Power Mad

Spring 1999

THE ROOSEVELT MYTH
John T. Flynn
Fox and Wilkes, [1948] 1998, xxiv + 437 pgs.

Ralph Raico points out in his incisive introduction to this fiftieth anniversary edition of The Roosevelt Myth that many take sharp criticism of FDR to constitute sacrilege against the civic religion of the United States. "Republican no less than democratic leaders revere and invoke the memory of Franklin Roosevelt" (p. vii).

No reader of The Roosevelt Myth, unless totally blinded by preconception, can continue to bow down in this temple of Rimmon. Quite the contrary, Roosevelt can be viewed only as a near total disaster. The "Roosevelt-haters" of the 1930s and 1940s, not least among them Flynn himself, have been vindicated by the account so vividly presented here.

Yet in one respect, our assessment seems paradoxical. Roosevelt, as he emerges from this book was a vain, intellectually shallow person whose principal interest was to retain at all costs his personal power. Can so petty a figure have been that dangerous?

Consider, for example, the amusing account Flynn provides of Roosevelt's decision to run for a third term. In conversation with the Eternal Glad-hander, Postmaster-General Jim Farley, who himself sought the presidency, Roosevelt alternately said that he would not run and plotted his campaign strategy. One half of his brain seemed unaware of the activities of the other lobe.

"On July 1, 1940, two weeks before the [Democratic Party] convention was to meet, Roosevelt asked Farley to visit him at Hyde Park...the conversation proceeded in the most singular manner with literally three persons present Farley for one, Roosevelt the man who was not going to run as the second, and Roosevelt the man who had decided to run as the third. In one breath he began to discuss vice-presidential candidates...he then began to outline the letter he would write to the convention telling them he didn't want to run and at what point he should send the letter. Then having gone into de-tails about how he would eliminate himself he said, 'Undoubtedly I will accept the nomination by radio and will arrange to talk to the delegates before they leave the convention hall'" (pp. 192 193).

Can such an absurd person really have been so dangerous? As Flynn shows with crystal clarity, the answer unfortunately is yes. Owing to the combined circumstances of economic depression and a menacing diplomatic situation in Europe and Asia, Roosevelt's "gifts" were an ideal recipe for disaster.

Roosevelt's total subordination of his country's welfare to his personal ambition began before he took office in March, 1933. The outgoing president, Herbert Hoover, confronted a dilemma. Faced with numerous bank failures throughout the country, Hoover wished to announce a plan to help promote bank solvency. He knew, however, that a statement from him would be worse than useless. He had utterly lost the confidence of Congress and the people.

He accordingly proposed to Roosevelt that he announce a plan to save the banks. Roosevelt refused to do so, since continued bank failures until he took office were to his political advantage. It would hardly do, would it, to have the banks recover under Hoover? Perish the thought! "On February 28 [1933], Hoover received a message that [Roosevelt adviser] Rexford Tugwell had said that the banks would collapse in a couple of days and that is what they wanted" (p. 22, emphasis in original). I leave aside here the issue of whether governmental action to end the bank panic was appropriate. Roosevelt himself favored such action: the point was not to allow Hoover credit for it.

Not an auspicious beginning, and matters soon got worse. Roosevelt had denounced Hoover as a spendthrift, and his platform promised strict economy in government. But a government that spent little would give Roosevelt scant opportunity to exercise the patronage he craved. Accordingly, "Roosevelt sent his now famous message to Congress deploring the disastrous extravagance of the Hoover administration.... As one reads that message now it is difficult to believe that it could ever have been uttered by a man who before ending his regime would spend not merely more money than President Hoover, but more than all the other 31 presidents put together three times more, in fact, than all the presidents from George Washington to Herbert Hoover" (p. 28, emphasis in original).

Here then, to reiterate, was the situation. Roosevelt confronted a major depression. The solution, so far as the government was concerned, lay within his grasp. He had only to follow his campaign pledge of economy. As good Austrians, we know, Paul Krugman to the contrary notwithstanding, that if the government steps out of the way and allows malinvestments to be liquidated, all is likely soon to be well. But just that solution went against the Rooseveltian categorical imperative: spend money to gain power.

Very well, then; out with economy: the government must spend. But spend on what? Roosevelt had little idea, and his vaunted Brain Trust gave him scant help. Flynn heaps scorn upon the Agricultural Adjustment Administration, one of FDR's more bizarre schemes: "Curiously enough, while [Secretary of Agriculture Henry] Wallace was paying out hundreds of millions to kill millions of hogs, burn oats, plow under cotton, the Department of Agriculture issued a bulletin telling the nation the great problem of our time was our failure to produce enough food to provide the people with a mere subsistence diet.... It was a crime against our civilization to pay farmers in two years $700,000,000 to destroy crops and limit production" (pp. 44-45, emphasis omitted).

I must not give readers the wrong idea. Roosevelt's efforts to extricate the United States from the depression were not totally aimless. The New Dealers found the blandishments of fascism much to their liking, and Mussolini's corporative state was the model for Roosevelt's National Recovery Administration. "As I [Flynn] write, of course, Mussolini is an evil memory. But in 1933 he was a towering figure who was supposed to have discovered something worth study and imitation by all world artificers anywhere." What they liked particularly was his corporative system.... The NRA provided that in America each industry should be organized into a federally supervised trade association. It was called a Code Authority. But it was essentially the same thing" (p. 39).

To Flynn's thesis of the New Deal as a combination of nonsense and fascism, there arises an obvious objection. Did not the Supreme Court declare both the AAA and the NRA unconstitutional? Flynn of course knew this, and wrote about these decisions, and Roosevelt's "court-packing" response, at length. Incidentally, the subject betrays Flynn into one of his few mistakes. He states: "On May 27, 1935, the Supreme Court, to everybody's relief, declared the NRA unconstitutional.... And the decision was unanimous, Brandeis, Cardozo, and Holmes joining in it" (p. 43). Justice Holmes retired from the court in 1932. (It's just this sort of point that makes reading The Mises Review worthwhile, isn't it?)

Flynn rightly saw that even without these two programs, his thesis was intact. The movement of the New Deal toward a planned economic system reflected the influence of a wide variety of self-styled Great Minds. Derailing a few programs could not halt their forward march.

Our author ascribes special importance to the influence of Thorstein Veblen, whose obscure writing style occasioned one of H.L. Mencken's best articles. "Perhaps the great pioneer of planning in this country was Thorstein Veblen and it was from him that Tugwell and the others drew their inspiration. Veblen, like so many of his kind, was an unpleasant fellow" (p. 142).

In the plans of Tugwell, Leon Henderson, and their fellow technocrats, Flynn saw grave danger to liberty. Anticipating the thesis of F.A. Hayek in The Road to Serfdom (1944), he maintained that a planned economy led inevitably to a totalitarian state. "Mussolini and Hitler...realized that a system like this, which undertakes to impose a vast complex of decrees upon a people while subjecting them to confiscatory taxes to support the immense activities of the State cannot be operated save by an absolute government that has the power to enforce compliance" (p. 140).

As if this group of planners were not bad enough, Flynn found another set of Bright Men even more ominous. This group, whom our author terms "the spenders," believed that extensive government outlays were necessary to ensure continued prosperity.

"Well," you may say, "so what? The dispute between Keynesian spenders and sound economists is long-standing. Why does Flynn emphasize it so much?"

Flynn's point was not primarily that the spenders practiced unsound economics: indeed, he unfortunately accepted the view that the economy requires a high level of spending to maintain prosperity. (Flynn, in contrast to the planners, thought that extensive government programs were not needed to achieve this.)

The danger that Flynn saw in the big spenders was not economic, but political. The spenders wished to stimulate the economy: but what projects stood available? Civilian spending had completely failed to achieve the goal of full employment. In point of fact, unemployment in 1938 was 11 million.

What could Roosevelt do? Only military spending remained available. "Here he was with a depression on his hands" [with] the pressing necessity, as he put it himself, of spending two or three billion a year of deficit money and most serious of all, as he told Jim Farley no way to spend it. Here now was a gift from the gods.... Here now was something the federal government could really spend money on military and naval preparations" (p. 157).

As Flynn saw matters, extensive government spending on the military, given the tense diplomatic situation during the period 1938-1941, led almost inevitably to war. Roosevelt, with his customary lack of thought, abandoned the Neutrality Act of 1936, legislation he himself had enthusiastically backed. American participation in war, Roosevelt thought, meant a chance to end economic depression and secure renewed electoral triumph. Never mind whether entry into the war served U.S. interests: a higher need, the fame and political fortune of Franklin Roosevelt, was at stake.

Given Roosevelt's utter lack of strategic sense, it should come as no surprise that the chief result of the war was an enormous expansion of Stalinist power in Europe and Asia. But for that sorry tale, which Flynn recounts with great skill, readers must consult the book.

Rather than describe every major topic in Flynn's book, I have thought it more important to stress his chief contribution: his brilliantly sustained argument that an irresponsible and ambitious president unleashed the baleful forces of state planning and militarism in order to keep alive his power. The book ends on a melancholy note: the dying Roosevelt, unable to think clearly, nevertheless clung to power. He proved no match for Stalin in the conferences at Teheran and Yalta.

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