It’s hard to exaggerate the incoherence of the WSJ editorial, “FDR’s Conservative 100 Days”. The authors write that Obama’s program “has been likened by the president himself to Franklin D. Roosevelt’s famous first 100 days. But FDR did not launch his New Deal with a program that roiled financial markets.” No: he shut down the banks, and reopened about eighty percent of them with federal assurance that they were sound. This helped restore confidence in the American financial system.

And, FDR said, “I hope you can see from this elemental recital of what your government is doing that there is nothing complex, or radical in the process.”

The authors also quote Raymond Moley saying, “It cannot be emphasized too strongly that the policies which vanquished the bank crisis were thoroughly conservative.” And then they add mention of the Economy Act, which cut the budget dramatically.

Now, you might note, as Ed Kilgore does, that you want to be careful quoting Moley, who “left the Roosevelt administration midway through 1933, and then devoted much of the rest of his long career to New Deal-bashing, contemporary and revisionist.”

Or you might want to use your common sense. Yes, it is in some sense “conservative” to save the banking system as FDR did—it helped, as Moley also said, save capitalism. But is it in any sense more conservative than what Obama’s doing to save the banking system? No; Obama’s so far avoided shutting down all the country’s banks for a week and keeping 20 percent closed for even longer. Which, by the way, is no recommendation of Obama’s policy; with each day it seems a less conservative measure might be a good idea.

But set all that aside: most hilariously, the WSJ authors’ measure of Roosevelt’s conservative success is that “By July 3, the Dow Jones Industrial Average was 93% above its close on March 3, the day before Inauguration Day in 1933.” Yet their account of the hundred days stops with the Economy Act, on March 14. Between March 14 and July 3, you had also (among other measures) the

  • Civilian Conservation Corps / Reforestation Relief Act, which employed young men chiefly for the maintenance of public lands;
  • Agricultural Adjustment Act, which taxed processors to subsidize reduction of farm crops;
  • Federal Emergency Relief Act, which allocated $500m as unemployment relief to the states;
  • Tennessee Valley Authority Act, which established federal management of the Tennessee River and its watershed, to generate lower electricity rates (among other purposes);
  • Banking Act of 1933, which among other things separated commercial and investment banking;
  • National Industrial Recovery Act, which created federally sanctioned industry cartels to set prices and wages and which strengthened the right to unionize.

I look forward to the WSJ editorial explaining how these conservative policies contributed to the market rally evident by July 3, 1933.

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