The Great Depression tested America’s political organizations like no other event in United States’ history except the Civil War. The most famous explanations of the period are friendly to Roosevelt and the New Deal and very critical of the Republican presidents of the 1920’s, bankers, and businessmen, whom they blame for the collapse. However, Amity Shlaes in her book, The Forgotten Man: A New History of the Great Depression, contests the received wisdom that the Great Depression occurred because capitalism failed, and that it ended because of Roosevelt’s New Deal. Shlaes, a senior fellow at the Council on Foreign Relations and a syndicated financial columnist, argues that government action between 1929 and 1940 unnecessarily deepened and extended the Great Depression.
Amity Shlaes tells the story of the Great Depression and the New Deal through the eyes of some of the more influential figures of the period—Roosevelt’s men like Rexford Tugwell, David Lilienthal, Felix Frankfurter, Harold Ickes, and Henry Morgenthau; businessmen and bankers like Wendell Willkie, Samuel Insull, Andrew Mellon, and the Schechter family. What arises from these stories is a New Deal that was hostile to business, very experimental in its policies, and failed in reviving the economy making the depression last longer than it should. The reason for some of the New Deal policies was due to the President’s need to punish businessmen for their alleged role in bringing the stock market crash of October 1929 and therefore, the Great Depression.
Shlaes does not support the politics of Hoover and Roosevelt; however, she supported Wendell Willkie’s vision. As the president of Commonwealth and Southern, a private electric company, Willkie fought against Tennessee Valley Authority(TVA), a government-owned electric company, over the degree to which the TVA would compete with the private sector in the sale and distribution of electric power. Willkie went on challenging the hostile business policies of the New Deal by arguing that growth and production fit better the goals of the U.S. The government role should be to encourage business, not to opposite it by making war against it. According to Shlaes, Willkie was the most eloquent critic of the New Deal because they shared the same view on the government role in the economy. He was able to convince the Republicans to nominate him for the 1940 presidential election. He ended up losing against Roosevelt because FDR had more political experience. Shlaes argues convincingly that a key to Roosevelt’s success was his mastery of the political process and especially his ability for passing legislation that would create groups sympathetic of Democratic candidates. These included unemployed people by the Works Progress Administration, unions organized by the Wagner Act, elder citizens by the Social Security Act, and farmers by agricultural aids.
Shlaes also shows that she is more sympathetic to the Willkie’s forgotten man than...