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Depressed by Government
Amity Shlaes's New History of the Great Depression.


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In her new book, The Forgotten Man: A New History of the Great Depression, Amity Shlaes, serves up the Great Depression as you’ve never known it — challenging conventional wisdom, telling a gripping story of the triumph of the American spirit and the folly of big government.

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Kathryn Jean Lopez: Who is the forgotten man?

Amity Shlaes: Some readers will know the film, My Man Godfrey, with Carole Lombard and William Powell. The forgotten man in that movie was a man who lived in a tramptown — someone at the very bottom during the hard years of the Depression. That is the man FDR also originally described when he gave his famous “Forgotten Man” speech on the Lucky Strike Hour.

But the phrase also had a special political meaning in the period. In a campaign speech in 1932, Roosevelt spoke of the forgotten man “at the bottom of the economic pyramid.” His speechwriter, Ray Moley, wrote to his sister that he couldn’t remember where he got the phrase. But it did have a provenance.

In the 1880s a Yale philosopher named William Graham Sumner had spoken of another forgotten man. Sumner described his forgotten man algebraically. A, he said, wanted to help X. Nothing wrong with that. B also wanted to help X. The problem occurs when A and B get together and pass a dubious law that coerces C into cofunding their project for X.

C is the forgotten man in this instance. As Sumner wrote: “He works, he votes, generally he prays — but he always pays, yes above all he pays…He keeps the production going on.” C is the man, he also wrote, who is “never thought of.”

During the Depression many people still recalled Sumner’s forgotten man. Throughout the decade politicians debated which forgotten man, C or X, was the true forgotten man. Many believed that Hoover’s and FDR’s efforts on behalf of one forgotten man was creating a second. Certainly the New Deal created modern interest-group politics — what Sumner, even before the income tax, the Great Society and Medicare Part D had the foresight to call “jobbery.”

There are other forgotten men in my book — one is Wendell Willkie.

Lopez: Who were the Schechters and why were they important?

Shlaes: The centerpiece of the New Deal was the National Recovery Act — or NRA — and it was a crazy piece of legislation. Consumer choice was illegal under some of the NRA codes. So was charging prices that were deemed too low.

Federal authorities prosecuted the Schechters, a Brooklyn family of chicken dealers, for violating NRA codes. One of the things the Schechters were prosecuted for was allowing customers to pick which chicken they bought. Another was for charging low prices.

This brave set of brothers fought back all the way to the Supreme Court. In writing the book, I relied on the court documents — their testimony was incredibly moving. At the end, I spoke with their descendant, the historian Glen Asner, to get a general feel for the family.

We’ve all heard of Clarence Gideon, the man who petitioned the court for the right to counsel — Tony Lewis wrote a famous book about him, Gideon’s Trumpet. The Schechters are the Clarence Gideon of the shopkeeper. The Supreme Court sided with them, and for the little man. The NRA was overturned. If it had not been, American business would be more like American agriculture.


Lopez:
Was the Depression Herbert Hoover’s fault?

Shlaes: To some extent. He’s the first troublemaker in my book. He was a sort of golden boy, the Bill Gates of his day. He was a mining engineer at a time when wealth was created by finding gold in the ground. And he was one of the world’s most talented. Luck makes talent look like genius and he thought he was a genius.

Lopez: Was the New Deal wholly unnecessary?

Shlaes: When I sat down to write this book I didn’t know. I used to work at the Wall Street Journal where we’d kick our toes against these great edifices…the Wagner Act, the Securities and Exchange Commission, federal-deposit insurance. Bob Bartley of the Journal didn’t like deposit insurance because of the moral hazard it created; he agreed with Andrew Mellon. Then there were the Civilian Conservation Corps and other New Deal programs that seemed questionable.

I came out however believing these entities were good or neutral — or, at the very worst, bad precedents. Having an institution like the SEC helps sustain America’s relative competitiveness in international markets, though that surely is under threat now. Even deposit insurance, the holy of holy targets, was not so bad. The worst part of the Hoover-FDR legacy was the concept that life is just a series of Katrinas with lulls in between and government needs to be present to manage these Katrinas. In fact the lull is the important part, it is where the American growth inheres.

The second worst part is the idea that the job of Washington is to create defined constituent groups and ignore the individual — that forgotten man.


Lopez:
Could your book be subtitled The Case for Classical Liberalism?

Shlaes: Yes. Where is it in our lives? I’m a liberal. It was a big error to use the word “liberal” to smear other people with. We’re the liberals! We stand for individualism – U.K.-Whig style. The liberal in this book is Wendell Willkie; as part of his political education, his girlfriend, Irita van Doren, made him write book reviews about Whigs.



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