This essay adopts Susan Stewart's notion of distressed genres as a way to interrogate the seemingly nostalgic strain of American modernist fiction produced in the early decades of the twentieth century. The first section reads Sherwood Anderson's Winesburg, Ohio alongside Walter Benjamin's “The Storyteller,” arguing that the literary text and the critical essay reach comparable insights into the ideological dimensions of the struggle to rehabilitate oral narrative practices. The second section takes these insights as the point of departure for an examination of the functional aspirations animating William Faulkner's Depression-era achievement. In this case, the guiding claim is that his novelistic enterprise culminates in a reflexive analysis of the fantasy organizing his literary labors throughout the period. More precisely, “The Bear” in Go Down Moses reveals the extent to which the anachronistic dream of recovering the collective experiences of preindustrial life masks the author's insertion into an industrialized system of literary production. The concluding portion of this discussion turns to F. Scott Fitzgerald's affiliated attempt to recreate or refashion the fairy tale as a (compensatory) response to the burdens of everyday existence in urban-industrial modernity. Here again the thesis is that the writer's mournful negation of his own project generates a perspective that parallels Benjamin's brief speculations on the folkloric genre.