Book SummaryThe Forgotten Man, by Amity Shlaes

1-Page Summary1-Page Book Summary of The Forgotten Man

The approaches and political philosophies of Hoover and Roosevelt diverged significantly when they tackled the economic turmoil of the Great Depression.

Hoover's benevolent strategy

The common misconception that Herbert Hoover remained inactive throughout the Great Depression is inaccurate; he actually supported significant government intervention in the economy. This approach, however, stood out in its execution when contrasted with the tactics later employed during the administration of President Roosevelt. Hoover championed the idea that the government should act as a facilitator and promoter, encouraging cooperation between businesses, workers, and governmental bodies to stimulate economic growth.

The government took on the role of a coordinator.

Hoover's foundational expertise in mining engineering and his pivotal involvement in orchestrating relief activities during and in the aftermath of the First World War are underscored by Shlaes. He came to the conclusion that it was the responsibility of the government to foster cooperation among different sectors of the economy. He advocated for "associationalism," where businesses would voluntarily work together under the guidance of government agencies to stabilize prices, maintain wages, and share jobs. Hoover believed that enlisting the expertise of industry professionals and technical specialists would lead to a more effective coordination of economic activities than could be accomplished by the wider market. He demonstrated his strategy by creating committees and alliances that brought together governmental officials along with business and labor representatives to collaboratively explore remedies for the economic slump.

Practical Tips

• Create a neighborhood skill-share bulletin board, either physical or digital, where people can post skills they are willing to teach and skills they want to learn. This can lead to informal classes or one-on-one sessions that promote cooperation and the sharing of knowledge. Imagine a retired electrician offering to teach basic home wiring to interested neighbors, who in turn might offer to share their own expertise in areas like cooking, coding, or carpentry.
• You can foster collaboration by starting a local business network where members commit to fair pricing and job sharing. Create a simple online forum or social media group where local businesses can communicate to discuss challenges, share resources, and agree on fair pricing strategies. This could lead to a collective agreement on maintaining wages and sharing job opportunities, mirroring the associationalism concept on a micro-scale.
• When facing a significant personal decision, like a career change, seek out targeted advice rather than general opinions. Instead of asking all your acquaintances for their thoughts, identify individuals who have experience in the field you're interested in and request their insights. This approach ensures you get informed, relevant advice that can guide your decision more effectively.

Intervention in Wages and Tariffs

Shlaes argues that the economic downturn was exacerbated by Hoover's hands-on approach to economic issues. She highlights his choice to encourage companies to sustain elevated salaries despite declining profits. She argues that such inflexibility prevented businesses from adjusting to the changing economic landscape, leading to increased unemployment and intensifying the downturn. Shlaes argues that Hoover's approval of the Smoot-Hawley Tariff Act in 1930 represented a disastrous mistake. The establishment of protective tariffs, intended to safeguard local businesses from international competition, unintentionally led to the formation of retaliatory tariffs, thereby hindering global trade and intensifying the economic challenges confronting America.

Other Perspectives

• Reducing wages might have led to a deflationary spiral, exacerbating the economic downturn by...

The Forgotten Man Summary Progressive thinkers influenced the understanding of the role that the government should play in the economic framework.

Shlaes emphasizes the pivotal influence of progressive intellectuals in formulating the New Deal, noting that their ideas regarding state intervention and fiscal policy originate from an era she views more positively than traditional historical narratives do. The group, which included figures like Felix Frankfurter and Stuart Chase, became increasingly outspoken in their criticism of capitalism's fundamental flaws, especially its failure to address problems stemming from industrial, agricultural, and social inequalities. They championed the idea that the government should take on a more dynamic part in steering the economy, taking cues from the economic systems of Soviet Russia, the policies of Mussolini's Italy, and the progressive changes occurring in Great Britain.

Intellectuals began to significantly influence politics.

During the 1920s, forward-thinking scholars and thinkers, who felt overlooked by the prevailing societal norms, carved out a niche for themselves within the realms of academia, literary discourse, and scholarly assemblies, as documented by Shlaes. They saw themselves as a balancing influence against the dominant materialism and complacency that Sinclair...

The Forgotten Man Summary The New Deal initiatives were characterized by their experimental nature and broad reach as they were implemented and grew in scale.

Shlaes chronicles the expansion of programs initiated during the New Deal, highlighting their experimental character, their focus on rapid job creation and support, and the lasting impact these initiatives had on the relationship between the government and the business community in the United States. While she acknowledges the positive aspirations and the initial enthusiasm that ignited the commencement of the array of initiatives and strategies under Roosevelt, she argues that its focus on spending, regulatory measures, and the creation of permanent support structures did not succeed in completely rejuvenating the economy.

Focus on creating job opportunities and offering support.

Shlaes outlines the various approaches taken in the New Deal period to tackle unemployment, highlighting the tension between initiatives aimed at building public works and those designed to offer direct monetary aid. Harold Ickes championed significant initiatives, including the building of dams, bridges, and government buildings, believing that these projects would stimulate the economy by creating jobs and increasing government spending. Harry Hopkins, on the contrary, pushed for rapid financial...

The Forgotten Man Summary The creation of the Tennessee Valley Authority often highlighted the conflict between government actions and the goals of the electric power industry.

Shlaes argues that the central theme of the New Deal was the intense struggle between governmental power and private enterprise, as highlighted by the conflict involving the Tennessee Valley Authority and separate electricity companies. The Roosevelt administration held the belief that overseeing the generation and allocation of electric power fell within the purview of the government, arguing that the private sector's focus on financial gain would hinder the provision of electricity to all Americans in a cost-effective and proficient way. Wendell Willkie, who was well-known for his support of private utility companies, argued that government intervention stifled innovation, discouraged the injection of capital, and reduced the value of investments for shareholders.

The creation of the Tennessee Valley Authority stood as a prime example of government intervention.

Shlaes portrays the TVA as a model of New Deal intervention, a government agency entrusted with vast powers to control a natural resource— the Tennessee River—and use it to reshape an entire region. She outlines the divergent goals and visions of the TVA's trio of leaders: Arthur Morgan, who was committed to the...

The Forgotten Man Summary Roosevelt's subsequent term's commencement signified a pivotal transformation in the political arena, impacting the formulation of policies for years ahead.

Shlaes argues that in Roosevelt's subsequent term, the New Deal shifted from its initial trial period to a phase focused on expanding and entrenching the reach of the government. Disheartened by the economic setbacks in his initial term and bolstered by his resounding victory as the months before the 1936 election unfolded, she argues that Roosevelt solidified his belief in the necessity of robust government action for the economic revival. The strategy evolved to focus less on pioneering initiatives and more on reinforcing established support bases while targeting those deemed adversaries.

President Roosevelt engaged with various groups, tailoring his interactions to their specific interests.

Shlaes argues that Roosevelt, in his second term, concentrated on securing support from specific demographics including agricultural workers, union affiliates, the elderly, and African Americans, which created a formidable coalition that guaranteed his prolonged stay in the Oval Office and reinforced the Democratic Party's dominance.

New political factions arose, uniting farm laborers, industrial workers, senior citizens, and African American communities.

Roosevelt garnered...

The Forgotten Man Summary The approach to managing the economic turmoil of the 1930s was shaped by strategic discussions and consensus.

Shlaes highlights the variety of economic debates that shaped the government's response during the Great Depression, illustrating how shifting goals within the administration and the divergent strategies of its advisors exacerbated the financial chaos. The conversations centered on the vital importance of maintaining budgetary balance and establishing clear boundaries for the government's role in economic oversight and financial regulation.

Discussions surrounding fiscal equilibrium and expenditure management.

Shlaes explores the discord within the President's advisory circle, where one faction advocated for heightened governmental expenditure to stimulate demand, while another emphasized the necessity of preserving fiscal equilibrium. On one side were figures like Marriner Eccles, who had been appointed governor of the Federal Reserve, and Lauchlin Currie, an economics advisor to the president who argued for greater government spending as championed by the British economist John Maynard Keynes. In contrast, individuals such as Henry Morgenthau Jr., who took over as treasury secretary from Andrew Mellon, placed a high emphasis on ensuring the budget remained...