Bad Deal

How FDR made life worse for African Americans.


Reconsidering Roosevelt on Race: How the Presidency Paved the Road to Brown, by Kevin J. McMahon, Chicago: University of Chicago Press, 298 pages, $20

FDR's Folly: How Roosevelt and His New Deal Prolonged the Great Depression, by Jim Powell, New York: Crown Forum, 352 pages, $27.50

Franklin Delano Roosevelt ranks near or at the very top of almost every standard list of America's greatest presidents. But there is a substantial part of the American public for whom the legendary four-termer did little: African Americans. Despite the determined efforts of his do-gooder wife Eleanor, for example, he failed to support federal anti-lynching legislation and refused to integrate the armed forces. (Successor Harry Truman finally did the latter in 1948.) Although supposedly sympathetic to the plight of black America, FDR was not about to risk losing either his New Deal or World War II by alienating Southern supporters or moving too far ahead of public opinion.

Two recent books, one generally liberal and the other libertarian, offer interesting and divergent viewpoints on what Roosevelt and his New Deal did, and did not do, to improve life for American blacks. In Reconsidering Roosevelt on Race: How the Presidency Paved the Road to Brown, Kevin J. McMahon credits the New Deal with establishing a judiciary "eager to defer" to the executive branch's authority and expertise, allowing the Justice Department to "instruct" the courts on civil rights cases. In FDR's Folly: How Roosevelt and His New Deal Prolonged the Depression, Jim Powell argues that New Deal economic and regulatory policies were bad for many Americans, especially poor blacks.

Both books offer original and persuasive arguments and engage each other in a number of challenging ways. Ultimately, Powell's case is both more convincing and damning. His evidence reveals that the New Deal threw African Americans out of work, raised the price of food during the depths of the Depression, and granted monopoly bargaining powers to racist unions. In short, Powell writes, "Black people were among the major victims of the New Deal." Such a conclusion doesn't merely reveal FDR's often indifferent attitude toward minorities—in passing wartime travel restrictions and internment rules on Italian Americans, for instance, he derided them as "a bunch of opera singers"—it suggests that a thorough, fact-based re-evaluation of FDR's mythic status as a champion of the underdog is long overdue.

McMahon, an associate professor of political science at the State University of New York, Fredonia, attempts a bold rehabilitation of our 32nd president. While FDR is often credited with ameliorating the effects of the Great Depression—if not actually saving capitalism, as the self-described conservative publishing magnate Conrad Black recently suggested in his hagiographic Franklin Delano Roosevelt: Champion of Freedom—critics continue to denounce his failure to secure the civil rights of African Americans.

McMahon's novel defense of FDR's race policy is that his creation of a strong executive and deferential judiciary set the institutional foundation for Brown v. Board of Education, the 1954 Supreme Court decision overturning the vile doctrine of "separate but equal." In McMahon's words, the Roosevelt Court was "constructed to be instructed by the executive branch on race."

McMahon makes a good case. Eight of Roosevelt's nine Supreme Court appointees were liberal progressives with New Deal sympathies. Five Roosevelt appointees voted with the majority in Brown. The Civil Rights Section of the Roosevelt Justice Department worked closely with the National Association for the Advancement of Colored People (NAACP) and other civil rights groups on cases dealing with police brutality, lynching, and voting rights abuses. These actions sent a powerful message to white supremacists in the South and their allies in Washington.

But McMahon doesn't satisfactorily address the major case where his model proves grossly inadequate. In Korematsu v. United States (1944), the New Deal Court upheld the Roosevelt administration's wartime internment of Japanese Americans. Korematsu, McMahon writes, "represented one of those rare times when the Roosevelt Court's deference to the executive clashed with the advancement of civil rights and liberties." One wonders why such an outrage deserves the qualifier rare. Doesn't this travesty cast into doubt the whole case for combining an empowered president with a pliant court? McMahon doesn't say.

Instead, he reassures readers that "the decision did not negatively affect the campaign to secure the civil rights of African Americans through the courts." The internment of American citizens was "hardly a victory for civil rights," he grants, then returns to his main focus. But since the New Deal Court did not begin enforcing the Equal Protection Clause in earnest until the late 1940s, the payoff for African Americans was slow in coming.

The most serious question raised by McMahon's thesis, however, concerns the nature of New Deal jurisprudence itself. In 1937, as Roosevelt's crowning legal victory, the Supreme Court overruled Lochner v. New York, the 1905 "bakeshop" case that established liberty of contract among the individual rights protected by the 14th Amendment from state and federal violation.

Writing for the majority in West Coast Hotel Co. v. Parrish, Chief Justice Charles Evans Hughes held that "the Constitution does not speak of freedom of contract." It says only that liberty may not be deprived without due process. And an economic regulation "which is reasonable in relation to its subject and is adopted in the interests of the community," he continued, "is due process." In fact, "even if the wisdom of the policy be regarded as debatable and its effects uncertain, still the legislature is entitled to its judgment." In other words, the Supreme Court should generally presume the constitutionality of laws regulating the economy, as long as they appear "reasonable" and "in the interests of the community." This ruling secured federal and state regulatory power and eliminated the individual right to liberty of contract.

McMahon praises West Coast Hotel, arguing that the triumph of New Deal economics over the Lochner Court's jurisprudence removed an impediment to the civil rights of African Americans. He describes FDR's struggle to "replace a Supreme Court that had consistently restricted liberty" and writes of a "Supreme Court that had consistently endorsed the states' rights creed."

Both of those statements are false. Between 1905 and 1937 the Court upheld numerous state economic regulations, including laws regulating the entry width to coal mines (Booth v. Indiana, 1915) and requirements that railroad workers be paid in cash (Erie R.R. Co. v. Williams, 1914). These pro-regulatory decisions discredit McMahon's breezy assertion that the Court "consistently" endorsed laissez faire. Furthermore, a close reading of several key decisions by the Lochner Court shows that individual liberties were sometimes expanded at the expense of states' rights. Lochner itself explicitly declared the Court's authority to review state economic regulations under the 14th Amendment.

Subsequent rulings built on this precedent. Pierce v. Society of Sisters (1925) invalidated an Oregon law banning private schools. Gitlow v. New York (1925) read the First Amendment, in light of the 14th, as a protection against state restrictions on speech. In Meyer v. Nebraska (1923), a decision invalidating a state law that banned foreign language instruction for children until they reached the eighth grade, the Court offered a sweeping definition of liberty under the 14th Amendment.

"Without doubt," wrote Justice James C. McReynolds, one of the "Four Horsemen of Reaction" who later struck down parts of the New Deal on "Black Monday," liberty "denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized at common law as essential to the orderly pursuit of happiness by free men." This ruling is both strikingly libertarian and totally at odds with states' rights, a position McMahon seems unable to understand.

Most significantly, in 1917 the Court invalidated a Louisville, Kentucky, ordinance segregating residential housing blocks by race. The majority in Buchanan v. Warley noted that "property is more than the mere thing which a person owns. It is elementary that it includes the right to acquire, use, and dispose of it." The Court therefore held that the 14th Amendment "operates to qualify and entitle a colored man to acquire property without state legislation discriminating against him solely because of color." Although the Court at this time failed to reconsider the Plessy v. Ferguson (1896) decision ruling "separate but equal" to be constitutional in railroad accommodations, Buchanan demonstrates that liberty of contract could effectively challenge racist and discriminatory laws.

Sadly, the demise of Lochner in 1937 removed this potentially lethal weapon from the impending fight against Jim Crow. Although both libertarians and their critics frequently associate libertarianism with a states' rights position, liberty of contract demonstrates how an expansive reading of the federal Constitution that sometimes overrides states' rights can be quite consistent with libertarian principles.

This brings us to Jim Powell's FDR's Folly, an excellent counterweight to many parts of McMahon's book. Powell, a senior fellow at the Cato Institute and the author of The Triumph of Liberty, has gathered more than four decades of economic research, most of which has gone unreported by Roosevelt's flattering biographers, that systematically disproves the myth that the New Deal was a successful recovery program. Focusing on outcomes rather than intentions, Powell details the numerous ways the New Deal made life worse for African Americans in particular, and for poor people in general.

For example, the Agricultural Adjustment Act of 1933 authorized the secretary of agriculture to inflate prices by reducing farm acreage. This meant white farm owners were paid to let their land sit idle, often resulting in the eviction of sharecroppers and tenant farmers, a significant number of whom were African American. Powell reports that reduced acreage particularly affected sharecroppers, whose estimated annual cash income fell from $735 in 1929 to $216 in 1933. The Department of Agriculture, moreover, paid farmers to destroy crops and slaughter livestock. This occurred while millions of Americans went hungry. "This was just the sort of thing," Powell notes, "that John Steinbeck protested against in his 1939 novel The Grapes of Wrath."

Southern states, home to the nation's poorest citizens yet full of dependable Democratic voters, received less New Deal spending than comparatively richer Western states, whose voters perhaps required additional persuasion to support Democratic candidates. Powell cites one study showing that states with a higher percentage of black residents and a lower per capita income received fewer New Deal dollars than richer, whiter states. Thus blacks were directly injured by New Deal policies, then ignored when it came time to dispense New Deal dollars.

It was New Deal labor laws that had the most pernicious impact on African Americans. The National Industrial Recovery Act (NIRA), in effect from June 1933 until a unanimous Supreme Court declared it unconstitutional in May 1935 (in Schechter Poultry Corp. v. United States), was considered the hallmark of the New Deal. In addition to creating the Works Progress Administration, the NIRA authorized the National Recovery Administration (NRA), which organized cartels, fixed wages and prices, and, under section 7(a), established the practice of collective bargaining, whereby a union selected by a majority of employees exclusively represented all employees.

While such compulsory unionism is routinely celebrated as a milestone for the American worker, many African Americans saw things differently. The NAACP's publication The Crisis, for example, decried the monopoly powers granted to racist unions by the NRA, noting in 1934 that "union labor strategy seems to be to obtain the right to bargain with the employees as the sole representative of labor, and then close the union to black workers." Members of the black press had something of a field day attacking the NRA, rechristening it the "Negro Removal Act," "Negroes Robbed Again," "Negro Run Around," and "No Roosevelt Again."

NRA codes harmed other poor groups as well. By setting the price of food and goods above market levels, the agency's price controls made it that much more expensive for the nation's poor and unemployed to provide for themselves and their families. Struggling entrepreneurs also suffered. Jacob Maged, a 49-year-old immigrant dry cleaner, spent three months in jail in 1934 for charging 35 cents to press a suit, rather than the NRA-mandated 40 cents.

To meet the inflated payrolls required by New Deal minimum wage codes, employers eliminated unskilled and marginal positions, precisely the sort of jobs filled by African Americans and other disadvantaged groups. According to a Labor Department report, between 30,000 and 50,000 workers, primarily African Americans in the South, lost their jobs within just two weeks of the activation of the Fair Labor Standards Act (1938), which set a uniform minimum wage. Not surprisingly, both unions and industrialists in the North favored the minimum wage, since it undercut their competitors in the South.

In 1935 the National Labor Relations Act (or Wagner Act, after its sponsor, Democratic New York Sen. Robert Wagner) revived section 7(a) of the recently defunct NRA and granted monopoly bargaining power to unions selected by a majority of employees. Neither company-sponsored unions nor unions representing a minority of workers were permitted. The act's original draft contained a clause forbidding discrimination against African Americans by federally recognized unions, but the clause was removed at the behest of the American Federation of Labor, a notoriously racist outfit at the time.

Predictably, FDR failed to spend any of his considerable political capital to retain the clause. Empowered by the Wagner Act, American unions brazenly continued their decades-long discrimination against African Americans, the effects of which are still visible in racial disparities within unionized trades such as construction.

So Franklin Roosevelt's New Deal increased poverty and joblessness among African Americans, empowered discriminatory labor unions, and, when the Supreme Court overturned Lochner v. New York, removed an effective legal tool to challenge segregation laws and other racist state actions. McMahon's ambitious attempt to salvage FDR's record on race is clever, but his focus on the long-term and secondary effects of Roosevelt's judicial nominees and policies fails to convince in the face of the direct negative outcomes the New Deal produced for many American blacks.