The Great Depression and the New Deal: A Very Short Introduction

I've become completely addicted to Oxford University Press's Very Short Introduction series. I primarily get them to read at lunch (I usually read heavier books on my commute, but as I walk around doing my lunchtime chores -- yes, I read while I walk -- I like to carry these lighter books, and they make great back ups to my main book if I finish them). Just about every book that I've read in the series has been good and several of them very good. Only one or two have been bad. This book provides a solid survey of the Great Depression and the New Deal. There have recently been a couple of exceptionally silly books that have argued that the New Deal actually extended the Great Depression. These books have done this by ignoring many of the facts and falsely attributing the 1937 recession to the New Deal rather than dramatically decreased federal spending. Rauchway neither ascribes more to the New Deal than it deserves nor denigrates it in ways that the fact will not support. He also presents a very balanced portrait of FDR. Roosevelt is perhaps my favorite president; over the years I've read nearly 30 books on his life and presidency. One of the most closely guarded secrets is that FDR was not a particularly liberal president, at least on economic matters. He had liberal ideals, in that he did not believe in trickle down theories and felt that public policy had to be crafted to benefit all Americans and not merely just a few at the top. He was actually an economic conservative, though he was also a pragmatist instead of an ideologue, which meant that he had no preconceived notions of what had to be done to help America get out of the catastrophe that has beset the nation. The book does a fine job of highlighting many of the causes of the economic meltdown, explaining the international situation better than many such books. I think he was a bit stronger on the non-Wall Street causes, but perhaps that was intended as a corrective to many accounts that focus too heavily on the stock market. The book also does a very fine job of chronicling the alphabet soup of New Deal programs and the rationale behind each one. He also excels at explaining the nonideological character of the New Deal. In fact, the biggest opponents of the New Deal from both the Right and the Left were ideologues, who felt that on principle the crisis should be dealt with in one way or another. Roosevelt took a practical approach, trying a wide variety of things in order to ease the situation. If something didn't work, he abandoned it and tried something else. But he also strove to put into place a number of changes in our government and society that would safeguard the country from future catastrophes. Rauchway is very evenhanded in his treatment. He accurately shows Roosevelt as a president who resisted some of the larger changes instituted by Congress -- the FDIC is the most famous example -- while explains the context of some of FDR's least distinguished momen

Most of us are taught via our public schools that the Depression of the 1930's was caused by the stock market crash, bank failures, USA's international economic policies, the drought, and the reduction of revenue generation via the purchasing of goods. Even though each of the afore mentioned are contributors to the financial/economic downturn in America the root cause of the banks closing and the stock market crash are rarely ever discussed. This book finally examines the effect of government intervention in the stock market, The Smoot-Hawley Act, Hoover's economic policies, the Federal Reserve, and Roosevelt's New Deal. The Great Depression was not a result of a series of "unfortunate events" taking place around the same time. It was series of stupendous bogus government created miracles with its appeal to class envy and hatred, treating government as a milk-cow with 3 trillion teats. This book is eerily timely and well worth the read if you are someone who wants to understand the fragile workings of our economic systems.

The Great Depression and The New Deal is a new title from Oxford University Press in its terrific series of Very Small Introductions. This topic will draw considerable debate from those interested in the factional aspects of economic theory but the author (and I) leave that for the reader to judge for themselves. Eric Rauchway is a Professor of History at the University of California, Davis and has done a remarkable job of putting together an interesting little book which, without pretending to present everything, covers this remarkable period with both old an new perspectives. Starting with the end of The Great War, Rauchway goes into the boom time of the Roaring 20's and into the Wall St Crash of 1929. He points to excessive levels of cheap credit and high levels of debt as a major factor in the impact the Crash had on America, which parallels the present Global financial Crisis. Efforts by the Hoover administration to contain the effects failed and by the time Roosevelt took office in 1933, unemployment stood at around 25%. With a clear mandate and a major crisis on his hands, Roosevelt and his crew acted swiftly and instituted a series of reforms to stabilise the problem in order that it could be acted upon. To do this he took on the banks and brokers in defiance of those who considered him a traitor to his class. Many would have seen it the other way around but it was a brave move anyway you look at it and it had to be done. The book goes on to describe many of the programs such as the CCC and CWA which took on so many of America's unemployed. Purists will argue that this didn't solve any problems but that point of view fails to take into account the fact that these programs had three positive effects. Firstly, they helped to prevent the population from starving. Secondly, they prevented many people from turning to crime and thirdly, they built an enormous amount of infrastructure, ranging from dams to dog pounds. Rauchway doesn't argue that these programs were without their shortcomings and illustrates how some were directly open to corruption but he does argue - and for what it's worth, I agree - that the US was better off for having them, even if they could only ever be temporary. Unemployment fell from 24% to 9% in five years, only spiking again for the 1938 recession. The truth of it is that the economy didn't recover until wartime production took up the slack and money started moving again. Anyone who doubts how severe the conditions of the time were would do well to think of the small shanty towns which grew up around major cities as homeless people moved around looking for work. A quarter of the population was without support. People starved to death. This is a great little book and as good an introduction to the subject as I can imagine.

In reading this book what stands out most for me are the author's explanations of the causes of the Depression. Particularly when he talks about the fact that people were carrying a large amount of debt just before the depression. It reminds me of today and makes me wonder how we're going to get out of the present mess without WWII to bail us out. I also found it interesting that the New Deal was a continuing series of experiments not just one project. There's a great deal here that I found new.