The New Deal

Thursday, October 30, 2008

Amity Shlaes, senior fellow at the Council on Foreign Relations and the author of The Forgotten Man: A New History of the Great Depression, discusses Obama's television program last night, the New Deal, and the silver lining in the dismal consumer confidence numbers.


Amity Shlaes

Comments [25]

Kevin Pike from Huntington

RE the discussion on socialism: why isn't anyone asking the question of progressive taxes? We've lived with a progressive tax structure for decades. When McCain charges Obama with socialism, why doesn't anyone ask him (McCain) about either a flat tax alternative or if he really believes that a progressive tax structure is socialist? McCain's charge against Obama on this issue is just silly.

Oct. 31 2008 10:43 AM
Joel Friedland from Forest Hills


Oct. 30 2008 12:03 PM
Josh from Brooklyn

The success of the new Deal is a huge myth. It was the war that got us out of the depression. Roosevelt did not stimulate production, he held it back. Rather than promoting growth, he actually made companies produce LESS in order to artificially increase prices. It was the military job creation that worked. He made farmers use less of their land and instituted quotas on how much they could sell. This not only caused more unemployment, but then they couldn't afford the elevated price of goods. Unemployment insurance was only for white male industrial urban workers. Notice how 1937 onward was much worse off then 1933. Notice how the depression in western Europe was over by 1934-1935 when their production levels reached pre-1929 levels and employment levels returned to normal.

Oct. 30 2008 11:06 AM
Rowland Hill from Columbus Ohio

Who will administer the home mortgage bailout?
The same people/banks/mortgage firms who indulged in the predatory lending/bad loans in the first place? Will they again be raking in commisions?

Oct. 30 2008 10:50 AM
Hugh from Crown Heights

So the Lehrer show doesn't like a challenge. I posted a comment noting that Shlaes has been dead wrong for most of the past year. Six weeks ago she was denying that the economy was entering a recession. She has repeatedly made outright false statements about Democratic policy. She is wrong in her assertions about US corporate tax rates. And she is a bigot. Her statements on Muslims, particularly regarding the Palestinians. These statements can be found on her own website.

But the Lehrer Show pulled my comment. Telling and not surprising. Those of us with memories still remember Mr. Lehrer's comment that Israel has done "some not very nice things" in the occupied territories.

Oct. 30 2008 10:42 AM
Paulo from Paterson, New Jersey

I've heard similar claims about the New Deal, and the fact that other countries that took a more "hands off" approach pulled through the Depression faster indicates that there is some truth to this. Britain got back on track much earlier than we did.

The New Deal stifled the free market and made big corporations bigger and more entrenched. But, that said, it brought calm at a time when calm was needed. I think if Roosevelt had not come in during 1933 with a sort of soft socialism, the country, out of fear, would've moved for something far more disturbing to the far left or the far right.

Oct. 30 2008 10:40 AM
Joel Friedland from Forest Hills

Ms. Schlaes makes the arguments of the Right against the accomplishments of the New Deal. Her viewpoints are presented everyday on Fox, CNBC, MSNBC, and PBS from spokespersons from the American Enterprise Institute, the Mies Institute, Americans for Tax Reform (Grover Norquist's front organization) and many others.
She presents her arguments in a less argumentive way than they, so can seem pleasant, just like sweet odors can mask the bitter almond of cyanide.

PLEASE DO NOT GIVE THESE PERSONS -- including Ms. Schlaes -- any additional credibility. They are undeserving of it. Their mal, mis, and nonfeasance serving W and the Right while in government is what has caused the mess we are in.

KEEP HER OFF THE AIR. If need be, have Paul Krugman -- and anybody he recommends -- on everyday. It is not BALANCE to have folks like Schlaes on. It is disserving your audience.

Oct. 30 2008 10:39 AM
AWM from UWS


Hey you're in luck! He did find someone to rebutt her... McCain 8 years ago!

Oct. 30 2008 10:36 AM
keith from hell's kitchen

Please Brian do not allow this lady to make these statements unchallenged. She is obviously wrong about the New Deal (it worked) and the no holds barred free market (it doesn't work).

I'm not always a fan of having two guests argue for about 12 minutes, but that is a better alternative to one pundit with an obvious leaning being allowed say whatever they want.

Oct. 30 2008 10:36 AM
Taher from Croton on Hudson

Thanks Brian for bring us another "Free economics market" hack. We need to hear more from those ideologues who continue to defend a failed economic model. Yes halloween is right around the corner.

Oct. 30 2008 10:33 AM
Norman from NYC

Progressive taxes were first advocated by Adam Smith, who said that those who got greater benefit from society should pay a greater proportion of their income to support society.

Adam Smith thought that luxury was a waste of economic resources, too.

Oct. 30 2008 10:33 AM
detv8 from nyc

is somebody going to rebutt this nonsense? brian since you won't, have you invited someone to?

Oct. 30 2008 10:32 AM
Voter from Brooklyn

Did McCain just claim mortgage payments were taxes? It was hard to hear, but that's what I heard.

Oct. 30 2008 10:32 AM


Has Shlaes ever had a job other than pundit and author? Has she ever had to run a business or had to face the pressure of working from paycheck to pay check? She sounds like she has a trust fund or something.

Oct. 30 2008 10:32 AM
Voter from Brooklyn

Perhaps I don't know enough to fully comment on this, but this argument seems familiar that London is a better environment for markets and investors.... I remember this argument being made when they said markets, banks, investors, etc. were over regulated with Europe being friendlier... Look where our overregulated markets got us.

Oct. 30 2008 10:31 AM
hjs from 11211

i always enjoy hearing from the right wing. she gives me confidence that the left is correct.

due to loop poles in the tax law the USA don't not have one of the highest corporate tax rates

Oct. 30 2008 10:30 AM
gene from NYC

shlaes is full of bunk! the corp rate in the USA as written is the highest but thanks to loop holes what US Big Corps actually pay is lower then any other developed country!

Oct. 30 2008 10:29 AM
KC from NYC

So if you can't legislate recovery, can we have all the billions of dollars we've poured into Wall Street for "liquidity" over the past couple decades back? Hey, if they don't need our money, that's wonderful news. Thanks.

Oct. 30 2008 10:29 AM
Norman from NYC

Uwe Reinhardt has a blog on the New York Times Economix Blog. It's pretty good.

Reinhard asked, if increased taxation diverts resources from private investments in golf resorts into government investments in infrastructure, schools, college education and research, does that retard growth?

Oct. 30 2008 10:28 AM
LeoinNYC from SoHo

McCain's plan, with it's tax cuts for the rich presupposed that it is the lack of investment capital that is slowing the economy. Isn't it really based on a lack of consumer spending because stagnant wages, high unemployment, untenable healthcare costs and lack of long-term confidence? Why would companies build more widgets and hire more employees if no one can afford to buy them?

Oct. 30 2008 10:28 AM
Amy from Manhattan

Companies couldn't reduce wages because of gov't. interference in the '30s? Had there been a decade or 2 of wage stagnation before the Depression the way there has been in our time? Reducing wages now would be disastrous, on top of the disaster we're already having.

Oct. 30 2008 10:27 AM
detv8 from nyc

wait for it.......corporate tax cuts....what else would you expect from a Bloonberg shill.
yeah sure, Mccain has the economic plan. go ahead, discredit the new deal. i would love to see what have happened otherwise.

Oct. 30 2008 10:27 AM


Doesn't London have a stock transfer tax?

Also in Europe, the feeling is that most shareholders are institutions so there is no need for rigorous ongoing disclosure. They have the same initial IPO disclosures as the U.S.

I attended a seminar last year hosted by Jefferies Investment bank.

Oct. 30 2008 10:26 AM
Kai from NYC

Does Ms. Shales believe that most of the jobs that the government could possibly be created (eg, "gree collar" jobs) will be done through the government? I believe that tax credits and subsidies to private business will be the driver of job growth.

Doubt cast upon her assumptions of today as compared to what WAS the old New Deal.

Oct. 30 2008 10:26 AM

John Maynard Keynes might have explained that the New Deal wasn't just offering make-work, it was stimulating the economy

Yet in her book, Ms. Shlaes chose to hides the effect of New Deal relief programs and makes it look as though the economy performed as poorly under Roosevelt as under Hoover of all the possible ways to measure unemployment.

And, why does she ignore about the enormous growth of the American economy since 1946? What about the seventy five years that have passed without another depression?

Oct. 30 2008 10:24 AM

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