By the time I set foot on an airport I usually already have all my entertainment for the flight. However, on recent weekend stint to New Orleans for a wedding, I realized I had nothing to read. So imagine my surprise when I went to one of those (usually very small) airport bookstores and found not one but five or six copies of Bob Murphy’s Politically Incorrect Guide to the Great Depression and the New Deal. As an amateur-hobbyist Austrian economist, how could I pass up that opportunity?
As with the other books in the Politically Incorrect series, Murphy’s Guide is aimed for the common man. Aside from the main body of the text, every other page features various quirky and fun text boxes that provide additional information to the reader: from book recommendations to quick facts.
So OK — I said that the book was aimed for the common man. However, the content is not at all common. Indeed, far from it. In under two hundred easy-to-read pages, Murphy has managed to turn the mainstream view of Hoover and FDR on its head. Hoover was not at all a "do nothing" president. Nor was he much of a defender of the market. Indeed, it was Hoover, as Murphy shows, who sets the tone for Roosevelt’s devastating attack on the economy and on the property rights of millions of Americans.
I was aware of a good deal of the shenanigans that Hoover and FDR imposed. Others, on the other hand, took me by surprise. When Roosevelt abolished the gold standard and began to manipulate its price in dollars, he would, according to stories, set the price of gold fairly randomly, picking numbers he though were "lucky."*
Murphy builds the case against Hoover by showing that he was in fact quite active, especially in his love for government/public work programs. FDR’s Sovietesque policies had a running start. And, of course, far from getting us out of the depression, FDR’s policies lengthened and deepened it.
Though the book analyzes policies enacted during Hoover and FDR’s regimes, special attention is given to that mysterious and supposedly independent entity: the Federal Reserve. This is the core of Murphy’s Politically Incorrect Guide to the Great Depression and the New Deal. The Fed’s relentless control of the money supply and of credit was central to the crash and the depression. Murphy devotes dozens of pages to address the arguments raised over the years by various groups, especially the Keynesians and Friedmanites, convincingly rebutting them (or at least, it convinced me — I am an amateur after all: YMMV).
Imagine an average person reading this book. What would the reaction be? I read the entirety of the book on the flight. As I flipped the pages I would turn my head to the person sitting next to me and think "this book is for you." And no, I do not consider myself an elitist. On the contrary, I wished more people were aware of these accurate, though revisionist, views. Grab a copy of this for yourself or for your family and friends. Be an intellectual troublemaker once in a while. Because if George W. Bush is our Hoover, and Obama the next FDR, then hold on. The Newest Deal won’t be pretty.
*Even if the story above were false, I would remind the reader that when there is not a market to set prices, any price set by the state bears no resemblance to economic reality and though we might say that a government price of $2.49 per gallon of milk is reasonable or “correct” and a price of $19.99 is not, even here, the former amount feels right because there is more or less a freeish market/reference price for milk. Central planning could be seen as randomly selecting prices.