TW: Everyone knows the "100 days" concept came from FDR's initial months in office during the Great Depression. Arthur Schlesinger wrote a look back at FDR's 100 days in April, 1983. It is one of those interesting pieces written fifty years after the fact but also over 25 years ago. It had the benefit of distance from the actual event without the distortions of recent history, no conservative ascendancy, no 9/11, no stress of being tangled amidst the to and fro of our current Great Contraction. Many passages though are very relevant to the current debates.
From NYT via Mark Thoma's blog (original by Arthur Schlesinger April 10, 1983):
" ...The Hundred Days were only the start of a process that ended by transforming American society. Who can now imagine a day when America offered no Social Security, no unemployment compensation, no food stamps, no Federal guarantee of bank deposits, no Federal supervision of the stock market, no Federal protection for collective bargaining, no Federal standards for wages and hours, no Federal support for farm prices or rural electrification, no Federal refinancing for farm and home mortgages, no Federal commitment to high employment or to equal opportunity - in short, no Federal responsibility for Americans who found themselves, through no fault of their own, in economic or social distress?
These social changes have won general approval. Even the Reagan counterrevolution, for all its 19th-century laissez-faire and Social Darwinist passions, shrinks from abolishing the framework of social protection -the ''safety nets'' - created by the New Deal.
But what of the narrowly economic results? How effective was the New Deal in reducing unemployment, promoting economic growth and altering the distribution of income? And does the experience of half a century ago offer any guidance to the nation in its economic perplexities today?
The technique of the New Deal was improvisation and experiment. ... In the intellectual circumstances of the time, there was really no alternative to experiment. The Hundred Days
found the country in a state of invincible ignorance. No one knew the causes of the Depression. No one knew the cure. Business leaders and academic economists alike were analytically baffled and impotent. ...
Economists had been so wrong in the recent past and were in such hot disagreement in the urgent present that no non-economist could take the profession seriously...
...The President-elect emerged from this varied experience with a patrician disdain for business wisdom and a curiosity about economists. ''This nation asks for action, and action now,'' he said in his inaugural address.
...But the New Deal came to public spending earlier and for its own reasons...He took his ideas from two now forgotten American economic writers, William Trufant Foster and Waddill Catchings, whose irreverent critique of Say's Law in the 1920's had demonstrated the perils of oversaving, concluding with the brisk injunction: ''When business begins to look rotten, more public spending.'' ...
The third prong in the Second New Deal was targeted attention to weak sectors in the economy - the South, the West, housing, railroads...[the New Deal] liberated the colonial South and West from the New York capital market and used government money to lay the foundation for the postwar boom in the Sun Belt...(The Sun Belt today repays Washington's initiative by opposing, in the sacred name of free enterprise, government intervention on behalf of other parts of the country, as, for example, the decaying industrial heartland of the Middle West and Northeast.)
...As has been often noted, the New Deal did not solve the problem of unemployment. By 1940 the jobless rate had been cut by nearly two thirds, to 9.3 percent of the labor force from 25.2 percent in 1933. Still five million people lacked jobs.
So much re-employment in half a dozen years was a not inconsiderable accomplishment...The reason the New Deal did not do even better was that Roosevelt, though much denounced at the time as a profligate spender, remained at heart a budget-balancer and a planner. In any event, the hysterical opposition of businessmen to public spending for anyone but themselves made it politically impossible for him to spend very much.
The largest peacetime deficit the big spender produced was a feeble $3.5 billion in 1936. The increase in public debt through the 1930's hardly offset the contraction in private debt. It was not until war legitimized really effective deficits - $18 billion in 1942, $54 billion in 1943 - that unemployment disappeared; proving incidentally how right Eccles and Keynes were.
The New Deal, aided by wartime full employment, also had some impact on the distribution of income. The top fifth of American families received only 46 percent of aggregate personal income in 1946, down from 54.4 percent in 1929, while the share of the lowest two-fifths rose to 16 percent from 12.5 percent.
This was not a great change. But it was the only reversal in the trend of income distribution in American history before or since (except for a brief moment in the 1960's, and is thereby an achievement.
Roosevelt was concerned not only with getting out of the Depression but with preventing new depressions in the future. For the Great Depression was a traumatic experience. Mass unemployment, doubt whether democratic institutions could master economic crisis, the waiting specters of Communism and fascism - all this gave democratic society such a scare in the 1930's that a primary New Deal goal was to make the American economy depression-proof.
Before the New Deal, in those glorious days of the gold standard and the unregulated marketplace, the nation had gone through a bad depression every 20 years or so - 1819, 1837, 1857, 1873, 1893, 1907, 1921, 1929. The New Deal now moved to equip the economy with built-in stabilizers designed to protect individuals against unemployment, businesses against bankruptcy and society as a whole against the roller coaster of boom-and-bust.
...But we have come to understand that, in an economy dominated by market power concentrated in large corporations and unions, fiscal and monetary policy can restrain inflation only by very crude-tuning - to put it bluntly, by inducing mass unemployment.
...Rereading the inaugural today, one is struck by a different passage - by Roosevelt's stinging indictment of the ethic of the ''money changers'' who, ''stripped of the lure of profit by which to induce our people to follow their false leadership ... have fled from their high seats in the temple of our civilization.''
The time had come, Roosevelt said, to ''restore that temple to the ancient truths. The measure of that restoration lies in the extent to which we apply social values more noble than mere monetary profit.
...These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and our fellow men.''
Perhaps our nation will be more united, more equitable and more prosperous, too, if we abandon the current program of cutting taxes for the rich and social programs for the poor and recall the proposition Roosevelt set forth in his second inaugural:
''The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.''
http://economistsview.typepad.com/economistsview/2009/05/the-hundred-days-of-fdr.html
Showing posts with label FDR. Show all posts
Showing posts with label FDR. Show all posts
Monday, May 11, 2009
Thursday, March 26, 2009
A Legal Repeat Of the 1930's?
TW: As you may recall, the SCOTUS threw serious wrenches in the FDR New Deal policies in the mid-30's declaring many attributes of his programs unconstitutional. It was iffy for awhile whether social security would survive a court made up of very conservative cro-magnons judicial appointees leftover from the Taft/Wilson/Harding/Coolidge/Hoover period. The infamous court packing crisis resulted whereby FDR threatened to expand the number of justices from 9 to 11 in order to alter the majority view.
Some are speculating Obama may run into similar constraints dealing with the current SCOTUS now composed largely of increasingly conservative Republican appointees. The last 30 years have been the longest heyday for laissez-faire since the 1920's (things crashed after that period too, wonder why?) and the longest stretch of conservative judicial appointments as well. A collision is likely.
From Newsweek:
"...From the TARP bank bailout, to climate change "cap and trade," to health-care reform, new laws could face an array of judicial doctrines recently honed by conservative lawyers.
...In fact, for most American of history, this alignment has been the norm. From the time Thomas Jefferson faced an array of Federalist judges, the unelected third branch has tended to be more conservative, more protective of private property, than the elected branches...In the early 20th century, the Supreme Court blocked Progressive Era laws, such as the minimum wage for women and limitations on working hours. It began to strike down key New Deal laws, too, until Franklin Roosevelt threatened to pack the bench by expanding the number of justices. When the court abruptly started to uphold FDR's laws, wags dubbed it "the switch in time that saved nine." The era marked by Chief Justice Earl Warren, when liberal federal judges sometimes raced ahead of the public and political leaders, was something of a fluke that lasted only about two decades.
For the past quarter century, the courts have been conservative, but so has the government. Few new sweeping regulatory schemes became law. Now the Roberts Court has tilted markedly more conservative than the Rehnquist Court—at the same time the voters elected a more liberal set of politicians than they had in half a century.
...Challenges to TARP, which gives vague powers to the executive branch, may unfold soon. If banks are nationalized, shareholders may assert they have been unfairly deprived of the value of their investments. Other goals, such as health-care reform and climate-change curbs, inevitably involve a blizzard of new rules, mandates and taxes. These will face challenges from businesses, who have found a sympathetic hearing in many recent cases. As law professor Jeffrey Rosen points out, of 14 antitrust cases heard by the court over the past two terms, business won every time. Conservatives increasingly cite the limits of the Constitution's "commerce clause," or states rights, to blunt federal action.
...In some ways, the biggest battles will be over doctrine—over the meaning of the Constitution and how to interpret it. Once, liberals like Justice William Brennan relied on what he called a flexible "living Constitution." In response, conservatives argued for relying on the original intent of the Founders and decried "activist judges." Now debates have turned topsy-turvy. Arguably the most visible advocates of a "living Constitution" are John Yoo and Dick Cheney, who claim it gives the president nearly unlimited power, while liberals are more likely to quote Madison and Hamilton on checks and balances. Justice Stephen Breyer, in his book "Active Liberty," argued that the Constitution at its heart seeks to boost the participation of citizens in their government. This deference to the idea of democracy may give room to uphold energetic new statutes. Faced with the prospect of courts far more likely to strike down liberal laws, many progressives may again embrace the virtues of "judicial restraint."
http://www.newsweek.com/id/189234
Some are speculating Obama may run into similar constraints dealing with the current SCOTUS now composed largely of increasingly conservative Republican appointees. The last 30 years have been the longest heyday for laissez-faire since the 1920's (things crashed after that period too, wonder why?) and the longest stretch of conservative judicial appointments as well. A collision is likely.
From Newsweek:
"...From the TARP bank bailout, to climate change "cap and trade," to health-care reform, new laws could face an array of judicial doctrines recently honed by conservative lawyers.
...In fact, for most American of history, this alignment has been the norm. From the time Thomas Jefferson faced an array of Federalist judges, the unelected third branch has tended to be more conservative, more protective of private property, than the elected branches...In the early 20th century, the Supreme Court blocked Progressive Era laws, such as the minimum wage for women and limitations on working hours. It began to strike down key New Deal laws, too, until Franklin Roosevelt threatened to pack the bench by expanding the number of justices. When the court abruptly started to uphold FDR's laws, wags dubbed it "the switch in time that saved nine." The era marked by Chief Justice Earl Warren, when liberal federal judges sometimes raced ahead of the public and political leaders, was something of a fluke that lasted only about two decades.
For the past quarter century, the courts have been conservative, but so has the government. Few new sweeping regulatory schemes became law. Now the Roberts Court has tilted markedly more conservative than the Rehnquist Court—at the same time the voters elected a more liberal set of politicians than they had in half a century.
...Challenges to TARP, which gives vague powers to the executive branch, may unfold soon. If banks are nationalized, shareholders may assert they have been unfairly deprived of the value of their investments. Other goals, such as health-care reform and climate-change curbs, inevitably involve a blizzard of new rules, mandates and taxes. These will face challenges from businesses, who have found a sympathetic hearing in many recent cases. As law professor Jeffrey Rosen points out, of 14 antitrust cases heard by the court over the past two terms, business won every time. Conservatives increasingly cite the limits of the Constitution's "commerce clause," or states rights, to blunt federal action.
...In some ways, the biggest battles will be over doctrine—over the meaning of the Constitution and how to interpret it. Once, liberals like Justice William Brennan relied on what he called a flexible "living Constitution." In response, conservatives argued for relying on the original intent of the Founders and decried "activist judges." Now debates have turned topsy-turvy. Arguably the most visible advocates of a "living Constitution" are John Yoo and Dick Cheney, who claim it gives the president nearly unlimited power, while liberals are more likely to quote Madison and Hamilton on checks and balances. Justice Stephen Breyer, in his book "Active Liberty," argued that the Constitution at its heart seeks to boost the participation of citizens in their government. This deference to the idea of democracy may give room to uphold energetic new statutes. Faced with the prospect of courts far more likely to strike down liberal laws, many progressives may again embrace the virtues of "judicial restraint."
http://www.newsweek.com/id/189234
Saturday, December 13, 2008
The Care And Feeding Of Businesspersons
TW: The resuscitation of Keynes continues...the full letter is attached.
From John M. Keynes letter to FDR in Feb 1938 via Brad Delong's blog:
"...Businessmen have a different set of delusions from politicians, and need, therefore, different handling. They are, however, much milder than politicians, at the same time allured and terrified by the glare of publicity, easily persuaded to be ‘patriots’, perplexed, bemused, indeed terrified, yet only too anxious to take a cheerful view, vain perhaps but very unsure of themselves, pathetically responsive to a kind word. You cold do anything you liked with them, if you would treat them (even the big ones), not as wolves or tigers, but as domestic animals by nature, even though they have been badly brought up and not trained as you would wish. It is a mistake to think that they are more immoral than politicians. If you work them into the surly, obstinate, terrified mood, of which domestic animals, wrongly handled, are so capable, the nation’s burdens will not get carried to market; and in the end public opinion will veer their way..."
http://delong.typepad.com/egregious_moderation/2008/12/john-maynard-ke.html
From John M. Keynes letter to FDR in Feb 1938 via Brad Delong's blog:
"...Businessmen have a different set of delusions from politicians, and need, therefore, different handling. They are, however, much milder than politicians, at the same time allured and terrified by the glare of publicity, easily persuaded to be ‘patriots’, perplexed, bemused, indeed terrified, yet only too anxious to take a cheerful view, vain perhaps but very unsure of themselves, pathetically responsive to a kind word. You cold do anything you liked with them, if you would treat them (even the big ones), not as wolves or tigers, but as domestic animals by nature, even though they have been badly brought up and not trained as you would wish. It is a mistake to think that they are more immoral than politicians. If you work them into the surly, obstinate, terrified mood, of which domestic animals, wrongly handled, are so capable, the nation’s burdens will not get carried to market; and in the end public opinion will veer their way..."
http://delong.typepad.com/egregious_moderation/2008/12/john-maynard-ke.html
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