Essay on Social Change and the Great Depression

FDR and Workers' Capitalism

When Newt Gingrich assumed the House speakership in 1995, he laid out the bipartisan case for the man who restored the confidence of a nation shattered by the Great Depression and then helped win a global war against tyranny.

'The fact is,' Gingrich declared, 'that it was Franklin Roosevelt who gave hope to a nation that was in despair and could have slid into dictatorship.'

E.J. Dionne Jr., Washington Post , May 1, 2020

I was born in the same month that FDR was elected President. He was in office until I was thirteen. My parents never discussed politics, although I think they voted for Roosevelt.

My early views were shaped in eleven schools, public and parochial, in Connecticut, New Jersey, New York, and Texas. Later, at Cornell University, I studied engineering and graduated with a degree in economics. I was more interested in creative writing and oil painting than in history and politics.

During the Depression, I grew up in middle class suburbs in New Jersey and Connecticut and never saw an employment line, a homeless person, or even heard of a neighbor or classmate at public school whose family was in difficulty.

These were halcyon days of YMCA camp, Saturday movie matinees, skating or fishing on the river, violin lessons, and the Barnum & Bailey Circus in the vacant lot at the end of the street.

When Roosevelt died, I hardly noticed. I lived in the suburbs, not New York City and I saw no renting of garments, gnashing of teeth, or rivers of tears. On the other hand, while I was growing up, I never heard a teacher say anything or read any book that cast any doubt that FDR was the greatest of Americans and that the New Deal saved the nation from the Depression caused by Herbert Hoover.

In high school, I read Tobacco Road, the Grapes of Wrath, Native Son, and God's Little Acre and was taken with the liberal view of history.

My college roommate was the son of a famous Democratic Senator, an icon in the liberal pantheon, and I breathed deeply the progressive air of the Ivy League.

In my last summer in college, I worked as a steward on a millionaire's yacht. One evening, listening to this elderly gentleman and his friends talking around the dinner table, I heard highly unflattering comments about Roosevelt. This was shocking; it was as if the old fogies were plotting to blow up the Lincoln Memorial. Like millions of Americans of my generation, I had been indoctrinated by public schools, by college professors, and by the media.

It was only much, much later, after having my own business for fifteen years and reading revisionist works, like that of Paul Johnson, that I began to understand how the common view of American history had been distorted.

The Legacy of FDR

What does the history of a president who was elected some seventy years ago have to do with the Great Bubble of the 1990s?

Quite a bit, when we realize that the rhetoric of the Democratic Party at the millennium was virtually identical to the ideology that kept America from coming out of the Great Depression.

The political buzz words of the revered liberal hero, FDR, were still in vogue.

Democrats still talked of taxing the rich and 'trickle down economics'; they still had the Great Universities in economic thralldom; they still controlled labor unions and dominated the black vote; and they still advocated bigger government.

Most of America believed that Franklin Roosevelt saved the country from the Depression.

Most Americans still believe the myths about the Great Depression and Franklin Roosevelt

Pictures of Migrant Mother come up on an Internet search for 'Great Depression' in 2004 — perpetuating the little lie that has served the Democratic Party so well for almost four generations.

Most Americans still believe the myths about the Great Depression and Franklin Roosevelt.

Even Newt Gingrich, a leader in the Republican Revolution of the 1980s, as our lead-in quote indicates, pays homage to the legend and the man.

However, we can now find scholars that question the received wisdom and paint a different picture of Roosevelt and his times.

We now see how the twist that FDR gave the American system is relevant to the shortage of equities in the 1990s.

The secular relativism that guided teaching of American history also infected the Great Business Schools, inspiring ethical ambiguity in corporate leaders.

Why Was the Depression so Long?

The question that we must ask is this:

Why did the Great Depression last so long?

Before the 1930s, most American financial crises lasted three to four years.

By 1935, Germany, Italy, Great Britain, Japan, and many other countries had already recovered from the bad times, with real national product back at 1929 levels.

Although some nations, like France and Canada, languished in the same economic dump as the U.S., the 'Great Depression' in many countries was not much different from periodic financial crises that had been endemic in world economies for over a century.

When the stock market fell sharply in October 1929, most Americans thought that this was just the start of another of those periodic brief business cycles that had been a regular feature of American industrial society for generations.

The Harvard Economic Service predicted in December 1929 that 'the year 1930, as a whole, should prove at least a fairly good year.'

Irving Fisher, considered by the establishment to be one of America's greatest economists and the inspiration of Yale University's economics department, forecast in January 1930 that

'it would not be surprising if by next month [i.e., February 1930] the worst of the recession will have been felt.'

Businessmen, also, were basically optimistic; few foresaw the dramatic changes in the economic system that the next decade would bring.

They didn't expect Roosevelt's debilitating economic policies.

Hardly anyone anticipated his subversion of established order.

Without a constitutional convention or reasoned debate among property-holders, few expected New Deal political-operators to change the American economic system forever.

Hoover and Roosevelt

Herbert Hoover and Franklin Delano Roosevelt, the two candidates for the presidency in 1932 were similar in many ways.

Both were Protestant descendants of 'old-stock' Americans.

Hoover was a successful engineer with a degree from Stanford University.

Roosevelt was a lawyer with degrees from Harvard and Columbia.

Both had served in government during the First World War, Hoover as the U.S. food administrator stabilizing prices, increasing production, reducing consumption, eliminating waste, and improving distribution; Roosevelt as Assistant Secretary of the Navy.

Both had permissive views regarding government intervention in the private sector that were shaped during the Great War when property and civil rights were sometimes suspended.

Both believed in balancing the budget, raising taxes, and using government power to revive the economy.

Most importantly, both were total failures when in came to bringing the economy out of the Depression, and in this, Roosevelt's failure was the greatest, since he had three times as long and massive political support to get the job done.

It took Japanese bombs on Pearl Harbor to distract businessmen from their hatred of Roosevelt – shifting attention to the war effort and industrial production, thereby reviving the economy to pre-1929 levels.

FDR's Character

In other ways, Roosevelt and Hoover were very different.

Hoover was a self-made millionaire, the son of a village blacksmith who had died when Hoover was only six, a young man who had worked his way through college and had used his skills to become rich in mining and engineering.

In his thirties, Hoover turned from money-making in order to dedicate his life to others, lecturing at universities and, more famously, providing relief to hundreds of millions of refugees in Europe.

In short, Hoover, a Quaker with strong moral underpinnings, represented the best of the traditional American entrepreneurial spirit – the self-made man with a big heart.

Roosevelt, on the other hand, was a patrician, born on his parent's lavish estate Springwood, overlooking the Hudson River at Hyde Park, New York.

Roosevelt was a patrician, born on a lavish estate overlooking the Hudson River

A spoiled, only-child, he was breast-fed until he was one, dressed in frilly dresses until five, pampered by private tutors, conveyed eight times to health spas of Europe by the age of fourteen, and prepped for college at the snobbish and exclusive Groton School in Massachusetts.

He had a second home on Campobello Island, off New Brunswick, Canada, where he would sail the cool waters to escape the heat of summer.

His only job in the private sector was three years as a law clerk, in which position he did not distinguish himself, leaving to enter the congenial and venal world of Tammany Hall politics and the Democratic Party.

A distant cousin of President Theodore Roosevelt (of the 'Oyster Bay Roosevelts'), Franklin spend his spare time studying genealogy and collecting stamps.

Unlike Hoover, Roosevelt did not waste his money or efforts on charity or helping the 'down-trodden' on any personal level.

Roosevelt was an archetypical 'limousine liberal' that, like members of the Kennedy clan, came to be so important to the Democratic Party over the next half-century.

Roosevelt was the spiritual opposite of Hoover.

He was a supreme anti-entrepreneur who had inherited wealth – a member of the rentier class who had no emotional understanding of what it takes to create value.

Perhaps it was a subconscious suspicion of his inability to ever have succeeded in the world of business that caused his intense, petty, personal dislike for Herbert Hoover that even led him to deny the endangered ex-president Secret Service protection when in retirement ('A History of the American People', Paul Johnson, Harper Perennial, 1999, p. 751).

Limousine Liberals: Economic Royalty

The motivation of the 'limousine liberal', 'latte leftist', and 'cabernet socialist' is an interesting example of political hypocrisy.

Why should wealthy people back political movements that favor increased taxes on income?

The answer is, of course, that income tax is considerably different than the taxation of wealth and power.

A man with one hundred million dollars invested in bonds yielding ten percent will have an income of ten million dollars a year. So will a worker who wins ten million dollars at the race track.

However, a fifty percent income tax will represent only five percent of the millionaire's assets but fifty percent of the assets of the worker that won at the race track.

The multimillionaire bond-holder will still make five million dollars after taxes next year, but the 'lucky' worker's next year income (assuming he is prudent and also invests in bonds) will only be $250,000 after tax.

The income tax effectively keeps the poor in their place.

The income tax favors those that are already rich because it makes it harder for the 'down-trodden' to catch up with them.

Since wealth is always relative, their position of power in society is enhanced by making it difficult for 'Johnny-come-latelies' to improve their economic status.

Furthermore, the income tax doesn't address control of wealth.

A man with one hundred million dollars may be able to control a corporation with market capitalization of one billion dollars, receiving all the advantages of such control tax free (executive jets, private secretaries, company chauffeurs, first class world travel, and so forth).

Finally, by using wealth to gain political power, the 'limousine liberals' can use public money to multiple their effective wealth many times, having the power of the state to do their bidding.

Pious efforts to close 'tax loopholes' distract the masses from the real goals of rich socialists – the retention of the relative advantage of established wealth and the non-taxation of the 'fringe benefits' of economic and political power.

In order for the income tax to be truly 'progressive', the tables would have to be scaled to count total wealth and power — but this would be too complicated and is extremely unlikely to happen.

Therefore, the Kennedys and those like them may safely incite the rabble to 'tax the rich' in order to enhance their own power, since they know that their benefits will probably exceed the costs and that their wealth, on balance, will not be adversely affected.

When Roosevelt attacked businessmen, he had no intention of surrendering his own wealth, earned by distant ancestors.

It was the upstart, nouveau riche, entrepreneur, like Herbert Hoover, that he wanted to tear down.

Roosevelt was a shallow thinker, a vindictive intellectual dilettante, and a person of dubious moral fiber.

Known for using the FBI and the IRS against his enemies, Roosevelt was an early proponent of the saying, later adopted by the Kennedy's, 'Don't get mad, get even.'

However, these personality flaws were zealously and successfully hidden from the American public by leftists who virtually controlled the media until the 1990s.

Anyone like H. L. Mencken, a leading intellectual of the time, who dared to shed light on the true nature of FDR's reign was slimed by academia and vilified in the popular press.

This excerpt from 'Media Reality Check' shows how, even generations later, liberals were not ashamed and boasted of their immoral bias ('Who Cares? – If the Liar's a Liberal', Media Reality Check, Thursday, March 26, 2020, Vol. Two No. 13.

'On August 8, 2020, the author of Primary Colors, former Newsweek and CBS News contributor Joe Klein, elaborated on his philosophy on Tim Russert's CNBC show.

Russert asked: 'You told The New York Times something I found very interesting and let me just read it for our viewers.

'We define the character issue so narrowly.

My idea of a great President is a guy who cheated on his wife in such a damaging way it pretty much ended their marriage, drank a pitcher of martinis every night, cheated at poker with his friends, lied to his staff, sicked the IRS on his enemies, and my father voted for him four times – FDR.'

Klein replied: 'That was inaccurate, my father pointed out to me. It wasn't him. My grandfather voted for him. But it's true, absolutely true.'

Non Self-Reliant Workers

Unemployment in 1932 reached 23.6%, not as high as unemployment in various states during the many panics that gripped the industrial economy periodically over the previous fifty years, but of far greater political significance, since most people were now in the labor force.

Many Americans had lost the spirit of self-reliance.

Most had no family farms to which they could return.

Like their European cousins, few knew how to survive without a regular paycheck and the corner store.

Furthermore, industrial capitalism had been good for workers.

Between 1913 and 1925, hourly wages of bricklayers, painters, stonecutters, and typesetters more than doubled.

Since people were living better, a downturn in the economy was all the more painful and distressful.

With indoor toilets, electricity, and running water, these citified American workers had grown soft and delicate, no longer able to bear the hardships that had been endured by their ancestors.

Essay: continued >

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