Arnold Kling reviews Amity Shlaes' new book, The Forgotten Man (which sounds like something I really need to pick up), and ponders, "How Depressing Was the Depression?"

I would have thought that 1929 should have looked pretty good to people living in the depths of the Depression. But one of the many interesting lessons of Amity Shlaes' new history of the Great Depression and Franklin Roosevelt's New Deal is that many Americans, both inside and outside the Roosevelt Administration, thought of prosperity as an aberration. Instead, they saw hard times as the new norm.

The Forgotten Man (TFM for short) is not a polemic. It is not an argument for a particular theory or economic interpretation of the Depression. Instead, the author steps back and lets the story tell itself. She has sifted through memoirs and contemporaneous accounts in order to carry the reader back into the mindset of the 1930's. She focuses on a diverse selection of protagonists from that period, including opponents of Roosevelt like Andrew Mellon and Wendell Wilkie as well as members of Roosevelt's "brain trust" like Paul Douglas and Rexford Tugwell. Note that in the context of that time, "trust" meant the same thing as cartel (as in anti-trust laws). Roosevelt was claiming that with his advisers he had cornered the market on brains. If so, then after reading TFM, my sense is that there was not much value in this particular monopoly.

I came away with three major conclusions.

1. For better or worse, much of the country saw the Depression as something akin to a natural disaster, and people accordingly lowered their expectations for their standard of living.

2. Economic ignorance among policymakers was much worse than I had realized. I was steeped in the myth that the reason the Depression was so bad was that only Keynes had the answer, and he had to overcome the resistance of "the classical economists," such as Irving Fisher. But the differences between Fisher and Keynes seem small when compared to the differences between the policymakers and both economists. In physics, it would be like watching an academic debate over the meaning of quantum mechanics while policymakers are unable to grasp the simple concept of gravity.

3. The struggle over economic policy in the 1930's was really an episode in the long, historical conflict between business participants in the market and anti-business academics. Roosevelt gave free rein to the professors, until the start of the Second World War led him to realize that he would need the tycoons to help mobilize to defeat Hitler. I suspect that one reason that Roosevelt and the New Deal come off so well in the conventional wisdom is that history books are written by professors, not by entrepreneurs.

Don't miss Kling's charts of the unemployment rates and Dow Jones Industrial Average closings from 1927 to 1940. And for a revisionist look at the Roosevelt administration's imperfect handling of the events of 1941 to 1945, check out Thomas Fleming's The New Dealers' War, which is also a fascinating read.