Book Analysis: The Forgotten Man
Board: Macro Economic Trends and Risks

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By somethingwicked
August 3, 2007

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I've always found it interesting that, much as we like to think that those of us alive today are somehow unique - that the problems and challenges we face are those of a "modern" era, never before seen - that, really, nothing of the kind is true. Read the Bible or the Koran or the Greek tragedies, or any of the other writings dating back into antiquity and you quickly conclude that human behavior has been the one constant down through the ages.

So with the realization that there's never really anything new under the sun, I tend to search for clues to the future... by looking at the past.

THE FORGOTTEN MAN, by Amity Shales, published a few weeks ago, is a fresh look at the Great Depression. Unlike most other histories of that time - most of which tend to focus either on the underlying economic policies of that decade or the plight of communities and individuals - this new history focuses mostly on the politics of the time. We all obviously are immersed in the politics of today, the day to day machinations of our politicians in government. But once we've moved past an era we tend to forget the partisan politics which informed it. And those who come much later usually have little sense for how things really were - the general history books inevitably touching only upon the major milestones. What's the old saw - it's the winners who get to write the history books...

So this book is a welcome addition, of an era which holds many lessons. It walks through the years of the thirties, touching upon the major issues and the political arguments of the time. It provides a fascinating glimpse into the political intrigues of the era, and the economic climate which precipitated them.

It underscores, for instance, the unsettled nature of labor and socialist doctrines vs. capitalism during the twenties and thirties. The Bolshevik revolution in Russia was little more than a decade old at the time and, depending upon where you sat, communism was viewed either as a threat or an opportunity. There were many idealist, leftist-leaning individuals back then - several of the men who later would become players in Roosevelt's administration visited Russia in 1927 to see what they could learn.

Although Shales doesn't really assert a partisan bias, the book does oftentimes paint Roosevelt as being self-serving and arrogant on a range of issues. During the interregnum, for instance, the period between the election in November 1932 and Roosevelt's inauguration in March 1933, when the incumbent administration had been emasculated by its lame duck status, Hoover repeatedly sought Roosevelt's assistance in dealing with the banking crisis then unfolding. Roosevelt demurred, feeling that the greater the crisis, the greater would be his mandate once he held the reins of power.

Or how Roosevelt attempted to expand the number of Supreme Court justices by simple congressional act - as opposed to a constitutional amendment - in order to diminish the power of the high court. This immediately after the nine justices on that court had unanimously overturned the NRA (the National Recovery Administration), the centerpiece of Roosevelt's recovery efforts during his first administration.

Hubris in government is apparently not new.

What I found most interesting was the almost strident anti-business stance that many in the government espoused. Business and employers became the scapegoat for all that was wrong. Andrew Mellon, the treasury secretary for ten years under Harding, Coolidge, and Hoover - the Alan Greenspan of his time - was indicted on tax evasion charges in 1932. He was exonerated a few years later, but his case was emblematic of the sorry view that many - including most in government - held of business and businessmen during the thirties. The notion that business must be integral to any economic recovery... just simply went missing for most of those years.

Back in the winter and spring, when the mainstream media first began to report our current sub-prime housing mess, it was interesting to watch the almost knee-jerk reaction from so many politicians, from both parties, in true populist style. It didn't have anything to do with rational economics. It was all about misbegotten schemes to keep people in their homes - we'll worry about the math later. That, and finding someone to blame.

It's always that way. Seems it always has been.

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