“It is clear that anybody who deviates a hair’s breadth from the Roosevelt line is in trouble, not only from the professional smear Bund but also from ‘scholars.’” Thus spoke historian Charles Beard in 1948 to Ray Moley, the New Deal brain truster. In the 50-plus years since Beard wrote this, very few historians have had the knowledge, the nerve, and the integrity to challenge “the Roosevelt line” that the New Deal was, on balance, a positive contribution to American economic development.
David Kennedy, professor of history at Stanford University, is the latest historian to fall into line with his peers. In Freedom From Fear he largely defends the New Deal, lauds President Roosevelt, and celebrates the growth of government in the United States during the 1930s and 1940s. In the process, alas, Kennedy picked up this year’s Pulitzer Prize in history.
Kennedy covers Roosevelt’s complete administration—more than half the book, in fact, covers World War II and the $304 billion spent to fight it. His 380 pages on the Great Depression and the New Deal, however, is what will most interest historians and readers of Ideas on Liberty.
The book’s cover says that “Freedom From Fear tells the story of the New Deal’s achievements, without slighting its shortcomings, contradictions, and failures.” This is somewhat misleading. Kennedy does sometimes concede that various New Deal programs failed and that “Roosevelt conclusively demonstrated in 1938 that it [the New Deal] was not a recovery program, at any rate not an effective one.” But Kennedy usually attributes these failings to improper administering or insufficient funding. What Kennedy never says is that most New Deal programs—from AAA to NRA to the Silver Purchase Act—could never have worked regardless of funding. You can’t restore prosperity by having government (read “taxpayers”) pay farmers not to produce, by fixing prices of goods, or by purchasing silver at inflated prices. The more thoughtful observers recognized this; as Walter Lippmann, an early supporter of the New Deal, concluded, “the common character of all this legislation—from AAA to the Stock Market Bill, is that it constricts enterprise.”
Kennedy rarely talks about taxes, which are the flip side of the government programs and need detailed attention. Roosevelt and his allies pushed the tax rate on top incomes to 79 percent in 1935, and to over 90 percent in the 1940s. Kennedy neglects to mention that, in 1942, Roosevelt issued an executive order to tax all incomes over $25,000 at 100 percent (Congress repealed it). No wonder the economy did not recover—and that production during World War II was sometimes stymied. While entrepreneurs worked out schemes to avoid confiscatory taxes, FDR ran up the national debt and supported excise taxes on cars, tires, movie tickets, cigarettes, whiskey, and even grape concentrates—all of which are considered regressive because they hit lower income earners hardest. Kennedy avoids discussing the funding for New Deal programs from regressive taxes, but he clearly knows this happened because he cites the key sources that demonstrate this point.
Often Kennedy tells the part of the story that supports the New Deal, or big government, and then omits the part where the program didn’t work or where Roosevelt (or Hoover) endorsed a regressive tax scheme to help it survive. For example, Kennedy tells the reader about the $300 million spent (under the Reconstruction Finance Corporation) for the country’s first federal welfare program. But he fails to mention that it was a grab bag for whichever states could rush to Washington quickest to get the cash. Illinois managed to snatch over $55 million; Massachusetts got zero.
Kennedy tells the reader how skilled a campaigner Roosevelt was, but conveniently omits much of the logrolling that made his victories possible. In Roosevelt’s run for re-election in 1936, for example, he gave this order to Henry Wallace, his secretary of agriculture: “Henry, through July, August, September, October and up to the 5th of November I want cotton to sell at 12 cents. I do not care how you do it. That is your problem.” Also during that campaign a Gallup Poll showed that over 75 percent of the relief vote was for Roosevelt and only 17.5 for Alf Landon, his Republican opponent. Therefore, Roosevelt pumped millions into relief in the key states right before the election. Had Kennedy chosen to discuss FDR’s orders to Wallace, the targeted spending for relief, or the many other examples of programs for votes, the reader would have had a more balanced account of the changes taking place in American society with the growth of government.
Instead, Kennedy usually toes what Beard called “the Roosevelt line.” He portrays the growth of government in an invariably positive light. “In the yeasty atmosphere of Roosevelt’s New Deal, scores of social experiments flourished,” Kennedy writes. “In the last analysis, Franklin Roosevelt faithfully discharged his duties . . . . He did mend the evils of the Depression by reasoned experiment within the framework of the existing social system.” Such lines may have helped Kennedy win the favor of the Pulitzer Prize committee, but they don’t illuminate the complexities of the New Deal era.