A Patriot's History of the United States: From Columbus's Great Discovery to the War on Terror (114 page)

Best known in the context of his fireside chats as president, Roosevelt successfully used radio, beginning with the 1928 nominating speech for Al Smith, which in a manner, he admitted, he directed specifically to the radio audience. One of his most important speeches, during his first run for the presidency, came on the
Lucky Strike Hour
, sponsored by the American Tobacco Company. But it was the fireside chats that allowed Roosevelt to connect with large numbers of Americans. He deliberately slowed his speech to about 120 words per minute, well below that of the 170 words per minute at which most radio orators spoke.
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Despite an elite northeastern accent, Roosevelt came across as an ordinary American. One summer night in Washington, he asked, on air, “Where’s that glass of water?” and, after a brief pause in which he poured and drank the water, said, “My friends, it’s very hot here in Washington tonight.”
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Realizing that familiarity breeds contempt, however, FDR carefully spaced his talks in order to avoid losing their effectiveness, aiming for a schedule of one every five or six weeks.

FDR’s adroit manipulation of the media became all the more important when combined with his pliable approach to the truth. The Depression, he claimed, stemmed from the “lure of profit,” and he decried the “unscrupulous money changers”—warmed-over Populist rhetoric that always played well in tough economic times.
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He knew, certainly, or at least his advisers must have told him, that it was an arm of government, the Fed, which had tightened money, making the Depression worse. One hardly thinks Roosevelt had the Fed in mind when he spoke of “unscrupulous money changers.”

Once he won the nomination, he had an opportunity to solidify the markets and restore at least some confidence in the economy by stating the truth—that many of his policies would simply continue Hoover’s. But he would not. Between November and the inauguration, Roosevelt kept silent when a few endorsements of Hoover’s policies might have made the difference between continued misery and a recovery. These deceptions illustrated Roosevelt’s continued facility with lying. Nor was he above pure hypocrisy: during the campaign, FDR, a man whose presidency would feature by far the largest expansion of the federal government ever, called for a balanced budget and accused Hoover of heading “the greatest spending Administration in…all our history [which] has piled bureau on bureau, commission on commission.”
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Honest observers can find little difference between his programs and Hoover’s. His own advisers admitted as much. Rexford Tugwell, for example, noted, “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”
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Economic Chaos

I
n addition to all his natural advantages—the flashy smile, personal courage, and his family name—Franklin Roosevelt also had good old-fashioned luck. After narrowly escaping an assassination attempt in Miami, Roosevelt took the controls of the U.S. government just as repeal of Prohibition had cleared Congress, leading to the slogan, “Beer by Easter.” If nothing else, the free flow of alcohol seemed to liven the spirits of the nation. (It also filled the federal coffers, providing new sources of revenue that the Roosevelt administration desperately needed.)

When voters went to the polls in November 1932, they handed Roosevelt a landslide victory, giving him the entire West and South. Roosevelt received 22.8 million votes to Hoover’s 15.7 million, a remarkably strong showing for the loser considering the circumstances of the Depression. Roosevelt heaped dishonor on the defeated Hoover, denying him even a Secret Service guard out of town. Congress paid a price as well, having done nothing during the lame-duck session because many members knew the new president would purposely torpedo any actions they took.

In fact, Roosevelt hoped to capitalize on the terrifying collapse of the economy, his own absence of preelection promises, and a timid Congress to bulldoze through a set of policies that fundamentally rearranged the business and welfare foundations of American life. Many of FDR’s programs—undertaken under the rubric of a “New Deal” for Americans—came as spur-of-the-moment reactions to the latest crisis. The absence of internal consistency has thus produced confusion over whether there was a single New Deal or two distinct programs that were dramatically different.

Were There Two New Deals?

Just as a fable developed about business failures causing the stock market collapse and the subsequent recession, a similar tale arose about Roosevelt’s New Deal program to rescue America. Although most scholars have maintained that there were two New Deals, not one, they differ on the direction and extent of the changes between the first and second. According to one tradition, Roosevelt came into office with a dramatically different plan from Hoover’s “do-nothingism,” and the president set out to restore health to the American economy by “saving capitalism.” However, although the first phase of FDR’s master plan—roughly between 1933 and 1935—consisted of adopting a widespread series of measures at the national level that emphasized relief, around 1936 he shifted the legislation toward reform.

Another variant of this theory saw the early measures as designed to keep capitalism afloat, especially the banking legislation, with a deliberate attempt to introduce planning into the economy. Rexford Tugwell subscribed to this interpretation, complaining that conservative elements stifled attempts to centralize control over the economy in the federal government’s hands. At the point where FDR had found that more radical redistributions of wealth could not be attained, a second, more conservative New Deal evolved that emphasized piecemeal measures. Generally speaking, the Tugwell interpretation is endorsed by the Left, which suggests that FDR saved capitalism from itself by entrenching a number of regulatory measures and social programs that kept the market economy from its own “excesses.”

That there is confusion about how many New Deals there were reflected the utter lack of a blueprint or consistency to Roosevelt’s programs. Rather, a single theme underlay all of them, namely that government could and should do things that citizens previously had done themselves. In fact, FDR’s policies were haphazard, fluctuating with whichever advisers happened to be on the ascent at the time.

Then Nazi Germany invaded Poland, and many New Dealers realized that in a coming war—if it came—they needed capitalists. World War II in a sense saved the nation from the New Deal by unleashing the power of the private sector to make implements of war—rather than the New Deal saved capitalism.

The two–New Deals interpretation has allowed scholars to deal simultaneously with the relative ineffectiveness of FDR’s policies to extricate the nation from the Depression and to explain the contradictions of FDR’s first half-dozen years in office.
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For example, he often claimed that he was committed to a balanced budget, yet he ran what were—and remain to the present, in real terms—all-time record deficits. Those deficits came in spite of the Revenue Act of 1935 that raised the tax rates on the upper classes from the already high level of 59 percent to 75 percent. More than anything, the two New Deals view paralleled the ascendance and decline of different groups within the administration, revealing policy influences on Roosevelt from among a staff who spanned the ideological spectrum.

At the advice of Raymond Moley, a Columbia University professor, Roosevelt sought to raid the nation’s universities to produce a “Brain Trust” of intellectuals, then mix in a cross section of business leaders or career politicians from around the country. Moley became FDR’s trusted adviser and speechwriter, and he later served in the State Department. Roosevelt’s administration also included Texan Jessie H. Jones (head of the Reconstruction Finance Corporation); two Columbia University professors, Rexford Tugwell (assistant secretary of agriculture) and Adolph Berle (a member of the Brain Trust); Arizonan Lewis Douglas (director of the budget); Louis Brandeis (associate justice of the Supreme Court); and Harry Hopkins. Some, such as Budget Director Douglas, were budget balancers, pure and simple. When Roosevelt took the nation off the gold standard, Douglas envisioned waves of inflation sweeping through the country, at which point someone suggested to him that they change the inscription on money from “In God We Trust” to “I Hope That My Redeemer Liveth.” Tugwell was an intellectual and scholar who had written on economics. In 1939, summing up his views as the New Deal began, he exposed what he called the “myths” of laissez-faire, stating flatly, “The jig is up. There is no invisible hand. There never was.”
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Others, such as Jones, who headed the RFC—a New Deal holdover from the Hoover years—were big government activists extolling the efficiencies of government/business partnerships. Still others, like Hugh Johnson, who ran the National Industrial Recovery Agency (NIRA), was an antibusiness bully who threatened corporate leaders who resisted his “voluntary” programs with “a sock right on the nose.”
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Most of these policy makers subscribed in one way or another to the theories of English economist John Maynard Keynes, whose book
The General Theory of Employment, Interest and Money
had appeared in 1936. Long before Keynes had published the
General Theory
, however, his papers had circulated and his basic premises—that government spending would spur demand and thus pull a nation out of a depression—had thoroughly seasoned the thinking of the Brain Trust members. As Treasury Secretary Henry Morgenthau noted, a number of acolytes already labored within the government to ensure that federal spending was transformed “from a temporary expedient to a permanent instrument of government.”
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Traditionalists, including Morgenthau and Budget Director Douglas, instead argued for cutting government spending to encourage private investment. For weeks (the nature of the crisis had compressed the time available for considering the positions), the two camps fought over Roosevelt’s soul, but the president sided with the Keynesians, and the race to spend federal money was on.

Given these disparate influences on Roosevelt, it became possible for sympathetic writers at the time, and to historians subsequently, to portray FDR as either a conservative corporatist intent on saving the free enterprise system through regulation or as a revolutionary who understood the limits of genuine reform. But there is another alternative, namely, that the New Deal—or either of them, if one prefers—had no overarching principles, no long-term vision, no guiding fundamentals, but was rather a reactive network of plans designed to “get” business. Many members of Roosevelt’s New Deal Brain Trust could not identify any coherent precepts even years later—certainly nothing of majestic civic virtue or high moral cause. Quite the contrary, whatever clear policies could be identified, such as electric-power policy, the administration’s aims were crudely simple: “One objective [of New Deal power policy] was to enlarge the publicly owned sector of the power industry…as a means of diminishing private control over the necessities of life.”
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It did not help that FDR had few business leaders among his advisers. He distrusted them. Roosevelt told Moley that he “had talked to a great many business men, in fact to more…than any other President, and that they are generally stupid.”
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Roosevelt cared nothing about the effects of the class warfare that he had started. When Moley questioned how the welfare of the country could be served by “totally discrediting business to the people,” he concluded that Roosevelt “was thinking merely in terms of the political advantage to him in creating the impression through the country that he was being unjustly attacked by business men.”
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FDR specifically looked for “high spots” in his speeches to get in “a dig at his enemies.” More than by the president’s vindictiveness, Moley was “impressed as never before by the utter lack of logic of the man, the scantiness of his precise knowledge of things that he was talking about [and] by the immense and growing egotism that came from his office.”
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It is true that “the New Dealers shared John Dewey’s conviction that organized social intelligence could shape society, and some, like [Adoph] Berle, reflected the hope of the Social Gospel of creating a Kingdom of God on earth.”
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Roosevelt, however, had enough vision to know that the public would not share in his enthusiasm for many large-scale programs. Tugwell observed that the president engaged in “secret amputation” when it came to introducing programs that might generate opposition: “If you have to do some social reorganizing,” Tugwell noted, “you do it as quietly as possible. You play down its implications.”
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Mixing Hooverism with spot emergency measures, applied to selective sectors of the economy, then combining them with stealth social engineering, the New Deal took on a variegated appearance, and perhaps the only thread that ran through it emanated from the Keynesian policy recommendations.

By the time the New Deal got underway, Keynes had already established a spectacular scholarly reputation as well as a talent for turning quick profits in the British stock market. His
General Theory
did not appear until 1936, but Keynes had published the essentials in scholarly studies and white papers that found their way to the United States through academia. They had thoroughly penetrated American economic thinking even while Hoover was in the Oval Office.

Few seemed troubled by the fact that Britain had pursued Keynesian policies with little success for some time prior to Roosevelt’s election. Moreover, people pointed to Roosevelt’s comments about the need to balance the budget, and his choice of Douglas (a budget balancer par excellence) as budget director, as evidence that Roosevelt never endorsed Keynesian economics. But the deficits told a different story, and between 1932 and 1939, the federal debt—the accumulated deficits—had leaped from $3 billion to $9 billion, and the national debt had soared to real levels unmatched to this day. Insiders with Roosevelt’s ear, such as Tugwell, saw the only hope for escaping the Depression as lying with increasing purchasing power on the part of ordinary Americans, not with stimulating business investment.

Thus, the New Deal contained little in the way of a guiding philosophy, except that government should “do something.” Equally as important as the lack of direction, virtually all of the New Dealers shared, to one degree or another, a distrust of business and entrepreneurship that they thought had landed the nation in its current distressed condition. Above all, emergency measures needed to be done quickly before opposition could mount to many of these breathtaking challenges to the Constitution.

The Hundred Days

Although many historians characterize the New Deal programs as divided into categories of relief, reform, and recovery, such a neat compartmentalization of the programs clouds the fact that they were passed in haste—occasionally, even frenzy—and that no one in 1933 knew that any of the programs would be effective or politically beneficial. Rather, the Hundred Days especially addressed areas of the economy that seemed to be most distressed. The banking system had to be stabilized, and wages (including farm income) increased. And the only calculated policy Roosevelt had, namely, to somehow restore the morale of the nation, rested almost entirely on intangibles such as public emotion and a willingness to believe change would occur. When FDR addressed the nation in his first inaugural, his comment that “the only thing we have to fear is fear itself” embodied the single most important element of Roosevelt’s recovery program, a sense of confidence at the top.