly and labor union monopoly, of the many regulations, taxes and law suits limiting competition, controlling acts that both caused the second crash of 1938 and it's subsequent constraint on economic growth for years to come.

Here was a world of that in it's attempt to compensate for social ills of the poor and the crash, looked for someone to blame. And the elevated idea of the evils of big business dominated thinking. And while there was some truth to this, it was out of hand, unbalanced to the degree that simply being big meant a possible law suit and penalties. "It was a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It was a world in which the law is so vague that businessman have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict - after the fact." p. 261

While I partially agree with Powell in suggesting Lazzaire-Faire treatment of decreasing government spending and allowing the economy to stabilize on it's own, it is with Powell solutions in no higher taxes for the rich (naturally), no wage control - no minimum wage, and illegality of protests and critical voices of the workers, is where I strongly disagree. Despite free market legal violations, it's the spirit of the law, the mathematically irrational part that values human lives. And these conditions, socially and in labor, and the hours spent, are of crucial importance. Here I remain a socialist, and with socialism, it only occurs when the people (the majority) support it, otherwise it ceases to be, when conditions speak out for themselves. It's just a shame the New Deal attempt at socialism was never socialism at all (true socialism is democracy), but was the same non-democratic monopolistic control of the entrepreneur now transferred to the government and unions, anotherwards a transference from business monopoly to government and union monopoly. True democracy are people's majority governments and unions, which was not the case. History shows what the United States was like socially in working conditions, in hours, wages and human treatment and in the abuses of the environment; a horrendous record prior to New Deal policies, as erroneous as they were for the economy.

And so, my only criticism is this: the author of this book shows that he deeply and compassionately loves the free market society, but unfortunately he loves it more than he does the working people. Again, to be well informed, to attempt freedom from ignorance and see the larger picture, this book is outstanding when read with the other side of the story, as in Noam Chomsky in propaganda and foreign policy and Howard Zinn and the common people's voices of struggles in our society.

20 people found this helpful

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Keen Incite

One of the Worst We've Ever Had

Reviewed in the United States on June 9, 2007

Verified Purchase

It is a common trait of human nature to judge people and events within the limited historical scope of their own lifetimes. We tend to think of things in absolutes (e.g. - "It's never been this bad" or "he's the worst president ever,") because we have no historical context in which to properly judge the actual significance of a person or an event that we personally experience. As a result, we tend to take on faith the judgment of "experts" about those people and events that lie outside of our own personal experience. Unless we actually take the time and effort to investigate an historical person or event for ourselves, we will always tend to agree with the "general consensus."

Jim Powell's "FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression" is one of those historical sources that will change your opinion from that of the "general consensus" that FDR is one of the top five American presidents to something appropriately lower. In this rigorously cited work, Powell presents evidence that FDR's New Deal, far from helping the country recover from the Great Depression, actually extended and exacerbated it.

Powell begins by introducing the FDR's main actors who collectively constructed the New Deal. Almost to a man, they were ambitious, arrogant Ivy Leaguers who thought they knew better how to control an economy than the millions of citizens who daily executed informed economic choices in a free market. As Powell explains, "some New Dealers were outright socialists" who rejected free market economics. Indeed, Chamber of Commerce president, Henry Harriman, typified this attitude when he declared that "laissez-faire must be replaced by a philosophy of planned national economy." Powell also relates how "many people in FDR's administration especially admired Italian fascism."

Powell then addresses several aspects of the New Deal with chapter titles that are questions such as "Why Did FDR Seize Everybody's Gold?," "Why Did the New Dealers Destroy All That Food When People Were Hungry?" and "How Did New Deal Labor Laws Throw People Out of Work?" Then, with sound economic analysis, backed by facts and citations, Powell meticulously describes how New Deal policies made things worse instead of better.

New Deal policies consisted of higher taxes, minimum wages, price controls, production limits and myriad other things that were exactly the wrong things to do to bring about economic recovery. Many of these policies were so-called "experiments," but as Powell writes, "Such policies were `experiments' only to the degree that New Dealers were ignorant about what had been tried and failed before." New Deal policies also assaulted individual liberty and economic freedom. Indeed, in April of 1934, Jacob Maged "was jailed for three months and fined for charging 35 cents to press a suit, rather than the 40 cents mandated by the NRA dry cleaning code." Powell summarizes, "Wherever there is dictatorial power over an economy, wherever economic liberty is denied, people are sure to be suffering agonies of the damned. New Dealers assumed that individual rights, private property, and economic liberty were obstacles to recovery, but they are essential."

Particularly disturbing during this time was FDR's encroachment on constitutional freedoms. Many today accuse George W. Bush of being a dictator, but Bush can't hold a candle to the imperial presidency of FDR. As Powell explains, "...FDR was impatient with American democracy, and he issued an extraordinary number of executive orders - 3728 altogether - which is more than all the executive orders issued by his successors Harry Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson, Richard M. Nixon, Gerald R. Ford, Jimmy Carter, Ronald Reagan, George H. W. Bush and Bill Clinton combined." Many of these had the power of law behind them, effectively circumventing the legislature. FDR's assault on constitutional liberty was so severe, that in a November 1941 "Fortune" magazine poll "93 percent of employers said they expected their property rights to be undermined and also anticipated the possibility of a dictatorship."

Powell's book conclusively proves that the New Deal was an economic and civil rights disaster whose effects are still being felt today. FDR and his administration, arrogant in their ignorance, committed the cardinal sin of thinking they knew better than all those who had gone before. The sheer destructiveness of FDR's assault on freedom and his economic incompetence disqualifies him from the top five of "general consensus" and rightly places him near the bottom of American presidents.

35 people found this helpful

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Top reviews from other countries

Patrick Sullivan

Highly Recommended

Reviewed in Canada on July 4, 2011

Verified Purchase

Growing up, I heard so many stories about The Great Depression. Older relatives had such strong opinions regarding The New Deal, FDR, and of course for Canadians, R.B. Bennett and Mackenzie King. My Dad told me how the US government confiscated gold in the 1930s, which I was shocked to find out. It also seems to be commonly accepted wisdom; that Hoover caused the Depression because of his inaction, and FDR`s New Deal turned around a hopeless economic situation.

Well Jim Powell sets the record straight. He examines FDR`s New Deal policies in detail. He explains the mindset of the policy makers. He outlines the policies and their intended results. Then of course, he discusses the actual impact of these policies.

Unemployment never recovered during the 1930s. Yet Roosevelt is credited with curing the economic woes of The Great Depression. The New Deal policies also caused an explosive growth in the US government, which continues to this day. The policies of the New Deal, are still very much affecting the modern era.

During an economic collapse, the public outrage usually demands drastic actions. Wars and despotic rulers have often emerged after economic disasters. The New Deal would never have been accepted, during an era of prosperity. One can not help wondering what sort of big changes would take place, if the current US government defaulted.

In summary, this book is well worth reading. On the negative side, I would have liked a discussion, on why FDR`s New Deal enjoyed such popular support. Even today, the New Deal is still held in high esteem.

One person found this helpful

Ross

Why The New Deal Failed So Completely

Reviewed in the United Kingdom on December 13, 2007

Verified Purchase

Roosevelt rose to power promising to respond to the depression that had sent the US economy into a tailspin. However such was his sheer ineptitude he managed to prolong it so that it became the greatest downturn in US history.

Time and time again FDR and his arrogant underlings were driven by ideology to impose obstacles to the economic recovery of the country. In an era where unemployment was rife New Deal policies made it almost impossible for businesses to employ more staff. New Deal demagogues made it clear that businesses were the enemy and were then mystified as to why investment plummeted.

In an era of chronic banking weakness the New Dealers demonised the strongest banks and encouraged the smaller more precarious ones to continue as they were. With unemployment sky high the New Dealers introduced labor laws that strongly discouraged businesses from expanding. With food shortages widespread FDR's agriculture policies resulted in food being burnt rather than sold. With black unemployment especially high Roosevelt introduced laws enabling compulsory unionisation, with the unions free to block blacks from joining. Almost every New Deal policy had the result of prolonging and deepening the depression.

This was accompanied by some outrageously authoritarian tactics by the administration, for example jailing business people for violating the price fixing agreements that were brought in, in one case a dry cleaner was imprisoned for three months for the 'crime' of charging five cents less to clean a shirt than the price government had fixed. They really did believe that they had both the ability and the right to micromanage the economy in this manner.

Towards the end of the book Powell goes away from the purely factual accounts of the New Deal failure to speculate on what would have happened if it had not been for the New Deal, if FDR had not managed to diminish the world's greatest democracy so thoroughly could the rise of fascism and communism worldwide have been avoided? It is an interesting question.

As a quick note about the previous review of this book on the 10th of July 2007, the writer of that review has clearly not read this book and is simply advertising her political prejudices by pretending to have done so. Anyone who thinks that Powell is engaged in partisan point scoring has plainly not read the book as he is almost as devastating about Hoover's errors such as imposing tariffs and tax rises and his criticism elsewhere of other Republicans such as Theodore Roosevelt and George W. Bush are on record.

6 people found this helpful

birchden

Useful info on the New Deal, but flawed economics

Reviewed in the United Kingdom on March 4, 2015

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On the plus side this handy and readable book provides a useful review of the New Deal, its personalities and the frankly unhinged policies that it spawned; for example, was it really wise to destroy food when people could barely afford to eat?; did it make sense to imprison a laundry man for charging 5c too little to clean a pair of trousers? - and so on.

All this is useful, because too often, especially in the mainstream media, we are fed a monotonous diet of New Deal propaganda.

On the other hand, the book does contain a serious flaw, in that it uncritically accepts the Milton Friedman monetarist view of the depression; namely that if only the Fed had been a bit more expansionary, all would have been well.

But how can a government agency creating new claims on goods and services without any corresponding production - in other words 'money out of thin air' - be of any assistance to economic growth? Not surprisingly, the author does not say.

So yes, by all means read this for an accessible discussion of the New Deal, but look elsewhere for some economic background to the 1929 depression.

8 people found this helpful

Interested Buyer

Informative.

Reviewed in Canada on April 6, 2018

Verified Purchase

Generally follows my beliefs and understanding. I got a new appreciation for the interplay of Politics and Economics. Good read.

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