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The Myth that Is FDR

Mises Daily: Tuesday, January 19, 2010 by

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[American Affairs, 1949. An MP3 audio file of this article, read by Floy Lilley, is available for download.]

The Roosevelt Myth

When John T. Flynn has put the Roosevelt myth through his terrible wringer and thrown aside the empty sack, all that remains of it is — the myth. His book will not be challenged on grounds of fact. He has a special way with facts. He brings them together in piles like fissionable material, and then suddenly a pile explodes with atomic effect, even though there had been nothing new in the facts. Many of them you already knew and had forgotten. But the secret of a myth is no more explained by facts than the secret of life is explained by anatomy. It may be that for good or bad the man of myth is an instrument, and if that is so, he would be unable to account for himself, or, trying to give reasons, would give wrong or puerile reasons, not knowing any better.

You get this idea as you read Flynn's history of the thirteen Roosevelt years. From backstage, the New Deal was an incredible confusion, unable, as Mr. Flynn thinks, to make sense even to itself; and the man least competent to make sense of it was the president. He was the juggler who made fascinating patterns in the air with glittering objects handed out to him from behind the scenes by visionaries, monomaniacs of economic theory, social reformers who found themselves suddenly in the land of a dream come true, disaffected intellectuals, sinister aliens, petted communists, and crackpots; Henry Wallace, under whose evangel of abundance cotton was plowed under and little pigs were slaughtered; Milo Perkins, who wanted a world he could lift and whose slogan was "Grab the Torch," and Dr. Maurice Parmalee, who

had spent years drinking deep of the "new learning" in Europe and wrote a book called "Farewell to Poverty." Wallace and Perkins and Parmalee made a marvelous trio of musketeers as they figuratively strutted over this hemisphere arm-in-arm singing "Hello Plenty! Here We Come!" Parmalee wrote another book labeled Bolshevism, Fascism and the Liberal Democratic State. In this he said: "The high technological development in the United States renders it feasible to introduce a planned social economy much more rapidly than has been the case in the U.S.S.R. …. The superficial paraphernalia of capitalism can be dispensed with more quickly than in the Soviet Union." But the Doctor had strayed into much lighter fields of literature. He had also written a book called Nudism in Modern Life which is secluded in the obscene section of the Library of Congress.

They were willing to try anything, and did try everything they could think of, but nothing really worked. After five years, the bad-wolf depression was back again, deficit spending was no longer a magic solution because, for one reason, nobody could think of anything big enough to spend money for, and the New Deal was on the rocks. On January 1, 1938, says Flynn, the president and Henry Morgenthau

sat down to a sad repast. Roosevelt told him "the next two years don't count — they are already water over the dam." Then he revealed the extent of his plans — they would have to step up spending, forget about balancing the budget and get along with a two or three billion dollar a year deficit for two years. Then a conservative would come into office. That administration would do what Roosevelt had been promising he would do — quit government spending. And then the whole thing would go down in a big crash. At that point they would have to yell for Roosevelt and Morgenthau to come back and get them out of the hole. The amazing feature of this strange confidence, which Morgenthau has reported, is this: Roosevelt and Morgenthau were already in a hole — the kind of hole the next administration would be in. Nobody had to call them in now — they were in. And they had not the foggiest idea what to do about getting out of the hole they were in, except to spend. Morgenthau concluded from this that Roosevelt had put out of his mind any thought of a third term. It is possible that he had.

What saved the New Deal from confession of failure was first the defense program and then the war. There was then something big enough to absorb astronomical deficit spending. The attitude of the New Deal economists toward the defense program was upside down. Their question was not "How much will it cost to create an adequate national defense?" The question they asked themselves was "What expenditure for national defense will increase the national income to $100 billions?" It was, therefore, inflation of the national income they were thinking of — not how to buy a maximum of defense at a minimum of cost.

But many of those who lived through the early years of the New Deal, especially the period known as "the one hundred days," without surrendering control of their rational faculties, will feel that Mr. Flynn leaves something out, and that what is missing from his history is the key. To this Mr. Flynn would undoubtedly say yes, and then explain that the key, it was a fact, could not be documented. Even those who believe there was a key were never sure that Mr. Roosevelt was aware of its existence.

From the facts alone, as Mr. Flynn relates them, you might suppose that everything just happened; that when Mr. Roosevelt was elected he had no idea what he was going to do, never thought through any of the things he did do, and that the story of the New Deal made itself up as it went along. Events of revolutionary meaning took place, but they were happy and reckless inventions, launched in a spirit of experimental adventure, with no preconceived design and no thread of purpose at all.

Mr. Flynn says, for example, and it is undoubtedly true, that Mr. Roosevelt's understanding of economics was immature and that monetary questions confused and bored him. Everyone knew that. Nevertheless a study of the New Deal's monetary measures may lead one to a startling conclusion. That conclusion may be stated as follows: if there had been a definite revolutionary purpose and if the way of bringing that purpose to pass had been thought out beforehand with extreme intelligence, everything would have happened just as it did.

Try putting down first the conditions. The country was on a gold standard, banking was free, exchange was free, every man was free to do what he pleased with his gold to hoard it or to sell it or to take it out of the country. All the gates stood open.

Then imagine the problem to be this: under these conditions given, how are you going to get control of all money, banking, and credit, in order not only to get your hands on the public purse, but to be able to use inflation as an instrument of social or revolutionary policy?

The solution of that problem can be worked out with chesslike precision, provided you can get control of both the executive and legislative functions of government. You will need this power for only a little while, because the edicts and laws you are going to use, if you know what they are, will be short and few. In the name of emergency, the New Deal did get such control of government. Edicts issued from the White House were validated by Congress afterward; and Congress was willing to enact any law sent to it by the president, sometimes even without reading it.

But with all this political power you still cannot solve the problem unless you know how. The solution requires certain definite steps in a certain sequence, as, for example, first to get physical possession of all the gold by a plausible pretext, then with the gold in your possession to confiscate it; next to take control of foreign exchange and slam the gates, then to repudiate the gold standard, declare all gold contracts void on grounds of public policy, even the gold-redemption clause engraved on government bonds, and finally to introduce an unlimited, irredeemable paper currency and pass a law making any other kind of money illegal.

The sequence must be right. That is imperative. One step in the wrong order might be ruinous and certainly the wrong step first would be fatal. Now the point is that each of these steps was taken in the right order, unerringly. Could that have been accidental? Or was it easier to imagine that behind the facade of innocent trial and error a keen and purposeful intelligence was all the time acting?

This was the clearest example that could be isolated. Nevertheless it soon became evident to thoughtful observers that all the New Deal's experiments, no matter how artless they might seem, had a certain bent. The tendency was to change the philosophy of American government, within the law if possible, in contempt of law when necessary, as when the president wrote to the chairman of a House committee saying that a little thing like the Constitution ought not to stand in the way of a good intention for the public welfare. The executive principle of government was daringly exalted. Much lawmaking power was delegated to the executive power by a pliant Congress, and thus the rise of administrative law, controlled by administrative commissions, who acted as prosecutor, jury, and judge to enforce their own laws.

By this means, the hand of government began to be laid upon every economic activity of life. The NRA was a failure; the Blue Eagle was already sick before the Supreme Court had chopped off its head. Yet the purpose was clear: the purpose was to create a kind of corporate state, not very unlike the Mussolini state, with all business in obedient submission to the paternal wisdom of government.

In a little while men who had been able to associate themselves with the New Deal by thinking of it not as a philosophy but as a dispensation for the emergency only, began to perceive through all its confusions the elements of design and became very uneasy about it.

One of these was Lewis W. Douglas, the first director of the budget, who visited Mr. Roosevelt in his bedroom one morning and said, "Mr. President, I do urge you to open your mind to the possibility that among the people surrounding you there is a kind of purpose you are not aware of." To this the president said, "Now you, too, Lew. Are you beginning to see things? Who are they? Where do they hide? Do you want to look under the bed?"

Another one was Senator Carter Glass who had been secretary of the Treasury and knew his monetary book. He, too, began to believe there was a controlling design, audaciously conceived and moved by unusual intelligence, but neither he nor anyone else was ever able to identify the intelligence or say where it was seated. The curious fact is that nobody imputed it to the president.

The latter part of Mr. Flynn's book is the kind of history that induces postdated shudders. The idol of a great myth in such a state of physical and mental decline that he had moments of blackout, bearing on paralyzed legs the weight of a world at war, is a figure of supreme tragedy; and it was much more than personal tragedy because it involved the country in the unpredictable perils of a new and strange destiny. Although people were dimly aware of the truth, its more painful aspects were concealed, and this, Mr. Flynn thinks, was wrong. That has happened twice in our history, and each time with a world hero.

Mr. Flynn leaves one singular episode in a state of mystery. When he was nominated for the last time, Mr. Roosevelt, by all intimate testimony, was aware that he might not live through another term. Then why did he put Henry Wallace down the well? Wallace was the natural candidate for second place on the ticket. All that weird and powerful motley on the Left, led by Sidney Hillman and including Browder's demobilized communists, were for Wallace, and for him to the point of saying that there was no second choice.

Nevertheless, at the eleventh hour, still saying, "Clear everything with Sidney," Mr. Roosevelt turned from Wallace to Truman. That was perhaps the last of his unexplained acts on the domestic political scene; and in view of the astonishing Truman performance in 1948 — that is, in the first election of post-Roosevelt time — it was what some might call a sign of premonition. Otherwise the country would have had three and one half years of Wallace.

Mr. Flynn is no academic historian. He is a reporter. Reporting is history in the raw. This is excellent reporting, by one who, besides penetrating insight, has a gift for dramatizing facts, not to omit a sense of humor. One of Mr. Roosevelt's "dainty intellectual pets," he says, was Archibald MacLeish, the poet, who was made head of the Office of Facts and Figures. He quotes from a MacLeish poem:

Who is the voyager on these coasts?

Who is the traveler in these waters

Expects the future as a shore;

foresees Like Indies to the west the ending — he

The rumor of the surf intends.

Flynn then adds, "A man who writes poetry like that inevitably becomes a New Dealer, if not worse."

Those who may allow for the fact that Mr. Flynn was born with a psychic mechanism guaranteed to protect him from all spells of human origin. The Roosevelt spell repelled him violently.