Roosevelt's Lessons For Future Presidents

[JMS]

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Roosevelt's Lessons For Future Presidents (Fullilove, FT)

Thursday, November 8, 2007

Financial Times

By Michael Fullilove

Seventy-five years ago today, Franklin D. Roosevelt of New York achieved a sweeping victory over Herbert Hoover in the 1932 presidential election.

From time to time we hear assertions about FDR's limitations – that his was only a second-class mind, or that his foreign policy was ambivalent and reactive, or that he was outwitted by Joseph Stalin at Yalta in 1945.

His detractors are right: Roosevelt achieved nothing in his life, apart from rescuing American democracy from the Depression; taking the US into the second world war and, through his defeat of isolationism, into the world; leading the Allies to victory over the dictators; winning four consecutive national elections; and doing all this with a crippled body.

Historians have likened the study of FDR's diplomacy to peering through a kaleidoscope: if you take the device apart, what seemed like a random display, created by the outside force of spinning the tube, suddenly has internal logic. It is the exact reverse of George W. Bush's diplomacy, in which a rigid mindset and ideology has been broken by reality and splintered into randomness.

Comparing the two presidents may seem unfair, however the Bush administration has brought the analogy down on its own head through its use of second world war imagery and terminology, such as the ill-starred reference to an "axis of evil".

Policymakers may wish to consider three lessons from FDR's foreign policy.

First, curiosity is a good thing. Isaiah Berlin wrote that Roosevelt "practised a highly personal form of government" that "must have maddened sober and responsible officials used to a slower tempo and more normal patterns of administration". FDR ignored established lines of authority; he listened to many advisers but relied on none; he worked through friends, personal contacts and battalions of special envoys. He was determined never to become, as the historian Arthur Schlesinger, Jr told me, "a prisoner of a single information network".

Mr Bush prefers clear reporting lines and administrative tidiness. In his first term he was captured by certain ideas and individuals and closed his mind to the alternatives. By the time he had recalibrated his approach, the damage was done.

Second, it takes time and effort to build a durable domestic consensus in favour of involvement in a foreign war. FDR reached out to his opponents, co-opting vanquished rivals such as Wendell Willkie and installing Republicans such as Henry Stimson in his cabinet. He convinced Americans they needed to lead – and then he asked huge things of them. With the Lend-Lease Act, FDR put the whole country on a war footing even before war had been declared. By the time of the surprise attack on Pearl Harbor, Americans understood where their security interests lay and they were ready for the fight.

Mr Bush has chosen a different path. He used 9/11 and the early successes of the Iraq war to squeeze the Democrats. His rash decisions have persuaded millions of Americans that their country should look inward and mind its own business. He was quick to invade Iraq, but very slow to ask the American public to share the burdens being borne by its armed forces.

The final lesson is that America is strongest when it works with others. FDR had the imagination to perceive America's appeal to the world. With his ready laugh and his cigarette holder held at a jaunty angle, he was the quintessential American optimist. In the depths of the Depression he raised Americans' spirits by assuring them that "the only thing we have to fear is fear itself". By signing up to the Atlantic Charter (with its provisions against territorial aggrandisement and for freedom of trade and the seas) and by pressing his British ally on decolonis­ation, he signalled that the rest of the world had a place in the American world view. For the postwar settlement, he designed institutions of global order that gave other nations a voice but ensured American predominance.

Mr Bush has presented a different face to the international community: Abu Ghraib, Camp X-Ray, extraordinary rendition and all the rest. These policies violated individual liberties; they also offended against American self-interest.

President Bush told the world: "Either you are with us, or you are with the terrorists." President Roosevelt's anniversary is a good reminder that there are better ways to bring the world along.

The writer directs the global issues programme at the Lowy Institute for International Policy in Sydney

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[rincewind]

Shouldn't the title read "Roosevelt's Lessons for A Future President" ?

[Riggo-toni]

FDR prolonged the recession for far longer than it should have gone on through his lame-brained domestic policies.

Recognizing the menace that was Nazi Germany, he rightly managed to drag the country into WWII, which is the only reason I don't hate him as a President.

[jbooma]

Why is everyone living in the past, time to worry about the now.

[stwasm]

Why is everyone living in the past, time to worry about the now.

Off topic, but someone needs to tell Joe Gibbs that!

[JMS]

FDR prolonged the recession for far longer than it should have gone on through his lame-brained domestic policies.

Actually it was the global Great Depression, not a recession. Also most modern Critics of FDR fault him for not doing enough deficit spending as he continued to stress fiscal responsibility while lifing the country out of the great depression.

As for his "lame-brained domestic policies". This is revisionist history. The global economic down turn or Great Depression started on Black tuesday October 29, 1929, in the first year of Herbert Hoovers first and only term in office. After three years in Office herbert Hoover's policies had severly worsened the Crissis as GDP, corporate bankrupcies, bank failures, and employment all continued to fall.

Now In Roosevelts first year in office 1933, the difference he made was both dramatic and significant.

Take GDP for example..

In 1933 the GDP graph makes a complete turn around.

Take unemployment

Another complete turn around...

Recognizing the menace that was Nazi Germany, he rightly managed to drag the country into WWII, which is the only reason I don't hate him as a President.

You should love him as a President. Not only was he the greatest American president ever. He likely saved the United States from an extreme fring leader like who took power in Germany, Italy, Spain. His handling of the economy during the depression likely saved the country from revolution. His handling of the war effort likely saved the world.

There is a reason the country elected Roosevelt to four consecutive terms in office. It's because he did very well by the country.

[EersSkins05]

Why is everyone living in the past, time to worry about the now.

History is the sum total of things that could have been avoided.

Konrad Adenauer

EDIT- GREAT post, JMS.

[jbooma]

Off topic, but someone needs to tell Joe Gibbs that!

:laugh: :laugh: :laugh:

Nah that is totally On topic

[jbooma]

History is the sum total of things that could have been avoided.

Konrad Adenauer

EDIT- GREAT post, JMS.

What you do is learn from your MISTAKES in the past when presented with something similar in the future. You do not live like you did in the past and I think that is the problem here. The ability to adapt in times of change is what is needed most instead of what is in our history books.

[rincewind]

What you do is learn from your MISTAKES in the past when presented with something similar in the future. You do not live like you did in the past and I think that is the problem here. The ability to adapt in times of change is what is needed most instead of what is in our history books.

You learn from your mistakes but not repeating them.

[Riggo-toni]

Unemployment was still at 17% in 7 years after FDR took office. The retail sector, which he left untouched, recovered quickly; but manufacturing which he insisted on regulating never recovered until WWII.

The trade war started by Smoot-Hawley tariff (especially in the aftermath of Hoover's excessive easy credit policies) and the massive tax increases by Hoover (raising the top rate from 30% to 66%) were more responsible for the Depression than the market crash, which actually initially brought stock prices down to where they were at the beginning of the year. For all the rhetoric, there was little difference in policy between Hoover and FDR, but FDR had the style, empathy and confidence that the bureaucratic Hoover sorely lacked.

Look at your employment graph - it took 8 years to get back to the level it was in 1930. The improvement would've been far quicker and more dramatic if FDR hadn't continued Hoover's bad policies of pushing taxes up higher and higher, which discouraged any new investments, a problem exarcerbated by restrictions on bank financing brought about by the Glass-Steagal act.

[Midnight Judges]

I'm always dumbfounded when Americans don't approve of FDR.

[Riggo-toni]

Not meaning to snipe at anyone, but a good read on the 20s and 30s is Modern Times by Paul Johnson. Maybe you'd understand or at least somewhat appreciate my POV.

[PeterMP]

Unemployment was still at 17% in 7 years after FDR took office. The retail sector, which he left untouched, recovered quickly;

I'm curious about your definition of quickly. Is it years later, but shortly after FDR took office?

Manufacturing and retail are completely different. It is unlikely that the same policies that would work to stimulate retail would also work to stimulat manufacturing. Comparably, retail requires little investment capitial (especially if you are unemployed and doing the selling yourself). Simply put money in peoples pockets, which FDR did through work programs, and retail will come back. Manufacturing requires that somebody have enough money and confidence to invest.

[Henry]

Not meaning to snipe at anyone, but a good read on the 20s and 30s is Modern Times by Paul Johnson. Maybe you'd understand or at least somewhat appreciate my POV.

I own that book. It's one of the most conservative history books in existence, and puts forth some extremely reactionary analyses of significant events in modern American history. It's a good read in the sense that it gives the reader a definitive view of history from one side of the political spectrum, but I'm always wary whenever anyone cites that book as a primary basis for his historical outlook. Just my opinion.

[Riggo-toni]

The problem was Roosevelt and his people regulated wages and such in the manufacturing sector. Simple economics - the price of labor was high, so employers took on fewer workers. FDR et al didn't think the retail sector was important, so they let the market work there. I would have to go back and look up the actual timeframe, but I think employment in the retail section was back up to where it had been pre-crash within a year or so.

If FDR had simply reversed all the damage Hoover had done and lowered taxes back down to where they'd been and reversed the tariff war, the economy would've bounced back sooner. Instead, he continued and even expanded Hoover's policies of high taxes and public projects. Only a handful, like the TVA, were truly beneficial, and many, most notably agricultural subsidies, continue to be a blight today.

[JMS]

Unemployment was still at 17% in 7 years after FDR took office.

And again unemployment rates were climbing throughout Hoovers term in office and began to drop immediately when Roosevelt took office. So your complaint isn't that FDR improved unemployment. Your complaint is that his radical approach to the economy didn't improve it fast enough? that seems rather unreasonable when you see what Hoovers more conventional approach achieved. A month by month constant and steady climb in the ranks of the unemployed. Did FDR turn around the economy almost immediately. YES.

Did he fix the economy almost immediately. No. In 1937 he had unemployment down to 10% down from 25%.

Given the perspective of where the country was heading with Hoover's laize fair policies; FDR did great. As I said most modern economists fault FDR for not deficit spending enough.

The retail sector, which he left untouched, recovered quickly; but manufacturing which he insisted on regulating never recovered until WWII.

Roosevelt's policies pumped billions into the economy. Those policies had an almost immediate effect in retail. Likewise manufacturing completely turned around in Roosevelts first year in office, 1933. Again, did he fix it overnight. No; but he turned it around almost overnight ( first year ). And he did get industrial production back to pre depression levels in 1937 well before WWII.

You can't make the case that WWII saved the country from the Great depression of 1929 because that is not debatable. That depression follows a strict definition and ended in 1933 based upon GDP growth. You can make the case that WWII saved the country from the recession which followed this dramatic recovery in 1937.

Again Roosevelt's effects on the manufacturing economy was dramatic.

[/url]

For all the rhetoric, there was little difference in policy between Hoover and FDR, but FDR had the style, empathy and confidence that the bureaucratic Hoover sorely lacked.

Any reasonable review of the economic indicators would refute this statement. Fact is Hoover contracted government spending. FDR increased it. Hoover tightened credit. FDR loosened it.

Just take banking policies.. FDR took office while a banking crisis was occurring. Roosevelt immediately called for a "bank holiday" closeing the banks until he could get federal backing to reopen the banks. When FDR reopenned the banks a week latter deposits outnumberd withdrawls.

Hoover had allowed two previous bank crisises to run there coarse which contributed to over 10,000 bank failures and $2 billion in lost deposits. FDR's actions took place in his first week in office.

FDR's first 100 days in office is considered to be the most efficient 100 days in our country's legislature history.

• The Emergency Banking Bill
  
• creation of the Federal Emergency Relief Administration,
  
• the Civilian Conservation Corps,
  
• the Reconstruction Finance Corporation,
  
• the Tennessee Valley Authority.
  
• the Federal Trade Commission was given broad new regulatory powers, provided mortgage relief to millions of farmers and homeowners.
  http://www.aliveness.com/kangaroo/First100days.htm
  

Look at your employment graph - it took 8 years to get back to the level it was in 1930. The improvement would've been far quicker and more dramatic if FDR hadn't continued Hoover's bad policies of pushing taxes up higher and higher, which discouraged any new investments, a problem exarcerbated by restrictions on bank financing brought about by the Glass-Steagal act.

Agreed, most economists believed FDR should have done more deficit spending. Something Roosevelt resisted until WWII. This did prolong the recovery. One can hardly fault Roosevelt for this. He had taken economic policy from stone knives and bear skins under hoover to the Jet age within months of taking office. Your complaint with him is he didn't fly the Concord but rather only progressed as far as a lockeed Constilation seem rather unfair and short sighted. Look where the economy was and where it was heading under Hoover. FDR did a great job, even as I admit; he wasn't perfect.

It's funny how a conservative is saying FDR didn't deficite spend enough and that's his big knock on FDR...?

[JMS]

The problem was Roosevelt and his people regulated wages and such in the manufacturing sector. Simple economics - the price of labor was high, so employers took on fewer workers. FDR et al didn't think the retail sector was important, so they let the market work there. I would have to go back and look up the actual timeframe, but I think employment in the retail section was back up to where it had been pre-crash within a year or so.

If FDR had simply reversed all the damage Hoover had done and lowered taxes back down to where they'd been and reversed the tariff war, the economy would've bounced back sooner. Instead, he continued and even expanded Hoover's policies of high taxes and public projects. Only a handful, like the TVA, were truly beneficial, and many, most notably agricultural subsidies, continue to be a blight today.

The problem was there wasn't any money in the economy. People were willing to work for pennies on the dollar of what they needed to support themselves. And they were lucky if they could get that. It wasn't enough for Roosevelt to increase manufacturing; he had to boost wages so the money made it into the economy. The money made it to the workers who would spend it to support themselves rather than end up in one guys pocket.

That's not where modern economists critisize Roosevelt. They critisize him for not spending more government money to quicken the pace of recovery.

[Riggo-toni]

First off, let's be clear - I am equally, if not more criticial of Hoover. Hoover's policies were the catalyst for the great depression.

As for deficit spending - FDR did plenty of that, and so did Hoover. The debt to GDP ration grew I believe around 150%. Yes, my point IS exactly that FDR could've achieved faster results, but I don't believe that's unreasonable. What if he'd simply cut taxes back to where they were before Hoover screwed things up, and opened up trade with all the nations who'd retaliated after Smoot-Hawley. You seem to believe there's some huge gap between Hoover's policies and FDR's, when there really wasn't. FDR was simply much more of the same, but there was an ENORMOUS gap in style, and the confidence which Roosevelt instilled in the public. However by raising income taxes to around 90%, he choked off any incentive for wealth creation. Comparing his stats to the misery Hoover caused is like telling me Ramsey is a franchise QB because he did sooo much better than Danny Waffle.

Furthermore, a President can't "boost" wages. That was a fundamental flaw in FDR's policies. Artificially raise the price of labor, and fewer people get hired. Simple supply and demand. Now - don't take me out of context and claim I'm advocating this, but Germany recovered years before the US because the facists pressured the unions into taking lower wages. No, I don't think we should've sent brownshirts into our labor unions; I'm simply pointing out a tangible example of a country that made a complete recovery by not trying to artificially boost the cost of labor. Again, if the US had simply lowered taxes and stayed out of price fixing, the recovery would've been much faster. This is what happened in previous crashes. NEITHER Hoover NOR FDR did this.

[Predicto]

There is a deliberate effort among conservative ideologues to diminish the accomplishments of FDR, because FDR is the "icon" of liberals and democrats. Left wing ideologues do the same thing to Ronald Reagan, utterly denying any value to his presidency. Both understand that controlling history is vitally important to shaping the long term views of the electorate.

Some of the criticisms are at least colorable, others are just revisionist nonsense. Suggesting that Roosevelt exacerbated the Great Depression falls into the nonsense category. It is easy to say, in 21st century retrospect, that some of his policies were ineffective and a few were even negative. But the circumstances were so extraordinary that it is utterly ludicrous to expect that anyone could have done better at that time. There had never been an event like the Great Depression, and there were no blueprints for how to deal with it.

The biggest thing that people forget is how people thought in the 1930s, what information they had. Communism was not the discredited ideology that it is now. The propaganda coming out of Russia painted a rosy picture of communism as a fair and sane alternative to capitalism, which clearly had "failed" (or else there wouldn't be a Great Depression, right?) Communism had an enormous appeal to the hungry and dispirited masses. There were huge marches on Washington DC, some of which were broken up by soldiers. It was a very delicate time for our nation. We could have gone communist, we could have gone fascist - seemed like everyone else was and was having success with it.

Roosevelt's policies put people to work, got the economy moving a bit, but mostly his leadership gave people hope that capitalism and democracy could work for them. He used the bully pulpit to SAVE capitalism in this country. I'm sorry, but conservative revisionist history is full of crap on this one.

[Predicto]

Now - don't take me out of context and claim I'm advocating this, but Germany recovered years before the US because the facists pressured the unions into taking lower wages. No, I don't think we should've sent brownshirts into our labor unions; I'm simply pointing out a tangible example of a country that made a complete recovery by not trying to artificially boost the cost of labor.

I do not think you are painting a complete picture of the German situation. It would take a week to explain all the flaws in this short statement. Let me start with the most obvious: the Nazis boosted the German economy in the mid 1930s through massive deficit spending, on a per capita basis much larger than in the US. They sold gazillions of bonds that they never repaid (because the Reich went to war and then lost before they were due.) They heavily regulated industry to achieve political goals of improving employment. They did massive public works projects, most notably the autobahns.

In other words, they did much more of the EXACT thing that you are criticizing Roosevelt for.

[G.A.C.O.L.B.]

I got to say, JMS I think you might be my favorite poster. **** college. I'll just read your posts.

[luckydevil]

There is a deliberate effort among conservative ideologues to diminish the accomplishments of FDR, because FDR is the "icon" of liberals and democrats.

There is legitimate scholarship behind the notion that new deal prolonged the great depression. In fact, it is a fairly mainstream position among economists. Even Keynes criticized many aspects of the New Deal. I have had this debate with you before, you have in the past acknowlege some of the scholarship. So I am bit puzzled by the revionism claim.

[Predicto]

There is legitimate scholarship behind the notion that new deal prolonged the great depression. In fact, it is a fairly mainstream position among economists. Even Keynes criticized many aspects of the New Deal. I have had this debate with you before, you have in the past acknowlege some of the scholarship. So I am bit puzzled by the revionism claim.

Like I just said above: "It is easy to say, in 21st century retrospect, that some of his policies were ineffective and a few were even negative. But the circumstances were so extraordinary that it is utterly ludicrous to expect that anyone could have done better at that time. There had never been an event like the Great Depression, and there were no blueprints for how to deal with it."

There is no question that some of the New Deal was counterproductive from a pure economic point of view. However, it was not a situation in which a pure economic view was appropriate - social unrest was a real issue. Moreover, Roosevelt and his people did not have the benefit of the past 70 years of economic study. Economists alwasy find it easy to criticize, after the fact, and say what should have been done. They ignore that what was ACTUALLY done back then was done after listening to the advice of the economists back then.

Viewed fairly from an overall perspective, Roosevelt has to be given an "A minus" for his efforts. Not an "A plus" - it took WWII to put him over the top.

[JMS]

I do not think you are painting a complete picture of the German situation. It would take a week to explain all the flaws in this short statement. Let me start with the most obvious: the Nazis boosted the German economy in the mid 1930s through massive deficit spending, on a per capita basis much larger than in the US. They sold gazillions of bonds that they never repaid (because the Reich went to war and then lost before they were due.) They heavily regulated industry to achieve political goals of improving employment. They did massive public works projects, most notably the autobahns.

In other words, they did much more of the EXACT thing that you are criticizing Roosevelt for.

I totally agree with the revisionism aspect.

Not to mention that Germany began arming for the war they would shortly start in the early 1930's. The economic boom Hitler created can be directly attributed to the fact that he was planning global war which allowed him to begin arming before everybody else.

How can you speak of German economic policy of the 1930's and not mention Hitler put Germany on a war economy? That re-armament had everything to do with their employment and industrial growth. Wages being kept low, just allowed Hittler to get a little more bang for his bucks. ( literally)

Again, The depression for America ended in Roosevelt’s first year in office. The country was officially in recovery because GDP stopped going down and started rising. Depression and recovery have formal definitions so these statements are not debatable given the statistics I've already quoted.

First off, let's be clear - I am equally, if not more critical of Hoover. Hoover's policies were the catalyst for the great depression.

Claiming Hoover’s policies were the same as Roosevelt’s is not reasonable. Hoover literally was letting the economy run it's course, with disastrous results. FDR was actively intervening in the economy from the moment he took the oath. As I said he took the oath while a banking crisis was ongoing and immediately he intervened, something Hoover had not done either in 1933, or in the two previous banking crisis’s which occurred under his watch.

As for the claim both Hoover and Roosevelt were deficit spenders.. That too is not creditable. The government was actually running surpluses under Hoover while the country was in Depression in 1929. And FDR narrowed the gap between receipts and outlays he inherited from Hoover in 1933. FDR just about balanced the budget in 1937 before the country slide back into recession!! That can only be attributed to incredible fiscal restraint. It is this strict adherence to fiscal responsibility which most economists today believe caused the recession of 1937-38.

You will also note that FDR resisted deficit spending right up until WWII started, as noted by the steep increase in slope of government outlays accompanied with the widening of the gap between outlays and receipts in 1942. (we were attacked December 7 1941..)

I don't believe any Criticism of Roosevelt is credible. He is already claimed to be the "most liberal" American President ever by his detractors. With 20-20 hind sight the only criticism, they can make of him; is he wasn't liberal enough!!! He should have deficit spent more.. Again who can't be criticized with the benefit of hind sight? Even a man like Roosevelt likely the boldest greatest most innovative President in American History.

Let’s not forget after battling with big industry in order to right the economic ship of the country. It was Roosevelt who had the intelligence and understanding to turn to these very same men and make them allies in re-arming the country for WWII. Can you imagine?