Amity Shlaes brings a new evaluation of Franklin Roosevelt's response to the Great Depression, with lessons for our times. FDR needed a foil, and he elected the businessman. His rhetoric was sharp and persuasive. In saying that "the only thing we have to fear is fear itself," Shlaes told a buffet luncheon the other day at the Americans for Tax Reform, FDR was clever, charming and original, "but he scared businessmen away from investments and innovation and frightened them into inaction." He turned the government into competition the private sector could not match. Fear froze the private economy. What often gets lost in the mythologies of the New Deal is that it was World War II, not the New Deal, that ended the Depression; the Dow-Jones Average did not rise to pre-Depression levels for at least a decade after FDR died in the early spring of 1945.
The president changed the meaning of words, too. Before FDR assumed office in 1933, the word "liberal" identified someone who championed the rights of the individual. FDR changed "liberal" to mean someone who champions rights and advantages of groups. The individual wouldn't any longer count for very much. Republicans, to be sure, had long practiced interest-group politics on behalf of business, but Roosevelt raised group rights to an art, creating constituencies of labor unions, senior citizens, teachers, farmers and others. The election year 1936 saw a landslide for FDR and the first time short of war that federal spending outpaced the spending of the towns and states. All those political constituencies showed their appreciation with votes for Roosevelt. Said his aide Harry Hopkins: "Tax and tax, spend and spend, elect and elect."
"It can even be argued," says Shlaes, "that one year -- 1936 -- created the modern entitlement challenge that so bedevils both parties today." The year 2007 is nothing like 1936, but the attitudes that polarized the country then are with us still, occasionally exacerbated by ambitious politicians like John Edwards and his reprise of class-warfare rhetoric.
I grew up in a New Deal family, with a photograph of FDR on our living room wall. I understood his appeal, which we imagined could never be successfully challenged. His "fireside chats" reassured us all. Evaluating the economics was not something for a child to worry about, and the trust that the nation reposed in FDR was often little more than child-like.
Amity Shlaes says she wrote "The Forgotten Man" to remind young people that such child-like faith is for children, that young and old must understand that lavish government programs cost money, and they will pay for them no matter how the bill for them is disguised. Otherwise, theirs, too, will become a generation of the forgotten men.