Too Partisan to be Real History
UC Davis history professor Eric Rauchway let his rabid partisanship get in the way of some of the real history that is in his book. His cheer-leading is obvious in the subtitle and that should clearly warn less biased readers. It is not so much what Rauchway left in, but rather what he left out and in doing that he did a real disservice to his readers.
What Rauchway leaves out is as follows:
1. Although he rightly blames the operation of the gold standard as one of the predominant causes of the Great Depression, he fails to discuss how successful it was in spurring growth in the five decades up to World War I.
2. He fails to emphasize the fact that it was the imbalances caused by the financing of World War I that was the key element in the demise of the gold standard.
3. He completely ignores the “forgotten depression’ of 1920-21 where recovery was rapid absent most of the Keynesian remedies that came later and he ignores the great prosperity of the 1920s.
4. He hails President Roosevelt in his “blowing up” of the World Economic Conference in 1933, but fails to mention that far from being an internationalist, Roosevelt was an isolationist. The fascists in Europe took note of America’s withdrawal from the world.
5. He characterizes the 1936 Tri-Partite Agreement to stabilize the French Franc as the start of an anti-Nazi coalition. Wrong! Although France was lost some gold following the German reoccupation of the Rhineland, the real cause of the Franc’s collapse was the popular front policies of Leon Blum which scared the living daylights out of French Capital.
6. He completely ignores the fact that after all of the New Deal spending programs and the Federal Reserve money printing, the economy remained mired in depression as late as 1939.
7. He makes way too a big deal out of the congressional vote to join the IMF. The measure passed both houses of Congress easily.
8. Although he notes that Assistant Treasury Secretary Harry Dexter White, Keynes' negotiating partner at Bretton Woods, was a Soviet spy, he doesn’t take seriously the Soviet penetration into the highest circles in the New Deal.
9. In his glorification of managed currencies he fails to note the debacle that came after Nixon closed the gold window in 1971. Further if you want a date to start when the United States economy became “financialized” you can do a lot worse than 1971. Whatever the real problems of the gold standard, it would certainly have acted as a very real constraint on what we call “the shadow banking system”.
For readers who want a better understanding of the Great Depression I would recommend much of the works of Barry Eichengreen, Ben Bernanke and Peter Temin.
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