March 31, 2024 By Mary Grabar
There is a new longing for the New Deal. And it is not a good sign.
Of course, the invocation of the New Deal and its presumed architect, President Franklin Delano Roosevelt, has been a constant on the left since Roosevelt’s reign ended with his death on April 12, 1945, less than three months into his fourth term. The optimistic, paternalistic, mom-and-apple-pie image was etched into Americans’ consciences by Norman Rockwell paintings, such as the one illustrating the “Four Freedoms.”
Democrats want to ride his coattails. William Leuchtenburg, a pro-New Deal historian, catalogued dozens of instances after Barack Obama’s election when the liberal media presented him as the second coming of FDR, with the cover of Time magazine showing Obama posed behind the wheel of a convertible FDR-style. The headline said, “The New New Deal: What Barack can learn from FDR—and what the Democrats need to do.”
President Biden has tried to wrap the mantle of FDR around his presidency, from his American Climate Corps, a “New Deal-style” “green jobs training program,” modeled on the Civilian Conservation Corps” to his Bipartisan Infrastructure Law, which he likened to the Rural Electrification Act. Biden said in January in Superior, Wisconsin, “High-speed Internet is as essential as electricity was when Franklin Roosevelt was president. Not a joke.” Then, in his March 7 State of the Union address, Biden recalled “In January 1941, Franklin Roosevelt came to this chamber to speak to the nation. And he said, ‘I address you at a moment unprecedented in the history of the Union.’ Hitler was on the march. War was raging in Europe.” Biden presented himself as an FDR-like protector against threats “both at home and overseas at the very same time.”
The common perception of FDR remains that of someone who brought an end to fear of starvation and of fascism. This is a recurrent theme in history books, school room lessons, documentaries, and popular culture. Even many economic conservatives herald FDR’s wartime leadership and give him credit for defeating Hitler and imperial Japan.
But in recent years a certain segment on the right has embraced FDR’s New Deal, claiming it ushered in the “Golden Age of Capitalism” for the American worker in the mid-twentieth century. Those were the days when a union worker in a factory could support a family.
Such claims resonate. We have statistics for what everyone can see: former places of employment such as Kodak in Rochester, New York, where I grew up stand empty, and in Utica, near where I now live, abandoned warehouses line the roadways, where thousands used to work at General Electric. Along with empty factories have come boarded storefronts, neighborhoods of sinking value, and social decay.
A growing number of conservatives—tired of free market absolutism that has shipped well-paying working-class jobs overseas and enacted deregulation for the benefit of billionaires—long for the days of their parents and grandparents when loss of a job was not a daily source of anxiety and when middle class taxpayers were not forced to pay for public benefits for low-paid workers such billionaires exploit.
The movement goes by such names as National Conservatism and Post-liberal Conservatism. Disillusioned with Carter-Reagan deregulation and the George W. Bush policy of global trade and interventionism, it looks back nostalgically to the New Deal. These advocates are socially conservative but fiscally liberal. They want the national government to help working- and middle-class families. They are writing books, articles, and position papers.
For example, in the October 12, 2023, The American Conservative, Jeffery Tyler Syck argued in an article titled “Conserving the New Deal,” “there is nothing terribly communist or revolutionary about the New Deal.” In fact, the New Deal addressed a greater problem, “private tyranny,” which is too often ignored on the Right. “Roosevelt was right in saying that equality of opportunity can be destroyed by more than government overreach; greedy corporations both historically and today pose just as serious a threat to human liberty.”
Sohrab Ahmari, formerly with the New York Post and the Wall Street Journal, attacks this private tyranny in his 2023 book, Tyranny, Inc. The problem, according to Ahmari, lies in the fact that “free labor” advocates place “‘job creators’ above . . . jobholders.” The “job creators” often simply buy out and reorganize corporations and leave the “jobholders” with families and mortgages in the cold. The abstract principles of the free market are simply cover for granting license to this “overclass’s” plunder. Ahmari’s points are backed up with stories about the hardships resulting from corporate buyouts and privatization of community services like firefighting and ambulances. Similarly, at American Compass, which promotes “conservative economics” focusing on “workers, their families and communities, and the national interest,” Gord Magill convincingly describes the dangers and costs passed on to average Americans—taxpayers and truck drivers—of deregulation. At the conservative Catholic journal First Things, Bradford Littlejohn lauds the “pro-family politics” that Ahmari advances in his book.
Ahmari gives credit to Michael Lind for inspiring his thinking in this new direction. Lind himself started off as a disaffected neoconservative who had become angered by conservatives’ abandonment of workers and the middle class, among other things—a conversion described in Up from Conservatism (1996).
At American Compass, Michael Lind offers a manifesto of sorts, beginning with a historical overview. He disputes the traditional theory of oppositional politics in which political parties implement the policies of their platforms after winning elections. Instead, a “bipartisan policy consensus” emerges—often in reaction to a crisis—as happened in the 1930s as liberal Democrats joined progressive Republicans and embraced New Deal measures. Then, “Following World War II, ‘modern Republicans’ like Eisenhower and Nixon accepted the basic New Deal framework, including Social Security and the legitimization of trade unions, while seeking to make it more solvent and business friendly.”
In response to the “stagflation” of the 1970s (stagnant economic growth combined with inflation and high unemployment), President Jimmy Carter engaged in a campaign of deregulation, thus ushering in a new bipartisan consensus of neoliberalism. Deregulation was continued with enthusiasm by President Ronald Reagan and every president subsequently, “despite its manifest failures and the ineffectual challenges from Bernie Sanders and Donald Trump.”
Changes were needed, Lind admits, due to “technological evolution and demographic change.” The New Deal had grasped onto the fact that “Government structures and policies suitable for the small-town America of Presidents Grant and Garfield” were not suitable “in the era of automobiles, big cities, and mass production factories.” Similarly, a shift was needed in response to the decreased need for manufacturing and increased need for service work. But instead of “modernizing the national regulatory state,” neoliberals of both parties simply “dismantled it,” deregulating “industry, banking, trade and immigration.”
As a result, while the New Deal improved the lives of most Americans, the neoliberal consensus has chiefly benefited small numbers of rich investors and affluent professionals, while many Americans are worse off than their parents and grandparents. Instead of opening markets to U.S. exports of manufactured goods from clean, highly-automated [sic] factories, trade deals like NAFTA and the WTO exposed the U.S. market to subsidized imports from the mercantilist regimes of East Asia—China, Japan, South Korea and Taiwan—and allowed U.S.-based multinationals to shut down factories in the U.S. and open them in other countries with cheap, unfree, non-union labor.
Today’s “overclass” of billionaires also exploits foreign-born “servants and service providers” and American minimum-wage workers.
Lind proposes as solution “national developmentalism—a twenty-first century version of the state-sponsored national industrial capitalism of Hamilton, Clay, Lincoln, Theodore Roosevelt, Franklin Roosevelt and his New Deal Democrat successor and modern Republicans like Eisenhower and Nixon.”
Under “democratic nationalism,” private and public sectors collaborate in order to maximize “the military security and well-being of the community.” To this tradition Lind claims,
Grandma and Grandpa’s Good Old Dayswe owe the Internet and the national rail and highway and aviation systems, the single continental market that allows increasing returns to scale to be exploited by globally competitive corporations, the unmatched military that defeated the Axis powers and the Soviet empire, and has generated one technological spin-off after another, and, not least, the federally enforced civil rights laws and minimum-wage laws that have eradicated the slavery and serfdom that once existed in the South and elsewhere.
Because of the Great Depression, FDR was the leader who had the mandate to implement “national developmentalism.” As Lind writes in
Land of Promise: An Economic History of the United States (2012), FDR set in motion the policies that would bring in the greatest period for the middle class, the mid-twentieth century—the “Golden Age of American capitalism.”Similarly, Ahmari calls for “retrac[ing] our steps to the wisdom of the past”—”not a distant and misty past . . . but of economic achievements that took place when our parents and grandparents were in prime working age,” when “government made it its business, however imperfectly, to exert countervailing power against their employers. And as your grandparents will tell you, it was a generally happy time of broad prosperity.”
The “countervailing power” resided in unions, which, according to Lind and Ahmari, had received the government’s blessing and help. Ahmari calls for a return to such “government backing” of unions as “counterpressure” to the “coercion” of corporations.
Nostalgia Based on Historical AmnesiaThe problem with both Ahmari’s and Lind’s prescriptions for what ails the working class lies in a misinterpretation of what the New Deal was. Lind, on one hand, takes the standard leftist position as illustrated by Leuchtenburg and Arthur Schlesinger, Jr. that “the New Deal improved the lives of most Americans.” Indeed, the New Deal did improve the lives of some—those like Leuchtenburg, who received federal aid for pursuing a degree at Cornell University, and for Schlesinger, who rose to the pinnacle of his profession as a history professor at Harvard University (like his father) and counseled not only FDR, but also Adlai Stevenson, John F. Kennedy, and Robert F. Kennedy.
Schlesinger argued stridently in The Coming of the New Deal that the “Roosevelt-hatred” that began during his second year in office could not be other than “psychopathological impulses.” He insisted, “Reasonable people argued in vain that most Roosevelt haters were far better off after March 4, 1933, than before; that, far from destroying capitalism, Roosevelt had probably saved it.” It may have been the case with New Deal bureaucrats who were earning two or three times the salaries of those in the private sector, as Joseph Lash admitted in his recollection of those days, Dealers and Dreamers. New Deal veterans like him and Schlesinger wrote the major histories, which in turn have been cited by generations of historians and biographers.
Lind relies on such standard narratives in Land of Promise. He does not examine and refute the evidence that contradicts his claims, such as that in Amity Shlaes’s book, The Forgotten Man. He disputes only her characterization of A.L.A. Schechter, the kosher slaughterhouse that helped bring down the NRA, and then calls the book “an anti-New Deal polemic.”
At the same time, he also claims that “The New Deal was not primarily a movement of the Left. It was an alliance of several groups—international bankers and international businesses, workers in the industrial core, farmers, and local champions of economic development in the southern and western periphery.’” But the “alliance” was not really an alliance. The workers, farmers, and local champions of economic development, he cites, were excluded from the decision-making. One of the sources for his claim says so.
The New Deal was a chaotic program, which was not based on experience or even well-thought-out theories, but in response to FDR’s demand in the inaugural for “action, and action now!” A dangerous program, it gave FDR unprecedented confiscatory powers through a wartime powers act while granting him discretion in spending the federal budget. It was through such strong-arm (and unconstitutional) tactics that FDR was able to implement “national developmentalism.” And even that was illusory. The “growth” came in make-work jobs in building roads, dams, and public buildings, or in such pursuits as playwriting, administration, and social services. But Lind insists, in agreement with such far-left historians like Eric Rauchway (who has collaborated with contributors to The 1619 Project on a Howard Zinn-ish book) that the 1937 depression within a depression was due to pulling back on spending.
Ahmari’s understanding of the New Deal is similarly “misty.” He simply regurgitates the “scarcity theory” that led to the plowing under of crops and slaughter of piglets under the New Deal’s Agricultural Adjustment Act on the mistaken notion that scarcity would lead to higher prices. Ahmari writes, incorrectly, “it was by bolstering demand that the New Dealers finally pulled the nation out of the Depression.” Without any citations by economists or historians, Ahmari writes that the “lopsided distribution of income” had “weakened the economy. Chronically underpaid workers couldn’t afford to buy the things they helped produce. . . . The power inequalities that kept workers down at the firm level ended up breeding material inequalities that threatened the system.” No. The policy led to food shortages.
Unionization was the primary means for bolstering the working class, according to Ahmari’s narrative, which relies quite a bit on Kenneth Galbraith. “To foster workers’ countervailing power,” writes Ahmari,
New Dealers enacted two hugely significant pieces of legislation. One was the Wagner Act (the National Labor Relations Act), which sought to encourage unionization and collective bargaining. The other was the Fair Labor Standards Act, which created federal minimum-wage and overtime protections.
The Wagner Act was passed after the Supreme Court struck down as unconstitutional the National Recovery Act (a price- and code-fixing scheme put together by favored corporations). Its section 7e allowed for unionization (though whether of a company union or independent union was unclear). As for the minimum wage, the harm done to the most vulnerable workers (primarily young and minority workers) has been detailed by Thomas Sowell and other economists.
The notion that the government could be relied on as an advocate for the worker is bizarre and goes back to the false image of FDR as a paternalistic figure on the side of the worker. According to long-standing myth, FDR, who was born into the gentry of the Hudson River Valley, became a “traitor to his class” by becoming an advocate of workers. As I show in my forthcoming book, that is the farthest from the truth. For FDR, unions were simply a means for amassing political power. Workers who were coerced into joining unions under the Wagner Act had portions of their union dues going to FDR’s presidential campaign in 1940. (His 1936 reelection was due in large part to showering New Deal funds in key areas for votes and pressuring workers in government-funded programs for contributions and votes.) When the scheme of using unions as vote-getting vehicles was outlawed by the Smith-Connally Act of 1943, the CIO (by then infused with Communists) formed a PAC, a Political Action Committee, the first of its kind. It “educated” workers and even brought them to the polls.
But what the state giveth, the state can also take away. During wartime, in 1943, FDR used the powers of the government to take over a coal mine during a miners’ strike. And few remember the National War Service Act of 1943, essentially a draft for laborers, promoted by FDR, which as George Schuyler commented in his January 15, 1944, column, would have made it “possible to move male and female labor hither and yon across the country without its consent.” The stage was being carefully set to “effectively eliminate labor’s independence by outlawing strikes, and thus inaugurating industrial slavery.”
The beneficiary of unions was not only the breadwinner, whistling off to his factory job with steel lunchbox in hand, but members of Students for a Democratic Society. The United Auto Workers, headed by Walter Reuther, a veteran of the 1930s sit-down strikes, funded such left-wing causes as SDS—hardly a pro-family act.
Life Under the New DealLife under the New Deal meant scurrying to the bank to turn over the gold one owned during the first week of FDR’s presidency, then of living under onerous rules for small businesses, rationing, increased racial segregation, high taxes, high prices, and high unemployment (that never went under fourteen percent with a median rate of over seventeen percent from 1934 to 1940). Life was not better for sharecroppers and tenant farmers, already living precariously; they were left homeless by the AAA, which paid their landlords to leave fields fallow. The whole scheme was stitched together by young college graduates who had never held a plow handle, piece of machinery, or payroll book.
FDR, like many of his class, had little sympathy for the middle class. Much of the New Deal was spent on favors for his corporate cronies, patronage to Democrat allies in exchange for votes, and “relief” programs for the poor as a dispensation akin to noblesse oblige—though with other people’s money.
The burdens of the “reforms” were borne by the middle class. The “reforms” such as the Banking Bill of 1933 (the Glass-Steagall Act) were not reforms at all. The Banking Act was an outcome of an effort by an FDR ally at Chase Bank against J.P. Morgan. Federal Deposit Insurance, which was part of it, was not paid for by banks, but by taxpayers. Taxpayers have been left on the hook during the Savings and Loan crisis of the 1980s and then again in the 2008 banking crisis. Remember “too big to fail”?
Social Security, a “regressive tax” (as one of Lind’s sources called it) was favored by FDR’s business allies. Oddly, Lind sees nothing wrong with Roosevelt’s admission that Social Security was “politics all the way through.” Roosevelt explained candidly,
We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.
Eisenhower and Nixon, like all subsequent Republicans, realized that it would be political suicide to discuss eliminating or lowering Social Security benefits. That is not the bipartisan “acceptance” that Lind maintains continued New Deal policies.
In fact, the New Deal was a political patronage scheme that kept FDR in power until death.
And, no, FDR did not end the Depression. Because of the uncertainty due to FDR’s mercurial decision-making process and excessive taxation on corporations there was little real job growth. The postwar “Golden Age” job growth was due to the election of Republicans to Congress in 1942 and 1946. They cut through the stranglehold of coercive unionization (passing in 1947 the Taft-Hartley Act) and onerous regulations.
As historian R.J. Pestritto has outlined, the New Deal was an opportunistic reaction to the crisis of the Great Depression, when the progressive policies in the air since the late nineteenth century could be implemented. Since that time, regulations have only increased and become more and more complicated and farther away from the understanding of the average American or business owner. Consider one of the New Deal reforms touted by New Deal fans, the Securities and Exchange Commission. Recently it has updated its disclosure requirements to “enhance and standardize” “climate risk disclosures” for investors. SEC chair Gary Gensler cited President Franklin Roosevelt’s call for “’complete and truthful disclosure’” in establishing the SEC. But as numerous economists and economic historians have demonstrated the SEC hid information and gave further advantage to insiders, like those who surrounded FDR. Is this what democratic nationalists want? Who can understand what the “climate risk disclosures” mean?
The Old Right WayThere is another way, and it was laid out by someone who did live through the New Deal. In her last book, The Conservative Case for Trump, Phyllis Schlafly pointed out that “’Free trade’ as it exists today isn’t ‘free’ at all and it certainly isn’t fair, at least to the United States.” She pointed to the trade deficit, especially the “lopsided commerce with the Communist People’s Republic of China” that has resulted in a total of “$4 trillion over the last twenty-five years, and accounts for 60 percent of the U.S. trade deficit.”
Shlafly also inveighed against regulation, which the democratic nationalists want more of, at least when it comes to the workplace.
She and other members of the Old Right opposed international entanglements (and FDR was an internationalist, eager to get America involved in war).
Other critics of the time, such as John T. Flynn, George Schuyler, and Westbrook Pegler had pertinent things to say. As Flynn maintained in a 1939 essay, New Dealers on Roosevelt’s Brains Trust were simply “messenger boys” for corporate interests. Westbrook Pegler, who won a Pulitzer for his reporting on labor racketeering, attacked court rulings by FDR-appointed justices that gave unions license for monopoly and violence. And the Taft-Hartley Act was praised by Schuyler and others for ending closed unions and opening them to black workers.
Such critics saw the real aims of FDR and the New Deal.
It is hoped that elected officials, such as Senators J.D. Vance, Josh Hawley, and Marco Rubio, who have endorsed Ahmari’s book, don’t buy his nostalgic mythical view of the New Deal.
Mary Grabar was born in Slovenia when it was still part of the Communist Yugoslavia and grew up in Rochester, New York. She earned her Ph.D. in English from the University of Georgia in 2002 and taught at several colleges and universities in Georgia until 2013. While teaching, she wrote widely on political, cultural, and educational topics, and founded the Dissident Prof Education Project, a nonprofit reform initiative. In 2014, she moved to Clinton, New York, and became a resident fellow at The Alexander Hamilton Institute for the Study of Western Civilization. Her book Debunking Howard Zinn: Exposing the Fake History That Turned a Generation against America was published by Regnery in 2019. Her most recent book, Debunking the 1619 Project: Exposing the Plan to Divide America, was published by Regnery in 2021. Her forthcoming book on debunking the FDR myths will be published by Regnery in the coming months.
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