A New Deal Insider's Damning Account of FDR's Policies


Over at Liberty & Power, distinguished economist Robert Higgs highlights some very damning passages from New Deal "Brain Truster" Raymond Moley's 1939 book After Seven Years. As Higgs puts it, Moley gives "one of the clearest, best informed accounts ever written of the problem of regime uncertainty in the 1930s." In other words, Moley admits that the New Deal stifled entrepreneurship and investment during the Great Depression. From Moley's book:

Confidence consists, on the one side, of belief in the prospect of profits and, on the other, in the willingness to take risks, to venture money….

This, Roosevelt refused to recognize. In fact, the term "confidence" became, as time went on, the most irritating of all symbols to him….

For one thing, the confusion of the administration's utility, shipping, railroad, and housing policies had discouraged the small individual investor. For another, the administration's taxes on corporate surpluses and capital gains, suggesting, as they did, the belief that a recovery based upon capital investment is unsound, discouraged the expansion of producers' capital equipment. For another, the administration's occasional suggestions that perhaps there was no hope for the reemployment of people except by a share-the-work program struck at a basic assumption in the enterpriser's philosophy. For another, the administration's failure to see the narrow margin of profit on which business success rests—a failure expressed in an emphasis upon prices while the effects of increases in operating costs were overlooked—laid a heavy hand upon business prospects. For another, the calling of names in political speeches and the vague, veiled threats of punitive action all tore the fragile texture of credit and confidence upon which the very existence of business depends.

Read the rest here. And click below to watch Robert Higgs discuss the decline of classical liberalism and the government's reaction to the current financial crisis with Reason.tv's Nick Gillespie.


NEXT: Reason Writers Around Town: Shikha Dalmia on Obama's Top Five Health Care Lies

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  1. This isn’t what they taught me in school.

  2. I can confirm that “regime” or regulatory uncertainty is absolutely killing investment in the health care field right now. New facilities, new hires, new equipment are all being put on hold pending the release of whatever abomination of health care reform is diktated by Our Masters in DC.

  3. No no no. All wrong. FDR used his super powers to give everyone jobs and a kitten. Then he flew over to Germany and defeated Hitler in his transforming/flying robot-wheelchair and then went to heaven cause he was so awesome.

  4. Nuh uhhh.

  5. “Then he flew over to Germany and defeated Hitler in his transforming/flying robot-wheelchair and then went to heaven cause he was so awesome.”

    And don’t forget about the Japs.

    He whipped them all by himself too.

  6. If Peter Bagge is done with his Founding Father’s Follies series, it would be cool if he’d do a New Deal series.

  7. You know, Keynes was constantly on FDR for the latter’s penchant for attacking business people.

  8. Moley, Flynn, Luce,Read and other critics of the New Deal lost the intellectual battle. Most of us grew up thinking FDR was, perhaps next to Lincoln, the greatest president ever. If the critics of Obamessiah similarly fail, he will be as equally revered for the next sixty years.

  9. I think most of FDR’s halo comes from having the great good luck to be President when WWII broke out.

    Let’s hope Obama doesn’t agree.

  10. We shouldn’t forget that FDR was a very able politician, able to move vast numbers of people to “his” side of an issue, no matter how often his side may have shifted in actual practice. FDR and JFK were the two ablest speakers in 20th century presidential politics. (Reagan, I think, was a distant third.)

    Obama follows in this tradition. Being very appealing, ably moving logos in tandem with ethos and pathos, he has many advantages, able to sell snake oil when others (Dukakis, Gore, Kerry) couldn’t help but fail.

    The origin of the FDR myth was FDR himself. His friends — whom he elevated to great heights, with the mission of “saving the country” — built it up to build themselves up.

    It’s not a mysterious process, really.

    War, of course, helps heaps. I, too, hope that Obama won’t see himself as a “war president” as well as mere savior.

  11. Brings to mind FDR’s Treasury Secretary Henry Morganthau in May 1939:

    “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong … somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises … I say after eight years of this Administration we have just as much unemployment as when we started … And an enormous debt to boot!”

  12. Where is FDR buried? I wouldn’t mind shitting on that fucker’s grave.

  13. JB, didn’t your mom ever tell you if you don’t have anything genuinely witty to say, STFU?

  14. mark, didn’t your mom tell you she should have aborted you?

    Why don’t you go dig up FDR’s bones so you can suck on them?

  15. Why don’t you take your FDR scat fantasies elsewhere?

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