The Forgotten History of the Great Depression

by Derrick G. Jeter

Franklin Delano Roosevelt is a hero—the savior of America. This is how he is portrayed in history books and taught in schools. It was FDR and his brain trust—his intellectually elite advisors—who are credited with pulling America out of the greatest economic crisis since the country’s founding. Every American student, since the death of FDR in 1945, has been taught that the New Deal’s alphabet soup of government programs was the reason America arrested her fall into the economic abyss, was able to claw herself out of that hole, and march proudly into a future of unimagined prosperity. This is the standard line regarding FDR and the Great Depression. So mythic has FDR become to the American mind that if we had to replace Theodore Roosevelt’s image from Mount Rushmore we’d do so with his cousin, Franklin. But is the myth true? Did FDR and his progressive governmental largess save America during the Great Depression?

Few historians have bothered to ask these questions. Fewer still have been able to penetrate the mythic haze that shrouds FDR and his big government ideas. That is until Amity Shlaes and her wonderful book The Forgotten Man: A New History of the Great Depression.

Shlaes take her title from a famous essay written by William Graham Sumner, a Yale philosopher, “The Forgotten Man.” Sumner had written his essay as a polemic against the progressives of his day—those who believed in and worked for a more collective (socialistic) society through the auspices of the federal government—and in defense of classic liberalism advocated by our Founders. In his essay, this is how Sumner intended the phrase:

As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X, or in the better case, what A, B, and C shall do for X. . . . What I want to do is to look up C. I want to show you what manner of man he is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of. . . .

He works, he votes, generally he prays—but he always pays. . . .[1]

In 1932, Ray Moley, one of Roosevelt’s advisors, picked up on the phrase and inserted it into Roosevelt’s first speech as a presidential candidate. But Moley distinctly intended the phrase to mean the exact opposite than Sumner’s intention. “If elected,” Shlaes writes, “Roosevelt promised, he would act in the name of ‘the forgotten man at the bottom of the economic pyramid.’ Whereas C had been Sumner’s forgotten man, the New Deal made X the forgotten man—the poor man, the old man, labor, or any other recipient of government help.” [2]

To aid this new forgotten man (X), Roosevelt need to make a scapegoat out of C—the individual, the entrepreneur, the businessman, “the Depression-era man who was not part of any political constituency . . . who paid for the big projects, who got make-work instead of real work.” [3] Or as Shlaes quotes an editorialist in Indiana in 1936: “‘Who is the “forgotten man” in Muncie? I know him as intimately as I know my own undershirt. He is the fellow that is trying to get along without public relief and has been attempting the same thing since the depression that cracked down on him.’” [4]

So successful was Roosevelt in altering the perception of the true forgotten man—C—that the Xs of the 1930s began to view themselves as the forgotten man. But forgotten no longer, for Roosevelt would remember them and care for all their needs, as this song from the time illustrated: “Roosevelt! You’re my man! / When the times come / I ain’t got a cent / You buy my groceries / And pay my rent!” [5] The Xs of our day saw a new Roosevelt with the rise of Barack Obama and expressed a similar a hope—a hope that they would now be remembered: “I won’t have to worry about putting gas in my car I won’t have to worry about paying my mortgage. You know, if I help him [Obama win the presidency in 2008], he’s gonna help me.”[6] Of course the rent, gas, and mortgage payment comes from the pocket of the true forgotten man, C—forgotten then and forgotten today.

The Forgotten Man is a meticulously researched and well written account by one of America’s leading economic thinkers and writers of what FDR, his brain trust (who were virtually all committed socialist), and the New Deal actually wrought during those terrible years between 1929 and 1940. As one measure of economic depression and growth, Shlaes included the average yearly unemployment percentage before each chapter. In chapter one, which opens in January 1927, the unemployment rate was 3.3 percent. By Black Tuesday, October 31, 1929 unemployment was moving toward 5 percent. A few years later, in 1931, now deeply into the Depression, unemployment was 17.4 percent. Within a couple of years the average was 23.2 percent and fluctuated in the low 20s until the late 1930s. In 1936, the unemployment dropped to 15.3 percent and hovered there within a few points up and down for the remainder of the decade.

Shlaes conclusion was FDR and his philosophy of intrusive government really prolonged and deepened the Depression—he made it “great.” The Forgotten Man in this way becomes more than just a history of a particular time in American history; it becomes a warning for today. The good intentions of A and B to help X will, in the end, not help X much, but will lower the income and reduce the liberty of C. It is simply true that you will never enrich the poor by impoverishing the rich. Yet, progressives in government never learn this lesson, or don’t care.

Though Shlaes doesn’t address in detail the catalyst for ending the Depression, it is clear from her final chapter that FDR and the New Deal had very little to nothing to do with saving the country from economic ruin; the very real prospect of world war did. Ironically, we could say that Hitler had more to do with ending America’s Great Depression than FDR did. If this is correct, or even close to the actual historic fact, then what we’ve been taught about FDR, the New Deal, and the Great Depression has fallen fall short of the truth.

But as Shlaes writes, “Luck makes talent look like genius.” And few presidents have been as lucky as Franklin D. Roosevelt, both in the 1930s and throughout history.

[1] William Graham Sumner, “The Forgotten Man,” quoted in Amity Shlaes, The Forgotten Man: A New History of the Great Depression (New York: HaperCollins, 2007), epigraph.

[2] Shlaes, The Forgotten Man, 12.

[3] Shlaes, The Forgotten Man, 13.

[4] Shlaes, The Forgotten Man, 13.

[5] Shlaes, The Forgotten Man, 251.

[6] Peggy Joseph, YouTube video, October 31, 2008, (accessed March 7, 2010).