Been reading Michael Hiltzik’s “The New Deal: A Modern History.” Some of it is a little too much “inside baseball” on the FDR administration for me, who has limited interest in why Henry Hopkins and Harold Ickes couldn’t get along, but it’s a readable narrative of a decade that has much to say about the state of this nation today.
I found a favorite story retold, and I’ll share it again here:
Humorist Will Rogers recalled the scene at the U.S. Chamber of commerce annual dinner in 1933, which he attended as (the guest of Jesse H. Jones.) “The whole constitutution, by-laws and secret ritual of that Orchard Club is to ‘keep government out of business,’” Rogers related to the readers of his daily newspaper column. “But here was the joke: They introduced all the big financiers…. As each stood up Jesse would write on the back of the menu card just what he had loaned him from the R.F.C. Yet, they said ‘keep the government out of business.’” Rogers preserved that menu card for proof, he said.
-The chapter on the Recession of 1937, or “Roosevelt’s Recession” got special notice from me, as I expect that the same thing will happen again if the GOP wins big this November and enacts the sort of policies they’ve been talking about in the presidential debates and in Congress. Hiltzik shows that the New Deal, at least through FDR’s first term was not an example of Keynesian stimulus spending by the federal government. Certainly Keynes didn’t think so. FDR had run against Hoover on a platform of spending cuts and balancing the budget, and was more conservative than history remembers him as being. At least he was too much of a politician to get too far out ahead of the country on any issue. Deficit spending through the pre-war years was barely half the level called for by Roosevelt’s ‘brain trust’ in order to effect a sustainable recovery. Still, unemployment was down, GDP was rising, and the administration moved to balance the budget; to disastrous results, spurring the White House and Congress to enact new measures to pour money into the economy.
“It is a big program,” Roosevelt conceded. Yes there would be more federal debt. But getting out of the recession would repay the cost “several times over,” for the greatest tax on the economy was time lost to unemployment: “Because of idle men and idle machines this nation lost one hundred billion dollars between 1929 and the spring of 1933, in less than four years.”
“Democracy has disappeared in several other great nations,” he stated –“disappeared not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity… Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat.”