Essay on FDR and Workers' Capitalism: continued

FDR, the New Deal, and Workers' Capitalism

An Economic Agnostic

In regard to economic theory, Roosevelt was an agnostic.

He was surrounded by academic advisors representing a hodge-podge of views, but he was bound by no particular philosophy.

Lacking the wisdom of Canute the Great, he believed that he could order the economic sea to do his bidding.

Lacking the wisdom of Canute, FDR believed he could order the economic sea to do his bidding

When he thought prices were falling too fast, he ordered up a law to fix prices and jail anyone who disobeyed.

If people needed work, he would use taxpayer money to give them a job doing something … anything … whatever might satisfy the fancy of one of the thousands of 'social engineers' that infested the New Deal.

The word 'boondoggle' used in the late 1920s to indicated the leather braided thong that bound a Boy Scout's neck scarf – something done in Scout camp to keep young hands busy – was adopted by Roosevelt's detractors to symbolize the myriad futile 'work relief' projects that FDR used to buy votes of the unemployed, but that did nothing to revive the economy.

The picture shows a typical New Deal 'boondoggle' – a workman carving a totem pole in a Civilian Conservation Corps workshop in Alaska.

Roosevelt, the anti-entrepreneur, delighted in 'soaking the rich', claiming that this was the new American way of life.

In a campaign speech in Worchester, Massachusetts on October 21, 2020, he proclaimed that:

'increasing the tax paid by individuals in the higher brackets – those with income over $50,000 – was the American thing to do and increasing still further the taxes paid by individuals in the highest brackets – those with incomes over one million dollars a year—was even more the American thing to do.'

Roosevelt Attacks Corporations

Roosevelt's attack on corporations was just a savage as his assault on individual property.

He signed the National Labor Relations Act (Wagner Act) of 1935, giving workers the right to join labor unions and to bargain collectively with their employers – in other words, the right to form 'workers trusts' to extort prices not in line with the marketplace.

The Walsh-Healey Act of 1936 also disavowed the free market, setting wages for workers at firms selling to the Federal Government.

Roosevelt's attack on corporations was as savage as his assault on individual property

The Fair Labor Standards Act of 1938 established a minimum wage for most workers producing goods for interstate commerce.

The National Industrial Recovery Act (NIRA) of 1933 set minimum wage and maximum hours for industry 'codes of fair competition'.

Between 1930 and 1940, union membership more than doubled, from 12.3 million to 27.6 million.

In the 1940 election, President Roosevelt got 27.2 million popular votes, a number similar to total union membership.

By pandering to the unions and antagonizing business, Roosevelt guaranteed his reelection, prolonging the Great Depression.

Undermining Law

Roosevelt struck at the foundations of the capitalist system – the right of property and the rule of law.

By forbidding Americans to own gold and by reneging on the long-time government guarantee to redeem currency and bonds in this precious metal, FDR let investors know that government promises were arbitrary and unreliable – not a reassuring signal to capitalists in the depths of the Depression.

His use of the income tax was unconcealed expropriation – pummeling anyone with property.

Although Roosevelt was trained as a lawyer and was surrounded by many in the legal profession, neither he nor his gang had respect for precedent; 'the rule of law' meant only that the laws he wanted would be used for his purposes, often to squeeze businesses and political opponents.

FDR stayed in office for so long that he nominated enough judges to give the courts a permanent socialistic bias

Luckily, Roosevelt did not have absolute power and the Supreme Court struck down many of his measures as unconstitutional.

He responded by scheming to pack the court with new justices, hoping to put in cronies.

He stayed in office so long that eventually he nominated enough judges to give the courts a socialistic bias that permanently distorted the American economic system.

If New Deal tinkering was just a temporary phase – a bad dream to disappear in better days – it would hardly be worth mentioning in our search for causes of the Great Bubble of the 1990s.

Unfortunately, the New Deal nightmare did not go away.

It was reinforced and magnified many fold by Lyndon Johnson, FDR's protégé, and internationalized by the World Bank and the International Monetary Fund – latter day dispensers of the foul patent medicine of the 1930s that continued to sicken under-developed nations in Africa, Latin America, and Asia through the close of the century.


The relationship between Roosevelt and Johnson is described in 'A History of the American People', as follows: 'FDR loved him and seems to have regarded him as his natural successor at some future date. In 1944, he used his executive authority, unlawfully and unconstitutionally, to save Johnson from going to jail for criminal tax fraud.'

Its Not the Economy, Stupid!

There are many reasons why Roosevelt continued to be reelected, even though he failed to get the economy out of the Depression.

James Thurber, the humorist, accurately pointed out that the 1930s was one of the best times to be alive, if you had a steady job, and eighty percent of Americans had a job.

Although New Deal propagandists have seared into popular culture the images of sharecroppers fleeing the Dust Bowl, lines of unemployed, 'forgotten men' selling apples on the street for a chance to put food on the table, and ex-college professors, now vagabonds huddling around campfires in 'Hoovervilles', the average, middleclass American in the suburbs or small towns saw little of this.

The Great Depression was the best of times, if you had a steady job, and 80% of Americans were employed

For the typical person with a good job, the 1930s were good times: prices were stable, crime was low, prohibition had been repealed, and signs of progress were everywhere. Homes now had radios, phonographs, telephones, electricity, washing machines, a family car, milk delivered on the doorstep, unlocked doors, and indoor plumbing.

There was much to do in leisure time, with triple feature movies in the new luxurious cinemas for fifteen cents, piano lessons for the kids, interesting articles in the Saturday Evening Post (with covers by Norman Rockwell and Joseph C. Leyendecker), photographic essays in Life magazine, and the Book of the Month Club that delivered the latest exciting, uplifting books to your home.

To the average American, never having been an entrepreneur, and with no hope or wish of ever going into business, but instead dependent upon a 'good job' for a livelihood, Roosevelt seemed to offer security.

Even if he failed to conquer unemployment, at least he seemed to be trying.

He gave the impression of being a man of action, willing to do anything for the good of the workers.

Many Americans believed that capitalism had failed and that a new system must be found.

The dominant propaganda theme of the Democratic Party was 'Gloom is Good'

This was fostered by what was to become the dominant propaganda theme of the Democratic Party for the rest of the century: Gloom is Good.

Whereas the Nazis and Soviets (already having achieved dictatorial power) were pushing their own Big Lie, making posters of happy worker-slaves, Roosevelt's New Dealers (still seeking an excuse for greater power) made a virtue of failure.

Stalin showed confident citizens enthusiastically supporting the latest Five Year Plan; Roosevelt showed abject poverty, destroyed lives, and hopelessness, while grinning inanely, sipping nicotine through a patrician's cigarette holder, and telling Americans, 'all we have to fear is fear itself' – the suggestion being that he was all that people had to protect themselves from the obvious evidence of a failed capitalist system, or, if they did not believe that, at least to lay upon them a thick blanket of guilt for being well-fed while others, supposedly, were starving.

The New Deal propaganda worked exceedingly well and has been repeated in myriad forms by the Democratic Party for generations.

Suborning Intellectuals

Although Roosevelt's economic policies did not succeed in getting America out of the Depression, he was totally victorious in using public funds to buy the lifelong loyalty of academics, intellectuals, artists, writers, and the press.

He started by flattering the universities, boasting of a 'brains trust', which was more fiction than fact.

He never brought together a standing panel of reputable economists and business people to provide him with reasoned, impartial, coherent advice on how to attack the Depression.

Instead, he was guided by hard-core, political operatives and influence peddlers, like Jesse H. Jones, Tommy 'the Cork' Cochoran, and Harry 'the Hop' Hopkins, while occasionally consulting with an odd and disordered assortment of college professors (predominantly from Columbia and Harvard), social workers, Soviet agents (like Alger Hiss and, as recently revealed, Harry Hopkins himself), fascist sympathizers (like Joseph Kennedy) and intellectuals of various persuasions, all of whom were flattered by presidential attention and wooed by the sweet scent of power. Paul Johnson tells how H. L. Mencken perceived FDR and his mob:

He was the 'Führer,' the 'Quack,' surrounded by 'an astonishing rabble of impudent nobodies, a gang of half-educated pedagogues, non-constitutional lawyers, starry-eyed uplifters, and other such sorry wizards.'  His New Deal was a 'political racket', a 'series of stupendous bogus miracles,' with its 'constant appeals to class envy and hatred,' treating government as 'a milch-cow with one hundred twenty-five million teats' and marked by 'frequent repudiations of categorical pledges.' ('A History of the American People', Paul Johnson, p. 762.)

This, of course, was considerably different from the fawning, glowing picture of the Age of Roosevelt painted by establishment liberals, like Pulitzer Prize historian, Arthur M. Schlesinger Jr., who saw the New Deal as 'not just a matter of staving off hunger, [but] a matter of seeing whether a representative democracy could conquer economic collapse.' ('The Age of Roosevelt: The Coming of the New Deal', Arthur Schlesinger.)

Schlesinger, like many other left-wing apologists who rewrote history to disguise FDR's failed policies and disregard for constitutional law, asserted that 'the only hope lay in governmental leadership of a power and will [sic] which representative institutions seemed impotent to produce.'

This thought may be compared with that of Friedrich W. Nietzsche in The Anti-Christ, saying, 'What is good? – Whatever augments the feeling of power, the will to power, power itself, in man.' ('The Anti-Christ', Friedrich Nietzsche, 1895, translated by H.L. Mencken, 1920)

Roosevelt owed a political debt to Joseph Kennedy, the father of JFK.

Joe Kennedy had intervened with the political kingmakers at the Chicago convention in 1932 to get FDR nominated.

He paid Kennedy back by making him the first Chairman of the new Securities and Exchange Commission.

Paul Johnson, in ' A History of the American People', said that Kennedy was 'a big Democratic wheeler-dealer, paymaster, and fund raiser but a crook and known to be such: his personality horrified the stiffer elements in Wall Street'.

Indeed, FDR himself called Kennedy 'a very dangerous man' and said he had him 'watched hourly.'

After his stint at the SEC, FDR named Joe Kennedy as Ambassador to the Court of Saint James, where he showed strong pro-Nazi sympathies, using his financial connections in Hollywood to impede publicity of Hitler's concentration camps.

By energetically sucking up to artists, writers, journalists, actors, and college professors, Roosevelt was able to create a perpetual disinformation machine that continued to mold public perception of capitalism for generations long after he was gone.

In essence, Horatio Alger was to be replaced by 'the forgotten man'.

Wealthy people were to be portrayed as fat and frivolous, the men wearing tuxedos and smoking cigars, the women in perpetual evening gowns and strings of pearls, like Peter Arno's 1936 cartoon in the New Yorker showing a group of fatuous, affluent people at the window of a friend's home, saying, 'Come along. We're going to the Trans-Lux to hiss Roosevelt.' (Peter Arno, New Yorker Magazine, September 26, 2020.)

The successful entrepreneurial heroes of the past – Carnegie, Eastman, Edison, Westinghouse, and so many others – were to be wiped from memory, replaced by FDR's forgotten men – semi-literate, bumbling failures – losers like the Joad family in Steinbeck's Grapes of Wrath, or like Jeeter Lester in Erskine Caldwell's Tobacco Road.

Who Really Was Hissing Roosevelt

Sarah Wernick, writing in the June 1995 issue of Smithsonian, tells how the New Yorker cartoon, mentioned above, was inspired by actual social behavior during the New Deal.

She recounts how Richard McAllister, Peter Arno's gagman, explained how he came upon the idea for this famous drawing at a newsreel theatre in the 1930s.

'I could hear hissing. I thought it must be one of the radiators. Then I looked around and realized people were hissing the President.'

Obviously, the people in the theatre were not wearing evening clothes, as the cartoon suggested.

They were, in fact, probably middleclass, rather than wealthy socialites – perhaps even traveling salesmen and unemployed professionals.

However, the New Yorker was a humor magazine catering to New York liberals and pseudo-intellectuals.

Truth and accuracy was never a standard for humor.

Essay: continued >

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