FDR's Friend in New York

How Franklin Roosevelt and Fiorello La Guardia transformed the American state.


City of Ambition: FDR, La Guardia, and the Making of Modern New York, by Mason B. Williams WW Norton, 512 pages, $29.95.

Franklin Roosevelt was president of the United States from 1933 to 1945. Fiorello La Guardia was mayor of New York City from 1934 to 1945. Roosevelt was a Democrat and La Guardia was a Republican, but the two were both personal friends and ideological allies. Between them, they created something new: an institution that Mason Williams, author of the new history City of Ambition, calls the Intergovernmental Public Investment State. From that innovation a host of developments, from the urban renewal program to federally funded transit systems and public housing, were born.

Under the Intergovernmental Public Investment State, Williams explains, Washington would not plan and finance local projects and expenditures alone—something it had rarely done anyway. It would set the general mandate (to create jobs, say, or to build infrastructure) and provide much of the funding, but it would often give state and local authorities a say in just what to do and how to do it. That was the idea behind the Public Works Administration, created in 1933, and more so later with the Works Progress Administration, created in 1935, which funded what we might call today "shovel ready" projects intended to boost economic growth and reduce unemployment. Most importantly, it used local authorities as leverage to expand federal power greatly. At its peak in the late 1930s, 30 percent of the New York City's annual budget came from federal sources. In this way, cities across the country became partners of the national government.

Williams reminds us what a turning point the Great Depression and World War II were, not only for the expansion of public policy at the national, state, and local levels, but in the public's expectations about what the national government could and should do. (Even Roosevelt was initially reluctant to provide cash payments to the unemployed, fearing it would undermine their character. That didn't last long.) The government grew from a potential helper of last resort to a guarantor of the people's right to a certain standard of living. "Stewardship of the national economy," Williams writes, "would become an accepted function of government."

The Roosevelt/La Guardia alliance made another contribution to America's political culture: the figure that became known as the "New York liberal." As a Republican, La Guardia faced stiff opposition from Tammany Hall, from conservative Democrats, and from elements within his own party who disliked his close ties to FDR. To maintain power, the mayor used his considerable organizational abilities to assemble coalitions from a wide range of diverse voting groups: New Deal Democrats, garment unions, professional civil servants, Jewish socialists, and Italian- and African-American communities. (Communists, with what Williams calls their "capacity for ruthlessness and subversion," were left out of the coalition.) The alliance that emerged consisted of socially progressive (for the time), multi-ethnic, pro-union interventionists who could be either Democrats (Bella Abzug, Ed Koch) or Republicans (Nelson Rockefeller, Michael Bloomberg).

La Guardia's legacy helps explain why New York leaves a bad taste in the mouth of many free-market supporters, despite the historical importance of big cities in the development of dynamic free societies. La Guardia believed, Williams writes, "that if New York City, acting on the municipal scale, could demonstrate the feasibility and desirability of elements of the postwar liberal policy agenda, it could serve as an 'example' to other political communities—including the nation itself." Libertarians would prefer better examples.

My own point of reference for any book about New York's political history is Robert Caro's Pulitzer Prize–winning The Power Broker, a massive tome that thoroughly examines the life and career of Robert Moses. Moses, who in his various posts was perhaps the most powerful unelected public official in the history of 20th-century New York, played a major role in expanding the authority of local government, and his projects were aided and abetted by Washington; Caro's book thus covers much of the same ground as Williams'. But Moses enters only sporadically in Williams's narrative. Indeed, he isn't mentioned until page 69 and isn't formally introduced until page 154.

But that's not a bad thing. It was interesting to see the rise of the intergovernmental public-investment state from the perspective of the FDR/La Guardia nexus instead of the Moses empire. Williams just lets us watch the story through a different lens.

A bigger problem is that Williams tends to view the policies advanced by Roosevelt and La Guardia as a success, arguing in particular that controls on wages, prices, and rents kept inflation in check and that "war production began to pull industrial America out of the Great Depression." Readers interested in the period should consider the more skeptical views to be found in Caro's book, in Fred Siegel's The Future Once Happened Here, and in Murray Rothbard's America's Great Depression. I also recommend Amity Shlaes' The Forgotten Man, which emphasizes the effectiveness of ordinary Americans during the Depression, and Peter Salins's Scarcity by Design, which critiques the city's rent control and housing policies.

There are other nits I might pick with Williams' book, but overall it is a scholarly, very readable, and highly informative history. It has a great deal to teach about the economics and politics of those watershed years, not just in New York but beyond.