Author(s): Eric Rauchway
Business & Economics | No Category
Shortly after arriving in the White House in early 1933, Franklin Roosevelt took the United States off the gold standard. His opponents thought his decision unwise at best, and ruinous at worst. But they could not have been more wrong. With The Money Makers, Eric Rauchway tells the absorbing story of how FDR and his advisors pulled the levers of monetary policy to save the domestic economy and propel the United States to unprecedented prosperity and superpower status. Drawing on the ideas of the brilliant British economist John Maynard Keynes, among others, Roosevelt created the conditions for recovery from the Great Depression, deploying economic policy to fight the biggest threat then facing the nation: deflation. Throughout the 1930s, he also had one eye on the increasingly dire situation in Europe. In order to defeat Hitler, Roosevelt turned again to monetary policy, sending dollars abroad to prop up the faltering economies of Britain and, beginning in 1941, the Soviet Union. FDR's fight against economic depression and his fight against fascism were indistinguishable.
As Rauchway writes, "Roosevelt wanted to ensure more than business recovery; he wanted to restore American economic and moral strength so the US could defend civilization itself." The economic and military alliance he created proved unbeatable--and also provided the foundation for decades of postwar prosperity. Indeed, Rauchway argues that Roosevelt's greatest legacy was his monetary policy. Even today, the "Roosevelt dollar" remains both the symbol and the catalyst of America's vast economic power. The Money Makers restores the Roosevelt dollar to its central place in our understanding of FDR, the New Deal, and the economic history of twentieth-century America. We forget this history at our own peril. In revealing the roots of our postwar prosperity, Rauchway shows how we can recapture the abundance of that period in our own.
Library Journal "Rauchway succinctly places [Bretton Woods] within its political and economic context...A useful, readable companion to Ed Conway's The Summit..." Publishers Weekly "Rauchway's thoughtful, well-researched narrative history is a valuable contribution to economic history, with ample lessons for the current era." Kirkus "A compelling examination of a still-vilified monetary policy that has continued to show results in spite of conservative criticism." Douglas Irwin, Professor of Economics, Dartmouth College "If you think the Federal Reserve's quantitative easing after the Great Recession of 2009 was unusual and controversial, wait until you hear about what Franklin Roosevelt did in the 1930s. Eric Rauchway has given us a lucid and penetrating account of the monetary policies of the New Deal and how it helped to bring about economic recovery from the Great Depression." Brad DeLong, Professor of Economics, University of California, Berkeley "Eric Rauchway's The Money Makers is one of the very best books to read to understand our economy today. It tells the story of how Franklin Delano Roosevelt and the people who worked for him pragmatically--experimenting with institutional redesign, reinforcing success, dropping failure, focusing on what worked--refuted via action the ideologues of the left and the right who to this day condemn his New Deal as ineffective or destructive." Barry Eichengreen, Professor of Economics and Political Science, University of California, Berkeley "Monetary policy got the United States into the Great Depression, but monetary policy also got it out. Eric Rauchway brings that tale alive by describing the adventures of two most unlikely monetary escape artists: Franklin Delano Roosevelt and John Maynard Keynes. The 1930s will never look the same." Kevin M. Kruse, author of One Nation Under God: How Corporate America Invented Christian America "In this persuasive work, Eric Rauchway not only proves that monetary policy should be central to our understanding of the Roosevelt administration in depression and war, but also shows how that story should be told. With an engaging narrative and sharp argument, The Money Makers stands as a compelling read."
Eric Rauchway is a historian at the University of California, Davis, and the author of numerous books on the Progressive and New Deal eras. He has written for the American Prospect, the Financial Times, and other publications, and lives in Davis, California.