Saturday, November 8, 2008

The New Deal and the Great Depression

Financial commentators cannot go five minutes without reminding us that the current financial crisis is the worst since the Great Depression, so as we anxiously await the Obama team to parachute into Washington, it rather behooves us to consider the extent to which the Great Depression and FDR's response to it are valid models for our present predicament.

In recent weeks, I've seen and heard the economic journalist Amity Shlaes interviewed on several occasions (including on the NewsHour and The Daily Show) to discuss her book on the Great Depression, The Forgotten Man. I had never heard of Amity Shlaes but after listening to her explanations of FDR's foibles and of the danger when the government "does too much," I wasn't surprised to learn that she was once a member of the WSJ's editorial board.

It appears that her sudden ubiquitous presence in the national media is irritating some of the folks I turn to for economic insight. Eric Rauchway takes her to task for distorting Roosevelt's record, following up on his review of her book. Angry Bear blasts her for disseminating Republican propaganda. And Paul Krugman expands the critique to include FDR-haters at-large.

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