|The Forgotten Man: A New History of the Great Depression|
GLENN: You know, I'm watching the news, I don't even know what the heck is happening anymore. I saw on Drudge Report this morning that they are now looking for global regulations on banking and I'm thinking, oh, that doesn't sound good. I don't know -- uh-uh, I don't -- no, I don't think so. I don't like that idea. And I told you now for the last year, it reminds me, everything that we're doing, we did during the Great Depression. Obama is FDR 2 and the way you were taught history, you are probably thinking, well, FDR was pretty good; he had those fireside chats, which he probably couldn't have if he lived in Seattle now. But FDR, he changed America. And not in a good way. He changed America. Amity Shlaes is the author of "The Forgotten Man" which I think, it's out in paper back, isn't it now, amendment?
SHLAES: Yes, it is.
GLENN: And it's a fantastic book and I've been telling people you've got to buy this book. You know what I love is amendment and I traded e-mails about a week ago and she said, I just, I really think this is a book that should be studied, it should -- you know, I really hope that the educational system will pick this book up and use it and I'm thinking, no, no, no, no, no, no. If you name it The Forgotten Manifesto, then they would pick it up in schools, but I think this is -- there's too much common sense in this, Amity.
SHLAES: Actually I'm going to be teaching it all summer to high schoolteachers. Am I lucky? Is that great? Yeah.
GLENN: Aren't they going to be locked up in prison for teaching this history?
SHLAES: They are going to read "The Forgotten Man." So that's really exciting. So we have a lot of new material for teachers and readers in the book like time line at the front and casted characters at the front because it makes it easier to read.
GLENN: Okay. I want to ask you about, because we had the anniversary of going off not the gold standard but we used to write contracts and at any time somebody could say, hey, I'd like this in gold, please, right?
SHLAES: That's right.
GLENN: Right. And FDR said, no, not so much. And you say that changed everything. How?
SHLAES: Well, one of the things when you look at the oil price today, you are seeing at $4 and so on, $4 at the pump. What is that about? A lot of it is inflation. It's not just demand for oil. It's that there's too much money sloshing around. We all sense inflation. Even when you buy a plane ticket, you decide should I buy the plane ticket now or should I wait? How much more is it going to be in October? And that's a lot to do with the economic anxiety that we have today.
Well, in the old days there was a protection against that. You could write in any contract, I get the equivalent of this in gold. Gold measured by how much gold is worth today, the day that I signed the contract. And people loved those contracts, even the U.S. Government used them in World War I with the liberty lines. It said we promise to pay you in gold, gold worth what it's worth today. And it was the every man hedge against economic uncertainty against inflation and now when you've got that and, oh, they are changing things but I don't know what I can do about it and you are sort of primitively, vaguely, I don't know, getting adjustable rate mortgages or writing little clauses into things, they have FDR Bandit in June 1933. First he inflated and then he took away every man's defense from inflation. And you know, Glenn, this period is a lot like the Seventies, too, in terms of uncertain and we know what our parents went through in that period with their houses and their loans and their inability to sell the house. So that was inflation, a lot of that.
GLENN: Okay. But we're in a different -- I mean, everybody keeps saying that we're going through the 1970s again. I mean, I shouldn't say everybody. There's a lot of people that I talk to that are much more bullish than I am and they say, well, we're going through the Seventies, it's the stagflation thing. But Amity, I look at what is coming down the Pike from Obama or McCain even with the cap and trade and the global warming stuff and everything that is happening right now. And now this story that they want to have global regulations, I just think we are headed down the same road that we were in the 1930s.
SHLAES: Well, if you want to have political, really bad news, what you do is you get a President and a congress who all agree that government should be bigger.
GLENN: But that's what we've got. That's what we're headed for.
SHLAES: Exactly. And if you have not only Obama but also congress, you see how desperate the Republicans are. They are just trying to hope they can maybe filibuster, right?
SHLAES: They are not hoping that they can control congress. Forget that. They are just counting their votes so they can object to things currently. That's where they're at. So you imagine a very strong Democratic picture, and for good or bad, the Democratic party feels like it has great license right now with the Kennedy anniversaries and the illnesses of Senator Kennedy in the past and lots of New Deal nostalgia, New Deal narcissism, it's about me, it's about my feelings, it's about the New Deal. You are right that all bets are off. There's no Ruben moment yet in the Obama campaign.
GLENN: Wait a second. Amity again in your book what I learned was the depression was elongated by, what, five times? It was elongated in America because you couldn't count on -- business couldn't do business because they couldn't count on anybody. They couldn't count on government. And that's what I hear from all of these people who run global corporations, giant, that want to do business here in America, they want to have the energy supply that they need, they want to be able to build coal to oil. They want to be able to build nukes. They will build any car that America needs to be built, but they won build it because they are afraid if they retool their manufacturing unit, if they go and spend all of this money doing whatever it is that congress will turn around and change the rules on them and they will be out billions and billions of dollars and they will collapse.
SHLAES: That's right. So what are we concerned about the most? It's the arrogance. It's a sense that they can go in and do whatever they like and, hey, experimentation is good. And that comes right out of the New Deal. I talk a lot about in the book Roosevelt saying, oh, let's do bold, persistent experimentation. Sounds fun. Somebody had to do something. But that spirit is there now. You'll hear about the importance of experimentation a lot in the coming year. And markets don't like that. I mean, we all know that. We watch markets television. Markets don't like uncertainty. Even good news can be bad news if it's really unexpected and you are not set up for it, right? So that is a factor that's making everyone so anxious right now. We have no idea what the limit of the political ambition is.
GLENN: So Amity, what does the average person do? I swear to you everybody can feel it in their gut. Everybody knows we got trouble much and we can make it through it. We always make it through it. It just depends on how bad the down side gets. We'll make it. We're going to be fine. Everybody's gut says there's a problem, but what people don't have is an answer. What does the average person do? They can't vote for either of these clowns. I mean, we're voting for the lesser of two evils and we know what's coming. So what does the average person do?
SHLAES: I think one, inform yourself a bit about history, but you let your candidate know that you know about the past, that you done want them to repeat that. Two, you -- I don't give investment advice but I am concerned about inflation. So you look for things that can defend you from inflation. You don't borrow too much. I think it sounds so childish and so unexciting, but I'm really concerned about schools, you know, that we can teach this stuff in our schools so kids can know the picture. Americans are hungry for history. I can't believe --
GLENN: You know what? You know what? Americans are hungry for actual history. The history that we weren't taught. Your book started me down a path that opened up doors for me that I had never even known. I didn't even know they existed in history. I had no idea, Amity, that this is the way things really were. You look at these things, after hearing stories from your grandparents, but they were -- I mean, the press was really controlled back then. I had no idea. And I started open -- this opened up doors and I started opening up other doors and looking at other scholars and other history, and I have to tell you it is amazing. And you are exactly right. When Americans understand true history, when they aren't afraid of opening up doors and saying, well, what's behind this one, and they look at it and they stare it down and they see what true history is, they will be able to see the clear right and wrong. They will know what their politicians are doing right now and what the consequence of those actions are. Right now we're just like, oh, yeah, well, somebody's got to do something. Yeah, not that. That's already been tried. That's already been done. Doesn't work out well in the end. Amity, thank you so much. We'll talk to you again.
SHLAES: Oh, thank you.
GLENN: Amity Shlaes, she is the author of The Forgotten Man and it's now in paperback.