## FALSE DAWN: The New Deal and the Promise of Recovery, 1933–1947 — Book Review

## Source details

**Canonical URL:** [FALSE DAWN: The New Deal and the Promise of Recovery, 1933–1947 — Book Review](https://www.imf.org/-/media/files/publications/fandd/article/2025/09/books-binder.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/fandd/article/2025/09/books-binder.pdf.md)
- [Structured JSON version](/-/media/files/publications/fandd/article/2025/09/books-binder.pdf.json)

---

### Overview
- Title: FALSE DAWN: The New Deal and the Promise of Recovery, 1933–1947
- Author: George Selgin
- Publisher details as given: University of Chicago Press, Chicago,IL, 2025, 384 pp., $35
- Review author and affiliation: Carola Binder, associate professor of economics and an economic historian at the University of Texas at Austin’s School of Civic Leadership.
- Temporal focus in the book: 1933–39 (administration’s policies) and broader period through 1947 by title.

### Main arguments and narrative
- Selgin challenges the notion that the New Deal was a coherent, predesigned program by Roosevelt; instead, key components were "cobbled together after his inauguration, often without Roosevelt’s initial support."
- The book examines individual components of the New Deal, including:
  - the 1933 bank holiday
  - gold programs
  - alphabet agencies: Federal Deposit Insurance Corporation (FDIC), Reconstruction Finance Corporation (RFC), Agricultural Adjustment Administration (AAA), National Recovery Administration (NRA), Home Owners’ Loan Corporation (HOLC)
- Selgin disputes the identification of the New Deal with Keynesian economics, calling this the “Keynesian myth.”
- Selgin’s position on Roosevelt’s policy stance:
  - Roosevelt was “firmly committed to fiscal conservatism until after 1937.”
  - The Federal Reserve “did not deliberately use monetary stimulus in response to the Depression.”
- Selgin argues Roosevelt was not influenced by Keynes and that Keynes’s warnings about policy uncertainty and expectations were largely borne out by New Deal actions (for example, the National Industrial Recovery Act).

### Evidence assessment and research gaps
- Selgin evaluates conventional wisdom, challenges to that wisdom, and counterarguments in each chapter, making clear his stance and its evidentiary basis.
- He “pinpoints where evidence is shaky or missing,” and the book is described as “a treasure trove of research ideas for economic historians.”
- Example of research need identified: improved empirical studies estimating the effects of policy uncertainty on investment—highlighted as “an especially important topic today, with some measures of economic policy uncertainty at record highs.”

### Illustrative quotations and contemporary perspectives
- Business reaction captured in a 1937 quote from Lammot du Pont II: “uncertainty rules the tax situation, the labor situation, the monetary situation and practically every legal condition under which industry must operate...The whole future is a gigantic question mark.”
- Selgin’s formulation: “it isn’t simply bad outcomes that frighten investors; it’s also not knowing what’s in store.”
- Selgin critiques Eric Rauchway’s 2015 book The Money Makers as part of the “Keynesian myth” school, particularly the claim that Roosevelt “conducted an active monetary and fiscal program of recovery...working along lines suggested by Keynes.”

### Scholarly contribution and audience
- For economic historians: identifies specific empirical and archival gaps and poses research questions.
- For a general audience: principal contribution is debunking the association of the New Deal with Keynesian economics and clarifying Roosevelt’s fiscal and monetary stance in the 1930s.
- The book balances literature review and original historical interpretation chapter by chapter, making explicit where evidence supports or fails to support claims.

*Source: Review of False Dawn by George Selgin, F&D, SEPTEMBER 2025, p.72.*

---


_Source: https://www.imf.org/-/media/files/publications/fandd/article/2025/09/books-binder.pdf_