Ms. Shlaes recounts the lives of individuals both rich and poor, as well as, the proponents and critics of the New Deal. Nick Gillespie, editor-in-chief of Reason magazine inquires with Shlaes about her unique approach to the subject. The reader learns from the interview that the author found that people generally fell into one of these camps regarding history of the Depression generally:
It was the fortitude of the individual citizen and not President Roosevelt’s economic plan that sustained people throughout that era.
Supported Hoover and FDR's intervention into the economy;
Believed the intervention staved off fascism and communism after stock market crash of 1929;
Believed these interventions were a correction to moral corruption of 20's economic boom.
Believed Federal response of Hoover to tighten
Smoot -Hawley tariff blocking American Trade ; plus
FDR's New Deal caused the Great Depression.
NEW TO ANALYSIS OF THE GREAT DEPRESSION
Author, Amity Shaeles contends “that scholars have a tendency to concentrate of the role played by Keynesian economics and whether or not government spending can cure the economy when it's ill, long-term or short term. What scholars tend to overlook is the cost of uncertainty or the unknown unknowns”.
First, because of both Hoover but even more so Roosevelt's administration economic policies, Shlaes believes both administrations hurt the economy very much. Her research uncovered that people would not invest until they could say I know what's going to happen. The government under FDR was so unpredictable that what it was going to do was seen as a bold, persistent experimentation.
The second problem was what is called in economics the Public Choice Theory. That theory is that “government is no better or worse than a business.” It does not hold a moral high ground but it does seek to control it's market share.
ALL ABOUT POWER
Shlaes in this instance demonstrates that the government is like a crustacean. It will eat anything because it wants to survive. It has a tendency to be a cannibal. When looking back at the 30's, she found the government was no better or worse than the business sector. Rather, the government was determined to compete with the private sector for power.
The government was no more or less moral as a player.
This translated into a war literally about power. Ultimately the government won when establishing the Tennessee Valley Authority. FDR succeeded in staving off Wendell Willke - a private utility company executive who tried to compete with the government's takeover of power resources.
PUBLIC CHOICE ECONOMIC THEORY
The history of Public Choice Theory comes from the left according to Shlaes research. An Italian called Puviani who influenced Nobel Prize winner, James Buchanan, and the Marxist who argued about power in the form of colonial power embraced it. Public Choice Theory contends that rather than power players, the need is to focus on the small man.
In her illustrating examples of the Great Depression, Ms. Shlaes uniquely weaves the story of the wealthy players like Andrew Mellon and the little guy. She relates these stories to FDR's radio speech in which he coined (through his speech writer, Ray Moley) the story of the “Forgotten Man”. Mosely came up with the idea of the forgotten man through hearing a lecture and reading essays in the late 1800”s by Yale professor William Graham Sumner.
THE FORGOTTEN MAN -AN ALGEBRAIC EQUATION
Sumner's “Forgotten Man” was quite different from Roosevelt's in that Summer formulated this idea algebraically. He showed we have a philanthropic influence where A wants to help X at the bottom of the ladder. B wants to help X also. This impulse is a good one of charity or philanthropy.
The problem comes when A and B get together and pass a perhaps dubious law that coerces C to help with problem of X.
C is the forgotten man.
The man who pays, the man who prays, the man who is not thought of.
Shaeles then contends that in our current economic situation (this was a pre-election publication) “The Forgotten Man” will be the next generation.