Emerging Issues: Are We Suckers for 'Warped History?

December 7, 2009

In the policy debates about the current Great Recession - debates in which cities and towns have much at stake - references to the Great Depression and the New Deal play important roles.

Without some understanding of the 1930s, citizens and officials alike are susceptible to arguments from what Washington Post book reviewer Jonathan Yardley calls "warped history that gets us into trouble" (July 12, 2009.) To paraphrase Ben Franklin, if we don't know something, we'll fall for anything.

Christina Romer, chair of Obama's Council of Economic Advisors, knows something. She has a considerable record of scholarship about the economic policy of the Depression era. In a June guest column in "The Economist," she recounted the errors of 1937: "an unfortunate, and largely inadvertent, switch to contractionary fiscal and monetary policy." Efforts to reduce the federal deficit and to increase bank reserves plunged the economy downward. She urged that we not make the same mistakes again.

In this case, there seems to be wide agreement among scholars and analysts that these policy turnarounds in 1937 did put a damper on a budding recovery. This consensus doesn't tell us what to do, but it does provide perspective on our options regarding the gargantuan federal deficit and debt.

In other cases, the historical record is more complex and contested, and that's where an acquaintance with the evidence, the stories, and the controversies becomes useful.

Interested readers, in search of better understandings of the 1930s, have a large pool of books to draw from.

Amity Schlaes, for example, made a big splash with "The Forgotten Man" (Harper Perennial, 2008.) She declares that neither the "standard history nor the standard rebuttal" about the effects of the New Deal are correct. Yes, the stock market crashed, but the "deepest problem" was governmental intervention in the marketplace. Schlaes lets her stories - from the suicide of a despairing 13-year-old to the legal troubles of the Schechter brothers' poultry business - carry her argument.

"Politico," a Washington insider news source, reported on April 21st that the book was a best seller among House Republicans because it provides "red meat for a party hungry for empirical evidence that the Democrats' spending plans won't end the recession."

In sharp contrast, Arthur Schlesinger Jr.'s classic, The Coming of the New Deal (Houghton Mifflin, 1958), is unabashedly positive about FDR's politics and policies. It focuses on 1933-34 and implementation of the policy reforms of the "first hundred days."

Robert Leighninger's "Long-Range Public Investment" (University of South Carolina Press, 2007) documents the physical legacies of the New Deal public building programs, relating the national policies to on-the-ground local outcomes that are often still in place. Anecdotes and systematic tabulations of local products of these programs include parks and zoos, city halls and fire stations, museums and waterworks. There are, for example, pictures of the law barracks at the Citadel in Charleston, the Armory in Seattle and the reconstructed and modernized French Market in New Orleans. The book's second part is devoted to policy analysis, assessing the arguments for and against such investments.

An online search for "New Deal/Great Depression" finds numerous college syllabi and reading lists, as well as generous reflections and narrative overviews by academics who teach these courses.

Richard Nathan has done everyone a favor by producing a sprightly 20-page essay about his own reading on this topic. He recently retired from a distinguished career in public service, including the past 20 years as director of the Rockefeller Institute of Government at State University of New York. Nathan recommends that people read a lot and "rub the books you read up against one another."

Wanting to recommend a few works from the many he mentions, Nathan picks books by Schlaes, Adam Cohen and David M. Kennedy. Cohen's "Nothing to Fear: FDR's Inner Circle and the Hundred Days that Created Modern America" (Penguin Press, 2009) "highlights five New Dealers ... profiling each with emphasis on what they did with and for FDR." Kennedy's "Freedom from Fear: The American People in Depression and War,1929 -1945" (Oxford, 1999) won a Pulitzer Prize for history. It covers the war years too and carries the burden and benefit of a balanced and definitive account.

Nathan observes that "there is, to this day, a deep divide about the New Deal and fundamentally the role of government in the national psyche."

Precisely because the topic is rife with ideological battle lines, however, an investment in substantial historical understanding is all the more imperative.

Details: The Nathan essay is available at the Rockefeller Institute website http://www.rockint.org by selecting "research" and then "federalism and intergovernmental relations."

Bill Barnes is the director for emerging issues at NLC. Comments about his column, which appears regularly in Nation's Cities Weekly, and ideas about "emerging issues" topics can be sent to him at barnes@nlc.org. Previous columns are on the NLC website, http://www.nlc.org, under the "About Cities" menu.