Modern Times: The World From the Twenties to the Nineties (50 page)

In no sense was Roosevelt the cynosure of the left-wing intelligentsia.
Common Sense
, one of their favourite journals, thought the election a non-choice between ‘the laughing boy from Hyde Park’ and ‘the great glum engineer from Palo Alto’. Theodore Dreiser, Sherwood Anderson, Erskine Caldwell, Edmund Wilson, John Dos Passos, Lincoln Steffens, Malcolm Cowley, Sidney Hook, Clifton Fadiman and Upton Sinclair backed the Communist candidate William Z. Foster. They signed a joint letter insisting that it is capitalism which is destructive of all culture and Communism which desires to save civilization and its cultural heritage from the abyss to which the world crisis is driving it.’ Other intellectuals such as Reinhold Neibuhr, Stuart Chase, Van Wyck Brooks, Alexander Woolcott, Edna St Vincent Millay and Paul Douglas voted for the Socialist, Norman Thomas.
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Even after Roosevelt was well established in the White House, some of them continued to note a lack of specific gravity which he never wholly lost. ‘Washington seems much more intelligent and cheerful than under any recent administration,’ Edmund Wilson wrote, ‘but as one lady said to me, it is “pure Chekhov”. Where the Ohio Gang played poker, the brain trustees get together and talk. Nothing really makes much sense, because Roosevelt has no real policy.’
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There was an element of truth in the remark. Indeed, it was essentially Hoover’s campaign rhetoric which opened an ideological gap between the men. Hoover had never reciprocated Roosevelt’s admiration, and thought him a frivolous fellow who might easily become a dangerous one. During the campaign, feeling he was losing, he worked himself up into a fine froth about minor differences on direct relief (which Roosevelt had practised in New York) and proposed meddling in public utilities. ‘My countrymen,’ he roared, ‘the proposals of our opponents represent a profound change in American life … a radical departure from the foundations of 150 years which have made this the greatest nation in the world. This election is not a mere shift from the ins to the outs. It means deciding the direction our nation will take over a century to come.’ ‘This campaign’, he warned, ‘is more than a contest between the two men. It is more than a contest between the two parties. It is a contest between two philosophies of government.’
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Roosevelt, delighted to see some spice attributed to a programme which the
New York Times
found contained ‘not one wild nostrum or disturbing proposal in the whole list’ and which the
New Republic
dismissed as ‘a puny
answer to the challenge of the times’, took the same bellicose line: ‘Never before in modern history have the essential differences between the two major American parties stood out in such striking contrast as they do today.’
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It was all baloney. It illustrates the degree to which oratory engenders myths and myths, in turn, breed realities.

And not only oratory: personalities, too. Hoover, who had made his money by honest toil, and grown dour in the process, first despised, then hated the grinning and meretricious Whig who had simply inherited his wealth and then used it as a platform to attack the industrious. He had been incensed by a Roosevelt remark in 1928, which he never forgot, that he was ‘surrounded by materialistic and self-seeking advisers’.
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Roosevelt acquired a grievance in turn. He had been crippled by poliomyelitis since the early 1920s, and, at a White House reception for governors in spring 1932, had been kept waiting by Hoover for half an hour. He had refused to ask for a chair, seeing the incident as a trial of strength and believing – it is astonishing how paranoid politicians can become in election year-that Hoover had planned it deliberately. As it happened, Roosevelt’s successful struggle over his disability was the one aspect of his character Hoover admired; it is inconceivable that he could have sought to take advantage of it.
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But Roosevelt and his wife remembered the half-hour with hatred.

The mutual antipathy proved of great historical importance. Roosevelt seems to have been quite unaware that Hoover genuinely regarded him as a public menace; not taking politics too seriously himself, he dismissed Hoover’s Cassandra-cries as partisan verbiage, the sort he might employ himself. There was then a huge hiatus between the election and the transfer of power, from early November to March. Both men agreed action was urgent; except on details, they agreed what it should be – more of the same. Roosevelt conceived the fantastic notion that Hoover ought to appoint him Secretary of State immediately, so that he and his vice-president could both resign and Roosevelt could constitutionally move into the White House immediately. Hoover, equally optimistically, thought Roosevelt should be persuaded to disavow some of his campaign remarks and promises, which he thought had made a bad situation still worse, and humbly endorse, in public, measures which the President proposed to take, thus restoring confidence and ensuring continuity of (Hoover’s) policy. Granted these ludicrous misapprehensions, it is not surprising that their contacts over the long interregnum were confined to icy epistles and a mere courtesy call by Roosevelt on 3 March 1933, the eve of the transfer. It terminated in an arctic exchange which would have warmed Henry James’s heart.
When Roosevelt, who was staying at the Mayflower, said Hoover was obviously too busy to return his call, the stricken Jupiter unleashed his last thunderbolt: ‘Mr Roosevelt, when you have been in Washington as long as I have, you will learn that the President of the United States calls on nobody.’
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Roosevelt took his revenge by refusing to give the departing President, whose life was under constant threat, a Secret Service bodyguard to accompany him back to Palo Alto.
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The public lack of co-operation between the two men during the long interregnum worked decisively in Roosevelt’s political favour by drawing a profound, if wholly false, distinction between the two regimes. Roosevelt was a new face at exactly the right time and it was a smiling face. Hence he got all the credit when the recovery, under way during Hoover’s last semester, became visible in the spring in the form of what was promptly dubbed ‘the Roosevelt Market’. The historian hates to admit it, but luck is very important. Hoover had asked Rudy Vallee in 1932 for an anti-Depression song; the wretched fellow produced ‘Brother, Can You Spare a Dime?’ Roosevelt’s campaign song, actually written for
MGM’S
Chasing Rainbows
on the eve of the great stock market crash, struck just the right button: ‘Happy Days Are Here Again’. He had a lot of the intuitive skills of Lloyd George, a politician he greatly resembled. He could coin a phrase, or get others to coin one for him, as his Inaugural showed (’Let me assert my firm belief that the only thing we have to fear is fear itself’).
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At the end of his first week in office he showed his mastery of the new radio medium by inaugurating his ‘fireside chats’. In terms of political show-business he had few equals and he had an enviable knack of turning problems into solutions. Thus, faced with shut banks, he declared them shut by law (using an old 1917 Act) and termed it ‘A bankers’ holiday’. But he also had the solid advantage of an overwhelmingly Democrat and unusually subservient Congress. His first bill, the Emergency Banking Act, went through in less than a day, after a mere forty-minute debate interrupted by cries of ‘Vote, vote!’ From midnight on 6 April, after a mere month in office, he had America drinking legal liquor again, an immense boost to morale. His programme was rushed through Congress in record time but it was political showbiz which christened it ‘the Hundred Days’.

Beyond generating the impression of furious movement, what his Treasury Secretary, William Woodin, called ‘swift and staccato action’, there was no actual economic policy behind the programme.
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Raymond Moley, the intellectual who helped Roosevelt pick his cabinet, said future historians might find some principle behind the selection, but he could not.
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This lack of real
design was reflected in the measures. At Roosevelt’s exciting press conferences, he boasted he played things by ear and compared himself to a quarter-back who ‘called a new play when he saw how the last one had turned out’.
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While increasing federal spending in some directions he slashed it in others, cutting the pensions of totally disabled war-veterans, for instance, from $40 to $20 a month, and putting pressure on states to slash teachers’ salaries, which he said were ‘too high’. He remained devoted to the idea of a balanced budget; his first message to Congress called for major cuts in expenditure and one of his first bills was a balanced-budget measure entitled ‘To Maintain the Credit of the United States Government’. So far from being a proto-Keynesian, nothing made him more angry than journalistic suggestions that his finance was unsound.
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The notion that Roosevelt was the first deliberately to practise deficit finance to reflate an economy is false. Keynes indeed urged this course on him in a famous letter to the
New York Times
at the end of 1933: ‘I lay overwhelming emphasis on the increase of national purchasing power resulting from government expenditure financed by loans.’
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But that was not actually Roosevelt’s policy except by accident. When the two men met the following summer they did not hit it off, and there is no evidence, from start to finish, that Roosevelt ever read Keynes’s writings – ‘During all the time I was associated with him’, Moley wrote, ‘I never knew him read a serious book’ – or was in the slightest influenced by Keynes’s ideas.
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The Federal Reserve Bank was certainly inflationary under Roosevelt; but then it had been throughout the previous decade.

Roosevelt’s legislation, for the most part, extended or tinkered with Hoover policies. The Emergency Banking Act and the Loans to Industry Act of June 1934 extended Hoover’s
RFC.
The Home Owners’ Loan Act (1932) extended a similar act of the year before. The Sale of Securities Act (1933), the Banking Acts (1933, 1935) and the Securities and Exchange Act (1934) merely continued Hoover’s attempts to reform business methods. The National Labour Relations Act of 1935 (the ‘Wagner Act’), which made it easier to organize unions and won the Democrats organized labour for a generation, simply broadened and strengthened the Norris-La Guardia Act passed under Hoover. The First Agricultural Adjustment Act (1933) actually undermined the reflationary aspects of government policy, curtailed the production of foodstuffs and paid farmers to take land out of production. It was, moreover, in flat contradiction to other government measures to counter the drought and dust-storms of 1934–5, such as the Soil Erosion Service, the Soil Erosion Act (1935) and the Soil Conservation and Domestic Allotment Act (1936).
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Roosevelt’s agricultural policy, in so far as he had one, was statist, designed to win votes by raising farming incomes. But it also raised
food-prices for the consumer and so delayed general recovery. The National Industrial Recovery Act (1933), which created a corporatist agency under General Hugh Johnson, was in essence a Hoover-type shot at ‘indicative planning’. But, drawing on Roosevelt’s Great War experience – the sole source of such novel ideas as he had – it had a flavour of compulsion about it, Johnson warning that if businessmen refused to sign his ‘voluntary’ codes, ‘They’ll get a sock right on the nose.’ It was this which led Hoover to denounce it as ‘totalitarian’.
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Johnson’s bullying made the scheme counterproductive and there was not much real regret when the Supreme Court declared it unconstitutional.
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Where Roosevelt really departed from Hooverism was in reviving and extending a Wilson Great War scheme for the state to provide cheap power for the Tennessee Valley. But this was an isolated item of improvization, a ‘boondoggle’ to keep the South solid. Asked how he would explain its philosophy to Congress, Roosevelt replied, characteristically, ‘I’ll tell them it’s neither fish nor fowl but, whatever it is, it will taste awfully good to the people of the Tennessee Valley.’
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Roosevelt also spent a great deal of money on public works: $10.5 billion, plus $2.7 billion on sponsored projects, employing at one time or another 8.5 million people and constructing 122,000 public buildings, 77,000 new bridges, 285 airports, 664,000 miles of roads, 24,000 miles of storm and water-sewers, plus parks, playgrounds and reservoirs.
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But this again was an old Hoover policy on a somewhat larger scale. In all essentials, the New Deal continued the innovatory corporatism of Hoover. It was what Walter Lippmann, writing in 1935, termed ‘the Permanent New Deal’. ‘The policy initiated by President Hoover in the autumn of 1929 was something utterly unprecedented in American history,’ he wrote. ‘The national government undertook to make the whole economic order operate prosperously … the Roosevelt measures are a continuous evolution of the Hoover measures.’
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Hoover—Roosevelt interventionism was thus a continuum. Did it work? Pro-Roosevelt historians argue that the additional elements of the New Deal brought recovery. Pro-Hoover historians counter that Roosevelt’s acts delayed what Hoover’s were already bringing about.
¹⁰¹
From the perspective of the 1980s it seems probable that both men impeded a natural recovery brought about by deflation. It was certainly slow and feeble. 1937 was the only reasonably good year, when unemployment, at 14.3 per cent, actually dipped below 8 million; but by the end of the year the economy was in free fall again – the fastest fall so far recorded – and unemployment was at 19 per cent the following year. In 1937 production briefly passed 1929 levels but quickly slipped again. The real recovery to the boom
atmosphere of the 1920s came only on the Monday after the Labor Day weekend of September 1939, when the news of war in Europe plunged the New York Stock Exchange into a joyful confusion which finally wiped out the memory of October 1929. Two years later the dollar value of production finally passed 1929 levels.
¹⁰²
Keynes himself, addressing Americans in 1940, conceded that the war was crucial to economic recovery: ‘Your war preparations, so far from requiring a sacrifice, will be a stimulus, which neither the victory nor the defeat of the New Deal could give you, to greater individual consumption and a higher standard of life.’
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If interventionism worked, it took nine years and a world war to demonstrate the fact.