FDR Is Everywhere in Sight

Franklin Roosevelt biographer Conrad Black has a new article defending the 32nd president. This article, "Where’s FDR When You Need Him?" comes at a time when many are demanding "another New Deal" and a resurgence in Rooseveltian governance. Presumably, he believes FDR needs defending.

Interestingly, while most of these paeans to FDR have come from the progressive and center left, a few years back, it was the right deifying FDR’s policies – especially in war. Conservative talk show hosts could be heard nostalgically celebrating the U.S. strategic bombings of World War II, complaining that President Bush was unwilling to drop even more explosives upon the Iraqi people. They said Bush’s detainment policy was firmly rooted in FDR’s experience. It was also a conservative who penned a book defending one of FDR’s most conspicuous programs, Japanese Internment.

But now the myth is that the conservatives and Republicans in this country have cast away the New Deal in favor of "laissez-faire." Bush’s $3 trillion state is allegedly a mark of "anti-government bias" on the right.

The modern right actually loves the new Deal, of course. Ronald Reagan, the supposed paragon of modern conservatism, Newt Gingrich and Bob Dole all paid tribute to the president who supposedly brought America out of the Great Depression.

That the Depression, in terms of lowered standards of living for the masses, did not truly end until after FDR died never seems to complicate the standard narrative. For a Depression to last so long, unlike the unknown Panic of 1819 or sharp recession of 1920–21, should be a signal that perhaps FDR’s programs were not all that successful. Every other American recession was a flash in the pan by comparison.

Returning to Black’s eulogy, he notably blames Herbert Hoover for his "higher taxes and tariffs," thus rejecting the common myth that Hoover was a laissez-faire president who did nothing in response to the Depression. (See Rothbard for the full story.) But Black credits FDR’s many policies for bringing about recovery. One reason that he seems to believe FDR needs defending: "It has been alleged by some supply-side economic purists that he actually prolonged the Depression in the United States." Perhaps he is referring to these UCLA economists:

After scrutinizing Roosevelt’s record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years."

Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump," said Ohanian, vice chair of UCLA’s Department of Economics. "We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies."

In short, if not for the New Deal, particularly the National Recovery Administration (NRA), which forced businesses to cartelize, and pro-labor legislation, the Depression would have been much shorter. Yet this basic theory is not entirely new, nor one adopted merely by "supply-side purists."

More than sixty years ago, progressive liberal muckraker John Flynn took FDR to task in his journalistic treatment, The Roosevelt Myth. This included a wonderful attack on the clumsy and counterproductive NRA, modeled largely after Mussolini’s policies in Italy:

[Mussolini] organized each trade or industrial group or professional group into a state-supervised trade association. He called it a corporative. These corporatives operated under state supervision and could plan production, quality, prices, distribution, labor standards, etc. The NRA provided that in America each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a Code Authority. But it was essentially the same thing. These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA. This was fascism. The anti-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now he suspended them and compelled men to combine.

Before this monstrosity was finally ruled unconstitutional in Schechter v. U.S. – the Supremes recognized "interstate commerce" only reached so far – it was a plague of corporatism that imprisoned people for charging too little (landing tailors in jail for pressing pants too cheaply, for example) and smashed economic liberty in a hundred other ways. Clarence Darrow investigated the program in an independent commission and called it "harmful, monopolistic, oppressive, grotesque, invasive, fictitious, ghastly, anomalous, preposterous, irresponsible, savage, wolfish."

Another major New Deal feature was the Agricultural Adjustment Act, whose goal was to keep agricultural prices high through the mass destruction of crops and livestock. It worked in keeping prices up, but at a time when Americans were starving, this was hardly the most sensible or humane approach. Thankfully, it too was ruled unconstitutional. After that FDR responded with his infamous "court-packing scheme" and the Supremes became obedient.

Robert Higgs, not a supply-sider, has demonstrated other ways, in much greater detail, that FDR in fact prolonged the Depression. Higgs pointed out years ago that FDR’s ideas were not even that original, but were largely reincarnations of Woodrow Wilson’s wartime economic policies at peacetime. But where FDR lacked in originality, he compensated for in destructiveness. For one thing, Roosevelt’s constant assaults on the free market, without any sort of consistency or predictability about them, led to what Higgs calls "regime uncertainty," a situation in which investors felt very uneasy even about their property rights in their investments, making recovery that much slower.

Ultimately, FDR’s defenders rely on two statistics more than any other argument, and Black is no exception: "Unemployment declined from about 33 per cent when Roosevelt entered office to half of 1 per cent when he died in office 12 years later (and had been at that point for 4 1/2 years, since several months before Pearl Harbor). The average per capita income doubled under Roosevelt. . . ."

If the sharp decline in unemployment began before the war, it might have something to do with "the first peacetime draft in the midst of the 1940 election campaign" that Black proudly lumps together with FDR’s "Fourth New Deal." Higgs has shown how important conscription was to the reduction in unemployment. Being killed in the trenches is not actually good for the soldier’s economy, as I once heard someone remark.

As for income figures, they can be deceptive. Many will concede that the New Deal did not bring America out of the Depression (they say World War II did). But again, as Higgs has argued persuasively, the rise in national income in nominal dollars did not correspond to better economic conditions for the average American. With the government spending so much – about 40% of the economy – on the war effort, a staggering amount of American labor and production was being devoted to destruction – bombs, bullets, uniforms, warplanes, the Manhattan Project, and the like. Meanwhile, during the war, new automobiles and appliances were not available; sugar and butter were rationed and scarce; good clothing was hard to obtain. People worked harder for less. And if national income really told the whole picture, then how to account for the fact that 1946 saw "the largest single-year drop of income in American history"? No one talks about the Depression or crash of 1946. Americans became more prosperous that year: The USA had less money in nominal dollars, but it diverted much less wealth to unproductive uses. (For these and many other important Higgsian insights, see Depression, War and Cold War.)

Two more quibbles about Black’s article: First, yes, some might exaggerate the extent to which "Roosevelt had been swindled by Stalin at Yalta into handing over Eastern Europe to the USSR." Given the way things were going, much of that would have happened anyway. But FDR does indeed come off as naive about Stalin. He should have been familiar with Stalin’s ruthlessness throughout the 1930s, when he murdered millions, as well as in the war (the USSR aggression against Poland was no more excusable than Hitler’s). Yet he believed that Stalin didn’t "want anything but security for his country." Roosevelt thought if he gave "him everything I possibly can and ask for nothing in return, noblesse oblige, he won’t try to annex anything and will work with me for a world of democracy and peace." His adoration of "Uncle Joe," as he called the Soviet dictator, did not subside even as Stalin annexed, along with half of Poland, Lithuania, Latvia and Estonia. And although Yalta was far from the only factor in Stalin’s conquest of Eastern Europe, it was there that FDR secretly agreed to Operation Keelhaul, an unspeakably murderous repatriation program whereby hundreds of thousands, perhaps millions of refugees from the USSR were rounded up, forced back to Stalin, and enslaved or killed.

My second quibble: It is true that FDR, unlike the Republicans before him, was anti-prohibition. Indeed, his campaign promises were libertarian compared to Hoover's on most issues. (In 1932, FDR championed lower taxes, lower spending, liquidation, sound money, lower tariffs, a smaller bureaucracy, less war and freer markets. The Democratic platform of that year was also much more laissez-faire than that of the GOP, blasting the latter for its big-government policies. Ayn Rand and other small-government advocates voted for FDR for that reason.)

But it is perhaps an exaggeration to say that FDR "repealed Prohibition of alcoholic beverages (wrenching one of America’s largest industries out of the hands of the underworld)." He did modify the Volstead Act, allowing beer with 3.2% alcohol. But federal prohibition didn’t really end until the 21st Amendment was passed by the state legislatures, the culmination of years of activism. It would have likely happened without him. And, for what it’s worth to the civil libertarians on the left, four years later he signed into law the federal prohibition of marijuana, ushering in the federal drug war.

It is funny that FDR is so universally beloved on left and right. He imposed counterproductive economic fascism, destroyed food while people starved, imposed gun control and drug control at the federal level, created Fannie Mae (which has continued to cause economic troubles), drafted plans to round up rightwing and leftwing activists without due process, conscripted ten million Americans into the military, waged total war on civilians, brought nuclear weaponry into the world, stuck tens of thousands of U.S. citizens into concentration camps, set up a censorship office, palled around with Stalin, turned away exiled Jews back to Nazi control, was all around deceitful in foreign affairs, and did not actually bring America out of the Depression, in terms of economic well-being for the American people.

Today, everyone reveres Franklin Roosevelt. No one significant in either major party wants to repeal the New Deal. To the contrary, almost all wish to build upon it. Black wants to know where FDR is. Truth is, he’s everywhere in sight.

October 29, 2008

Anthony Gregory [send him mail] is a writer and musician who lives in Berkeley, California. He is a research analyst at the Independent Institute. See his webpage for more articles and personal information.

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