Liberty League

Do I delude myself in thinking Amity Shlaes is giving a bit of ground? In her latest effort to persuade us the New Deal was bad she admits, “Many of FDR’s initial plans did bring stability: His first Treasury secretary worked to sort out banks with the outgoing Hoover administration in a fashion so fair that an observer noted that those present ‘had forgotten to be Republicans or Democrats.’ By creating deposit insurance, FDR reduced bank runs. His Securities Act of 1933 laid the ground for a transparent national stock market. Equities shot up.” Which in fairness is not a concession I remember her making before.

But she’s still devotedly wrong. Today it’s the dollar devaluation that was a horror: “Using emergency powers, FDR yanked the country off the gold standard…. Some of the worst destruction came with FDR’s gold experiment. If he could drive up the price of gold by buying it, he reasoned, other prices would rise as well. Roosevelt was right to want to introduce more money into the economy (the United States was deflating). But his method was like trying to raise an ocean level by adding water by the thimbleful.”

Except, as even some George Mason economists will tell you, devaluing the dollar was possibly one of the best things FDR did, contributing mightily to the “spectacular” rate of recovery under the New Deal.

If the Post had wanted to publish a column on the general subject of whether current uncertainty is harmful, and reflecting on the New Deal, they might have wondered if today we have done as much as Roosevelt did with the bank holiday to make banks stable and worth the investment of public money.