8 Nov

FDR, Democrat Hero or Conservative? [Reader Post]

                                       

I just finished reading An American Life, the autobiography of Ronald Reagan. The book was given to me by my oldest daughter, and I enjoyed it very much.

What do Ronald Reagan’s autobiography and FDR have in common? After reading this, see if you agree with me.

At the end of page 66 and on page 67 of the (hardcover) book, Ronald Reagan is remembering FDR’s 1932 presidential campaign. Reagan says,

“With his alphabet soup of federal agencies, FDR in many ways set in motion the forces that later sought to create big government and bring a form of veiled socialism to America. But I think that many people forgot Roosevelt ran for president on a platform dedicated to reducing waste and fat in government. He called for cutting federal spending by twenty-five percent, eliminating useless boards and commissions and returning to state and communities powers that had been wrongfully seized by the federal government. If he had not been distracted by war, I think he would have resisted the relentless expansion of the federal government that followed him. One of his sons, Franklin Roosevelt, Jr., often told me that his father had said many times his welfare and relief programs during the Depression were meant only as emergency, stopgap measures to cope with a crisis, not the seeds of what others later tried to turn into a permanent welfare state. Government giveaway programs, FDR said, ‘destroy the human spirit,’ and he was right. As smart as he was, though, I suspect even FDR didn’t realize that once you created a bureaucracy, it look on a life of its own. It was almost impossible to close down a bureaucracy once it has been created.”   [emphasis mine]  

Based on what Ronald Reagan (who voted for FDR four times) said, it sounds to me like FDR is just the opposite of what Democrats say or remember. And Democrats like to cite FDR’s policies even today. So what follows can be considered a very brief fiscal history of the FDR administration.

When Roosevelt took office in March, 1933, the breadlines, bankruptcies, and bank failures of the Great Depression mandated unconventional politics. He responded immediately. The dominant faction in Roosevelt’s first Administration traced the origins of the Depression to basic structural flaws in the nation’s economy. According to “Brains-Truster” Rexford Guy Tugwell, an economist from Columbia University, a laissez-faire regime of “competition and conflict” was responsible for the crisis and only “coordination and control,” meaning centralized planning, could correct matters. FDR’s central planning economy was imposed on the United States, with almost every part of the market under the supervision, control, and regulation of the federal government. An increasing number of Americans became directly and indirectly dependent upon the Washington for their employment and income. The era of big government had arrived in the United States.

Sound familiar? Central planning is just what President Barack Obama is currently trying to ram down our throats. Obama is crafting his own laws of politics by issuing executive orders, saying “We Can’t Wait” for Congress.

FDR believed in the desirability of balanced budgets. During the presidential campaign of 1932, he pledged to balance the federal budget at a lower level of spending. Roosevelt qualified his commitment with a significant rider: The budget to be balanced included only “ordinary” government expenditures. “Extraordinary” outlays, needed to cope with fallouts from the economic emergency, could be treated separately. In the first two fiscal years for which his Administration was responsible, Roosevelt presided over record-setting peacetime deficits. But with the aid of creative bookkeeping about the categories to which expenditures were assigned, his Treasury’s arithmetic could nonetheless show an “ordinary” budget with a modest surplus. FDR’s Administrations had consistently run deficits. But he had regarded them as politically embarrassing, and had held that they were the result of unusual economic circumstances, not his policy preference.

Some advisers near FDR, including Harry Hopkins, Marriner Eccles, and Henry Wallace, had accepted the recent theories of British economist John Maynard Keynes, who argued that technically advanced economies would need permanent budget deficits or other measures (such as redistribution of income away from the wealthy) to stimulate consumption of goods and to maintain full employment. It was the reduction of federal spending that these advisers viewed as the cause of the recession. Deficit spending continued throughout WWII, when the economy expanded rapidly and employment reached full capacity. The acceptance by FDR’s Administration of what became known as Keynesianism established the precedent of using deficit spending as a vehicle for promoting economic recovery in times of national fiscal crisis.

Again, does this sound familiar? This is just what Obama wants to do: run up huge deficits and redistribute wealth through taxation.

Several of FDR’s measures have become bureaucracies and permanent fixtures. Several programs introduced by FDR remain active today, with some still operating under the original names, including the Federal Deposit Insurance Corporation (FDIC), the Federal Crop Insurance Corporation (FCIC), the Federal Housing Administration (FHA), and the Tennessee Valley Authority (TVA). The largest programs still in existence today are the Social Security System and the Securities and Exchange Commission (SEC).

But that’s just my opinion.

This entry was posted in History, Nanny Government, Politics, Ronald Reagan, Socialism. Bookmark the permalink. Tuesday, November 8th, 2011 at 5:06 pm
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22 Responses to FDR, Democrat Hero or Conservative? [Reader Post]

  1. Nan G says: 1

    Bottom line; Dems are worshipping FDR because of the Unforseen and Unintended Consequences of his Depression-ending fixes.

    And, to this day, Dems seem almost willfully unaware of the consequences of their actions.
    Fixing their unintended consequences is almost a full-time job!
    Obama could not even meet the deadlines for over 1/2 of all the deadlines now passed involved in ObamaCare!
    He can’t.
    It is too fraught with unintended and un-thought-out consequences.

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  2. The Old Coach says: 2

    In the 1960’s when I was in high school my teachers argues that FDR had prevented a Communist revolution by his policies. With the absolute clarity of 20-20 hindsight, I think they were wrong. Roosevelt’s administration WAS the Communist revolution. Which makes him a Democrat hero, and certainly not a Conservative.

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  3. Greg says: 3

    From Democrat Party (phrase):

    Delegates to the Democratic National Committee once proposed using “Publican Party” instead of “Republican Party”. The committee failed to accept the proposal “explaining that Republican is the name by which the our opponents’ product is known and mistrusted.”

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  4. openid.aol.com/runnswim says: 4

    Very nice essay, Warren, but it sure opens up a can of worms.

    Just a couple of points:

    Firstly, FDR was dead set against public employee unions. I happen to agree with him on this.

    Secondly, borrowing to pay for tax cuts is every bit as Keynesian as borrowing to spend money on unemployment benefits, aid to state and local governments, and infrastructure. The purpose, in both cases, is to borrow money to increase the amount of money in circulation, to boost the economy.

    The fiction that conservatives use to excuse this is that, through some sort of voodoo magic, the tax cuts will boost the economy so much that so much revenue will be generated that the tax cuts will pay for themselves. This is just as fictional as saying that the increased government spending will stimulate so much economic activity that there will be sufficiently increased revenue to pay for the spending.

    Both borrowing to spend and borrowing to pay for tax cuts are just two sides of the same Keynesian coin.

    Progressive taxation isn’t “wealth redistribution.” We’ve always had progressive taxation, since the dawn of the income tax. Both Theodore Roosevelt and Adam Smith were proponents of progressive taxation. No one called it “class warfare” until now. The level of progressive taxation which exists today is much smaller than that which existed in most of the post-World War II era. In the 50s, 60s, and 70s, conservatives didn’t have apoplectic fits over progressive taxation — there was general agreement that progressive taxation was not only fair but also was just — as the higher income people virtually always owe more to the government than do lower income people.

    But in post-2008 American politics, everything is exaggerated, with the transformation of political parties into political tribes. Hatfields and McCoys, Jets and Sharks, Crips and Bloods, is what it’s turned into.

    – Larry Weisenthal/Huntington Beach CA

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  5. openid.aol.com/runnswim says: 5

    This just in:

    http://online.wsj.com/article/SB10001424052970204190704577026360072268418.html?mod=googlenews_wsj

    The problem with both parties is misinterpreting election results. The 2006 and 2008 elections weren’t about embracing Democratic ideals; it was about punishing Republicans. The 2010 elections weren’t about embracing Republican ideals, it was about punishing Democrats.

    Why did Republicans and Democrats get punished? Because of OVERREACHING. That’s also the message of Ohio on Tuesday November 8. 61 to 39! In Ohio. The one state that the GOP candidate must win to get into the White House (for the last century, or so, at least).

    The most valuable political gift that Obama got in his Presidency to date was the GOP taking control of the House of Representatives in 2010. Overreaching. Both parties swear they won’t do it, but they always do. The devil makes them do it.

    And it’s why Romney or Huntsman are the best choices for the GOP in 2012. If they want to win.

    – Larry Weisenthal/Huntington Beach CA

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  6. JustAl says: 6

    Regan was absolutely wrong about this. FDR was, at the very least, a socialist, and possibly, like many in his administration, a want to be communist. FDR would have continued to grow government if he’d been in office for another fifty years because he and the progs of his time saw the soviet union as the model the US should follow. Contrast that to the current occupant of the white house who envies the rulers of communist China.

    None of his policies ended the depression, in fact, in can be argued his policies made it much, much worse. . . just like the policies of today’s socialists in DC.

    FDR did more long lasting harm to America than Tojo and Hitler combined by sowing the seeds of socialism so widely . . . and fertilizing them so well with BS. Revisionist history is still revisionist history even if the author of the first illegal invader amnesty goes along with it.

    Nobody’s perfect.

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  7. Aqua says: 7

    @ Larry

    Because of OVERREACHING. That’s also the message of Ohio on Tuesday November 8. 61 to 39! In Ohio. The one state that the GOP candidate must win to get into the White House (for the last century, or so, at least).

    They also opted out of the individual mandate for Obamacare 65.68 to 34.32 Larry, or did you just want to bring up the GOP side of the problem.
    Here’s the difference. The Ohio representatives and governor passed the collective bargaining reform law and the Ohio voters voiced their displeasure. Helped of course by a lot of outside union influence. But that’s ok, it’s their State. But issue 3 was a repudiation of a federal mandate.
    Now, I wouldn’t have voted the way many Ohioans did on issue 2, but it’s their State and I don’t have to live there, so good for them. That is the way our republic is supposed to work.
    (an issue you were going to respond to in another thread by the way)

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  8. Aqua says: 8

    @ Larry

    Progressive taxation isn’t “wealth redistribution.”

    Nope, no wealth redistribution here, please move along, nothing to see.

    (please, please someone embed this)
    http://www.youtube.com/watch?feature=player_embedded&v=HXqzxfB9jDM


    Done, Aqua! Mata

    ETA: check out the other videos as well, incredible!

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  9. bbartlog says: 9

    Have to agree with JustAl. You’ve cherrypicked a few items to try to support your thesis. Campaign promises in 1932 are hardly great evidence of FDR’s actual views (I seem to recall that in 1940 he promised not to involve us in foreign wars, too…). Too lazy now to dig up the exact quote where he boasts of having made social security politically indestructible in perpetuity, but based on his actions I expect it reflects his actual views better. Because of the political realities of the day he may have been forced to be more conservative in some respects than later politician, but it doesn’t seem to have been for lack of trying.

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  10. openid.aol.com/runnswim says: 10

    Hi Aqua. I basically agree with what you wrote in #7 (I haven’t watched the video in #8 to react/comment). I think that my point in #5 was that BOTH parties misinterpret election results as affirmation of their own core philosophies, when the reality is that voters are really just punishing the overreach. I like ObamaCare — most centrist voters don’t. Both of us like restrictions on public sector unions. Most centrist voters don’t — at least in the traditionally unionized Great Lakes region.

    Can you possibly remind me of the thread where I was supposed to respond, but didn’t? I mean well, but I have the attention span of a gnat.

    – LW/HB

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  11. Aqua says: 11

    Hi Larry, here is the link to the post I was talking about:
    http://floppingaces.net/2011/10/27/taxes-versus-tax-rates-reader-post/#comment-346539

    Also, I was going to discuss progressive taxation. You bring this up quite a bit. We have had a progressive tax system for a long time. Even Reagan didn’t abolish progressive taxation. I would prefer a tax code that is flatter and could not be abused by congress, but that doesn’t look like it will ever happen. So I believe the problem most conservatives have with the existing tax code is the continued cry by the left that taxes need to be increased on the wealthy when the current tax code is rife with corruption. There are loop holes, designed by congress to favor their pet projects and pet corporations, (and notice I didn’t point a finger at either party because they are both to blame). Tax reform should be the first step in any discussion concerning taxes, rates should come in way later. I think anyone saying we should increase taxes within the framework of the current structure is disingenuous.

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  12. another vet says: 12

    An interesting cartoon from yesteryear that addressed some of the same arguments. A tad long, but entertaining with a message.

    http://youtu.be/mVh75ylAUXY

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  13. Warren says: 13

    Two comments here:

    1. The purpose of this post was to illustrate that there many facits of FDR that current democrats don’t bother to research. The democrats just hold up FDR as an end all example of what they currently believe.

    2. Regarding progress taxes that Larry Weisenthal (comment # 4) continues to bring up. Larry says, “Progressive taxation isn’t “wealth redistribution.”” OK, Larry, what should we call it? At the risk of tooting my own horn, please see this link.

    And, Larry, you say, “FDR was dead set against public employee unions.” Please explain the relevance of that comment.

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  14. openid.aol.com/runnswim says: 14

    Hi Warren, I don’t know how long you’ve been following this particular blog. I’ve been writing for a couple of years now about the progressive tax issue. No time to go repeating it all, but here’s a brief outline.

    The purpose of government is to allow humans to coexist and prosper. Government spending is basically the people pooling their money to buy things which individuals couldn’t buy on their own. Bill Gates made his money in Microsoft. Microsoft has about 100,000 employees, most of them highly educated. Bill could possibly afford to educate all of them by himself, right now, but, along the way, he depended on the government to educate them. He depended on the US Patent office and the US justice department for intellectual property protection (over 5,000 patents, as of 2006), he depended on the State Department for international trade agreements, including protection of Microsoft’s 4,000 overseas patents. It goes on and on and on, but you get my drift. The higher on the economic food chain, the greater the debt to the US government for financial success.

    What about social security and Medicare? The existence of those makes it possible for businesses to pay lower wages and provide fewer benefits. I’m an entrepreneur and I benefitted greatly by being able to put all my money into founding and growing my business, as opposed to diverting it to the care of my aging parents. I was also able to take risks (such as putting all my retirement savings and kid’s college funds into my business, because of the safety nets, including social security and including low cost community colleges, in case I never made back the money I spent to be able to send the kids to private schools).

    It just goes on and on and on. But the point is that the rich should pay a higher proportion of their income in taxes, because they benefit disproportionately. These were, as noted, views also held by the founder of capitalism, Adam Smith, and by the most forceful proponent of progressive taxation among US Presidents, Theodore Roosevelt.

    – Larry Weisenthal/Huntington Beach CA

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  15. Wm T Sherman says: 15

    We have progressive taxation, Larry. The rich pay a higher percentage of their income. Even if we had a flat income tax rate, they would still be paying more total income tax. But we don’t have a flat rate, it’s progressive.

    In what way are the rich not paying their fair share already?

    You use the term “disproportionate benefit.” Nowhere did I see the concept of “disproportionate contribution to the economy.”

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  16. openid.aol.com/runnswim says: 16

    Hi Wm: So we both accept the concept of progressive taxation. All we are quibbling about now is what degree of progressive taxation to have. In the 1950s the top marginal rate was 91%. In the 1960s and 1970s, the top marginal rate was 70%. In the 1990s, it was 39.6%. Now it’s at 35%. Obama wants to raise it back up to 39.6%. I think that’s about right. You probably think that’s too high. But we can at least have a reasonable discussion about it, without throwing in all that stupid “class warfare” stuff.

    Do you know why 70% and 91% marginal tax rates actually worked? Listen to you guys and you’d think everyone would just go home and close the doors on their businesses. But that’s not what happens. In a lot of situations, it’s good for the economy to have high marginal rates. With high marginal rates, there’s little incentive to take profits out of businesses and it makes more sense to keep the money in the business — pay employees more; invest in R&D; expand. This is never factored in when it comes to armchair analysis of tax rates. It’s not the simple idea that everyone has that cutting tax rates magically grows the economy. It’s way more complicated than that.

    – Larry Weisenthal/Huntington Beach CA

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  17. Wm T Sherman says: 17

    The “super high marginal tax rates of the Eisenhower era” stories are a favorite of progressives. And the standard rejoinder is that nobody actually paid those rates, because there were tax deductions and shelters that were universally applied.

    Do you seriously think that taking 90% of what somebody earns is a good idea? If they actually couldn’t arrange to shelter it from the tax man, then yes, many people would feel it was not worth the effort, absolutely

    Why do you think all those British musicians moved over here in the 70s? It wasn’t because they loved us enough to exile themselves, it was because the looney British government taxed entertainment industry earnings at up to 95%. Like you, British politicians considered the brief period of high earnings of a musician to be “found money,” obtained by luck, not by years of hard grinding work leading up to it. So my reply to your chirpy euphoria about super high marginal rates is, do you think there should be an upper limit on how much the government can take? And what should it be?

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  18. Warren says: 18

    @openid.aol.com/runnswim: Larry, I must ask: Are you for real? Or are you here just to generate traffic?

    Re: comment # 14: You sound just like Elzabeth Warren. Read the link and you just may learn something.

    Also, Re: comment # 14: You say, “The purpose of government is to allow humans to coexist and prosper. Government spending is basically the people pooling their money to buy things which individuals couldn’t buy on their own. ” I agree with you concerning public things, such as roads, bridges, and police and fire protection. However, when it comes to private things, I could not disagree with you more. Please tell me why I should be forced (through taxes) to support anything you want? It all comes down to choice. If I choose to support things you personally and privately like, that is fine and well. If, however, I choose to support things you don’t like, please don’t try to force me to support things you like through higher taxes.

    Re: comment # 16 and marginal tax rates: Have you ever factored in that people paying those tax rates may have kept on working because they enjoyed what they were doing?

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  19. openid.aol.com/runnswim says: 19

    Hi William: I never said that 91% marginal rates were a good idea. I said that 39.6% (basically 40%) was about right.

    Hi Warren: It would be great if none of us were forced to pay for things we don’t want. I didn’t want either the Vietnam or Iraq Wars. You don’t want to pay for the Department of Education (I’m just guessing on this — but it’s only to make a point). I’ve previously read the op-ed on Elizabeth Warren you cite. I don’t debate with links. If there’s a particular point you’d like to argue, kindly state what it is and then I can comment. I’ve been making precisely these points for a very long time — long before Elizabeth Warren came out with them. And, as noted, these ideas didn’t originate with modern day liberals: they were previously espoused by Theodore Roosevelt and Adam Smith.

    I don’t understand your question about me being “for real?” What on earth do you mean by that? You can Google me. Yes, of course, I’m real.

    – Larry Weisenthal/Huntington Beach CA

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  20. bbartlog says: 20

    For what it’s worth, I largely agree with Larry here. Given our current government expenditures, the degree of progressiveness represented by a 40% top tax rate seems about right. Of course, I would *rather* have a far smaller federal government, so that even that would be unnecessary; but I have no problem with progressive taxation per se. Pragmatically speaking, the government taxes that way for the same reason Dillinger robbed banks: that’s where the money is.

    @William#17: you deliberately set up a strawman despite Larry’s clear endorsement of the Reagan-era 40% tax rate. If people were seriously arguing for 70% or even 90% rates, your protestations would be relevant; as it is it looks like you’re trying really hard to avoid arguing with a sensible position.

    It’s simply very difficult to put together a coherent defense of a flat income tax. There’s no historical evidence for the idea that progressive taxation damages growth (within the effective ranges applied in US history). There’s no particular philosophical justification; if you hold that all taxation is theft, then you should be an anarchocapitalist, but otherwise, you need to argue from fairness. And here you have your work cut out for you, because from Rawls to Friedman to the Bible, there is very widespread agreement that it is just for the wealthy to pay more.

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  21. Wm T Sherman says: 21

    There is no tax scheme that can make the gigantic ruinous deficits go away. The only thing that will do that is a drastic cut in spending afforded by a drastic the size and scope of government. Democrats are dead set against any spending cuts at all, becuase they believe that if they did not spend money, they wouldn’t get elected.

    How big a cut is needed: Look at the size of the deficit. It has to be at least that big. This is true at Federal, state and local level.

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  22. Aqua says: 22

    @ Wm T Sherman

    There is no tax scheme that can make the gigantic ruinous deficits go away. The only thing that will do that is a drastic cut in spending afforded by a drastic the size and scope of government.

    EXACTLY!! Spending has not been addressed since republicans took control of the congress in 1994. After Clinton left, both sides have spent money faster than it could be printed. I have said it before, taxes rates may need to be increased, but spending must brought under control first.

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