I’ve just finished a book recommended to me — The Forgotten Man: A New History of the Great Depression. With all the talk about the current recession, I have heard many people drawing comparisons to the Great Depression so I wanted to find out more about it to get a solid perspective. Author Amity Shlaes compiled enormous amounts of research and delivers an intensely detailed month-by-month depiction of the events, personalities, politics, and economics from 1928 to 1940. Here are some of my thoughts.
When the book starts out with a story of a 13 year-old boy who kills himself so that he could save more food for other members in his family, you know that any comparisons of our current recession to the Great Depression is wholly unjustified and disrespectful. I didn’t know how close the US came to converting to Communism or Socialism during the early years of the Depression, but it makes sense when you think about it. Since the country was thrown into a huge tailspin and desperation was everywhere, it seems that was the best time to reconsider if capitalism really does work and see if there is a better alternative.
The author makes a good case for why the early moments of the Depression became deeper and worsened due to the government trying to “fix” things. With this point, I do feel we are seeing similarities between what the Depression administration did and what the current administration is doing now. Of course some level of stimulus is needed to keep markets from stopping entirely, but capital markets work best when they are allowed to reach their equilibrium naturally.
I thoroughly enjoyed this book. The research and attention to detail is amazing, so much so that each of the characters draws into their place in history, thank you Amity Shlaes. I find it hard to compare what we are going through today to those who lived through the Great Depression and I’m very thankful that we won’t have that experience.