Eric Rauchway

Eric Rauchway is the author of The Great Depression and the New Deal: A Very Short Introduction and Blessed Among Nations: How the World Made America among other books. He is a professor of history at the University of California, Davis.

Recent Articles

How America Grew -- and Grew Unequal

Today’s inequality has more to do with historical accident and political power than economic efficiency.

AP Photo/Diane Bondareff
AP Photo/Diane Bondareff A man walks past the bronze 'Charging Bull' statue near the New York Stock Exchange. This article appeared in the Summer 2016 issue of The American Prospect magazine. Subscribe here . The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War By Robert J. Gordon Princeton University Press Unequal Gains: American Growth and Inequality Since 1700 By Peter H. Lindert and Jeffrey G. Williamson Princeton University Press P erhaps the most arresting moment in Robert J. Gordon’s comprehensive history of American economic growth comes near the end, when he explains that the yardstick he has been using no longer works very well. “Throughout this book, progress has been measured by the rate of advance of average real GDP per person. … Such averages … may be misleading if the pace of improvement benefits those who have high incomes more than those who have middle or low incomes.” And indeed, he goes on to note, that turns out to be the case. We...

Learning From the New Deal's Mistakes

The New Deal was, for the most part, phenomenally successful, but there are many ways it could have gone further or been better organized -- failings it is critical we avoid this time around.

Any smart historian of the 1930s is a New Deal critic. The Obama administration unquestionably needs to respond more effectively to the current crisis than the Roosevelt administration did to the Great Depression. But not because the "New Deal didn't work," as conservative pundits are now frequently saying -- it did. It didn't go far enough fast enough, and it included some other mistakes from which we can usefully learn, but ignoring its successes will only make things worse. The most important thing to know about Roosevelt's economics is that, despite claims to the contrary, the economy recovered during the New Deal. During Roosevelt's first two terms, the U.S. economy grew at average annual growth rates of 9 percent to 10 percent, with the exception of the recession year of 1937-1938. As economist Christina Romer (now director-designate of the Council of Economic Advisers) writes, these rates were "spectacular, even for an economy pulling out of a severe recession." Thus, at the...

Can We Have a New Deal Without the New Dealers?

Can a massive government intervention in the economy work if it is being run by people who don't believe in government?

If you prefer irony to panic, you might consider the peculiar spectacle of the current administration, a bitter opponent of the New Deal, deploying the full force of the New Deal's legacy to stave off the financial crisis. We've been bailing like it's 1933, with the Exchange Stabilization Fund joining the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Federal Reserve's Open Market Committee in an effort to stop credit from vanishing. And now Congress has provided an emergency-relief program of the kind that made the New Deal work. But can New Deal programs succeed without New Dealers running them? Judging by the last time Americans tried it, during Herbert Hoover's last year of office, the answer is, sadly, no. We remember Hoover as talking constantly about the imminent return of prosperity -- which, in his view, was a mischievous scamp who always happened to be just around the corner from America and who might be lured back with, say, a cut in...

McCain's Dangerous Do-Nothing Economics

The Great Depression was caused by a banking system left to self-destruct by a conservative president who, like John McCain today, insisted that the economy's "fundamentals" were strong.

Responding to the collapse of several major investment banks this week, John McCain reassured us, "I think still -- the fundamentals of our economy are strong." That move comes from an old playbook: On Oct. 25, 1929, Herbert Hoover declared, "The fundamental business of the country, that is the production and distribution of commodities, is on a sound and prosperous basis." The day before Hoover insisted that the fundamentals were strong was the day that came to be known as Black Thursday, when in heavy trading the Dow Jones Industrial Average lost about 9 percent of its value. And while, in endless stock-footage documentaries showing images of dumbfounded traders over a soundtrack of mournful jazz clarinets, the crash is supposed to begin the Great Depression, it wasn't quite so. The real cause was the collapse of the banking system, which followed the crash in part because Hoover believed strong fundamentals would protect the economy from disaster. For the likes of Hoover and McCain...

Drawing the Line

Against the Day by Thomas Pynchon (The Penguin Press, 1120 pages) Thomas Pynchon's characters in Against the Day worry about America's "capitalist Christer Republicans" as only the inhabitants of a thoroughly Protestant universe can. It's easy to mistake Pynchon's jittery, inventive monologues and his resentment of social order for the ramblings of a stoner hippie. But if Pynchon is a hippie he also drank his Protestantism deeply, and his sense of ineffable divinity sits uneasily alongside the certainty Christianity Americans often profess. From his Puritan ancestors Pynchon learned that grace comes to some of us and not others according to God's inscrutable wishes. What we do does not affect our salvation. We who believe in a gospel of success cannot easily imagine a people convinced of its irrelevance. But suppose corruption had thoroughly rotted a society: a God indifferent to worldly opinion might grow in popularity. If officially virtuous people were really villains, maybe...

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