(as it appeared at this site)
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.
Franklin Roosevelt biographer Conrad Black has a new article championing the 32nd president, and defending the man’s legacy against a number of critiques that have emerged since his time in office. This article comes at a time when many are demanding “another New Deal” and a resurgence in Rooseveltian governance in general.
An interesting facet here is that while most of these paeans to FDR have come from the progressive and center-left, a few years back, it was the right calling for the current president to be more FDR-like, in matters of war in particular. 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. It was also a conservative who penned a book defending one of FDR’s most conspicuous programs, one not revered so much on the Left these days, Japanese Internment.
But now the myth is that the conservatives and Republicans in this country have cast away the New Deal government created by Roosevelt, and cashed it in for “laissez-faire.” The federal government in America is huge, the largest in absolute terms in world history, probably, especially given its reach over the world and wealth consumed at home. Yet Bush’s $3 trillion state is allegedly a mark of “anti-government bias” on the Right.
Almost all the prominent and powerful Republicans have been New Dealers. Ronald Reagan, the supposed paragon of modern conservatism, was a New Dealer and never did anything to undo FDR’s legacy. Newt Gingrich and Bob Dole both paid tribute to this great leader, who, as the story goes, did so much to pull Americans out of the Great Depression.
That the Depression, in terms of lowered standards of living, poor quality and availability of consumer goods 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.
Interestingly, Black 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. But he credits FDR’s many policies for bringing about recovery. One thing that seems to have made Black 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 the UCLA economists who have recently concluded that FDR’s policies “prolonged the Depression by seven years”:
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."
The economists conclude that recovery would have come sooner, if not for the New Deal, particularly the National Recovery Administration, which forced businesses to cartelize, and pro-labor legislation. 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 National Recovery Administration, 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., it was a plague of corporatism that imprisoned people for charging too little (landing tailors in jail for pressing pants too cheaply) and smashed economic liberty in a hundred other ways. Clarence Darrow was called upon to investigate the program in an independent commission and called it “harmful, monopolistic, oppressive, grotesque, invasive, fictitious, ghastly, anomalous, preposterous, irresponsible, savage, wolfish.”
Another major feature of FDR’s New Deal was the Agricultural Adjustment Act, which sought to keep agricultural prices up through the mass destruction of crops and livestock. It worked in keeping prices up, but at a time when Americans were starving, this was perhaps not 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, also not a supply-sider so far as I know, has demonstrated other ways, in much greater detail, that FDR in fact prolonged the Depression. First, it bears mentioning that 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, except at peace. 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 about investing in projects, 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 percent when Roosevelt entered office to half of 1 percent 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 . . ..”
As for unemployment, if the decline 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 per capita income, or national income for that matter, this is also quite deceptive. I have heard many scholars concede the New Deal did not bring America out of the Depression; 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 GDP 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.
Two more quibbles about the Black 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 in many conventional accounts. 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 and killed.
My second quibble: It is true that FDR, unlike the Republicans before him, was anti-prohibition. Indeed, he was nearly a libertarian compared to Hoover across the board. (In 1932, he 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 effective 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), had plans to round up rightwing and leftwing activists without due process, drafted (enslaved) 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 the Nazis, was deceitful in foreign affairs, and did not actually bring America out of the Depression, in terms of economic well-being for the American people. We don’t need another one of him. His despotic spirit is seen plenty enough in the leaders of both political parties now.
For more on Franklin Roosevelt’s prolonging of the Depression, see Higgs’s Depression, War and Cold War. See also the Independent Institute’s bibliographies on the Great Depression and World War II. And for a bold critique of FDR and the many other overrated presidents, see Ivan Eland’s forthcoming book, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity and Liberty.
First published by The Independent Institute. Republished with permission.
Political Theory, Humanities, Language, Academia, Histo
Anthony Gregory is a Research Analyst at The Independent Institute. In addition to his work with the Independent Institute, he regularly writes for numerous news and commentary web sites, including LewRockwell.com, Future of Freedom Foundation, and the Rational Review.info@independent.org
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