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While we’re watching the signal, if not single, liberal achievement — the BFD, if you will — of the Most Disappointing President Ever™ writhe before conservative jurists like a tasty Christian before so many lions deciding whether merely to rip out the mandate or devour it whole (the Scalia lion is, of course, played by Jeremy Irons and drawling, “I can’t believe I ate the whole thing!”), let’s pause to remember how the Real Democratic Party™ acted when the High Court tossed out a law that was important to their constituents and agenda: They simply passed it again, with a different rationale.
Shasta Dam under construction, photographed in color by the FSA/OWI. The New Deal documented its accomplishments beautifully. And now the Library of Congress has them in an outstanding Flickr collection.
The New Deal also beautifully documented the American people; here’s a photograph of African American workers at a Florida “juke joint”.
I was playing around with the data at USGovernmentSpending.com and decided to share:
We are still living in the aftermath of World War II.
On the jacket of Alexander Field’s new book A Great Leap Forward, my colleague Greg Clark says this:
As we sit mired in the Great Recession, Alexander Field’s exciting reappraisal of the Great Depression offers surprising solace. By showing the Great Depression was coupled with the most rapid technological advance in U.S. history, he fundamentally recasts the history of the 1930s. But he also offers hope that our own depression likely will have no long-run costs to the U.S. economy.
By measuring total factor productivity (TFP), or the improvement in productivity not accounted for by traditional inputs, Field finds tremendous gains during the Depression. They owe in part to private investment in manufacturing efficiencies, chemical processes, and other technical improvements. Historiographically, there’s a major payoff in showing that the vast majority of such innovation came during the Depression, not during the war.
But (as the bulk of Field’s book is devoted to showing) the productivity improvement owes mostly to construction transportation infrastructure – to the construction of roads, bridges, and all that made the modern trucking industry possible. Field even goes so far as to say the end of the golden age of productivity in the American economy in 1973 “coincides with [he does not quite say owes to] a tapering off of gains from a one-time reconfiguration of the surface freight system in the United States”.
And this massive public investment in infrastructure, which made possible the postwar suburbanization and boom, went along with financial regulation. Field attributes both the current crisis and that of the 1920s to “a failure to control, or really to be interested in controlling, the growth of leverage.” If we want to come out of the Current Unpleasantness with less than a Great Depression to show for it, we’ll have to see regulation that responds accordingly, he says. “If an even more serious crisis occurs within the next decade, it will be because the regulatory response ended up being less effective than that which was summoned during the New Deal.”
Which makes Field sound a lot less optimistic than Greg. The Great Depression turned out relatively well in the long run because we had not only significant private investment in R&D and other improvements, but also the New Deal – road-building and regulation. Do we have that, or anything like it, now?
In a WSJ op-ed called “Forty Years of Paper Money,” Detlev Schlichter, a supporter of the gold standard, begins thus:
Forty years ago today, U.S. President Richard Nixon closed the gold window and ushered in, for the first time in human history, a global system of unconstrained paper money under full control of the state.
Now, with that title, that lede, and Schlichter’s very stern opinions about paper money, you’d think that the paper money era began right then, forty years ago. But as Schlichter himself says in his very next sentence,
It is not that prior to August 15, 1971, there was a gold standard. Far from it. Most countries had severed any direct link between their currencies and gold many years earlier.
Right. So the shift to a paper money system didn’t begin with Nixon. And the monetary thing that existed before Nixon’s intervention – the monetary thing that was not, per Schlichter, a gold standard – the monetary thing that happened to go along with decades of global growth and prosperity, the monetary thing that goes wholly unmentioned in the op-ed, was the Bretton Woods system.
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Franklin Roosevelt’s worst decision was Executive Order 9066, “Authorizing the Secretary of War to Prescribe Military Areas”, which is to say, interning Americans of Japanese descent.
The decision for internment had nothing to do with intelligence (particularly, as often alleged, from MAGIC cables) and everything to do with the conviction that “a Jap is a Jap,” as General John DeWitt said. I’ve never been very happy with historical explanations that start and end with “it’s racism,” but really … it’s racism. You can tell of course because there’s no similar simultaneous effort against Americans of German descent. You can tell because of Japoteurs and “Slap the Dirty Little Jap” and lots of other examples.
For my family, the war was the European war. My grandfather, a German-born American, had no trouble the way Japanese Americans did; he flew a bomber for the US in the war. We had the luxury of remembering the war the way white people often do – without considering how much better we’ve had it because of our whiteness.
It’s profoundly difficult to integrate the psychology of the Pacific War and the European War for the US, either when considering them from the standpoint of history or of memory.
Kevin Kruse brings the historicizing to Mitt Romney’s effort to unite us, under God.
The concept of “one nation under God” has a noble lineage, originating in Abraham Lincoln’s hope at Gettysburg that “this nation, under God, shall not perish from the earth.” After Lincoln, however, the phrase disappeared from political discourse for decades. But it re-emerged in the mid-20th century, under a much different guise: corporate leaders and conservative clergymen deployed it to discredit Franklin D. Roosevelt’s New Deal.
This opposition of God to the New Deal is of course specious: God was a member of FDR’s Brains Trust and in His incarnation as Jesus Christ and author of the beatitudes He directly influenced the New Deal’s relief provisions. As for the public works, He explained, “Yes, I could have built ’em quicker, but only by robbing the economy of much-needed stimulus.”
Partly for fun, partly to make a point, I’m writing this post without referring to any texts, either online or on paper. Which should explain, if not excuse, any paraphrases or errors. The point may or may not become clear by the end of the post. This is not going to be an “FDR is better than Lincoln” post; you have been warned.
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Why do we always refer to the GI “Bill”?
Major George Fielding Eliot, in the New York Herald Tribune, 4/14/45, in an article titled as this post is:
Lincoln gave his life that the Union might be preserved; he died before he knew that, from the wreck of war, a stronger and more enduring Union would arise. Franklin Roosevelt gave his life that a greater Union—a Union of all peace-loving peoples to achieve peace and guard the hard-won heritage of freedom—might rise from the desolation of a more terrible war than Lincoln ever imagined. He, too, died before he saw the fulfillment of his vision. To us who remain behind, he left the heritage and the responsibility of that vision, that bright hope from which his purpose never turned aside.
Congressman Brent Spence of Kentucky on how to negotiate when approached with amendments to the Bretton Woods bill in 1945.
I wouldn’t agree to anything…. You see, if we accept something now it puts us just in the same position as if we hadn’t accepted it…. Every amendment we accept kind of weakens us. [W]e might say, ‘Well, we’ll accept them if that’s all the amendments.’ But if we are going to have to fight it out, we just as well fight it out on all of them.
Could someone explain this to the people in the White House, please?
As a recent post on Metafilter points out, the well-known children’s author and sometime New Yorker cartoonist Syd Hoff had a radical alter ego, a Mr. Redfield who drew cartoons for the Daily Worker. Philip Nel has written about Hoff’s radicalism here and here; apparently, despite being a real-live Stalinist through and through—i.e., ticked at those who bailed on the party after the Hitler-Stalin pact—and a high-profile children’s author, Hoff never got blacklisted.
I came across Hoff in my own research because he illustrated a pamphlet supporting Bretton Woods titled Bretton Woods is No Mystery published by Pamphlet Press in 1945. The pamphlet’s author, Joseph Gaer, was a UC Berkeley lecturer who wrote extensively about religion, labor, and Western authors (including Bret Harte and Ambrose Bierce). At the time he wrote the pamphlet, Gaer was director of the CIO PAC; shortly before that he had been an assistant secretary of the Treasury and before that worked for the Farm Security Administration and the Federal Writers’ Project. He was also founder of Pamphlet Press, which (the back cover explains) worked “to find the area of agreement among all the progressive groups of our nation and unite them on the issues of their common concern”.
At the time of the pamphlet’s publication, the Treasury had embarked on a campaign to persuade Americans across the political spectrum to support the Bretton Woods Agreements and their adoption by Congress. Opposition came from the American Bankers Association and Senator Robert Taft (depicted by Hoff below).
So a Democratic administration put forward an international banking bill, and met well-funded opposition from the main banking trade group, opposition that persuaded the New York Times, the Wall Street Journal, Newsweek, and much of the major metropolitan newspapers that the bill was a bad idea.
Nowadays, a Democratic administration in such a position might well just give up. But the Roosevelt administration did not: it mobilized regional bankers, civic organizations, and labor groups on behalf of the bill, persuading them that it was vitally important to support Bretton Woods because (a) it was the first opportunity for Americans to show that in 1945, unlike in 1918, they would embrace international responsibilities and (b) it was a program for world prosperity and full employment.
That it hasn’t worked that way lately is more a reflection on what happened to Bretton Woods since 1971 than how and why it was created; at the time the Roosevelt administration meant it to save international capitalism, and lined up a coalition of bankers, businessmen, civic-minded middle-class professionals, and unions behind the idea that international capitalism should be saved.
(Which is the subject of this talk.)
Both the American and British chief delegates to the Bretton Woods conference were tall bald men, but there the similarity between them came to an end, and even in respect of their height they stood differently. Henry Morgenthau, Jr., hung on his own frame like a picture crookedly strung on a hook, while John Maynard Keynes wore his stature as comfortably as his tailored suits. Although Keynes was the older man, his powerful new ideas made Morgenthau look ever more like a relic. As Secretary of the Treasury since 1934, Morgenthau had helped engineer the New Deal. But as Keynesianism swept the policymaking landscape, Morgenthau became more old-fashioned, insisting that whatever Keynes might claim about deficit spending, the government ought to try a balanced budget—though between the Depression and the Second World War Morgenthau never presided over one. A cruelly witty Cambridge first who indulged his refined tastes in champagne, men, and women, Keynes enjoyed the comforts of the English upper class. Morgenthau was a relative outsider in America: a Jew who attended a state university but failed to graduate and instead became a farmer. It was only because he really took his farm seriously that he enjoyed a rapport with his Dutchess County neighbor, Franklin Roosevelt.
So as I read this, a Bretton-Woods–style system of stable exchange rates would be a potent weapon in the war on terror. You identify the countries harboring problematic insurgencies, set your adjustable peg high enough that insurrections can’t operate effectively, and watch the rebellion wither! Is there any problem FDR’s policies can’t help us solve?
Actually, rhetoric like this — pinning hopes for world peace to the Bretton Woods system of stable exchange rates, and thus freer trade and capital flows — was not at all uncommon. As one participant later recollected,
Peace was seen as linked with world prosperity, and prosperity, with free trade, free capital movements, and stable exchange rates.
He goes on to admit, “Although the causality was ambiguous….”1
1Raymond F. Mikesell, “The Bretton Wood Debates: A Memoir,” Essays in International Finance no. 192 (March 1994), International Finance Section, Department of Economics, Princeton University, 4.
UPDATED to add, hear the original here.
Adam Serwer on how the New Deal is holding Sharia at bay.
Speaking of US-Central American relations as we were, one of our far-flung correspondents sends us the below, from Guatemala. I mean, who needs to be on Mount Rushmore when you can pitch buffalo wings with a side of sexism.
Students Frequently Ask this Question: when did the major US parties switch places, and why? Which is to say, when and why did the Democrats, who had been the party of limited federal government, begin to favor expanding Washington’s power? When and why did the Republicans, who had favored so strong a central government in Washington that they would accept a civil war rather than see its power curbed, become the party rhetorically committed to curbing its power?
When is easier to answer than why, though there’s no single date. (It would be nicer, though, if in one presidential election, say, the two candidates had done a partial do-si-do and ended up in each other’s places.) But we can pretty easily bracket the era of change.
At the beginning, we can put the Civil War. During the 1860s, the Republicans favored an expansion of federal power and passed over Democratic opposition a set of laws sometimes called the Second American System, providing federal aid for the transcontinental railroad, for the state university system, for the settlement of the West by homesteaders; for a national currency and a protective tariff.
Taken together, this was a highly ambitious program for expanding federal power. It was mercantilist, but it also aimed to get small-time farmers and ordinary citizens to buy into it with the Homestead Act and the state universities. And, broadly speaking, Democrats opposed it.
The postwar era of Reconstruction saw this division grow clearer, as the Republicans supported an expansion of federal power to provide civil right for African Americans in the Civil Rights Act of 1866, the Fourteenth Amendment and the creation of the Department of Justice—an expansion that, again, Democrats opposed.
So through the early 1870s, then, the lines are pretty clearly drawn. Let’s leave that era for a moment and flash forward to our closing bracket, which we might as well make the 1936 election. Here we have the Democratic incumbent Franklin Roosevelt winning reelection for the successes and promise of the New Deal, which expanded federal power to provide … well, an awfully long list of benefits including banking, securities, and currency regulation; relief for the unemployed and pensions for the elderly; wilderness conservation; improvements to roads and electric infrastructure; support for unionization; and much else. And he was opposed in this election by Republicans staunchly against this expansion of state power.
So the switch takes place sometime between, let’s say, 1872 and 1936. That may not sound very narrow, but it’s a start.
Now, we can go further by finding some landmark dates in there. One of them has to be the 1896 election, when the Democratic Party fused with the People’s Party, and the incumbent Grover Cleveland, a rather conservative Democrat, was displaced by the young and fiery William Jennings Bryan, whose rhetoric emphasized the importance of social justice in the priorities of the federal government. The next time the Democrats had a Congressional majority, with the start of Wilson’s presidency in 1913, they passed a raft of Bryanish legislation, including the income tax and the Federal Reserve Act. And the next Democratic president after that was FDR. So from Bryan onward, the Democratic Party looks much more like the modern Democratic Party than it does like the party of the 1870s.
Oddly though, during the first part of this period, i.e., the time of Bryan, the Republican Party does not immediately, in reaction, become the party of smaller government; there’s no do-si-do. Instead, for a couple of decades, both parties are promising an augmented federal government devoted in various ways to the cause of social justice. It’s not until the 1920s, and the era of Coolidge especially, that the Republican Party begins to sound like the modern Republican Party, rhetorically devoted to smaller government.1 And that rhetorical tendency doesn’t really set in firmly until the early 1930s and the era of Republican opposition to the New Deal.
So now we have a better idea of when this happens; we need now at least the beginning of an explanation why. And the short answer to that is, the West. Which is to say, had the US not expanded westward and taken in a swath of new states in the post-Civil War era, it’s plausible that the parties would have remained as they were, with the Democrats the party of the South and states’ rights and segregation, and the Republicans seeking electoral advantage by trying to enforce civil rights legislation. But the admission of new western states changed the political calculus. In the West were voters disillusioned with the Republican Party’s Second American System, which turned out awfully favorable to banks, railroads, and manufacturing interests, and less favorable to small-time farmers such as those who had gone West and gone bust.
Those western voters were up for grabs—Bryan got them in 1896, Roosevelt helped McKinley get them in 1900, and got them for himself in 1904—and the only way to get them was to promise that some of the federal largesse that had hitherto benefited the northeast. Which is why you have the period of both parties promising some augmentation of federal power in the decades around the turn of the century.
Now, what happens next is that the Republicans prove able to regain western electoral votes from 1920 without having to promise anything much like Bryanite policies. Why this happens is, to my mind, a bit murky. Possibly it’s because a lot of Bryanite policies have already been passed, and western voters are less rebellious. Possibly it’s because of reaction against the Democrats and the war. Possibly it’s to do with the reaction against immigration. Or all of the above plus something else.
Anyway, that’s the when plus a little of the why the parties switched places. Now, one can get cleverer and point out that although the rhetoric and to a degree the policies of the parties do switch places, their core supporters don’t—which is to say, the Republicans remain, throughout, the party of bigger businesses; it’s just that in the earlier era bigger businesses want bigger government and in the later era they don’t. But this post is already long enough.
1That is to say, rhetorically devoted to smaller government even while increasing government’s size and power to regulate behavior with, e.g. Prohibition—but that’s another wrinkle to this story.