Eric Rauchway

It is said that history repeats itself. That's not quite true, but it does often rhyme. When FDR took office in in 1933, the United States was in much worse shape than it is today. The Great Depression had destroyed businesses and jobs. Discontent was raging, and there was a real threat of populist movements that saw democratic capitalism as a failure and were willing to consider fascism, communism, or some kind of totalitarian system to replace it as long as it provided a promise of security and a sense of hope for the future. People today are feeling much the same, but for reasons far less dire. Still, with wages stagnant and with the promise of upward mobility lost, there is again this urge to find an alternative. Roosevelt understood where the real problem lie, and he drew on the insights of British economist John Maynard Keynes to help him to not only restore the economy but to make America greater than it had ever been. The history related in this book is especially important for our time. "So we face a choice. We can return to the lately prevailing orthodoxy that discounted Roosevelt and Keynes, and which led to our current discontents: or we can heed the lessons of their success." (pg. 245)… (mere)

How Roosevelt (and Keynes) took the US off the gold standard, allowing the US to avoid continued deflationary spirals, and set up the postwar international financial order, including the IMF and World Bank. It was interesting to learn about the history of gold standard hardliners in the 20th century; perhaps unsurprisingly, the big bankers didn’t know what was good for them, insisting that deflation should continue (and they should get their loans paid back in more-valuable dollars) until growth returned. But in a demand crisis, continued deflation feeds on itself. This book doesn’t bother to lay out the basics of fiscal and monetary policy, so it probably shouldn’t be the first book you read about global finance.… (mere)