How Roosevelt and His New Deal Prolonged the Great Depression By Jim Powell

My interest was kindled when I read that Fed Chairman Ben Bernanke had saluted Milton Friedman and Anna Schwartz with the words “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” I wanted to find out why he would say that, and this book seemed a good way of doing it. (Friedman and Schwartz’s book ‘A Monetary History of the United States, 1867-1960′ goes hundreds of pages.)

Wow. FDR is made out to be the guy that made it possible for the USA to survive the Great Depression, at least over here. This book does a wonderful job in explaining why this is not the case; his policies and (many) Executive Orders exacerbated the problem.

This is possibly not the easiest book to read owing to its thoroughness; rather than just say ‘FDR mandated this which caused this to happen’, Powell documents everything; the written judgments of the Supreme Court Justices, mini biographies of people whom he mentions, statistics, etc.

Nonetheless, I’m glad to have read it, and it makes some things very clear to me know. I remember when I first learnt economics, I was introduced to both Keynesianism and Friedman’s monetarism. The teacher explained that they were two competing schools of thought, and it was up to us to decide to which we would subscribe. Having read this, I’m no longer in any doubt as to monetarism’s validity.

Tags: Economics, Jim Powell

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