One of the things that annoys me most about conservatives is when they claim that Ronald Reagan balanced the budget, cut federal spending, and never raised taxes. Because if any of them did a cursory examination of the history of the Reagan presidency, they would've found out these claims were false.
Unfortunately, many liberals have done the same thing with regard to Franklin Roosevelt.
First of all, let me assert my firm belief that FDR was the best and most liberal president of the 20th century. But let me also assert my firm belief that when it comes to FDR, many liberals are terribly misinformed.
I don't know how many iterations of "we needed an FDR and Obama is no FDR" I've seen from people criticizing President Obama. Critics apply this as needed, but mostly with regard to Obama's handling of the financial crisis.
On financial reform, liberals usually point to how unlike that sell-out Obama, FDR sicced Ferdinand Pecora on the bankers' asses, came up with the FDIC, split up investment and commercial banking, and made Wall Street his bitches.
Problem is, virtually everything I've just mentioned is either false or a distortion.
First, although FDR did say in his inaugural that "The money changers have fled from their high seats in the temple of our civilization", what many people don't know is that
"On the very morning of his inauguration, he agreed to consult with the leading 'money changers' on how to solve the banking crisis." (McElvaine 140)
But, you might ask, FDR then declared a bank holiday, which must've really stuck it to those greedy, bloodsucking Wall Street bankers, right? Well, not exactly.
Historian Robert McElvaine:
Given the magnitude of the problem and his unprecedented support, Roosevelt could have done whatever he pleased with the unpopular 'money changers' and their institutions. Had he wanted, he could have taken an important step by nationalizing the banking system. He did nothing of the sort. Instead he submitted to Congress a distinctly unradical Emergency Banking bill drawn up largely by bankers and Hoover appointees in the Treasury Department. (McElvaine 140)
That's right, FDR really took on those bankers by...working hand-in-hand with those same bankers, which I'm sure would've had some of you clutching your pearls.
But at least the progressives were with him on this, which must've made it kosher. There again, you'd be wrong.
"On the night before Congress convened, Senators Robert M. La Follette, Jr., of Wisconsin, and Edward P. Costigan of Colorado, two leading progressives, called at the White House to urge Roosevelt to establish a truly national banking system. But they found Roosevelt's mind made up. 'That isn't necessary at all," La Follette later recalled Roosevelt saying. 'I've just had every assurance of cooperation from the bankers.' The very moneychangers, whose flight from their high seats in the temple the President had so grandiloquently proclaimed in his inaugural address, were now swarming through the corridors of the Treasury." (Schlesinger, The Coming of the New Deal, 5)
Huey Long voted against the bill because he felt it didn't do enough for "the little banks at the forks of the creeks".
Congressman William Lemke, who would run as a third-party candidate in 1936, said of FDR,
"The President drove the money-changers out of the capital on March 4 and they were all back on March 9." (McElvaine, 140)
Editor of The Nation, Ernest Gruening, in a letter to Socialist Norman Thomas, wrote,
"Our information from Washington is of terrific confusion, with the money changers whom Mr. Roosevelt drove out of the temples in his inaugural congregating in the White House and telling him what to do." (McElvaine, 142)
But surely, Wall Street must've hated the Emergency Banking Act, right? Because everyone knows about how they hated FDR and how he "welcomed their hatred".
Well, if so they had a weird way of showing their hate for the Emergency Banking Act.
"The stock market, when it reopened on the third day after the fireside chat (in which FDR explained the Emergency Banking Act to the nation), had its largest one-day increase in history. Prices went up 15 percent." (McElvaine 141)
Alright, FDR did what he needed to do to stop the bank panic, even if it meant working with the very Wall Street bankers who caused the Great Depression. But FDR got medieval on them by appointing Ferdinand Pecora to investigate them, right?
Well, not really.
"The idea of an investigation of Wall Street had begun with Herbert Hoover, who had come to believe by early 1932 that bear raids conducted by short sellers were an important factor in demoralizing the securities market. Under the chairmanship of Senator Peter Norbeck of South Dakota, hearings began in April 1932. After the election, Norbeck, on the recommendation of Frank L. Polk, hired Pecora." (Schlesinger, The Coming of the New Deal, 434)
But at least FDR did come up with the Glass-Steagall Act that split up the banks and came up with the FDIC, which the bankers hated!
True, the bankers did hate Glass-Steagall and its provisions. But FDR pretty much had nothing to do with it.
As for the idea of splitting up the banks:
"The Pecora Committee had recommendations concerning banking practices – especially the divorce of commercial banks from their security affiliates and of investment banks from their deposit business." (Schlesinger, The Coming of the New Deal, 443)
In addition, the legislation that made up Glass-Steagall was largely the work of Senator Carter Glass, the man who is considered the father of the Federal Reserve system. In fact, there was a previous Glass-Steagall Act that passed in 1932 and this was essentially a continuation of that, so it’s not like Congress only started working on financial reform when FDR rode into town.
And as for the FDIC:
"Roosevelt was almost populist in his penchance for condemning bankers, yet his views on banking were so conservative that he refused to support the most obvious method of restoring confidence: federal insurance of bank deposits. The FDIC, a far more important reform than the Emergency Banking Act, was not to Roosevelt's liking, and he unenthusiastically accepted it only at the end of the special session in June." (McElvaine 142)
In fact, FDR threatened to veto Glass-Steagall over the FDIC, a move which was supported by the American Bankers Association.
Okay, what about the Securities Act of 1934 that created the Securities and Exchange Commission? That must've sealed the break with Wall Street, right?
Although to the administration's credit, Wall Street was shut out of the drafting process of the Securities Act, nevertheless:
"Business complaints had severely weakened the bill, removing many mandatory provisions and placing more decisions in the hands of the Securities and Exchange Commission, which the act created. This meant that much depended on who was appointed to the commission." (McElvaine 165)
And who did FDR appoint to head the SEC? None other than the ultimate fox in the henhouse, Joseph Kennedy.
"In the summer of 1933, Kennedy participated in a pool in the stock of Libby-Owens-Ford Company – precisely the kind of speculative manipulation the SEC was designed to prevent. For this and other reasons, rumors of his appointment as SEC chairman provoked violent opposition. New Dealers, mostly favoring Landis or Pecora for the chairmanship, were incredulous. Roy Howard of Scripps-Howard protested personally to the President and had the Washington News say editorially that Roosevelt could not "with impunity administer such a slap in the face to his most loyal and effective supporters.'" (Schlesinger, The Coming of the New Deal, 468)
Other liberals were not only unhappy with who was going to head the SEC, but with the Securities Act itself.
"(Brain Truster) Adolf Berle noted that the Securities Act would have stopped few of the financial transactions condemned in the Pecora investigation; all it did was to patrol one front when it ought to have aimed at reconstructing the system. (Fellow Brain Truster, Rexford) Tugwell, dismissing the bill as better suited to 1910 than to 1933, wanted a government mechanism to control investment, like the wartime Capital Issues Committee. 'The Act,' said Professor William O. Douglas of the Yale Law School, 'is a nineteenth century piece of legislation.' (Schlesinger, The Coming of the New Deal, 445)
Alright, so FDR wasn't perfect. But at least FDR's administration wasn't scandalized by ties to Wall Street the way the current administration has been, right? Not true.
Still worse was the unveiling of the Morgan 'preferred list' – an enumeration of the friends to whom the House of Morgan occasionally sold stock at figures far below market price. Thus, when shares of the Alleghany Corporation were selling on the exchange at from $31 to $35, friends of Jack Morgan...were invited to buy at $20 a share.
Among those who accepted Alleghany stock at Morgan's bargain rates in the booming days of 1929 were such leading Democrats as Owen D. Young, Newton D. Baker...and William H. Woodin, whom Roosevelt had subsequently appointed to the cabinet.
'It is nothing more or nothing less than bribery,' said Governor Alfred M. Landon of Kansas of the preferred list. '...I confidently expect the President to demand the resignation of Secretary of the Treasury Woodin.' (Schlesinger, The Coming of the New Deal, 437)
That's right, people were calling for Treasury Secretary Geithn- I mean, Woodin to resign. Undersecretary of the Treasury, Dean G. Acheson had problems with ties to Wall Street as well. Republican Senator James Couzen of Michigan "challenged Acheson's confirmation on the grounds that he was too close to the House of Morgan." (Schlesinger, The Coming of the New Deal, 197)
But at least FDR didn't bail out the banksters. Oh, except that he did, via the Reconstruction Finance Corporation, which Fiorello LaGuardia called "a millionaire's dole". (Kennedy 85)
As Schlesinger writes,
"By 1935 RFC owned over a billion dollars of preferred stock in about half the banks of the country...By 1938, at the end of its first seven years, it had disbursed $10 billion. Of this nearly $4 billion went to financial institutions." (Schlesinger, The Coming of the New Deal, 431)
Okay, so FDR wasn't really the enemy of the bankers that he's been portrayed to be. But on everything else, he was with the working man all the way!
Like the National Recovery Administration:
The NRA was a colossal failure. Dominated from the start by large business interests, it served them at the expense of the rest of society. Their first concern was to assure their own incomes so they sought to use the codes to guarantee their margins of profit on the basis of restricted production and higher prices. This was scarcity economics and it meant reduced purchasing power. (McElvaine 161)
Well, how about the Agricultural Adjustment Administration?
Sharecroppers and tenant farmers in the region had long been the subjects of miserable exploitation. Fully one-fourth of the South fell into these two categories. The AAA not only did little to help them, it actually worsened the plight of many. Under AAA rules, tenants and sharecroppers were supposed to get a fair share of the payments. These regulations were often ignored, and plantation owners evicted "their" tenants in order to collect AAA payments for taking land out of production. (McElvaine 150)
But it wasn't just with regard to the banking system, industrial policy, and agricultural policy where FDR was not exactly a liberal's wet dream. When it came time for FDR to allocate funds for public works, David Kennedy wrote:
As for public works, Roosevelt remained skeptical. Progressives in Congress still clamored for a $5 billion construction program, but Roosevelt reiterated Hoover's insistence that public works be self-liquidating. He also endorsed Hoover's conclusion that only about $900 million worth of acceptable projects were on the shelf. "Do not write stories about five or six billion dollars of public works,' he cautioned reporters on April 19. 'That is wild.' When (Secretary of Labor Frances Perkins) pressed a $5 billion list of projects on him at a White House meeting on April 29, he countered by going through the New York projects item by item, pointing out in well-informed detail how unsound most of them were. (Kennedy, 146-147)
In addition, PWA was far too slow in getting under way. Part of the reason was that it focused on large-scale projects like the Triborough Bridge in New York, the Hoover Dam, and the roads and bridges connecting Key West with the Florida mainland, which took time to get off the ground. As a result, just $110 billion of the $3.3 billion allocated for the PWA was expended in all of 1933, scarcely enough to make any kind of dent on unemployment or economic recovery. (Schlesinger, The Coming of the New Deal, 287)
But another reason why PWA was so slow to get going was FDR’s choice of who would head the project, Harold Ickes. As Schlesinger writes, "Ickes showed little interest in PWA as a direct economic stimuluant" and that "to Ickes its (PWA’s) object was to beautify the national estate". (Schlesinger, The Coming of the New Deal, 284-285) Nor did FDR exactly prod Ickes along to move faster.
"According to Ickes recollection, the President minimized complaints about tardiness, even saying ‘I do not want you to move faster.’ Explaining that recovery might come more swiftly than anticipated, Roosevelt observed that a ‘more deliberate carrying out of the Public Works program would mean money saved to the Treasury." (Schlesinger, The Coming of the New Deal, 287)
Yeah, that FDR, he acted so quickly to rescue the bankers but he dragged his feet in putting people to work. Because he was more concerned about "money saved to the Treasury." We needed a trustbuster like Teddy Roosevelt and a Square Deal and instead we got a banker-friendly deficit scold.
Because PWA took so long to get going, and with unemployment remaining stubborn as the winter of 1933-1934 approached, it was clear more was needed to get people to work. As a result-
"(FDR adviser Harry) Hopkins convinced Roosevelt to launch a temporary work relief program in the winter of 1933-1934. The idea was to tide the unemployed over the winter with small, quick projects until the PWA got into full gear." (McElvaine 153)
CWA was a huge success, employing some 4 million by the time it was done. But even then, the vast majority of the unemployed could not get CWA jobs.
"Lawrence F. Quigley, mayor of Chelsea, Massachussetts, wrote Hopkins in January 1934 that only 155 people in his town could get CWA jobs; another 2000 were congregating sullenly in City Hall; ‘a spark might change them into a mob.’" (Schlesinger, The Coming of the New Deal, 273)
Yet even this barely adequate works program that was still the boldest of the New Deal was considered too much for that sell-out Roosevelt.
"As spring arrived, Roosevelt ordered Hopkins to phase out the CWA rapidly. ‘Nobody is going to starve during the warm weather,’ Roosevelt declared with more confidence than comprehension." (McElvaine 154)
Wow, it’s amazing how "insanely stupid" our leadership was back then, huh?
But at least the Works Progress Administration was definitely an unqualified success for working folks.
Some WPA projects met the goal of sustaining workers' morale; many unfortunately did not. Pay was miserable. The nationwide average was $55 a month, much better than FERA relief payments, but an annual income of $660 amounted to barely more than half of a minimum subsistence budget of $1,200...WPA earnings were kept at a sufficiently low level that the government would not be competing for workers with private enterprise." (McElvaine 266).
Not to mention -
The greatest failing of the WPA was that it never provided work for most of the unemployed. This left upward of 5 million jobless Americans on the tender mercies and empty treasuries of state and local governments. When he chose the work relief option, President Roosevelt had decided to end federal relief, which he characterized in words worthy of Herbert Hoover as "a narcotic, a subtle destroyer of the human spirit." (McElvaine 268)
So what’s my point with this FDR hit diary? Do I have Roosevelt derangement syndrome? No, the point is to show that even with the most liberal president of all, you can find things to get outraged about with virtually every policy he came up with.
If you chose to overlook the fact that the AAA helped to stabilize the agricultural sector and that the Emergency Banking Act stabilized the financial sector, and instead chose to focus on the fact that AAA helped big agribusiness and large landowners and the Emergency Banking Act was drawn up by and mostly benefitted the bankers who caused the Great Depression, you might come away thinking FDR was a corporatist who betrayed his base and hated teh libruls.
I know people here will say, "But FDR said he 'welcomed their hatred'" and he called them "money-changers"! True, but I always thought you folks cared more about "actions" rather than "pretty speeches". Not to mention, FDR gave that speech in 1936, only after he had tried business-government cooperation for the first few years of the New Deal. As Schlesinger writes of the early New Deal,
"(FDR) had staked his program in 1933 largely on the thesis that, as he had put it, business leaders could be relied on to operate for the general welfare and that 'industry would not violate a great public trust.' In this faith, he had appointed business leaders to posts of high responsibility." (Schlesinger, The Politics of Upheaval, 212)
Yeah, that FDR, what a corporatist bootlicker. I knew we should've voted a real fighter like Al Smith in '32.
In fact, just a little over a year before his famous "I welcome their hatred" speech,
"Roosevelt still seemed to be drifting back into a pro-business policy. By mid-February Time could cheerfully list the evidence of this new turn: the purge of liberals in AAA; (NRA chief counsel and co-author Donald) Richberg's antilabor policy in NRA; the conservative social security program; the opposition to prevailing wages on public-works projects. The liberal publisher of the New York Post declared, 'I am very much worried about the President's trend toward the right...Of late it seems to me that he has been shifting more and more towards big business.'" (Schlesinger, The Politics of Upheaval, 213)
I could go on and on about things FDR did that would’ve resulted in a flurry of "FDR Has Betrayed Us" or "Happy Days Are Not Here Again" diaries on the rec list. Did you know that he blocked the Wagner Act, a bill that would’ve prohibited employers from retaliating against workers trying to organize, in 1934 because he didn’t want to antagonize big business? Or that the following year FDR didn’t lift a finger to get the Wagner Act passed? Or that the second piece of legislation FDR signed upon taking office was the Economy Act, which slashed pensions for World War I veterans?
I guess what I’m saying is that it’s a little much for me to see people saying, "Obama sucks, if only we had zombie FDR" when these same people would’ve been part of the "Huey Long needs to primary Roosevelt in ‘36!" crowd.
I want to make clear that this isn't some admonition for all of you to just STFU, nor am I aiming to just punch the hippies. If you want my opinion of it, FDR's best policies came after liberals started turning on him in late 1934 and early 1935, so clearly lefty criticism has a role to play.
But cut it out with the historical revisionism. It reminds me of the righties who fluff St. Ronnie at every opportunity although St. Ronnie himself wouldn't have passed their purity test.
And if you dispute any of this, then clearly you're a Rooseveltbot apologist who has drunk the FDR kool-aid.
References:
The Great Depression, America 1929-1941 (1983), by Robert S. McElvaine.
The Age of Roosevelt: The Coming of the New Deal, (1958) by Arthur M. Schlesinger, Jr.
The Age of Roosevelt: The Politics of Upheaval (1960) by Arthur M. Schlesinger, Jr.
Freedom From Fear, The American People in Depression and War, 1929-1945 (1999), by David M. Kennedy.