a day ago
- Business
- Wall Street Journal
‘False Dawn' Review: The Mirage of Recovery
For those who lived through the Great Depression, the strangeness of it was hard to convey. The nation had suffered no great natural disaster. The farmers were still farming, and the factories were still standing. Yet there lay rotting food that people couldn't afford to buy and empty factories next to shanty towns filled with the unemployed.
In 1932 Franklin Delano Roosevelt won the presidency with the promise to restore prosperity. But he and his advisors had no clear explanation for the collapse and his subsequent New Deal would amount to a series of experiments. FDR admitted to the nation that some of his proposals took the nation down 'a new and untrod path.' If they failed to 'produce the hoped-for results, I shall be the first to acknowledge it.'
George Selgin's 'False Dawn' asks if the New Deal's varied experiments produced the promised recovery. In dispassionate, careful and finally devastating detail, 'False Dawn' shows that, with a few exceptions, FDR's experiments did not work. And he did not acknowledge it.
Based simply on raw numbers, the case for the New Deal is not strong. Although the economy did recover from its nadir when FDR took office in 1933, by 1939 the unemployment rate was still 17%. After six years of supposed recovery, the economy was in worse shape than in any other recession of that century or the following one. The American public is right to link the Great Depression with the '30s, during most of which FDR was president.
