Liars (32 page)

The book's title?
A New Deal
.

Roosevelt was known for having, in the words of Oliver Wendell Holmes, “a second-class intellect, but a
first-class temperament.” The latter helped him to be an effective politician, and he made up for his deficiencies in the former by cherry-picking ideas from others. One such idea clearly came from Chase. As FDR accepted the Democratic presidential nomination in 1932, he declared: “I pledge you, I pledge myself, to
a new deal for the American people.”

Chase became a member of FDR's “Brain Trust,” advising the president as he directed the unprecedented expansion of government that became a hallmark of the Roosevelt administration. After his brief and unfortunate experience in government nearly two decades earlier, Chase had finally found a progressive hero who shared and appreciated his social sentiments. While not a philosopher-king in the mold of Woodrow Wilson, FDR was at least a king who valued his philosophers.

Philosophers like Stuart Chase.

As he continued to produce popular books and articles, Chase became an important evangelist for New Deal policies, one of the administration's “
foremost public analysts and interpreters.” Throughout the 1930s, every year saw a new Chase book published, most continuing to preach “
the inevitability of a planned economy.” In 1937, FDR remarked that Chase was “
teaching the American people more about economics than all the others combined.” It certainly helped that it was the same brand of economics that FDR himself adhered to.

Chase didn't always see eye to eye with Roosevelt, especially when it came to foreign policy. Chase was a pacifist who supported the isolationist view that the United States should keep out of World War II. He wrote an entire book making exactly that argument, 1939's
The New Western Front
.

When the United States entered the war after the attack on Pearl
Harbor, Chase must once again have found himself confronting his fear of the unknown. Everything had been going so well. He was one of the most popular economics writers in America and a trusted adviser to the president. Government was expanding and spending money all in the name of helping the people. Chase and the United States were firmly on the right path toward the ultimate light.

And then came the war. Chase knew it could ruin everything and undo all of his work. The progression of mankind that he had taken a direct hand in guiding could be set back dramatically. The “ultimate darkness” that he feared in 1911 could easily be brought on by war. Chase knew he could not sit back and let that happen. He had to control his country's destiny as best he could.

During the war years, a progressive think tank called the Twentieth Century Fund—which had grown out of the Co-operative League and is still in operation today as the Century Foundation—commissioned Chase to write “a series of
exploratory reports on postwar problems.” The first of these was published in 1942 as
The Road We Are Traveling: 1914–1942
, with the subtitle “Guide lines for America's future as reported to the Twentieth Century Fund.”

Despite the boring and scholarly title, this is an extremely important book. Today it remains obscure, and complete original copies, with all pages intact, are difficult to find. But if you locate one, you'll quickly see that Chase does indeed offer guidelines for America's future, just as the title suggests. A very chilling future.

In
The Road We Are Traveling
, Chase described his vision for the American and world economy after the end of World War II, but it was not a simple economic treatise. It was the journey into the mind of a man who feared that his life's work may be coming to ruin and who feared the unknown after a world-changing war. It was the fevered effort of a Fabian socialist, an admirer of Stalinist Russia, and an architect of central planning in the American economy to preserve his progressive vision for the future.

Chase, the onetime isolationist, opened
The Road We Are Traveling
with this statement: “America is at war. The objective of all of us
must be to win.” Why the shift? Once again, it was a classic progressive maneuver; he was justifying the war as a means to achieve his end goal of more government control. He learned to make the war work for him. He learned not to let a crisis go to waste.

Chase argued from the outset that a “retreat to free enterprise” would be impossible after the end of the war. The American economic system had been drifting away from free enterprise, he claimed, since before World War I. “In war and peace, boom and depression, the march toward
centralized, collective controls has continued,” he wrote.

This was not entirely inaccurate, considering that the time period between the world wars encompassed much of the first progressive era and FDR's New Deal. But by calling it a “retreat,” Chase not so subtly framed the reembrace of free enterprise as regressive, a step backward for the country. “Many people, especially older people,” he wrote, “will be weary to death of taxes, priorities, armaments, government decrees, forced savings,
lease-lending around the globe.” Imagine, Americans “weary to death of taxes” and “government decrees”? Fortunately for Chase, he believed that these people would not be able to stop the march of progress.

He feared that America would abandon FDR's planned economy after the war, so he attempted to convince Americans that
that
was their natural future, not a return to free enterprise or “business as usual.” Never mind that “business as usual” also means a limited, sensible government. Never mind that “business as usual” means following the constitutional road map back to America's founding principles and values.

Chase's America had progressed beyond that system. And as Chase continually and manically drove home to his readers, “we can't go back.”

So where
can
we go? What sort of government and economic system
should
we adopt if constitutionalism and the free market are passé? Good news: Chase sketched that out for us, too. There was just one problem: he couldn't come up with a name for it.

Chase tossed around terms such as
socialism
,
fascism
, and
state capitalism
, but those
didn't seem to fit the bill. And it's not hard to figure out why. The United States was at war with fascists, of course, and like any good Fabian, he shied away from calling socialism by its name. State capitalism seemed closer to the mark, but it still wasn't quite right.

Instead, he labeled America's future system “something called X.” This Political System X, according to Chase, was already “displacing the system of free enterprise,
all over the world.”

He offered a list of the “major characteristics” of this new system:

• “A strong, centralized government.”

• “An executive arm growing at the expense of the legislative and judicial arms. In some countries, power is consolidated in a dictator, issuing decrees.”

• “The control of banking, credit and security exchanges by the government.”

• “The underwriting of employment by the government, either through armaments or public works.”

• “The underwriting of social security by the government—old-age pensions, mothers' pensions, unemployment insurance, and the like.”

• “The underwriting of food, housing and medical care, by the government. The United States is already experimenting with providing these essentials. Other nations are far along the road.”

• “The use of the deficit spending technique to finance these underwritings. The annually balanced budget has lost its old-time sanctity.”

• “The abandonment of gold in favor of managed currencies.”

• “The control of foreign trade by the government, with increasing emphasis on bilateral agreements and barter deals.”

• “The control of natural resources, with increasing emphasis on self-sufficiency.”

• “The control of energy sources—hydroelectric power, coal, petroleum, natural gas.”

• “The control of transportation—railway, highway, airway, waterway.”

• “The control of agricultural production.”

• “The control of labor organizations, often to the point of prohibiting strikes.”

• “The enlistment of young men and women in youth corps devoted to health, discipline, community service and ideologies consistent with those of the authorities. The CCC camps have just inaugurated military drill.”

• “Heavy taxation, with special emphasis on the estates and incomes of the rich.”

• “Not much ‘taking over' of property or industries in the old socialistic sense. The formula appears to be
control without ownership
. It is interesting to recall that the same formula is used by the great corporations in depriving stockholders of power.”

• “The
state control of communications and propaganda.”

The characteristics of Political System X, Chase wrote, are “clearly contrary to the liberal democratic ideal,” and “most of them are anathema to the
doctrines of Adam Smith.” (I guess it's good that he was at least aware about how far afield this system was from our founding.)

“Study this list and think hard about it,” Chase challenged readers.
“[T]here is not an item on this list, which is not
applicable in some degree to the United States.”

What's perhaps most striking about Chase's utopian vision is how much of it seems to have already come to pass in the United States. Let's take them one by one:

• We obviously have a “strong, centralized government” that politicians of both parties have no compunction about expanding.

• The executive branch of government is “growing at the expense of the legislative and judicial arms”; this should be plainly obvious after the Obama administration's singular legacy of executive overreach.

• Government continues to exert “control of banking, credit and security exchanges,” and the recent Dodd-Frank legislation has only further cemented that.

• The “
underwriting of social security” and other social programs was realized as part of Johnson's Great Society, which Chase supported enthusiastically in his later life.

• “The underwriting of food, housing and medical care” is evident in First Lady Michelle Obama's signature issue: federal intervention into what local school districts feed their children.

• The prediction of government underwriting medical care has come true with a vengeance in the age of Obamacare.

• How about “use of the deficit spending technique to finance these underwritings”? Not even Chase could have conceived of
a federal deficit of more than $500 billion, as is predicted for fiscal year 2017. Democratic
and
Republican politicians seem to agree with Chase's assessment that the quaint notion of a balanced budget has “lost its old-time sanctity.”

• We achieved “the abandonment of gold in favor of managed currencies” under a Republican president when Richard Nixon took us off the gold standard in 1971.

• Government continues to have a hand in “the control of foreign trade.” Starting under FDR, Congress began regularly ceding its own authority on trade by granting the president authority to “fast-track” trade negotiations.

• As for the “control of natural resources” and “energy sources,” look no further than the environmental policies of the Obama administration. It propped up disastrous energy companies that fit its own agenda (Solyndra, for example) and fought to systematically shut down entire projects (the Keystone Pipeline) and industries (coal, for example) that didn't.

• “Railway, highway, airway [and] waterway” transportation have absolutely become more heavily regulated since Chase's writing. The 1950s saw both the establishment of the FAA and the federalization of highways (under Republican Dwight Eisenhower). And 1971 saw the creation of the National Railroad Passenger Corporation, or Amtrak, which is partially owned and subsidized by the government. Amtrak today holds a monopoly on passenger rail transportation in the United States.

• Chase mentioned government's “control without ownership” of industries instead of “ ‘taking over' . . . in the old socialistic sense.” This would be accomplished, of course, by government gradually inserting itself into the private sector through increased regulation. It's the “new” form of socialistic control. Chase's attempt to compare that to corporations “depriving stockholders of power” was flawed socialist logic.

• When discussing “state control of communications and propaganda,” Chase himself mentioned the FCC, which still exists. But rather than control the media outright, the Obama administration prefers to circumvent or stymie it. In 2015, the Associated Press reported that “the Obama administration more often than ever censored government files or outright denied access to them under the
U.S. Freedom of Information Act.” Former
Washington
Post
editor Leonard Downie, Jr., wrote in a report for the Committee to Protect Journalists that Obama's “efforts to control information are the most aggressive I've seen
since the Nixon administration.” Meanwhile, the administration uses its own social-media platform to break its own news directly from the White House without the filter of the press, which some might characterize as propaganda.

• Does the government completely “control” agriculture? No, but it does exercise some ridiculous regulatory controls over it. For instance, the Cherry Industry Administrative Board is a real-life government office funded by real-life tax dollars. In 2009, its machinations to control the U.S. cherry market forced farmers to
dump 30 million pounds of fruit onto the ground to keep it out of the marketplace.