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The Folly of FDR
#21
Oh Boy, we are definately living in Interesting Times. It seems like more and more are finally getting the message, that FDR was BAD for the US economy, not like the Jackasses have been braying about all these years. Do I finally see a Huge crack in the granite of invencibility here?

Anyway, it's about time, and definatley not too late.

Quote:President Roosevelt gave the US economy its worse economic recovery, not President Bush

Gerard Jackson
BrookesNews.Com
Monday 9 June 2007

I'm still getting emails from demented democrats about how "Bush's fascist cabal is destroying America by trampling on the Constitution" and "how Bush has presided over the worst economy ever" blah, blah, blah. This garbage makes it pretty clear that hardcore Democrats do not have a sense of irony, let alone a sense of humour. The message has changed somewhat of late. These hate-filled wingnuts are now claiming that "Bush has given the country the worse economic recovery in its history". So not only are these Dems economic illiterates they are also ignorant of their country's economic history.

It was 1937 and the US economy was showing definite signs of recovering from the depression. Unemployment was falling and business confidence was strengthening. Unemployment had dropped from a catastrophic 12.5 million in 1933 to 9.5 million in 1935 after which the drop in unemployment quickened, bringing unemployment down to 6.4 million by 1937. As for further evidence that activity was accelerating, iron and steel production had risen to over 100 per cent the 1933-34 level and car production more than doubled the 1933 level.

Production trends were similar for other products. Even so, it was still a weak recovery and aggregate wages as a per centage of national income exceeded 70 per cent while profits were only about 15 per cent. This meant a 10 per cent increase in labour costs would be enough to slash profits by more than 50 per cent. Clearly, any wage-push would quickly derail the recovery.

So how did Roosevelt manage to turn an emerging recovery into an economic disaster?

Let us begin with 1935, the year in which the Wagner Act was passed in reaction to the Supreme Court's decision to declare the economically destructive National Recovery Act unconstitutional. Constitutional lawyers had advised business that the Wagner Act was unconstitutional. In view of this advice, most big businesses ignored the Act and used free market prices to increase output and employment.

In 1937 Roosevelt-appointed judges dealt the economy a savage blow. The Supreme Court in a series of 5 to 4 decisions reversed its reasoning in the NRA case and upheld the Wagner Act as constitutional. (The Act had the effect of raising union membership from about 8 per cent of the workforce to 25 per cent). The court's decision meant that business was now forced by law to "negotiate" with politically privileged unions.

As one would expect, the unionocracy and its political allies refused to tolerate market wage rates. (In fairness I should point out that President Hoover also strongly opposed market rates). The court's judgment was immediately followed by an immense outbreak in union activity (some of it quite violent) resulting in a rapid rise in labour costs. The result was as predictable as it was tragic - unemployment leapt from 6.4 million in 1937 to 10 million in 1938.

In an effort to absolve the Roosevelt administration of any responsibility for aborting the recovery apologists cooked up three principal alibis. One blamed the Fed for reducing bank reserves. This excuse overlooked the fact that the Fed was only removing idle reserves, which explains why their removal had no effect on short-term interest rates, including commercial paper.

The second alibi had it that that the disappearance of the government's deficit caused the crash by reducing government spending. The problem with this argument is that total federal expenditure for the whole of 1937 and the first four months of 1938 was $10,058,000,000 while revenue equaled $8,229,000,000*.

The third argument had that by sterilising the gold inflow the Fed inadvertently created a deflation that caused the economy to contract. What this argument misses is that that sterilisation only prevented incoming gold from adding to excess reserves. As we have seen, these reserves were successfully reduced without affecting economic activity.

It was the destructive behaviour of unions - countenanced by the Roosevelt administration - that sent the American economy into a vicious tailspin. One does not have to be a genius to figure out that if a union grabs all of a firm's profit someone will have to be sacked. For evidence of this self-evident fact let us look at the situation in 1929 when the two-way division between employees and corporations was 81.6 per cent and 18.4 per cent respectively. In 1933 employees' share had rocketed to 99.4 per cent while payrolls fell from $32.3 billion to $16.7 billion and unemployment rose to a horrific 25 per cent.

In every free market there exists a tendency for every factor of production - including labour - to be paid the full value of its marginal product. It follows that when labour costs exceed the market clearing rate unemployment will rise. Gallaway and Vedder put this economic axiom to a statistical test. Taking 1929 as equal to 100 they found that by 1933 the adjusted real wage (the real wage adjusted for productivity) had risen to 122 while unemployment had jumped to 25 per cent. (Gallaway and Vedder, Out of Work. New York University Press, 1997, p. 103).

They also gave 1933 an index number of 100 for the adjusted real wage. In 1934 the index had risen to 104.5 and unemployment stood at 21.7 per cent. (Gallaway and Vedder , Review of Austrian Economics, 1987, 1, pp. 33-80). Unemployment for 1935 fell to 20.7 per cent while the adjusted real wage had dropped to 102.2. Now 1936 is of particular interest. In that year the adjusted real wage fell to 97.6 which brought the unemployment rate down to 16.9 per cent. The following year saw unemployment fall to 14.3 per cent. But 1937 was also the year in which Roosevelt sanctioned the union thuggery that drove the real adjusted wage up to 107.2 and then to 114.5 in 1938, the year which saw unemployment leap to 19 per cent.

So much for the myth that Roosevelt ended the Great Depression.
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*The idea that a significant drop in government spending will drive up unemployment is, unfortunately, still with us. Yet the employment record for the fiscal years from 1944 to 1947 completely demolish this erroneous thinking.

During those years the US government slashed Federal spending from an annual $95 billion to $36 billion per year - a $59 billion cut in three fiscal years. This was a staggering 62 per cent reduction. Instead of the economy spiralling into a depression with 8 million unemployed, as predicted by Keynesians, including Samuelson, it boomed.

Gerard Jackson is Brookes' economics editor
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#22
Here is an interview with Amity Shlaes, by Reason Magazine, about her latest history account of FDR and the Great Depression, "The Forgotten Man". It is quite enlightening in it's honesty, and even handedness. The entire interview is well worth the time, believe me. However, if time is of the essence, here are some of her statements taken at random.

Quote:When accepting the Democratic Party's presidential nomination in 1932, Roosevelt proclaimed "a new deal" for the American people. Once in office, he began radically transforming the federal government while seeking to ameliorate the nation's woes. He pushed subsidies for farmers, changed the banking system, and created the National Recovery Administration, which regulated many aspects of business until it was declared unconstitutional in 1935. Through the creation of the Social Security system and related programs, Roosevelt vastly expanded the scope and size of the federal government and created the political world in which we live. The shift was so complete that even as vocal a foe of big government as Ronald Reagan, who started his political career as a New Deal Democrat, approvingly wrote to Congress in the early 1980s of the "nation's ironclad commitment to Social Security" and praised FDR's visionary leadership in creating the program.

One of the important things about the existing argument is that it's all about Keynesianism, about whether government spending can cure the economy when it's ill. Scholars have overlooked the cost of uncertainty in an economy, what we would now call the "unknown unknowns." Both the Hoover and Roo-sevelt administrations (but especially the Roosevelt administration) were so unpredictable. That hurt the economy very much, and when I went back and saw the extent I was astounded. Uncertainty is a factor that I thought needed to be explored. There were lots of people who said, "I will not invest 'til I know what's going to happen." ...

Roosevelt's advisers didn't know Stalin was a monster, or at least not so much, and very naively they copied him. In the book I trace how some of the characters go to the Soviet Union in 1927 and are bowled over by Stalin. They get six hours with him and they come back and you see them, especially [former Columbia University professor] Rex Tugwell, implementing things they learned from fascist Italy or from the world of Stalin. The influence of these European entities from Russia to Italy was not parenthetical. These people were not working for Moscow, but they were influenced by Moscow.

One of the members of the junket was a very well-known writer named Stuart Chase, an accountant who wrote about economics. He wrote a book called The New Deal, and it appeared in 1932, and that's where Roosevelt got the phrase. The last sentence of Chase's book is, "Why should Russians have all the fun remaking a world?" So you see the continuity.

There was a romance with the economy of scale, and not just in America. FDR's advisers said that having so many different states and so many different ways of doing things was inefficient. If you had 50 flowers blooming, as federalists would have, they bloom differently and it makes for a messy garden. There was this sense that the economy couldn't grow further unless there was rationalization, standardization. Even now you'll see businessmen fighting for standardization: "Just make the rule!" they say.

The most important thing for our generation is that the New Deal will come back to bite our children when they pay yet higher payroll taxes because we did not dare to reform Social Security and other entitlements. There are not enough people to pay for Social Security, and Social Security is set up so that you can't fix it just by growing the economy.

This is a moment of choice for us, our generation and the younger people. We have to look again at Roosevelt. Roosevelt was inspiring. He was right on World War II, but we do not have to have false nostalgia for his wrongheaded policies in the '30s. We should warn our children and help to change Social Security, but you don't see that in the presidential candidates. You don't see daring on Social Security.
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#23
Has it ever occured to you, that all collectivist, even borderline fascist measurements Roosevelt introduced were caused by his deep religiousity? No wonder, zealous Christian faith always leads to big government and the choking of rugged individualism, religious doctrines are inherently collectivist.
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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#24
quadrat Wrote:Has it ever occured to you, that all collectivist, even borderline fascist measurements Roosevelt introduced were caused by his deep religiousity? No wonder, zealous Christian faith always leads to big government and the choking of rugged individualism, religious doctrines are inherently collectivist.

Nice try, but no cigar "Q". Try again somewhere eles. And remember the NSDAP was predicated on Norse Paganism, not Christianity.
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#25
John L Wrote:
quadrat Wrote:Has it ever occured to you, that all collectivist, even borderline fascist measurements Roosevelt introduced were caused by his deep religiousity? No wonder, zealous Christian faith always leads to big government and the choking of rugged individualism, religious doctrines are inherently collectivist.

Nice try, but no cigar "Q". Try again somewhere eles. And remember the NSDAP was predicated on Norse Paganism, not Christianity.
Ok, I guess you know American history and FDR better than I do. So help me. What was the underlying reason or motivation FDR introduced those collectivist measures and big government to the USA, what was the reason he proped up and allied with the most awful collectivist regime that ever existed, the one of Stalin, instead of fighting both fascism and communism? That FDR was a deeply dedicated Christian is well known, did I miss briefings by Lenin or so?
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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#26
quadrat Wrote:Ok, I guess you know American history and FDR better than I do.

Not a chance "Q". You know American history more than ALL of us combined. Wink1
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#27
Just for the record, as John has already posted, FDR lived as an elite in the times when elites swallowed the beliefs of Marx - hook, line, and sinker. Thomas Dewey set up the U.S. educational system which still percolates along spewing disinformation while totally dedicated to each directive in Marx's works. The world was small, and Pulitzer prizes were handed out to Walter Duranty who lied about the Stalin-made Russian famine that killed an average of 25,000 Ukraines per day. Those who knew how bad Communism was did not tell the world.

FDR was no seer who could predict just how opposite it was to how it was represented. There was no CIA that had fact-checking capabilities to tell the President what he needed to know. He did the best he could with a world view distorted beyond understanding. The decisions he made were all sincerely made for the betterment of all, but reality interposed and the true consequences of incorrect assumptions plague us to this very day.
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#28
As they say, the road to hell is paved with good intentions.

WmLambert, you are very charitable towards FDR. But maybe its true.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#29
WmLambert Wrote:Just for the record, as John has already posted, FDR lived as an elite in the times when elites swallowed the beliefs of Marx - hook, line, and sinker. Thomas Dewey set up the U.S. educational system which still percolates along spewing disinformation while totally dedicated to each directive in Marx's works. The world was small, and Pulitzer prizes were handed out to Walter Duranty who lied about the Stalin-made Russian famine that killed an average of 25,000 Ukraines per day. Those who knew how bad Communism was did not tell the world.

FDR was no seer who could predict just how opposite it was to how it was represented. There was no CIA that had fact-checking capabilities to tell the President what he needed to know. He did the best he could with a world view distorted beyond understanding. The decisions he made were all sincerely made for the betterment of all, but reality interposed and the true consequences of incorrect assumptions plague us to this very day.
You are totally right, Stalin was a bad, bad, bad man. Why did you say you allied with him, then? You might remember the alliance fighting in Europe with the nazis was a broad one, Ukrainian etc. nationalists, democrats, who wanted independence for their by the CCCP before WW2 occupied countries. Why didn't you back them, but Stalin commiting his crimes? Why did you send all Russians, Ukrainians, Serbs, Croats, Hungarians, Poles, Chechs etc etc caught in the by the Western allies occupied area of Europe back to their now by communists controlled nations? That were not only soldiers or militia fighting with the nazis, but slave labourers, POW's, and hundreds of thousands of refugees fleeing before the advancing Red Army. Hardly any of them survived the gulags, if they were not executed on the spot.
Why did you even transfer East Europeans who fought on your side in the war, invaded France with you in June of 1944, back to their countries were they were executed or jailed?
Save the crocodile tears, you had no more honour than Stalin. Not much change in the last 60 years, I might add.
Wait, I can tell you why you allied with Stalin. Because the communists have never been a threat to you, unlike Hitler.
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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#30
Yawn,..........ZZZZZZZZZZZZZZzzzzzzzzzzzzzz
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#31
Sorry, quadrat, but you missed the point. FDR did not ally with Stalin out of respect for Communism. Stalin was not understood for what he was, and what his economic and political system represented. FDR's VP, at one point, was the most Leftist man in Congress and although not a Communist agent, like Alger Hiss and many others proven to have been in FDR's staff, he pushed hard for Stalin. FDR is not known to have embraced Stalin's views, but he gave pause to battling them with so much unknowledgeable support for him.

You cannot point to any international position ever taken out of greed or malice from the U.S. - The leaders at the time genuinely believed their decisions were for the good of the people. Only the unknowing disinformed continue to claim wars were fought for ignoble reasons. Some wars, like the Clinton bombing of Kosovo, were tragic and misinformed - but the people who authorized it were just willing dupes, too easily led by uninformed Leftists. The did it because they thought it was right, even if later substantiated facts proved their actions wrong.

Instead of crowing about past errors, why not provide intelligent commentary of what should occur?
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#32
Close enough for government work. Reasons for fearing a new millennium WPA.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#33
mr_yak Wrote:Close enough for government work. Reasons for fearing a new millennium WPA.

Ahh yes, Amity Shlaes, arthur of "The Forgotten Man". And she is an FDR expert too. Much of the jobs provided by such things as the CCC were make work jobs, made to get people away from home and out of trouble. Dad was in the CCCs and he talked about using shovels and picks when a simple piece of equipment could have done the same thing in minutes.

The picture here, in the article, tells it all.

[Image: 123107wpa.jpg]

As James K Glassman stated in a speech to the CATO Institute, about The Blessings of Free Trade,

Quote:To see what I mean, let me relate an anecdote used by my friend Jerry Jordan, president of the Federal Reserve Bank of Cleveland, in an article in the Cato Journal last summer. Jordan described a U.S. businessman visiting China a few years ago. The American came upon a team of 100 workers building a dam with shovels. Shovels.

He commented to a local official that, with an earth-moving machine, a single worker could build the dam in an afternoon. The official replied, "Yes, but think of all the unemployment that would create."

"Oh," said the businessman, "I thought you were building a dam. If it's jobs you want to create, then take away their shovels and give them spoons."

this is why governments are not able to do for an economy what private enterprise can. Top down planning is inefficient and wasteful. All the money and resources spent by the FDR administration could have been done away with, had they just lowered taxes, and removed those G-d Awful tarriffs and allowed Free Enterprise to blossum.
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#34
Very good post, John. Clear as a bell, yet there will always be those who can't see the greater good than a mere 100 stoop labor jobs. They may also argue that these stoop labor jobs are those the U.S. worker won't do so illegal immigrants must do it with spoons.
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#35
John L Wrote:Dad was in the CCCs and he talked about using shovels and picks when a simple piece of equipment could have done the same thing in minutes.

article linked above Wrote:One of the saddest accounts of the public-works job culture I came across involved a model government farm in Casa Grande, Ariz. The men were poor--close to "Grapes of Wrath" poor--but sophisticated. They knew that the government wanted them to share jobs. But they saw that the only way for the farm to get profits was to increase output and to stop milking by hand. Five dairy crew men approached the manager to propose purchasing milking machines to increase output. They even documented their plea with a shorthand memo:

"Milking machine would save two men's labor at five dollars per day . . . Beginning in September would save three men's wages or $7.50 on account of new heifers coming in."

The men were willing to strike if they didn't get the machines, though they feared they might lose their precious places on the farm if they did strike. Their fears proved justified. "You're fired," the workers later recalled the manager replying when he saw their careful plan. The government man was horrified at the idea of killing the jobs he was supposed to create. "You're jeopardizing a loan of the U.S. government, and it's my job to protect that loan. You're through, everyone of you, get out."
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#36
WmLambert Wrote:Sorry, quadrat, but you missed the point. FDR did not ally with Stalin out of respect for Communism. Stalin was not understood for what he was, and what his economic and political system represented. FDR's VP, at one point, was the most Leftist man in Congress and although not a Communist agent, like Alger Hiss and many others proven to have been in FDR's staff, he pushed hard for Stalin. FDR is not known to have embraced Stalin's views, but he gave pause to battling them with so much unknowledgeable support for him.

You cannot point to any international position ever taken out of greed or malice from the U.S. - The leaders at the time genuinely believed their decisions were for the good of the people. Only the unknowing disinformed continue to claim wars were fought for ignoble reasons. Some wars, like the Clinton bombing of Kosovo, were tragic and misinformed - but the people who authorized it were just willing dupes, too easily led by uninformed Leftists. The did it because they thought it was right, even if later substantiated facts proved their actions wrong.

Instead of crowing about past errors, why not provide intelligent commentary of what should occur?
Voila, there one is. What's the problem of you right-wing oddities with Kosovo? Are you so blinded by Muslim hate that you don't realise, an independent Kosovo which leans towards America is better for you than as part of Serbia which is influenced by Russia?
"You know, Paul, Reagan proved that deficits don't matter." Dick Cheney
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#37
Here is another debunking of FDR, in the form of a book revies of The Forgotten Man.

Quote:The Raw Deal: A review of The Forgotten Man: A New History of the Great Depression, by Amity Shlaes

By Jonah Goldberg

Posted January 14, 2008

This article appeared in the Winter 2007 issue of the Claremont Review of Books.

In The Defining Moment, his recent paean to Franklin Delano Roosevelt, Jonathan Alter claims to have made a genuine historical find: in 1932, members of FDR's inner circle had urged the new president to deputize the American Legion as-in Alter's words-an "extraconstitutional" "private army." In prepared remarks to be delivered to a meeting of the American Legion (and broadcast as his first radio address after his inauguration), FDR was to tell the assembled veterans, "As new commander-in-chief under the oath to which you are still bound, I reserve to myself the right to command you in any phase of the situation which now confronts us."

Alter's interpretation that this was "dictator talk-an explicit power grab" is entirely plausible for any number of reasons, including FDR's determination to use the World War I-era Trading with the Enemy Act as the legal justification for his dirigisme; a memo written at the Democratic Convention by future National Recovery Administration (NRA) head Hugh Johnson suggesting that the entire Congress and Supreme Court be sent into temporary exile while a Mussolini-style dictator set the country straight; and the widespread clamor for a "man of action" to run the country. Walter Lippmann himself urged FDR to assume "dictatorial powers."

But happily FDR didn't read his prepared remarks. Instead, he reiterated the rhetoric of his inaugural address, essentially designating the entire American people as a single "great Army" he would lead in a "disciplined attack on our common problems." And with that, Alter exonerates FDR completely, dubbing him a champion of democracy, defending our way of life even from the authoritarian drives of his own advisors and speechwriters.

Alter's readers would never suspect that President Roosevelt scores as badly if not worse on the typical kinds of charges hurled against George W. Bush and his administration: militarism, ideological cabals, secrecy, lies and lying-us-into-war, unscrupulous punishment of political enemies, disrespect for the Constitution and our political traditions, run-amok Wilsonianism, special favors for Big Business, and, most of all, incompetence.

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.

* * *

But it is particularly on the charge of incompetence that Amity Shlaes's The Forgotten Man: A New History of the Great Depression mounts perhaps the best crafted indictment of FDR in at least the last half-century. Debunking the Roosevelt myth is hardly a new pastime, of course. It was already a cottage industry when John T. Flynn published The Roosevelt Myth in 1948. Libertarians like the late Murray Rothbard and, more recently, Jim Powell have written excellent broadsides against FDR and his New Deal. Shlaes's work is something different. Her book does not directly confront the standard hagiographies by Leuchtenburg, Frank Freidel, or Arthur Schlesinger, Jr.; nor does Shlaes, a financial columnist for Bloomberg News, advance her own polemical interpretation. Instead, she offers an almost novelistic rendering of the times, allowing the gray eminences of the 1930s, like Harold Ickes and Rexford Tugwell, to pop out as three-dimensional figures, but also bringing to life less well-known men and women who were affected, one way or another, by the New Deal.

The book's title is richly ironic. Roosevelt made the phrase "the forgotten man" famous as a populist slogan, synonymous with "the little guy" whom the New Deal was supposed to assist. But in doing so, FDR inverted the phrase's original meaning. A half-century earlier, Yale sociologist William Graham Sumner had written an essay about the businessmen, taxpayers, and workers who were generally asked to pay for the good deeds done by others through the instrumentality of government. According to Sumner,

Quote:As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X, or in the better case, what A, B, and C shall do for X.... [W]hat I want to do is to look up C.... He is the man who never is thought of.

For Shlaes, C is also the forgotten man, but so are many of FDR's supposed beneficiaries. She begins her book with William Troeller, a 13-year-old boy whose Brooklyn family had fallen on hard times. At mealtimes the shy William felt guilty asking for his share of the meal when the rest of the family seemed to need it more. He hanged himself from the transom of his bedroom. The New York Times headline read: "He Was Reluctant About Asking for Food."

But Troeller didn't hang himself in 1929, one of the notorious suicides in the wake of the initial stock market crash on Black Tuesday. (In fact, Shlaes finds that contrary to legend, suicides didn't increase after Black Tuesday at all.) The boy killed himself in 1937, eight years into the Great Depression, and four years after the New Deal had set out to alleviate the nation's ills.

* * *

Of course, the New Dealers did not want to see children hang themselves, but the political focus was on interest groups rather than individuals. FDR and the New Dealers believed that progress called for wrenching systematic change. So if a few little guys had to be hammered down like obdurate square pegs unwilling to fit into round holes, so be it. In one of the most famous cases, not mentioned in this book, an immigrant dry cleaner named Jacob Maged was thrown in jail for months because he charged 35 cents to press a suit when the federal government demanded a minimum price of 40 cents. Roosevelt's planners were convinced that traders, middlemen, small businessmen, and independent entrepreneurs were the problem because they made bureaucrats' balance sheets so untidy. "We are no longer afraid of bigness," proclaimed Rex Tugwell. "Unrestricted individual competition is the death, not the life of trade."

Shlaes illuminates the New Dealers' priorities with the case of the Schechter brothers, Orthodox Jews in Brooklyn who raised and sold Kosher chickens (Schechter is derived from the Yiddish word for "butcher"). They ran into trouble with the New Deal codes that said, in the name of quality assurance, that venders couldn't let individual customers select their own chickens. Of course, "straight killing," as the practice was called, was itself a time-honored method of quality control (as were Kosher dietary laws generally). Nobody deliberately buys a diseased bird. But appeals to tradition, never mind religious tradition, were not merely unpersuasive to the New Deal's crusading progressives, but also insults to the "scientific" mind. The Schechters were harassed, fined, prosecuted, forced out of business, and ultimately sentenced to jail. They appealed all the way to the Supreme Court and won in the famous Schechter decision (1935) which, along with its companion cases, effectively ended the New Deal's National Recovery Administration. Although Roosevelt could now blame all of the country's troubles on the supposedly reactionary Supreme Court, the economy rallied after the decision.

* * *

The book focuses also on the transformation of another forgotten man, Wendell Willkie, the utility executive who became FDR's Republican challenger in 1940. Originally a New Deal sympathizer, Willkie grew disillusioned with its politics. By the presidential race, he called upon Roosevelt to "give up this vested interest that you have in depression" as the rationale for a "philosophy of distributed scarcity." Willkie was defeated in large part because Roosevelt's political revolution had succeeded, even if his economic one had failed. But Willkie had it right. FDR's political interests were deeply tied to continuing economic misery. His class-warfare rhetoric became self-fulfilling. The more the government failed, the more the people resented Big Business, and wanted Roosevelt to punish the "economic royalists." The longer the economy remained depressed, the more justifiable seemed the New Deal's permanent welfare state and its abandonment of federalism and other constitutional restraints on the federal establishment.

Although Shlaes notes that some industries cooperated with the New Deal, she dramatically downplays the point. (She de-emphasizes, too, the New Deal's roots in Woodrow Wilson's wartime socialism.) By concentrating so much of her fire on the New Deal's encroachments into utilities regulations (in part to move Willkie's story along) and banking and trade (in order to explain the real causes of the Depression), she sometimes gives the impression that the 1930s amounted to a war between "business and government," the "private sector and the public sector."

The reality was a bit more complicated. Industry leaders were desperate to be inside the tent, carving up the pie, and they were happy to prostitute themselves to the government as the price of admission. These supposed champions of the free market implored FDR to repeal anti-trust rules in the spirit of "cooperation." Henry I. Harriman, the retiring president of the U.S. Chamber of Commerce, and H.P. Kendall, Chairman of the Business Advisory Council, were New Deal yes-men. "We are here to uphold the president's hand in the fight against the Depression," Kendall declared.

Shlaes does not mention Gerald Swope, the General Electric CEO who proposed a sweeping corporatist scheme toward the end of Herbert Hoover's presidency, whereby, according to Swope, industry would "no longer operate in independent units, but as a whole, according to rules laid out by a trade association of which every unit employing over fifty men is a member—and the whole supervised by some Federal agency." The "Swope Plan" was in many respects the intellectual foundation for the National Industrial Recovery Act (NIRA).

As Shlaes amply demonstrates, Big Businessmen, including Hoover, were very often progressives, too (Joan Hoff Wilson's 1975 biography is titled Herbert Hoover: Forgotten Progressive). They had their own cults of efficiency, love of "bigness," and hostility to the independent entrepreneurs who made their lives difficult. As with the rise of the railroads in the 19th century, businesses often had a vested interest in having the government centralize and streamline the American economy. An aging Clarence Darrow was tasked with investigating the NRA and found that in "industry after industry" big businesses "have for their own advantage written the codes, and then, in effect and for their own advantage, assumed the administration of the code they have framed." J.T. Flynn's broadsides against the New Deal often came from this direction as well, believing that the collusion of business and government was a harbinger of fascism.

Which brings us to the question of Roosevelt's continued sanctity among liberals. In the liberal imagination, but also among Americans generally, there is a pervasive myth that the New Deal "worked." And most liberals seem content to leave it at that. But if you press them to explain what "worked" means, you will quickly find them shifting ground.

The New Deal didn't end the Great Depression. It didn't cure unemployment or get America "back to work." By 1938, one in six Americans was still without a job, and many more were less than secure in their employment. Presented with these facts, liberals defensively point to Social Security and the expansion of the welfare state. We can debate the merits of those programs another day, but they did not end the Depression, which was the mission FDR accepted when he declared himself the commander-in-chief of all Americans, not just those in uniform.

To admit this is to concede that the intellectual mandate of Roosevelt's Brains Trust was fraudulent as well. It sought to prove that "planning" was the way of the future and infinitely superior to the chaos of the free market. (And do note the arrogance of the term "Brains Trust." A trust is a monopoly, after all.) But, again as Shlaes shows, not only did planning not work very wellâ-but there was far less real planning than we were led to believe. On one occasion, she points out, FDR raised the price of gold by 21 cents based upon his careful deduction that 21 is "a lucky number, because it's three times seven."

Some contend that these sorts of objections miss the point. Sure, the New Deal made mistakes, they'll concede, but it made them in the exciting spirit of "experimentation"-FDR's abracadabra word for "whatever I please." Left unelaborated is the fact that experimentation and planning are in fact opposites. One doesn't experiment in building a house; one plans, measuring twice and cutting once. The New Dealers cut first and measured later, if at all. Other liberals, like Jonathan Alter, try to find a safe harbor in poetry. FDR provided "hope." But for whom? Not for William Troeller, not for the Schechters, nor for Jacob Maged, nor for the countless sharecroppers thrown off their land or the workers left unemployed because their products were barred from export by New Deal trade policies. Another poetic harbor for liberals is the myth that FDR united the country. At least in those days, the sentiment runs, we were all in it together. But we weren't all in it together, at least not according to Roosevelt. He routinely and blithely made scapegoats of the wealthy (and not so wealthy), blaming the Depression on "the lack of honor of some men in high financial places" and vindictively prosecuting Andrew Mellon for years. Moreover, the 1930s, like the 1960s, were a time of riotous social unrest and profound ideological conflict. If unity itself were the highest virtue, liberals would look at the 1920s and the 1950s with admiration instead of contempt.

Nonetheless, as is often the case, the poetry gets us closer to the truth than the social science does. When liberals speak of unity and hope, what they really mean is success. The 1930s and 1960s, unlike the '20s and '50s, were decades when liberals, broadly speaking, were "winning." When you hear liberals bemoaning divisiveness and insisting that we must "get beyond" "labels" and "ideological" differences, what they are really saying is that their opponents should shut up and get with the program. The New Deal's appeal lies in the fact that it was the first time when progressive social engineers had real power without the galvanizing dynamic of a war. The Brains Trusters had spent much of the 1920s complaining "we planned in war," i.e., during World War I; they insisted that they should be allowed to plan in peace as well. The Depression gave them their shot. And that in a nutshell is why supposedly empirically minded and "reality-based" liberals still genuflect to the myth of the New Deal. It is the ne plus ultra of liberal power. Defending the New Deal is the first requirement of liberal power-worship.

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."

* * *

If there is a major drawback to Shlaes's brilliantly crafted indictment it is that it takes liberals at their word about what the New Deal was really about. She must do this, of course, if she is going to rebut their arguments. But in truth, the economic policies are merely symptoms of the larger disease. FDR was economically incompetent, as Shlaes demonstrates, but he was politically ingenious. Indeed, as she and others have chronicled, FDR's economic missteps were part of a larger political ballet. He transformed American politics by creating vast client constituencies who depended on the government-and by extension the Roosevelt Administration-for their livelihood. Such an enterprise stemmed first and foremost from a philosophical vision, not a mere economic one. FDR's economic policies, like his political maneuvering in general, were means to an end. Recommitting liberalism to the doctrine of a "living constitution" pioneered by Woodrow Wilson, the New Dealers believed that the Constitution could be reinterpreted on the fly, to create a new open-ended constitutionalism that depended not on texts, but on the will of those in charge of interpreting them. "I want to assure you," FDR's aide Harry Hopkins told an audience of New Deal activists in New York, "that we are not afraid of exploring anything within the law, and we have a lawyer who will declare anything you want to do legal." One can only imagine what Jonathan Alter might have said if Karl Rove had been caught saying such a thing.

For nearly three generations, liberal intellectuals have consistently refused to apply the same standards to their own heroes that they relentlessly misapply to their villains. Amity Shlaes's The Forgotten Man is a careful, even-tempered, and much needed corrective to this sorry history.


Jonah Goldberg is editor-at-large of National Review Online and author of Liberal Fascism: The Secret History of the American Left from Mussolini to the Politics of Meaning (Doubleday).
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#38
And speaking of the Forgotten Man, here is an article by Amity Shlaes, which is adapted from a lecture she gave earlier at Hillsdale College. It is about the legacy of the 1936 election, and what it's results eventually led to. In short, the actions of FDR, during his second administration halted the recovery and sent the country into a second depression.

One other note. This is the time where Fascism in America began in earnest. Bouyed by the success of this political economic system in Europe, the elites within the current administration sought to emulate it and impose the scope and size of government on to the system that the Founders did not intend. We are living with the results today.

Quote:"The Legacy of the 1936 Election"
Amity Shlaes
Author, The Forgotten Man: A New History of the Great Depression

The following is adapted from a lecture delivered on the Hillsdale College campus on July 24, 2007, during a Hillsdale Hostel on the American Constitution.

WHAT MAKES the current field of candidates so timid? It is clear listening to figures from both parties this year that they still believe Social Security is untouchable. This despite the fact that bringing Social Security into solvency is a relatively easy task. When it comes to the more serious fiscal burdens upon our grandchildren, the candidates are likewise timid. This despite the fact that those burdens only become heavier as we delay. We speak of 2008 as an election year, but it is also the year when the tide of Social Security cash begins to recede with the retirement of Baby Boomers.

But where is the origin of the problem? Traditionally historians have focused on the slow rise of American progressivism over the past century and a half. I'm going to do something different, and undertake an almost artificial exercise. Here I will compress history and argue that this destructive hesitation comes out of a single political campaign, the presidential campaign of 1936. This campaign marked the virtual end of old-fashioned American federalism and the rise of a new kind of politics. It was 1936 more than any other campaign that created modern interest groups and taught us that Washington should subsidize them.

Pinning blame on a single campaign (and its run up) may seem facile. Still, the story is well worth telling.

The Run Up

In 1932, total federal spending was still only five percent of gross domestic product. Spending by states and local governments represented by contrast ten percent of GDP. Even well into the Depression, it was to state and local governments that many looked for a means to recovery. There was no big tax redistribution. The word "liberalism" still signified a belief in individual liberty rather than paternalistic government. Nor did American workers view themselves so much as a class in those years. They viewed themselves as moving up and down the economic ladder. Even our greatest union, the American Federation of Labor, was more of a craft and trade union than a class union. But all this was soon to change.

In his 1932 campaign, Franklin D. Roosevelt had talked about helping someone he called "the forgotten man." He was thinking of the poorest man, or as he put it-invoking the time of the pharaohs-"the man at the bottom of the economic pyramid." His speechwriter, Ray Moley, had inserted the phrase into an address on The Lucky Strike Hour. Moley wrote to his sister Nell that he didn't know where the phrase came from. But in fact it did have a provenance. It came from an essay (and later a book) written decades before, called The Forgotten Man. Written by a famous Yale professor named William Graham Sumner, this essay defined "the forgotten man" differently.

Sumner employed an algebra to explain what he meant: A and B want to help X, he wrote. This is the charitable impulse. The problem arises when A and B band together and pass a law that coerces C into co-funding their project for X. Sumner identified C as the forgotten man. He is the man who works, the man who prays, the man who pays his own bills, the man who is "never thought of."

But this did not matter to Roosevelt, who of course won handily in 1932 without thinking much about the phrase again. He spent the next few years trying to help the poor through the now famous New Deal measures. But three years into his presidency, his efforts were still failing. The New Deal was having mixed results. Unemployment in May 1935 stood at what we today would compute to 20.1 percent-a large share of Americans were still forgotten men. The Brookings Institution wrote a nearly 1,000-page report on the New Deal's centerpiece, the National Recovery Administration, concluding that it "on the whole retarded recovery." The Dow was stuck in the low hundreds, nowhere near even the 250 it had been in 1930 under Hoover, well into the downturn. As a result, in July 1935- the year before the 1936 election-Roosevelt made a decision to give up on trying to help the general economy. Instead, he decided to refine his definition of "the forgotten man." No longer would this man be simply the poor person at the bottom of the economic pyramid. The forgotten man would now be the member of certain defined constituency groups-groups like senior citizens, farmers, writers and artists, and union members.

Federal Largesse

Critical to FDR's plan was to invent ways to alter the bonds of towns and individuals with their states and establish bonds with Washington, D.C. One of the first important institutions through which this was accomplished was an old office that we rarely talk about anymore, the Public Works Administration or PWA. The PWA was placed under the control of Secretary of the Interior Harold L. Ickes-father of Harold M. Ickes, the prominent Democratic strategist who has worked with Bill and Hillary Clinton. The PWA's role was to fund buildings, bridges, and other structures in towns and villages all over America.

The PWA went to counties and towns to offer them a combination of grants and loans to build schools or dams or power plants, or any kind of public buildings. PWA regional offices sent all bids for structures back to the national office, where Ickes reviewed them. Then, every week, with a manila envelope, he went to the White House and Roosevelt looked them over personally, just as he looked, say, over his stamp collection in the evenings.

On the local end, the experience was a pleasant one for mayors or officers of the county. They were able to allocate the cash, to pick the architect and even the contractors. The money made them feel empowered.

The scale of the spending of the PWA was unprecedented. Its budget was $3 billion in its first few years, or half the size of the federal budget in any given year. Ickes himself was stunned by the magnitude: "It helped me to estimate its size," he wrote, "by figuring that if we had it all in currency and should load it into trucks, we could set out with it from Washington, D.C., for the Pacific Coast, shovel off one million dollars at every milepost," and at the end "still have enough left to build a fleet of battle ships." It is hard now, when we have become accustomed to imperious Washington bureaucrats, to imagine the high of the brand new experience Ickes was enjoying. Riding up and down the East Coast and across the country on a train with the President-in special cars with a new luxury that Ickes in his diary calls "cooled air" - he felt that his job gave him the ability to reshape the country. And indeed, the pyramid image appeared again: people called Ickes a pharaoh. And in fact, the PWA enabled him to be like a pharaoh-simultaneously grandiose and petty. On each PWA structure were placed the words: "Harold L. Ickes, Secretary of the Interior."

There were more than 3,000 counties in the United States, and all but 33 of them received a PWA project. Many received several. At Michigan State University alone-just up the road from Hillsdale-nine PWA buildings went up.

What did the country think of it all? The critic Frederick A. Gutheim wrote an article at the end of the 1930s complaining that the entire PWA produced "not one architectural masterpiece." But that in a way was the point. Roosevelt knew that masterpieces were not what was needed for his purpose. On the contrary, a masterpiece from Washington might stand out too much in small town America. This was a task of ingratiation.

The goal was to make the towns feel that the buildings were theirs, to get people used to Washington's hand being involved in projects that formerly were entirely local. Relatedly, Ickes was attacked on all sides for the pickiness with which he reviewed PWA projects. But Roosevelt told Ickes that he did not mind. "This slowness did not displease him," Ickes wrote. "On the contrary," he said to me, "I do not want you to move any faster." - The extra months that the process took were extra months of activity that held the eye, evidence that Roosevelt the candidate was doing something.

With this advertisement campaign in place, Roosevelt went on to connect with all his targeted groups. The Wagner Act, the Public Utilities Law, the Social Security Law, and the Works Progress Administration-WPA, not to be confused with PWA-were all passed in great haste, beginning in the summer of 1935. Senator Arthur Vandenberg of Michigan was so aghast at the scale of WPA spending that he decried the "four or five billion worth of lost liberty."

The WPA served much the same purpose as the PWA. Many here will recall those humble, high quality WPA guidebooks to cities, states and regions. They were another way of making the new federal role seem less threatening. Just like the building projects of the PWA, they symbolized a new relationship between the federal government and the counties and localities, from which states are cut out.

The WPA also developed a direct form of propaganda: writings and theater that supported the New Deal. In October 1935, the Agency announced that it was producing a play in New York about agriculture called Triple A Plowed Under (Triple A was a New Deal agency). The WPA also produced Power, a Marxist play that caricatured private-sector utilities executives as old men who exploit American households. The New Deal produced some real art-we all remember the compelling photo of the migrant mother by Dorothea Lange. But it also produced pure propaganda.

It is hard for us now to overestimate how welcome it was for so many journalists, photographers, artists, sculptors, and actors, to be on the Washington payroll. There was no Hatch Act in those days, no federal law precluding political activity by government officials. The WPA was the equivalent of Congress or the White House today moving, after a market crash, to put the staffers of Slate and Google on its payroll as bloggers.

Even by the end of 1935, what the federal government was doing was so changed that it would have been scarcely recognizable to someone from the minimalist 1920s. Washington spent $5.6 billion for the year, double the level of 1930-and this was before the first Social Security check was cut.

Interest Group Politics

It is worthwhile to pause and consider what all these New Deal programs were doing. They were not bringing the economy back to health. Indeed, they frightened participants in the economy. Utilities, for example, were seeing increased use of electricity, even in the Depression. But utility stocks were not booming because Roosevelt was attacking utility companies as enemies of "the forgotten man." In fact, Ickes was giving towns power plants in exchange for their commitment to use government power instead of private power. The Dow, as mentioned before, was still in the 100s. Unemployment was still through the roof -19 percent in March 1936. Nonetheless, Roosevelt saw what his work at identifying groups to receive federal largesse would do: it would get votes. He continued to reach out to the mythical figure of "the forgotten man" through the spring, summer, and fall of 1936. Interestingly, people especially preferred the projects that were not for the poorest-the ones that instead helped the middle class along, not with relief, but with work and entitlements. This foreshadowed our own attitudes today.

Toward the end of the 1936 campaign, near the elections, Roosevelt moved into a frenzy, reaching out even to those groups he might have neglected before. He announced a $2 million expansion at Virginia State College, a black institution. In late October of 1936, days before the vote, he told an audience at Howard University that there are :no forgotten men and no forgotten races." By the last days of the election Roosevelt therefore had cemented his party's position vis-àvis his revised "forgotten man"-now a member of a group, not an individual. The job of everyone in the "unforgotten" groups henceforward would be to pay for the larger Washington that in turn would pay for the "forgotten" ones.

In 1936, federal spending moved to nine percent of GDP, up from two-and-a-half percent in 1929. If the gift to the 1932 electorate had been liquor -with the promise of Prohibition's repeal-federal spending was the gift in this election cycle. Historian Jim Couch of the University of North Alabama has shown the precision of the targeting of this money as a way of buying votes. He documents that Roosevelt poured money into battleground states and gave short shrift to safe states, including those of the poor South. Richard Vedder of the University of Ohio has data that suggests that the creation of jobs was also targeted politically. Reckoning unemployment rates month-by-month for 1930 to 1939, he found that though the average for 1935 or 1936 is between 15 and 20 percent, there is one month where unemployment dropped to 13.9 percent: November 1936, the month of the election. It went below that, and then rose again.

In other words, it is true that FDR was at his most popular in 1936, taking 46 of 48 states; but that fact cannot be credited entirely to his radio voice. Nor to the heroic popularity of an ailing president leading a nation through World War II-as we now, anachronistically, remember the 1930s elections. That would come later. In 1936, Roosevelt's was also the popularity of a leader who had invented a new way to reward the constituencies that he needed to win.

* * *

The overall lesson of this is that we can continue to respect many aspects of Roosevelt's presidency today. But we shouldn't have false nostalgia about it. After all, it was Roosevelt's political machinations in the 1936 campaign-symbolized by the PWA-that gave us the "earmarks" that bedevil Congress today, on both sides of the political aisle. Action is more important today because of our fiscal challenge-the new forgotten men are the grandchildren who will pay if we do not give up some of that costly nostalgia. John Marini was right when he said, right here at Hillsdale and earlier this year, that the country must choose now between Reagan and Roosevelt. That Reagan himself did not have to choose was because of demography. Unfortunately, now we must.

When I was writing my book on the Great Depression, I kept thinking back to William Graham Sumner, who originated the idea of "the forgotten man." Sumner was a Victorian who died in 1910. But I continued to hear him in the background as I studied Roosevelt and Ickes, and what Sumner said continued to apply-both to the 1930s and to our current political life. He spoke prophetically about the voter who was not included in preferred interest groups "the man or woman who everyone fails to think about. He spoke of the forgotten voter for whom there is - no provision in the great scramble- for federal largesse. Our elections are not good elections until they welcome back that voter, too.
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#39
One of the few places that I actively contribute to is the CATO Institute. It is THE premier Libertarian/Classical Liberal think tank, and has been gaining in influence over the last generation.

I have so many places to go and see, so I frequently miss good articles that the site puts out, so I naturally missed this insightful article. Mr Boaz is the Executive Vice-President of the site, and responsible to the day-to-day operations of it and it's projected path.

Anyway, here is his article, a review of Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939, by Wolfgang Schivelbusch about FDR and his Fascist connections with the rest of the successful Fascist dictators of the last century. It's a good read, and will help solidify your understanding of Fascism, and how it is the REAL threat to individual Liberty today, just as it was in the 20th century.

Quote:Hitler, Mussolini, Roosevelt

What FDR had in common with the other charismatic collectivists of the 30s


David Boaz | October 2007 Print Edition

Three New Deals: Reflections on Roosevelt's America, Mussolini's Italy, and Hitler's Germany, 1933-1939, by Wolfgang Schivelbusch, New York: Metropolitan Books, 242 pages, $26

On May 7, 1933, just two months after the inauguration of Franklin Delano Roosevelt, the New York Times reporter Anne O'Hare McCormick wrote that the atmosphere in Washington was "strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan. - America today literally asks for orders." The Roosevelt administration, she added, "envisages a federation of industry, labor and government after the fashion of the corporative State as it exists in Italy."

That article isn't quoted in Three New Deals, a fascinating study by the German cultural historian Wolfgang Schivelbusch. But it underscores his central argument: that there are surprising similarities between the programs of Roosevelt, Mussolini, and Hitler.

With our knowledge of the horrors of the Holocaust and World War II, we find it almost impossible to consider such claims dispassionately. But in the 1930s, when everyone agreed that capitalism had failed, it wasn't hard to find common themes and mutual admiration in Washington, Berlin, and Rome, not to mention Moscow. (Three New Deals does not focus as much on the latter.) Nor is that a mere historical curiosity, of no great importance in the era following democracy's triumph over fascism, National Socialism, and communism. Schivelbusch concludes his essay with the liberal journalist John T. Flynn's warning, in 1944, that state power feeds on crises and enemies. Since then we have been warned about many crises and many enemies, and we have come to accept a more powerful and more intrusive state than existed before the '30s.

Schivelbusch finds parallels in the ideas, style, and programs of the disparate regimes - even their architecture. 'Neoclassical monumentalism,' he writes, is "the architectural style in which the state visually manifests power and authority." In Berlin, Moscow, and Rome, "the enemy that was to be eradicated was the laissez-faire architectural legacy of nineteenth-century liberalism, an unplanned jumble of styles and structures." Washington erected plenty of neoclassical monuments in the '30s, though with less destruction than in the European capitals. Think of the "Man Controlling Trade" sculptures in front of the Federal Trade Commission, with a muscular man restraining an enormous horse. They would have been right at home in Il Duce's Italy.

“To compare,” Schivelbusch stresses, “is not the same as to equate. America during Roosevelt’s New Deal did not become a one-party state; it had no secret police; the Constitution remained in force, and there were no concentration camps; the New Deal preserved the institutions of the liberal-democratic system that National Socialism abolished.” But throughout the ’30s, intellectuals and journalists noted “areas of convergence among the New Deal, Fascism, and National Socialism.” All three were seen as transcending “classic Anglo-French liberalism”—individualism, free markets, decentralized power.

Since 1776, liberalism had transformed the Western world. As The Nation editorialized in 1900, before it too abandoned the old liberalism, “Freed from the vexatious meddling of governments, men devoted themselves to their natural task, the bettering of their condition, with the wonderful results which surround us”—industry, transportation, telephones and telegraphs, sanitation, abundant food, electricity. But the editor worried that “its material comfort has blinded the eyes of the present generation to the cause which made it possible.” Old liberals died, and younger liberals began to wonder if government couldn’t be a positive force, something to be used rather than constrained.

Others, meanwhile, began to reject liberalism itself. In his 1930s novel The Man Without Qualities, Robert Musil wrote, “Misfortune had decreed that…the mood of the times would shift away from the old guidelines of liberalism that had favored Leo Fischel—the great guiding ideals of tolerance, the dignity of man, and free trade—and reason and progress in the Western world would be displaced by racial theories and street slogans.”

The dream of a planned society infected both right and left. Ernst Jünger, an influential right-wing militarist in Germany, reported his reaction to the Soviet Union: “I told myself: granted, they have no constitution, but they do have a plan. This may be an excellent thing.” As early as 1912, FDR himself praised the Prussian-German model: “They passed beyond the liberty of the individual to do as he pleased with his own property and found it necessary to check this liberty for the benefit of the freedom of the whole people,” he said in an address to the People’s Forum of Troy, New York.

American Progressives studied at German universities, Schivelbusch writes, and “came to appreciate the Hegelian theory of a strong state and Prussian militarism as the most efficient way of organizing modern societies that could no longer be ruled by anarchic liberal principles.” The pragmatist philosopher William James’ influential 1910 essay “The Moral Equivalent of War” stressed the importance of order, discipline, and planning.

Intellectuals worried about inequality, the poverty of the working class, and the commercial culture created by mass production. (They didn’t seem to notice the tension between the last complaint and the first two.) Liberalism seemed inadequate to deal with such problems. When economic crisis hit—in Italy and Germany after World War I, in the United States with the Great Depression—the anti-liberals seized the opportunity, arguing that the market had failed and that the time for bold experimentation had arrived.

In the North American Review in 1934, the progressive writer Roger Shaw described the New Deal as “Fascist means to gain liberal ends.” He wasn’t hallucinating. FDR’s adviser Rexford Tugwell wrote in his diary that Mussolini had done “many of the things which seem to me necessary.” Lorena Hickok, a close confidante of Eleanor Roosevelt who lived in the White House for a spell, wrote approvingly of a local official who had said, “If [President] Roosevelt were actually a dictator, we might get somewhere.” She added that if she were younger, she’d like to lead “the Fascist Movement in the United States.” At the National Recovery Administration (NRA), the cartel-creating agency at the heart of the early New Deal, one report declared forthrightly, “The Fascist Principles are very similar to those we have been evolving here in America.”

Roosevelt himself called Mussolini “admirable” and professed that he was “deeply impressed by what he has accomplished.” The admiration was mutual. In a laudatory review of Roosevelt’s 1933 book Looking Forward, Mussolini wrote, “Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices.…Without question, the mood accompanying this sea change resembles that of Fascism.” The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies” and “the development toward an authoritarian state” based on the “demand that collective good be put before individual self-interest.”

In Rome, Berlin, and D.C., there was an affinity for military metaphors and military structures. Fascists, National Socialists, and New Dealers had all been young during World War I, and they looked back with longing at the experiments in wartime planning. In his first inaugural address, Roosevelt summoned the nation: “If we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. I assume unhesitatingly the leadership of this great army.…I shall ask the Congress for the one remaining instrument to meet the crisis—broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

That was a new tone for a president of the American republic. Schivelbusch argues that “Hitler and Roosevelt were both charismatic leaders who held the masses in their sway—and without this sort of leadership, neither National Socialism nor the New Deal would have been possible.” This plebiscitary style established a direct connection between the leader and the masses. Schivelbusch argues that the dictators of the 1930s differed from “old-style despots, whose rule was based largely on the coercive force of their praetorian guards.” Mass rallies, fireside radio chats—and in our own time—television can bring the ruler directly to the people in a way that was never possible before.

To that end, all the new regimes of the ’30s undertook unprecedented propaganda efforts. “Propaganda,” Schivelbusch writes “is the means by which charismatic leadership, circumventing intermediary social and political institutions like parliaments, parties, and interest groups, gains direct hold upon the masses.” The NRA’s Blue Eagle campaign, in which businesses that complied with the agency’s code were allowed to display a “Blue Eagle” symbol, was a way to rally the masses and call on everyone to display a visible symbol of support. NRA head Hugh Johnson made its purpose clear: “Those who are not with us are against us.”

Scholars still study that propaganda. Earlier this year a Berlin museum mounted an exhibit titled “Art and Propaganda: The Clash of Nations—1930–45.” According to the critic David D’Arcy, it shows how the German, Italian, Soviet, and American governments “mandated and funded art when image-building served nation-building at its most extreme.…The four countries rallied their citizens with images of rebirth and regeneration.” One American poster of a sledgehammer bore the slogan “Work to Keep Free,” which D’Arcy found “chillingly close to ‘Arbeit Macht Frei,’ the sign that greeted prisoners at Auschwitz.” Similarly, a reissue of a classic New Deal documentary, The River (1938), prompted Washington Post critic Philip Kennicott to write that “watching it 70 years later on a new Naxos DVD feels a little creepy.…There are moments, especially involving tractors (the great fetish object of 20th-century propagandists), when you are certain that this film could have been produced in one of the political film mills of the totalitarian states of Europe.”

Program and propaganda merged in the public works of all three systems. The Tennessee Valley Authority, the autobahn, and the reclamation of the Pontine marshes outside Rome were all showcase projects, another aspect of the “architecture of power” that displayed the vigor and vitality of the regime.

You might ask, “Where is Stalin in this analysis? Why isn’t this book called Four New Deals?” Schivelbusch does mention Moscow repeatedly, as did McCormick in her New York Times piece. But Stalin seized power within an already totalitarian system; he was the victor in a coup. Hitler, Mussolini, and Roosevelt, each in a different way, came to power as strong leaders in a political process. They thus share the “charismatic leadership” that Schivelbusch finds so important.

Schivelbusch is not the first to have noticed such similarities. B.C. Forbes, the founder of the eponymous magazine, denounced “rampant Fascism” in 1933. In 1935 former President Herbert Hoover was using phrases like “Fascist regimentation” in discussing the New Deal. A decade later, he wrote in his memoirs that “the New Deal introduced to Americans the spectacle of Fascist dictation to business, labor and agriculture,” and that measures such as the Agricultural Adjustment Act, “in their consequences of control of products and markets, set up an uncanny Americanized parallel with the agricultural regime of Mussolini and Hitler.” In 1944, in The Road to Serfdom, the economist F.A. Hayek warned that economic planning could lead to totalitarianism. He cautioned Americans and Britons not to think that there was something uniquely evil about the German soul. National Socialism, he said, drew on collectivist ideas that had permeated the Western world for a generation or more.

In 1973 one of the most distinguished American historians, John A. Garraty of Columbia University, created a stir with his article “The New Deal, National Socialism, and the Great Depression.” Garraty was an admirer of Roosevelt but couldn’t help noticing, for instance, the parallels between the Civilian Conservation Corps and similar programs in Germany. Both, he wrote, “were essentially designed to keep young men out of the labor market. Roosevelt described work camps as a means for getting youth ‘off the city street corners,’ Hitler as a way of keeping them from ‘rotting helplessly in the streets.’ In both countries much was made of the beneficial social results of mixing thousands of young people from different walks of life in the camps. Furthermore, both were organized on semimilitary lines with the subsidiary purposes of improving the physical fitness of potential soldiers and stimulating public commitment to national service in an emergency.”

And in 1976, presidential candidate Ronald Reagan incurred the ire of Sen. Edward Kennedy (D-Mass.), pro-Roosevelt historian Arthur M. Schlesinger Jr., and The New York Times when he told reporters that “fascism was really the basis of the New Deal.”

But Schivelbusch has explored these connections in greater detail and with more historical distance. As the living memory of National Socialism and the Holocaust recedes, scholars—perhaps especially in Germany—are gradually beginning to apply normal political science to the movements and events of the 1930s. Schivelbusch occasionally overreaches, as when he writes that Roosevelt once referred to Stalin and Mussolini as “his ‘blood brothers.’ ” (In fact, it seems clear in Schivelbusch’s source—Arthur Schlesinger’s The Age of Roosevelt—that FDR was saying communism and fascism were blood brothers to each other, not to him.) But overall, this is a formidable piece of scholarship.

To compare is not to equate, as Schivelbusch says. It’s sobering to note the real parallels among these systems. But it’s even more important to remember that the U.S. did not succumb to dictatorship. Roosevelt may have stretched the Constitution beyond recognition, and he had a taste for planning and power previously unknown in the White House. But he was not a murderous thug. And despite a population that “literally waited for orders,” as McCormick put it, American institutions did not collapse. The Supreme Court declared some New Deal measures unconstitutional. Some business leaders resisted it. Intellectuals on both the right and the left, some of whom ended up in the early libertarian movement, railed against Roosevelt. Republican politicians (those were the days!) tended to oppose both the flow of power to Washington and the shift to executive authority.

Germany had a parliament and political parties and business leaders, and they collapsed in the face of Hitler’s movement. Something was different in the United States. Perhaps it was the fact that the country was formed by people who had left the despots of the Old World to find freedom in the new, and who then made a libertarian revolution. Americans tend to think of themselves as individuals, with equal rights and equal freedom. A nation whose fundamental ideology is, in the words of the recently deceased sociologist Seymour Martin Lipset, “antistatism, laissez-faire, individualism, populism, and egalitarianism” will be far more resistant to illiberal ideologies.
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#40
One of the few places that I actively contribute to is the CATO Institute. It is THE premier Libertarian/Classical Liberal think tank, and has been gaining in influence over the last generation.

I have so many places to go and see, so I frequently miss good articles that the site puts out, so I naturally missed this insightful article. Mr Boaz is the Executive Vice-President of the site, and responsible to the day-to-day operations of it and it's projected path.

Anyway, here is his article, a review of Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933–1939, by Wolfgang Schivelbusch about FDR and his Fascist connections with the rest of the successful Fascist dictators of the last century. It's a good read, and will help solidify your understanding of Fascism, and how it is the REAL threat to individual Liberty today, just as it was in the 20th century.

Quote:Hitler, Mussolini, Roosevelt

What FDR had in common with the other charismatic collectivists of the 30s


David Boaz | October 2007 Print Edition

Three New Deals: Reflections on Roosevelt’s America, Mussolini’s Italy, and Hitler’s Germany, 1933–1939, by Wolfgang Schivelbusch, New York: Metropolitan Books, 242 pages, $26

On May 7, 1933, just two months after the inauguration of Franklin Delano Roosevelt, the New York Times reporter Anne O’Hare McCormick wrote that the atmosphere in Washington was “strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan.…America today literally asks for orders.” The Roosevelt administration, she added, “envisages a federation of industry, labor and government after the fashion of the corporative State as it exists in Italy.”

That article isn’t quoted in Three New Deals, a fascinating study by the German cultural historian Wolfgang Schivelbusch. But it underscores his central argument: that there are surprising similarities between the programs of Roosevelt, Mussolini, and Hitler.

With our knowledge of the horrors of the Holocaust and World War II, we find it almost impossible to consider such claims dispassionately. But in the 1930s, when everyone agreed that capitalism had failed, it wasn’t hard to find common themes and mutual admiration in Washington, Berlin, and Rome, not to mention Moscow. (Three New Deals does not focus as much on the latter.) Nor is that a mere historical curiosity, of no great importance in the era following democracy’s triumph over fascism, National Socialism, and communism. Schivelbusch concludes his essay with the liberal journalist John T. Flynn’s warning, in 1944, that state power feeds on crises and enemies. Since then we have been warned about many crises and many enemies, and we have come to accept a more powerful and more intrusive state than existed before the ’30s.

Schivelbusch finds parallels in the ideas, style, and programs of the disparate regimes —even their architecture. “Neoclassical monumentalism,” he writes, is “the architectural style in which the state visually manifests power and authority.” In Berlin, Moscow, and Rome, “the enemy that was to be eradicated was the laissez-faire architectural legacy of nineteenth-century liberalism, an unplanned jumble of styles and structures.” Washington erected plenty of neoclassical monuments in the ’30s, though with less destruction than in the European capitals. Think of the “Man Controlling Trade” sculptures in front of the Federal Trade Commission, with a muscular man restraining an enormous horse. They would have been right at home in Il Duce’s Italy.

“To compare,” Schivelbusch stresses, “is not the same as to equate. America during Roosevelt’s New Deal did not become a one-party state; it had no secret police; the Constitution remained in force, and there were no concentration camps; the New Deal preserved the institutions of the liberal-democratic system that National Socialism abolished.” But throughout the ’30s, intellectuals and journalists noted “areas of convergence among the New Deal, Fascism, and National Socialism.” All three were seen as transcending “classic Anglo-French liberalism”—individualism, free markets, decentralized power.

Since 1776, liberalism had transformed the Western world. As The Nation editorialized in 1900, before it too abandoned the old liberalism, “Freed from the vexatious meddling of governments, men devoted themselves to their natural task, the bettering of their condition, with the wonderful results which surround us”—industry, transportation, telephones and telegraphs, sanitation, abundant food, electricity. But the editor worried that “its material comfort has blinded the eyes of the present generation to the cause which made it possible.” Old liberals died, and younger liberals began to wonder if government couldn’t be a positive force, something to be used rather than constrained.

Others, meanwhile, began to reject liberalism itself. In his 1930s novel The Man Without Qualities, Robert Musil wrote, “Misfortune had decreed that…the mood of the times would shift away from the old guidelines of liberalism that had favored Leo Fischel—the great guiding ideals of tolerance, the dignity of man, and free trade—and reason and progress in the Western world would be displaced by racial theories and street slogans.”

The dream of a planned society infected both right and left. Ernst Jünger, an influential right-wing militarist in Germany, reported his reaction to the Soviet Union: “I told myself: granted, they have no constitution, but they do have a plan. This may be an excellent thing.” As early as 1912, FDR himself praised the Prussian-German model: “They passed beyond the liberty of the individual to do as he pleased with his own property and found it necessary to check this liberty for the benefit of the freedom of the whole people,” he said in an address to the People’s Forum of Troy, New York.

American Progressives studied at German universities, Schivelbusch writes, and “came to appreciate the Hegelian theory of a strong state and Prussian militarism as the most efficient way of organizing modern societies that could no longer be ruled by anarchic liberal principles.” The pragmatist philosopher William James’ influential 1910 essay “The Moral Equivalent of War” stressed the importance of order, discipline, and planning.

Intellectuals worried about inequality, the poverty of the working class, and the commercial culture created by mass production. (They didn’t seem to notice the tension between the last complaint and the first two.) Liberalism seemed inadequate to deal with such problems. When economic crisis hit—in Italy and Germany after World War I, in the United States with the Great Depression—the anti-liberals seized the opportunity, arguing that the market had failed and that the time for bold experimentation had arrived.

In the North American Review in 1934, the progressive writer Roger Shaw described the New Deal as “Fascist means to gain liberal ends.” He wasn’t hallucinating. FDR’s adviser Rexford Tugwell wrote in his diary that Mussolini had done “many of the things which seem to me necessary.” Lorena Hickok, a close confidante of Eleanor Roosevelt who lived in the White House for a spell, wrote approvingly of a local official who had said, “If [President] Roosevelt were actually a dictator, we might get somewhere.” She added that if she were younger, she’d like to lead “the Fascist Movement in the United States.” At the National Recovery Administration (NRA), the cartel-creating agency at the heart of the early New Deal, one report declared forthrightly, “The Fascist Principles are very similar to those we have been evolving here in America.”

Roosevelt himself called Mussolini “admirable” and professed that he was “deeply impressed by what he has accomplished.” The admiration was mutual. In a laudatory review of Roosevelt’s 1933 book Looking Forward, Mussolini wrote, “Reminiscent of Fascism is the principle that the state no longer leaves the economy to its own devices.…Without question, the mood accompanying this sea change resembles that of Fascism.” The chief Nazi newspaper, Volkischer Beobachter, repeatedly praised “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies” and “the development toward an authoritarian state” based on the “demand that collective good be put before individual self-interest.”

In Rome, Berlin, and D.C., there was an affinity for military metaphors and military structures. Fascists, National Socialists, and New Dealers had all been young during World War I, and they looked back with longing at the experiments in wartime planning. In his first inaugural address, Roosevelt summoned the nation: “If we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. I assume unhesitatingly the leadership of this great army.…I shall ask the Congress for the one remaining instrument to meet the crisis—broad executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.”

That was a new tone for a president of the American republic. Schivelbusch argues that “Hitler and Roosevelt were both charismatic leaders who held the masses in their sway—and without this sort of leadership, neither National Socialism nor the New Deal would have been possible.” This plebiscitary style established a direct connection between the leader and the masses. Schivelbusch argues that the dictators of the 1930s differed from “old-style despots, whose rule was based largely on the coercive force of their praetorian guards.” Mass rallies, fireside radio chats—and in our own time—television can bring the ruler directly to the people in a way that was never possible before.

To that end, all the new regimes of the ’30s undertook unprecedented propaganda efforts. “Propaganda,” Schivelbusch writes “is the means by which charismatic leadership, circumventing intermediary social and political institutions like parliaments, parties, and interest groups, gains direct hold upon the masses.” The NRA’s Blue Eagle campaign, in which businesses that complied with the agency’s code were allowed to display a “Blue Eagle” symbol, was a way to rally the masses and call on everyone to display a visible symbol of support. NRA head Hugh Johnson made its purpose clear: “Those who are not with us are against us.”

Scholars still study that propaganda. Earlier this year a Berlin museum mounted an exhibit titled “Art and Propaganda: The Clash of Nations—1930–45.” According to the critic David D’Arcy, it shows how the German, Italian, Soviet, and American governments “mandated and funded art when image-building served nation-building at its most extreme.…The four countries rallied their citizens with images of rebirth and regeneration.” One American poster of a sledgehammer bore the slogan “Work to Keep Free,” which D’Arcy found “chillingly close to ‘Arbeit Macht Frei,’ the sign that greeted prisoners at Auschwitz.” Similarly, a reissue of a classic New Deal documentary, The River (1938), prompted Washington Post critic Philip Kennicott to write that “watching it 70 years later on a new Naxos DVD feels a little creepy.…There are moments, especially involving tractors (the great fetish object of 20th-century propagandists), when you are certain that this film could have been produced in one of the political film mills of the totalitarian states of Europe.”

Program and propaganda merged in the public works of all three systems. The Tennessee Valley Authority, the autobahn, and the reclamation of the Pontine marshes outside Rome were all showcase projects, another aspect of the “architecture of power” that displayed the vigor and vitality of the regime.

You might ask, “Where is Stalin in this analysis? Why isn’t this book called Four New Deals?” Schivelbusch does mention Moscow repeatedly, as did McCormick in her New York Times piece. But Stalin seized power within an already totalitarian system; he was the victor in a coup. Hitler, Mussolini, and Roosevelt, each in a different way, came to power as strong leaders in a political process. They thus share the “charismatic leadership” that Schivelbusch finds so important.

Schivelbusch is not the first to have noticed such similarities. B.C. Forbes, the founder of the eponymous magazine, denounced “rampant Fascism” in 1933. In 1935 former President Herbert Hoover was using phrases like “Fascist regimentation” in discussing the New Deal. A decade later, he wrote in his memoirs that “the New Deal introduced to Americans the spectacle of Fascist dictation to business, labor and agriculture,” and that measures such as the Agricultural Adjustment Act, “in their consequences of control of products and markets, set up an uncanny Americanized parallel with the agricultural regime of Mussolini and Hitler.” In 1944, in The Road to Serfdom, the economist F.A. Hayek warned that economic planning could lead to totalitarianism. He cautioned Americans and Britons not to think that there was something uniquely evil about the German soul. National Socialism, he said, drew on collectivist ideas that had permeated the Western world for a generation or more.

In 1973 one of the most distinguished American historians, John A. Garraty of Columbia University, created a stir with his article “The New Deal, National Socialism, and the Great Depression.” Garraty was an admirer of Roosevelt but couldn’t help noticing, for instance, the parallels between the Civilian Conservation Corps and similar programs in Germany. Both, he wrote, “were essentially designed to keep young men out of the labor market. Roosevelt described work camps as a means for getting youth ‘off the city street corners,’ Hitler as a way of keeping them from ‘rotting helplessly in the streets.’ In both countries much was made of the beneficial social results of mixing thousands of young people from different walks of life in the camps. Furthermore, both were organized on semimilitary lines with the subsidiary purposes of improving the physical fitness of potential soldiers and stimulating public commitment to national service in an emergency.”

And in 1976, presidential candidate Ronald Reagan incurred the ire of Sen. Edward Kennedy (D-Mass.), pro-Roosevelt historian Arthur M. Schlesinger Jr., and The New York Times when he told reporters that “fascism was really the basis of the New Deal.”

But Schivelbusch has explored these connections in greater detail and with more historical distance. As the living memory of National Socialism and the Holocaust recedes, scholars—perhaps especially in Germany—are gradually beginning to apply normal political science to the movements and events of the 1930s. Schivelbusch occasionally overreaches, as when he writes that Roosevelt once referred to Stalin and Mussolini as “his ‘blood brothers.’ ” (In fact, it seems clear in Schivelbusch’s source—Arthur Schlesinger’s The Age of Roosevelt—that FDR was saying communism and fascism were blood brothers to each other, not to him.) But overall, this is a formidable piece of scholarship.

To compare is not to equate, as Schivelbusch says. It’s sobering to note the real parallels among these systems. But it’s even more important to remember that the U.S. did not succumb to dictatorship. Roosevelt may have stretched the Constitution beyond recognition, and he had a taste for planning and power previously unknown in the White House. But he was not a murderous thug. And despite a population that “literally waited for orders,” as McCormick put it, American institutions did not collapse. The Supreme Court declared some New Deal measures unconstitutional. Some business leaders resisted it. Intellectuals on both the right and the left, some of whom ended up in the early libertarian movement, railed against Roosevelt. Republican politicians (those were the days!) tended to oppose both the flow of power to Washington and the shift to executive authority.

Germany had a parliament and political parties and business leaders, and they collapsed in the face of Hitler’s movement. Something was different in the United States. Perhaps it was the fact that the country was formed by people who had left the despots of the Old World to find freedom in the new, and who then made a libertarian revolution. Americans tend to think of themselves as individuals, with equal rights and equal freedom. A nation whose fundamental ideology is, in the words of the recently deceased sociologist Seymour Martin Lipset, “antistatism, laissez-faire, individualism, populism, and egalitarianism” will be far more resistant to illiberal ideologies.
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