FDR and the Great Depression

With all this talk of another Great Depression, it is worth looking at what made it Great. For starters, the financial markets dropped approximately 25% in one day. Unemployment at times was over 25%. And it lasted until the onset of World War II in 1939. This last part is curious, because most depressions are much shorter, usually one or two years. During this period, we had the government, under first Herbert Hoover and then Franklin Roosevelt, radically experimenting with many facets of the economy in order to "fix it". Hoover failed so miserably he was driven from office, while only WW II saved FDR from looking like the next great dictator. Sound harsh? Well, consider what was going on. Jonah Goldberg is good at detailing these things, like he does in his column titled The Raw Deal.

As historian William Leuchtenburg documented in his essay "The New Deal as Moral Analogue to War," Roosevelt's presidency was drenched in martial metaphors and militaristic appeals to loyalty and unity long before World War II. The New Deal's Public Works Administration (PWA) funded enormous rearmament, including two aircraft carriers, and even the Civilian Conservation Corps was organized along military lines. The preeminent Progressive historian Charles Beard was driven to the point of crankery in his rage against FDR's "Caesarism." Roosevelt's famed Brains Trust was the original ideological cabal, intent not so much on fixing the Depression as on using it as a pretext for schemes of radical reform. The president ordered the domestic surveillance of his political enemies, and the House Un-American Activities Committee was organized in the 1930s—a decade before Joseph McCarthy became a senator—to hunt down "Browns," real and imagined. FDR's attempt to pack the Supreme Court was an assault on constitutional propriety far more sinister than the alleged irregularities of the Bush v. Gore recount decision. The four-term Roosevelt was our first and only president-for-life, flouting the two-term tradition begun by George Washington. He ran for his third term on the promise that he would keep American boys out of another "foreign war," even though he probably had other intentions.

And this list is just a beginning. Does this really qualify him for near dictator status?

Of course, FDR was no cruel dictator. But he saw nothing wrong with using the mechanisms and aesthetics of dictatorship in order to advance the Progressive transformation of the American state. Roosevelt himself privately acknowledged that "what we were doing in this country were some of the things that were being done in Russia and even some of the things that were being done under Hitler in Germany. But we were doing them in an orderly way." That so many liberals today find that not only forgivable but laudable should tell us something about their ambition. After all, the FDR myth remains liberalism's most "usable past."

Really, what people want is acknowledgment of the advent and import of social security and the welfare state, but those two institutions, arguably the most enduring institutions left from that turbulent time, did nothing to end the Great Depression. Instead, "by 1938, one in six Americans was still without a job, and many more were less than secure in their employment." And agencies to manage the economy were often declared unconstitutional, like the National Recovery Administration. And even today we are wondering why the SEC has done nothing to prevent the mortgage meltdown. Maybe because no small group of people can possibly expect to manage an economy?

FDR believed in the Wilsonian 'living constitution', as a malleable set of texts, with himself as the interpreter. His attempts to pack the Supreme Court to rubber-stamp unconstitutional legislation were obscene power grabs. He was notorious for his secrecy in most matters. He had no appreciation for his impacts on individuals, all while maintaining that he was helping everyone, at least everyone if you were poor. Class warfare was an important part of FDR's New Deal. If you owned your own business or were an entrepreneur, FDR make life very difficult. Confiscatory tax rates stifled new investment (someone please explain again why Obama wants to raise capital gains taxes during an economic downturn), while changes in labor laws forced many businesses to close because they couldn't afford union wages and benefits or why Obama wants to rewrite labor laws to allow more labor corruption?).

But the end goals are lauded by liberals (ie the end justifies the means), so extending the Great Depression for an extra six to eight years is worthwhile if it raises government's role in the economy and the life of the citizenry, since people cannot be expected to act rationally for their own interests, someone on high must do it for them. WW II has saved a lot of the historical appreciation of FDR, but the management of that war makes the management of our current Iraq adventure look like a Toyota factory in comparison. Enough decisions were made correctly, enough good minds were on our side that we were able to prevail, and enough manpower was available that we could waste millions of lives through poor planning and still achieve victory.

And it took FDR's death before the American economy truly returned to prosperity, as 1946 brought a wave of tax cuts and the lifting of restrictions on trade and businesses, which ignited the post-war boom. And then there is the small fact that some of Roosevelt's closest advisers were Soviet agents, reporting our every move and every secret to Stalin. Fortunately, Americans wised up after this near-dictatorial experience and passed a Constitutional Amendment prohibiting a third term. Hopefully we can avoid a second experiment with New Deal style policies, although some government intervention is clearly necessary to maintain confidence.