The Federal One Program and Hallie Flanagan: continued

FDR and Workers' Capitalism

Bread and Circuses

The largest public-funded propaganda campaign in American history was undertaken by the New Deal.

The program was designed to swing popular opinion from capitalism to socialism by pointing out supposed flaws in the free enterprise system, dramatizing the New Deal socialist vision and by publishing as many pictures, books, plays, and 'living histories' of American non-success as tax-payer money could buy.

Roosevelt got the idea of government sponsored arts for socialist purposes from George Biddle, a classmate from his Groton days.

Biddle, after having studied law at Harvard and passing the bar in Pennsylvania, used his prerogative as a coupon-baby and turned to painting, studying under Diego Rivera in Mexico.

Rivera was not merely a 'painter with a social conscious' as some New Deal apostles would prefer.

He was an active, ardent, life-long Communist who welcomed Leon Trotsky to live in his home (and even to his wife's bed).

FDR saw the political potential of Biddle's concept and eventually, after some smaller programs in his first term, turned the task over to Harry Hopkins and the Works Progress Administration (WPA), naming the project 'Federal One' to signal the importance of this massive public brainwashing effort.

'Federal One' was divided into five divisions: Federal Projects for Art, Writers, Music, Theater, and Historical Records.

Voices from the Dust Bowl

U.S. Library of Congress

"The Charles L. Todd and Robert Sonkin Migrant Worker Collection, 1940-1941"

Conversation about Mr. Johnson's troubles.

Place: Yuba City FSA Camp

Date: August 18, 2020

A sample of the 'living history' gathered by FDR's social-worker-writer-artists can be heard in the text box.

Of course, many of the targets of this federalized muckraking did not cooperate as hoped with the government invaders of their private lives.

Instead of blaming capitalism, they attributed their problems to more honest causes – like their own mistakes, or even their varicose veins, like Mr. Johnson in the recording.

The sad, gray photograph of Migrant Mother, mentioned at the beginning of this essay, is just one minuscule piece of the massive New Deal propaganda campaign.

Under Federal One, at the height of the Depression, Harry Hopkin's WPA hired over forty thousand artists, writers, sculptors, painters, actors, photographers, art teachers, music teachers, musicians, musical therapists, folk music records, stage hands, composers, orchestra leaders, oral history collectors, and other 'cultural workers'.

Federal One Program

American tax dollars paid for the publication of over three million books with eight hundred titles, more than one hundred thousand paintings, eighteen thousand pieces of sculpture, 2,500 murals, more than five thousand musical performances of all types each week, over one thousand theatre performances each month (even 'girlie' shows), and the radio program 'Federal Theatre of the Air' on all major networks that reached ten million listeners.

FDR taxed the rich to pay for girlie shows to suborn to poor

People on the WPA Federal One payroll who later became rich, famous, or both, include:

Unionized labor loved the 'Arts' program and rallied for its continuance.

In short, New Deal Big Government bought and paid for the already leftist soul of America's intelligentsia – lock, stock, and barrel.

For the rest of the people – the eighty percent who were still employed and enjoying the low prices of the Depression years – it was bread and circuses.

About two-thirds of the performances and art programs were free to the public and the rest charged a small admission, below cost.

The Hollywood studios, still living in a capitalist world, hated the subsidized arts program because tax money was being used to take away business.

Many art critics were also dismayed by the program because legitimate artists were displaced by amateurs, communist agitators, and freeloaders.

Hallie Flanigan, a communist sympathizer, ran the Federal Theatre Project

Hallie Flanagan

Hallie Flanagan, an old college chum of Harry Hopkins, was National Director of the Federal Theatre Program.

She was a firm believer in careful central planning and the use of tax money to 'educate' the masses to what she perceived as the new economic reality. She wrote that:

'New days are upon us and the plays that we do and the ways that we do them should be informed by our consciousness of the art and economics of 1935 …

In an age of terrific implications as to wealth and poverty, as to the function of government, as to peace and war, as to the relation of the artist to all these forces, the theatre must grow up.

The theatre must become conscious of the implications of the changing social order …'

['Arena', Hallie Flanagan, New York: Benjamin Blom, 1940, p. 45-46.]

In order to ready American minds for government-directed social change, she carefully chose plays that contained communist propaganda and anti-capitalist ideas:

Extreme hunger, poor exploited workers, and mothers driven to kill their babies for lack of food money – these were typical themes.

When the Supreme Court declared Roosevelt's programs as unconstitutional, Hallie Flanagan's Federal Theatre Program portrayed the Justices as doddering fools, while representing Earl Browder, the leader of the American Communist Party, propounding the Marxist line, as a noble statesman.

Like Paul Schuster Taylor and other New Dealers, Hallie Flanagan was in many ways a reactionary – a Luddite – trying to shield individuals from the economic consequences of change.

She saw the movies and the phonograph as creators of unemployment for actors and performers.

If technological progress put people out of work, the government should hire them so that their talents would not be lost.

Even unionized workers protested over the New Deal's communist bias

Leftist historians have long since excused infiltration of Communists in universities, the arts, and government, as youthful indiscretions of a few naive individuals, while aggressively painting the work of the Congressional Committees under Martin Dies and Joseph McCarthy as villainous political machinations that destroyed the lives of 'innocent' people.

The facts are somewhat different.

Objections to the Communist bias of the Federal Theatre Program came first, not from Congress, but from the workers themselves on these projects – Americans demanding something be done to counter the blatant anti-Americanism sponsored by FDR.

More on The Federal Theatre Project

See: ' Reality; The Federal Theatre Project: Theatrical Savior or Communist Mouthpiece?', Bowie Valeriano Ibarra, December 5, 2020. This web page discusses the influence, encouragement, and tolerance of communist infiltrators in the Federal Theatre Project during the FDR administration. There are numerous sources cited.

Bigger Government, Less Capitalism

The virulent anti-capitalist measures of the New Deal, in word and deed, changed the American economic and political system.

Years later, with the advent of the Cold War, liberals protested love for a new kind of capitalism, but the leeches of socialism had already been applied and were now draining away the capitalist spirit that had made American great during the previous century.

The New Deal had set in motion the conditions for an eventual shortage of equities by the 1990s, with four critical elements:

First: The primary responsibility of government shifted away from improved material well-being of the masses and technological progress, towards the elimination of business cycles and unemployment.

Second: The income tax became the principal instrument for social engineering and economic coercion, providing funding for a giant new client for business: the government itself.

Third: Government's role as defender of the rights of property gave way to being the champion of the rights of labor, especially organized labor and distributor of benefits to the poor and the 'down-trodden'.

Fourth: The universities were politicized and commercialized, setting up these institutions to become gatekeepers to the 'good life' for young people in a workers' world, and the authority over ethical norms in a relativistic society.

These changes worked against entrepreneurial initiative, while setting the stage for unparalleled exploitation of small investors by hired-managers of public companies by the end of the century.

The New Deal's success in bringing artists, writers, musicians, historians, economists, sociologists, educators, psychologists, film-makers, and other members of the intelligentsia into a single party, with leftist leanings, and effective modern propaganda techniques that gave a like-minded media oligarchy great influence over voters, pushed the nation into a new world of workers' capitalism.

Non-Progressive Taxation

The vastly expanded income tax created serious problems for small business, especially micro-ventures just starting up.

The tax, rather than being 'progressive' as liberals claimed, was highly regressive, acting more harshly on would-be entrepreneurs than on the wealthy rentier class.

The liberals, appealing to those most easily fooled, succeeded in sowing confusion as to the difference between income and wealth.

Democratic Party politicians, even seventy years later, still use FDR's rhetoric and call people with $100,000 annual income 'rich', worthy of heavy taxation.

To tax them is, after all, as Roosevelt said, 'the American way'.

However, the table shows the brutal regressive nature of income tax on entrepreneurs who are trying to hoist themselves by their bootstraps:


Wealth of Taxpayer (start of year)
Income of Taxpayer (end of year)
Tax as % of Income
Tax as % of Assets
Retired individual with $10 million invested in safe money market funds at 1%, earning $100,000 in a year.





Young restaurant owner, starting up with rented quarters and equipment, earning $100,000 after expenses in first year, with personal liability from business and contractual obligations equal to assets.





In this example, the starting entrepreneur pays taxes that are one hundred times more burdensome on his or her assets than the truly wealthy individual.

After this young restaurant owner pays taxes and living expenses, it is unlikely that there will be much left to invest in expansion of the business.

Even worse, whereas the wealthy individual with $100,000 from a money market fund may take only a few hours in preparing his income tax, the young restaurant owner will spend a good part of his or her life keeping copious special records mandated by the authorities, collecting and reporting tax on his employees, filling out forms for countless government agencies, and getting licenses and permissions just to stay in business.

The IRS special audits of the 'home office' reflects government bias against small businesses and entrepreneurs

The tax bias against small business is seen clearly in the Internal Revenue Service's establishment of special auditing departments, maintained just to make life difficult for micro-entrepreneurs that work from home or that use an automobile for both family and business purposes.

If the home office is not used full time or if the entrepreneur's family also uses the office, or even if children enter the office to see their mother or father, the expense can no longer be deducted.

No comparable restrictions apply for large corporations, much less for government employees.

Unreasonable, time-consuming paper burdens hinder the use of the family car by small-business persons.

It is not the wealthy rentier class — people like Roosevelt, Joe Kennedy, and John Kerry — that create jobs and expand the supply of equities; this is the role of courageous entrepreneurs that start small businesses, financing new ideas by scraping together personal savings and reinvesting hard-earned profits.

It was this valuable entrepreneurial class that suffered under the heavy-handed, wrong-headed tax and regulatory policies of the New Dealers.

What Is A Rational Entrepreneur To Do?

Let us play economist and assume that the restaurant owner in the above table is rational.

After a lifetime of paying a large portion of family assets to Uncle Sam, our small-time entrepreneur is likely to notice the disparity in lifestyle and fiscal burden of those who took the easier route and invested in an MBA to get a job with a big corporation, ingratiate themselves to the top, and become fabulously wealthy on stock-options pumped up by misusing shareholders money to finance buybacks.

The 'rational' man may no longer wish to be an entrepreneur

The micro-entrepreneur may even observe the cushy lifestyle of those in government, where top-level 'public servants' can earn the same $100,000 without the hassle of bookkeeping or the financial responsibility of running a business.

What must our small restaurant owner make of a retired 'public servant' like Rozanne Ridgway, the director of Boeing, with her cushy annual income in excess of half-a-million dollars from positions on multiple boards?

Some evening towards the end of the century, when working late to get the restaurant books and records in order for the government, our entrepreneur, now middle-aged, may take a few minutes to watch TV.

Here he or she will see images of a nation populated not by hard-working small business owners creating employment for others, but a world of 'public servants': policemen, public doctors, firemen, government lawyers, district attorneys, FBI profilers, soldiers, teachers, politicians, CIA operatives, and assorted other public officials – all living off the taxes of small business.

The entrepreneurial role models held up by Hollywood seem to be limited to imaginary 'capitalists' like Tony Soprano and Vito Corleone, or pumped-up sports heroes, rock stars, actors, and similar 'entrepreneurs' who, despite limited moral and intellectual attainments, are able to become rich on trick reflexes and special talents that are promoted by big corporations to sell tennis rackets, golf clubs, breakfast cereal, and basketball shoes.

Our restaurant owner may also notice the payment of $140 million dollars to the NYSE Chairman, Richard Grasso, a guardian of 'corporate governance', a 'self-regulator' designated by the SEC to protect small investors – a quasi-public-servant – and wonder if the life of an entrepreneur, risking one's own capital, is not just a bit irrational in the modern world.

How will the small business owner advise the next generation as to choice of career?

Our restaurant proprietor sees what passes for capitalism in the workers' state that has virtually no appreciation for simple, small-business people that the nation needs to create jobs and investment opportunities.

With regards to a choice of career, how should our restaurant owner advise the next generation?

The government offers to help finance the increasingly out-of-control costs of college so that young people can earn an MBA and get a good position with a big corporation; but there is no equivalent, easy-to-get help for those willing to assume the more difficult burden of a career as an entrepreneur.

The government even offers special programs to pay off student loans for those who choose a government career.

Furthermore, even if the owner's restaurant should increase in value after a lifetime of hard work, the government will exact a heavy estate tax, forcing the owner's heirs to sell out and join the ranks of the proletariat.

The rational entrepreneur at the end of his career, whose estate is about to be depleted by taxes, may advise his children to 'get a real job' and buy (on government credit) the MBA credential needed get a position with a public corporation or, better yet, the government.

Capitalism Adjusts to the New Deal

Finally, in 1945, after ceding half of Europe to the Soviets at Yalta and having done what he could to finish off the British Empire, Franklin Roosevelt passed away while still in office.

As his remains rolled down Pennsylvania Avenue on a black caisson pulled by six white horses, business people again saw signs of hope.

They had won the war and now, with 'That Man in the White House' out of the way, they could reap the benefits of running the world's most potent industrial economy.

Even the slowest corporate leader could perceive that the federal government had become a mammoth new potential customer, worthy of being courted so that the tax flow could be re-channeled to their shareholders.

Meanwhile, tens of thousands of sincerely grateful artists, writers, journalist, historians, and other literate beneficiaries of the New Deal munificence rushed to propose Roosevelt's beatification and eventual canonization, permanently rewriting history and twisting perceptions of future generations.

As Roosevelt's remains rolled down Pennsylvania Avenue, businessmen breathed a sigh of relief

This passage from the government-sponsored Franklin Delano Roosevelt Memorial web site captures the slavering sentimentality of a large segment of the population, even a half-century later:

'Imagine being in first grade when FDR is elected president.

By the time you are a senior in high school, FDR is still the president of the country.

He is the only president you have known.

He helped your father get a job during the Depression.

During the war he helped you understand why your brother must fight overseas.

FDR's portrait hangs in your house, alongside the portrait of Jesus.

Imagine you unexpectedly hear on the radio that FDR is dead.

You cannot believe he is gone.

Everyone around you is in shock or crying.

You wonder what will happen to the country now.

You worry that we will lose the war.

You wonder if our nation will survive without President Roosevelt to guide us.'

['America Reacted To FDR's Death', June 27, 2020,]

After Pearl Harbor roused American capitalists to move to Washington and take a more active role in the economy, a new and more formidable alliance of the elite was formed.

The unfinished business of World War II – the bungling at Yalta and the policy of accelerating the collapse of the British Empire, left America standing alone against a new foe, the Soviet Union, creating a Cold War that lasted two generations, punctuated by hot wars in Korean and Vietnam, and new spending sprees championed by Roosevelt's heirs, Kennedy (the Space Race) and Johnson (the War Against Poverty).

Essay End: Start

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