Amity Shlaes and the New New Deal

The Liberal New Deal Fantasy

I don’t know why Amity Shlaes stirs such a vicious response to her articles about FDR’s New Deal. Well, actually I think I do. The New Deal is the foundation of the liberal world. If it were determined that control, experimentation, and manipulation of business by the  government were really harmful to our well being, that would undermine everything they stood for.

Readers of this blog know well that Shlaes wrote the very successful book about the Great Depression, The Forgotten Man.  She wrote an article entitled “FDR Was a Great Leader, But His Economic Plan Isn’t One to Follow” in the Sunday Washington Post. In my opinion this is a worthy sentiment, though I disagree with her proposed remedies. Since Obama has been called upon to emulate FDR, she pointed out the failures of FDR’s administration which included the prolongation of the Great Depression.

I understand that D.C. is a company town. But the responses to her article were mean spirited. Here are some typical responses form the Post’s web site:

Why does The Post keep running op eds from this right wing author, when her analysis of the New Deal is so misleading? Will you allow someone space to defend this vital series of initiatives (which only saved capitalism)? For a nice analysis of how wrong-headed this writer is, see “Shlaes Strikes Again,” at  washingtonmonthly.com.

You and your conservative/right-wing ilk made this problem lady, so sit down and shut up while the Democrats try and fix it.

Who is Amity Shlaes and why is the WaPost printing her ideological nonsense? Unlike her, I grew up in the poverty of the Great Depression and the ranting of her fellow conservatives back then. They were dangerous back then and they are more dangerous today. 

Paul Krugman has already debunked Amity Shlaes nonsense. Read his columns instead…

Amity in Wonderland! Where up is down and down is up.

Calamity Shlaes.

Liar.

Intellectual prostitute.

Wow! There were 322 responses to her article, which is a lot.

I will start out by saying I agree with Amity Shlaes’ assessment of the New Deal. I think her book is brilliant. What is interesting about the Post’s readers’ comments is that they are all blindingly one-sided in their condemnation of Shlaes. I’m going to guess that none of them read The Forgotten Man. I will also guess that none of them have read any book about the New Deal. I will also guess that most of them get their information from the Washington Post, the NYT, and TV. 

Shlaes is constantly criticized for things she doesn’t say. She has the failures of the Bush Administration heaped on her. And she generally has every liberal’s criticism of what they see as capitalism and Bush’s right wing agenda applied to her ideas. In their mind FDR saved the USA. 

In her book she does criticize Hoover too. He and his smart boys caused the depression. She goes on to say that FDR and his smart boys achieved temporary gains but couldn’t lick the persistent unemployment and eventually made it even worse in ’37-’38. She criticizes FDR’s Brain Trusters for finding their inspiration and policy in Fascist Italy and Stalin’s USSR.

The readers point to Paul Krugman who continues to criticize Shlaes for being a lightweight. He supposedly has “proved” her wrong. I would turn that around and say he’s the lightweight when it comes to Keynesian theory. He can cite no example of when massive deficit spending advocated by Keynes ever worked in the real world. And, whenever cornered he says, like many supporters of failed theory: it wasn’t done right, or there were intervening circumstances, or they didn’t spend enough. The best Krugman can do is cite a 1956 paper by E. Cary Brown of MIT which “proves” FDR failed because he didn’t spend enough. It contains no empirical evidence and reiterates the unproven and disproven Keynesian spending model.

I urge Shlaes’ critics to read her book, to read about the Great Depression, and not just swallow what “everyone” is saying. After all, the same people that got us into this mess, the so-called “smartest guys in the room,” are the ones who are telling us how to get out of it. That should make them pause.