The Medium-Sized Book That Started This Big War (Against the New New Deal)


David Weigel at the Washington Independent profiles the book, The Forgotten Man: A New History of the Great Depression, and its author, Amity Shlaes, which he credits with energizing the intellectual and political opposition to the new age of bailout and stimulus.


There are 200,000 copies of the The Forgotten Man in print, a dramatic success for a work of economic history. Shlaes has written a gripping revisionist history of the New Deal, told through the interweaving lives of New Dealers and prominent Americans of the era…..

According to Shlaes, who builds on decades of New Deal criticism and research into the lives and work of FDR's brain trust, the programs actually lengthened and aggravated the Depression because of regulation that ate away at American entrepreneurship and profit motive, and because of haphazard implementation that drove businesses and banks to uncertainty and panic. The "forgotten man" of the title is the American whose income and effort were taken, against his will, to pay for the experiments and entitlement programs of the New Deal. The New Dealers, in this telling, were well-meaning and smart people who did a lot of damage and little good, and understanding that is key to understanding why government intervention in the economy and big-spending stimulus packages are doomed to fail.

Shlaes did not invent these arguments. She's more a journalist reporting on a decades-old controversy than a pathbreaking economist or historian. Still, as Hayek knew, such popularizers of big ideas do the most to directly influence public opinion and policy. Nor is she even the only recent author making such anti-New Deal arguments; but she has certainly been the most influential one. Weigel gives examples of her shaping the thoughts of politicians from Gingrich to Giuliani.

Shlaes is hard-edged about the political lessons she thinks should be gleaned from her work:

Shlaes wants to wave Republicans off from making the kind of rhetorical or ideological compromise with the New Deal that Republicans made, for example, during the 2005 Social Security fight. "This is a time for choosing," she said on Monday, "and I'm not the first person to say that or to use that term in saying so. Reagan could afford to like FDR because, at the time, it seemed possible to keep our entitlements if we reformed them. It turns out that we can't afford entitlements. We have to choose between Reagan and Roosevelt. You can't just say you like both Reagan and Roosevelt."

Reason magazine interviewed Shlaes about her influential book in its January 2008 issue.