Rauchway's book is an exceptionally valuable pocket summary of the major actions of the New Deal. It solves a big problem for those with small pockets: how to keep enough facts at close hand to answer, with authority, all the anti-Roosevelt nonsense and disinformation in circulation these days.

But Rauchway is also very good on Hoover. He is especially good on the illusions and self-delusions of the Depression's first years. Chief among these was the optimism, the ritual statements that things would soon get better, that prosperity is "just around the corner." This false optimism we don't hear expressed so much today; President Obama knows to avoid it.

But false optimism is, nevertheless, still present. It has become a mental habit. It is institutionalized and embedded in the professional economic forecasts, notably the official baselines of the Congressional Budget Office. These cannot admit the possibility that we are at the start of a new Depression, because there is no similar experience in the statistical record on which they draw. It will take time, grim experience, and determined argument, before the President and Congress come to grips with this.

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Eric asks a good question:

As the New Deal abetted America's move from the countryside to the city, it also saved memories of the ways of life lost.

Are we truly in a similar transition now -- to a post-suburban world, to a post-paper world? What folkways do we want documented?

I don't think we fully understand or appreciate the social, economic, and political changes the information revolution revolution will bring. I will leave it to the historians to document these changes, and I'll talk briefly instead about how the advance of information and other technology will impact -- has already impacted -- our economic security.

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I have greatly enjoyed these comments from a newer generation of New Deal historians. As someone who started work on the New Deal forty years ago, I have a lot of sympathy with Eric's lament about 'writing a book in a very different world than the one in which it was published.' It took me a long time to realise how powerful the right-wing critique of the New Deal had become since 1990. In Britain there remains a largely bi-partisan acceptance of the positive aspects of the New Deal. It is difficult here to realise how successful Amity Shlaes has been in the United States at influencing public discussion of the New Deal. What was once the academic argument of economic historians about the lack of recovery in the 1930s has, in recent years, acquired amongst some historians and commentators a moral outrage at the supposed Leviathan state of the New Deal and the way it sapped individual self-reliance.

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Eric and bluemeanie have kicked off a terrific thread, and in so doing have underscored a key question that has resonated throughout this week's discussion: How can the past inform the present?

History rarely repeats. But to borrow the apocryphal Mark Twain line, sometimes it does rhyme.

I would argue that there are a large number of rhymes between the past of the New Deal and our present moment. Indeed, to a great extent the economic downturn we are experiencing today is not a "Black Swan" event, in the mode of Nick Taleb. Rather, in many respects our economic crisis might better be viewed as a White Swan: we've seen a great deal of this before, right?

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We know -- those of us who aren't Austrians -- that the New Deal promoted recovery, even if it didn't get the country all the way back to pre-Crash conditions before the end of FDR's second term; that it laid the foundations for the modernization, at long last, of the South; that it established regulations for banking and securities that proved successful until repealed; that it prevented a nontrivial number of Americans from starving and gave the dignity of work to millions; that its basic provisions for social security -- including not only old age pensions and unemployment insurance but established the principle, as Justice Cardozo wrote, that in dire straits "the ill is all one or at least not greatly different whether men are thrown out of work because there is no longer work to do or because the disabilities of age make them incapable of doing it. Rescue becomes necessary irrespective of the cause."

We also know that in doing these things, New Dealers made some blunders and some devil's bargains -- that by lurching uncertainly into and out of relief they did not do as much to end the Depression as they might have with a committed and full-scale program at the start (are you listening, stimulus-compromisers?); that to keep the South in the Democratic Party they left Jim Crow largely untouched; that to get Social Security established they had at the start to omit coverage for occupations that disproportionately included African Americans.

But the New Deal did more: not only did it build modern America, it created our sense of the old America.

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I'd like to follow up on the discussion about a New New Deal, i.e. the need for
an updated version of the New Deal to fit the modern economy. In the posts so far, there have been discussions of the types of policies Obama may implement (Card check? Health care reform?), and who will actually benefit from those policies relative to who ought to benefit. In particular, there have been cautions against limiting the recovery package to the typical "males in hard hats with families to support" image that many people seem to have in mind when thinking about stimulus policies.

As we think about a Brand New Deal, I think it's important to recognize that the structure of families and households has changed considerably over time. The notion of a family was very different in the 1930s. Men were the bread winners, that was their responsibility to the household, and by and large, it was assumed that there was a spouse at home taking care of household needs and supporting this effort. Men who let down their families by losing a job, or who failed to provide for them adequately in other ways, were not fulfilling their proscribed social function.

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Thank you Jason for bringing up the issues of gender and race. Feminist historians and economists are now working together in an organization W.E.A.V.E (Women's Equality Adds Value to the Economy) to push for .... well, it's obvious isn't it? Interested readers should take a look at Mimi Abramovitz's recent essay Female Workers Can Jolt Economy; Look at Japan. Two related stories are

Three Steps to Women's Fair Share of the Recovery, and New Deal Slighted Women in Recovery Plans.

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For those not held captive by obsolete theories, our current moment presents a chance to draw on some of the best aspects of the New Deal's achievements--bold public investment that stimulates economic recovery, generates jobs, provides socially useful infrastructure, leverages input from local communities, and safeguards taxpayer money through careful oversight.

Julian and Eric have both pointed us to John Kenneth Galbraith's concept of "countervailing power," the idea that the state can, essentially, make a fairer society by helping empower constituencies who have previously been left out of the political system. And Susan has directed our attention to the importance of state action to ensure widespread economic security--"freedom from want," as FDR put it. Picking up on these themes, I want to look at how one of the tensions within the New Deal--how best to spend public monies to construct infrastructure--is playing out with respect to Obama's stimulus plan. In short, who will benefit?

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Susan Feiner thinks "Eric misunderestimates the clarity of the New Dealer's vision.... Suggesting that the commitments holding the New Deal together were 'little' makes no sense."

Clearly we read the record differently. I see a New Deal that included, as one of its first priorities, the Economy Act, which balanced the budget; which provided 4m jobs through the Civil Works Administration and then took them away a scant few months later; which went back into the relief business with the Works Progress Administration in 1935, only to shrink WPA in 1937, in Keynes's view causing the 1937-38 recession.

In short, I see a New Deal that looks as wobbly as an immediate post-Prohibitionist who's had a night on the tiles.

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I'm delighted to be joining another TPM book club discussion, especially on such a hot topic. In Maine, in winter, hot is good. I'll add a dash of spice. In my view Eric's characterization of the New Deal and Keynes gets in the way of answering the questions he poses.

Early on, Eric misunderestimates the clarity of the New Dealer's vision. "Beyond Roosevelt's core conviction that '[n]ecessitous men are not free men,' little held the New Deal together." (Rauchway page 4) Suggesting that the commitments holding the New Deal together were "little" makes no sense.

FDR first referred to necessitous men in his 1936 address to the DNC. By 1944, he knew exactly what he meant, "We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence." The Economic Bill of Rights followed.

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Jason Scott Smith's quite right to point out that in a Very Short Introduction some things get less attention than others, and in my book one thing that gets less attention is the role of the New Deal as a political vehicle for the Democratic Party.

But there's a good reason for that! The Democratic Party in the 1930s (perhaps as now) had the luxury of knowing that in response to the economic crisis, good policy was good politics. Roosevelt had been elected to do a job for the country, and if he did it he would be rewarded -- as indeed some research suggests he was in the most basic sense; states with "robust income growth" went proportionately stronger for Roosevelt in 1936. Maybe the voters were simply asking if the New Deal (whatever it was) had, in the crassest sense, been a good deal for them.

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Americans have compared our current political situation to the New Deal from almost every possible angle. There is one component to the New Deal, however, that has been downplayed in public discussion.

That is the theme of countervailing power. Rauchway devotes a chapter to this subject, building on an argument developed by John Kenneth Galbraith in the 1950s. Galbraith and Rauchway argue that one of the most important contributions of New Deal policies was to help empower certain social groups, such as industrial workers, so that they could better compete on the political playing field long after FDR was gone.

The objective was attractive for three reasons.

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Eric Rauchway, in his introductory post, asks "What kind of government did the New Deal leave us, and why?"

I'd like to take some liberty with this question, and reframe it just a bit: "What was the essence of the New Deal, and why have historians argued about its nature and significance for so long?"

To begin thinking through this question, it makes great sense to begin with Eric's book, The Great Depression and the New Deal: A Very Short Introduction. It's an elegant, concise, and analytically sharp account of the 1930s and the many implications that this period holds for what comes afterwards. But perhaps more interestingly, the points of emphasis in his narrative point to how historians, generally, have wrestled with defining the New Deal. And, I would suggest, what we include and what we leave out shapes the understandings of the past that we are able to bring to our present moment.

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I want to come back to Eric's first question in a later post, the question of how depressions come about, and turn to his second question, "what happened to the principle of countervailing power after the New Deal? Did it remain a core concept of American politics, and if so, for how long?"

The idea that countervailing power is needed to balance labor markets has faded over time, and I think the movement toward deregulation in the 1970s is part of the reason for this, and that economists were one of the driving forces behind this change. We hear a lot about the role that Nixon and the Republicans played in bringing about a push for deregulation, a push that found success, but we hear less about the role that the economics profession played in setting the stage for the deregulatory phase that began in the 1970s, a phase that continued for decades and has only recently been muted - perhaps - by the recent crisis in the US and world economies. Thus, I'd like to focus on changes within economics that set the stage for the anti-union movement and gave intellectual credence to this movement.

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Good morning (from the West Coast, anyway), this is Eric Rauchway and I'm delighted to be asked to talk about my book, The Great Depression and the New Deal: A Very Short Introduction.  I'll use this post as an even shorter introduction.

If TPM readers have heard of me in connection with the New Deal before (which I don't assume you have) it might be because Paul Krugman or maybe Tim Fernholz sent you my way in connection with the series of "New Deal Denialist" posts on The Edge of the American West.

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This week at Cafe, Eric Rauchway is joining us for a book club discussion on his latest, The Great Depression and the New Deal: A Very Short Introduction. This is a great series, and I think this book in particular does an excellent job of laying out the details of the Great Depression and The New Deal in a timely, readable, and highly relevant way.

Eric Rauchway is a History Professor at UC Davis and he specializes in US political, cultural, and intellectual history. His previous works include Murdering McKinley: The Making of Theodore Roosevelt's America (2003) and The Refuge of Affections: Family and American Reform Politics, 1900-1920 (2001).

Joining him are James K. Galbraith, economist and professor at the Lyndon B. Johnson School of Public Affairs and University of Texas at Austin; Brad DeLong, professor of economics at UC Berkeley; Susan Feiner, professor of economics and Women's and Gender Studies at the University of Southern Maine; Mark Thoma, associate professor of economics at the University of Oregon; Anthony Badger, professor of history at Cambridge University; Jason Scott Smith, assistant professor of history at the University of New Mexico; and Julian Zelizer, professor at Princeton University.