BOOK REVIEW: ‘When the New Deal Came to Town: A Snapshot of a Place and Time With Lessons for Today’

OPINION:

WHEN THE NEW DEAL CAME TO TOWN: A SNAPSHOT OF A PLACE AND TIME WITH LESSONS FOR TODAY

By George Melloan

Simon & Schuster, $25, 240 pages

For decades George Melloan has been the insightful pater families of The Wall Street Journal’s editorial pages. Recently he retired as deputy editor and columnist, although he continues still to contribute commentary to the paper. Yet, he also has taken time to research, report and create this charming and penetrating memoir of his life during the Great Depression and its parallels to Washington’s continuing irresistible impulse to shape America to the liking of our political elites, left or right.

All good memoirs should have some resonance with current times and crises and this book is as fresh as today’s grim headlines. In a nicely balanced mix of memory fleshed out by interviews with his hometown childhood friends and his customary scrupulous analysis, he produces what he calls a snapshot of what life was like in Whiteland, Ind., when, first, the Great Depression struck the country and, for good or ill, both Herbert Hoover and Franklin Roosevelt set out to remake America for its own good.

Whiteland was no isolated backwater when Mr. Melloan’s father gave up sharecropping a nearby farm and moved into town with his family. Twenty miles south of Indianapolis, the town had a canning factory and grain elevators that were linked to markets by roads and train service. Many residents had cars but folks could venture abroad on that lamentably lost rapid transit system known as the interurban trolley. Still, when the great stock market crash of October 1929 rocked the world’s financial markets its impact on life in Whiteland was so minimal that the local newspaper did not bother to report the disaster.

Mr. Melloan argues that the people he grew up with were better able to adjust to the economic and climate cycles before Washington started to try to save them from their own ingenuity and enterprise. It is a polemical argument to be sure. Whiteland could never have withstood the urban sprawl that swallowed it today into the suburbs of Indianapolis. But some of the lunacies visited on Whiteland and thousands of towns like it from 1930 on read like comic fiction if it were not for the fact that many of the same illogical experiments are in play again today.

We are reminded that it was not FDR who started the grand experiment. Herbert Clark Hoover had been so much the beau ideal of the Progressive movement way back in 1920 that Roosevelt begged him to run for president as a Democrat with himself as vice president. His brand of government activism is being reprised even now by President Trump in his reliance on jawboning target industry and banking groups to pitch in and voluntarily revive the economy.

Huge public works projects like the mammoth Hoover Dam were supposed to jump-start activity. Industries were pressured into keeping wages high with the result that manufacturers shifted to part-time employment — he notes that in 1928 U.S. Steel employed 225,000 full-time workers; by 1932 they had all been laid off or replaced by part-timers. Protectionist tariffs installed by the Smoot-Hawley Act were imposed on 20,000 imported items with the result that our trading partners lost the earnings needed to buy American exports.

Mr. Melloan blames a lot of the pressure on both Hoover and Roosevelt administrations to “do something” about the deflation and contraction that are part of the adjustment process of any economic cycle on the political clout of the various farming lobby groups. Back then nearly half of all Americans (and even more Whitelanders) were farmers whose instinct during times of falling prices was to plant more crops, raise more livestock and to demand Washington lend a hand.

And when Roosevelt and his New Dealers took over in 1933 the transformation of Whiteland and the rest of American began in earnest. The newsreels that are the base for most history channel documentaries about the Great Depression focus on FDR’s considerable persona and on scenes of happy lads planting trees, WPA painters daubing murals and other uplifting activities. But there were no newsreels shot in Whiteland.

Mr. Melloan is at his polemical best when he declares, “The Agricultural Adjustment Act of 1933 was arguably the most dubious of the New Deal’s legacies. The AAA empowered the federal government to reach into the lives and work of the nation’s farmers and dictate how much they could produce, through measures justified by their authors as a rescue mission. Unmentioned was that they were being rescued from other government policies, principally Smoot-Hawley and a Federal Reserve Board not up to the job of stabilizing the value of the currency.”

With a skill honed over decades, Mr. Melloan shifts easily from the broad picture of how the New Deal policies impelled the struggling economy into a second depression in 1936 and how his family and their neighbors struggled to adjust, make do and sacrifice with their eyes fixed firmly on the American Dream. This book is both a charming memoir of a hopeful time long ago and a primer for anyone who instinctively abhorred Obama-economics but is skeptical of the Trump-brand of Hooverism on steroids.

• James Srodes is a veteran financial reporter and former Washington bureau chief of both Forbes and Financial World magazines.