New Deal or Raw Deal? How FDR’s economic legacy has damaged America. Burton Folsom, Jr., Threshold Editions, 2009.
A history professor at Hillsdale College in Michigan, Folsom has written the best critique we have seen of the New Deal of the 1930s. Astute readers will note many parallels between the politics of that era and the struggle between liberals and conservatives about the proper role and reach of government that is currently raging.
President Roosevelt is portrayed as a clever politician, but something of a lightweight. Prior to going into politics, he had been a mediocre student, attorney, and businessman. He had a habit of making things up, as when he claimed in 1920 – with no basis whatsoever – that he had written Haiti’s Constitution, and “if I do say so, I think it a pretty good Constitution.”
Many of Roosevelt’s economic ideas were wrongheaded, such as his notion that the basic cause of the depression was under-consumption. Even FDR’s closest advisors, notably Treasury Secretary Henry Morgenthau, were appalled at times by his penchant for experimentation. But Roosevelt enjoyed being unpredictable and remained unrepentant.
Major New Deal programs are described and evaluated, such as the NRA, WPA, AAA, SEC and Social Security, pointing out weaknesses and in some cases merits. The basic thrust was centralization of power, which Roosevelt and his supporters were not averse to using for political ends. Periodic promises to reduce government spending and balance the budget were casually broken, with the excuse being that “we had to balance the budget of the American people before we could balance the budget of the national government.”
Although often thought of as a benefactor of the downtrodden, Roosevelt followed regressive tax policies (excise taxes grew during the 1930s, while high tax rates on high earners and corporations served to reduce revenues) and supported minimum wage and pro-labor policies that contributed to high unemployment. His record on civil rights was undistinguished, e.g., he failed to support anti-lynching legislation.
Federal patronage was lavished on large states that were seen as electoral toss-ups, such as Pennsylvania (which went for Hoover in 1932, but for FDR by a wide margin in 1936). Opponents like Senator Huey Long (can’t feel too sorry for him) and former Secretary of Treasury Andrew Mellon were subjected to intense IRS investigations, generally with little success. And in his second term, FDR attempted to pack the U.S. Supreme Court and then waged a vindictive campaign against members of the U.S. Senate who had thwarted his scheme.
Historically, the nation’s founders designed a system of government that elevated process over results. President Woodrow Wilson broke with this pattern, arguing that the focus should be on results, and FDR followed in his footsteps. In the end, what Roosevelt delivered was intentions rather than results. The country’s unemployment rate declined somewhat after he took office, but it rebounded to roundly 20% by 1938.
If the foregoing analysis is sound, why have so many historians classed FDR as one of our greatest presidents? Folsom’s explanation is that “most modern historians, following Woodrow Wilson’s lead, have embraced the progressive view of history.” In other words, they have tended to see what they wanted to see in the historical record.
Probably all historians do this to some extent, including Folsom who is clearly a conservative, but his book seems objective and well researched.