The Truth About the New Deal

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It took academic economists and historians nearly three-quarters of a century to begin questioning the conventional wisdom about Franklin Roosevelt’s New Deal programs. Why, they rescued the economy from the Depression!, said the old view. These days, even mainstream economists like Harold Cole and Lee Ohanian have published a substantial corpus of peer-reviewed material that takes the conventional view through the shredder. And even most mainstream historians — even the execrable Doris Kearns Goodwin — now concede that the New Deal did not cure the Depression. The new story is that FDR’s initiatives “gave people hope.” And that World War II saved the economy from the Depression — another grotesquely false view.

Someone on my Facebook page who was looking for a dissenting view on the Depression asked me for some book suggestions. Here are some popular-level treatments that do a good job:

Robert P. Murphy, The Politically Incorrect Guide to the Great Depression and the New Deal.

Jim Powell, FDR’s Folly. (Not entirely sound on the Fed, but very good otherwise.)

Burton Folsom, New Deal or Raw Deal? (Again, not completely sound on the Fed, but excellent otherwise.)

John T. Flynn, The Roosevelt Myth. This one is from 1948. A very interesting read. Flynn is not entirely sound on economics — he has a soft spot for Hoover, who was just Roosevelt lite — but you’ll find a lot of useful information here.

I recently read on a libertarian site that the reason this book never became a national bestseller is that it took direct aim at both the welfare state and the warfare state. Actually, The Roosevelt Myth hit number two on the New York Times bestseller list.

The New Deal section of David Stockman‘s book The Great Deformation has plenty of excellent material you won’t find in any of these other books, and I highly recommend it.

Finally, I don’t include Amity Shlaes‘ book The Forgotten Man because, although it is an absorbing and non-worshipful discussion of the material and critical in places, it isn’t really a critique of the New Deal.

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