Francis Meyrick

Book Review: “New Deal or Raw Deal ” – Burton Folsom

Posted on April 6, 2009

“New Deal or Raw Deal? ” – How FDR’s economic legacy has damaged America.
by Burton Folsom, Jr.
ISBN-13:978-1-4165-9222-8 Threshold Editions

Interesting book.
This is a very well written and well researched book. A keeper.
It is not one I read cover to cover over two days. It’s more a case of reading a chapter, digesting it, cross referencing it, and then moving on. The prose, to my taste, is a little on the heavy, slightly cumbersome side. It’s not a novel. It’s not a racy read, like perhaps Fleming writes. It’s more of an economics history text book. What IS attractive is that the style is balanced, very fair, presenting BOTH SIDES of the arguments. That makes it a good research book. It avoids shrill indignation, or fatuous adulation. It is timely, with, on the one side, many advisers of Mr Obama, publicly touting some similar ‘big government spending’ policies and attitudes, whilst presenting them as excitingly new and original. That is historically simply not correct. Just read the book and see how intensely Roosevelt tried to wield the clout of Big Government. I believe this book gives a better insight into the arguments for and against the New Deal. I feel there was a well meaning idealism at work (former social workers Hopkins and Perkins et all meant well), Roosevelt indubitably (The First Hundred days, etc) was not a Coolidge, and put his back into it. But against that, this book raises again the shadow side of FDR and his policies, which today, only the true devotees choose to wholly ignore. The machinations, the sledge hammer political approach, the war on the “economic Royalists “, the “court packing ” fiasco, the cynical use of the IRS to persecute his detractors, the ‘taxpayer dollar bombardment’ of swing states, etc, etc. Many reasoned studies today attack FDR pretty furiously. Defenders of FDR mostly seem to just ignore such misguided babbling, and I’m always on the hunt for good, reasoned, New Deal apologies. However, let me say no matter which side you prefer, the extreme laissez faire minimalist Coolidge approach, or the heavy ‘beneficient hand’ of Big Government, you will find in this book many good summaries of the principle arguments, for and against.
Mr Obama himself, I suspect, knows more than some give him credit for, and is astute enough to know government stimulatory (‘anti-cyclical’)spending is a double edged sword, which needs very careful handling lest it cut the wrong way. The deficit economic theories of Keynes (who met with Roosevelt, and didn’t get along too well) have been widely challenged. Many argue against them, saying “Tried, tested…and failed “. However,others hold a polar opposite view, and argue that FDR should have spent more, not less, and that the same massive government spending today,in 2009, is the only way forward. Still others allege a common misconception exists today of what Keynes was actually saying!
However, read the book and draw your own conclusions. And enjoy, as I did, checking thoughtfully on the historic 1930’s backdrop to today’s intense economic debate. The stakes… are high.

I have a lot of areas highlighted. Some examples:
“Federal Aid encourages the expectations of paternal care on the part of Government and weakens the sturdiness of our national character “.(p.77)
“This historic shift to using federal dollars for local relief profoundly changed the American work ethic ” (p.81)
“Such a system tended to make liars out of everyone involved. Governors and mayors would shed abundant tears telling Hopkins and Roosevelt of their financial hardships; Hopkins and Roosevelt then listened and pretended to dispense FERA money solely on the basis of need, not on political considerations. ” (p.82)
(p.132) “Forbes magazine protested that “a fundamental motive of the New Deal is to wage war against bigness in business. “
(p.132) Roosevelt encouraged this fight and tore into business in his State of the Union message in January 1936. He condemned the “selfish power ” and the old ‘resplendent economic autocracy’ that was fighting his ‘new instruments of public power.’ Roosevelt added, “In the hands of a people’s Government this power is wholesome and proper. But in the hands of political puppets of an economic autocracy such power would provide shackles for the liberties of the people. “
Hm. You can imagine the raucous cheers. These are fighting words, unquestionably encouraging a class hatred. Was that good for America? If you love FDR, and many people do, I fully respect that, then you are however faced with the requirement to face the often heard complaint that the entrepreneurial class (ranging from small to big) was discouraged from launching new business ventures and investments, and creating employment. Uncertainty undermined confidence.
Next question might be: “Did that matter? ” If you feel it didn’t matter, then I would like to hear your reasoning, and your notion of what America stands for.
I hate to say it, but if you like FDR and his policies, then you will probably growl your way through this book. Folsom does not pull any punches.
(p.133) “Roosevelt’s next step was to impose yet another tax on business – this one a tax on all undistributed corporate profits. “
(P.133) “Businessmen may have been nearly unanimous in criticizing this new tax on profits, but Roosevelt believed it was a vote-getter in November, and throughout the election year he hammered away at “economic royalists ” and “malefactors of great wealth “.
I don’t doubt it WAS a vote-getter. Good for Roosevelt. The question one might ask: Was it good for the country?
And one I really chuckled about, “With so much help from most reporters in so many areas, Roosevelt sometimes became careless in telling the truth. ” (p.228)
“So much help from most reporters in so many area ” is a criticism, no, a devastating condemnation of the impartiality/objectivity of the media at that time. Many of course make the same somber assessment of today’s trendy so-called ‘liberal’ media. Who, oddly enough, don’t seem to be alarmed at the steady non-liberal (in the old, classic sense) erosion of freedom, and the ever growing boot print of bigger and bigger central government. This book illuminates some of the cynical,manipulative origins of this insidious, ongoing process. The unethical undermining of American democracy’s (beautifully eloquent) founding idealism, and its replacement with a ‘no holds barred’, and ‘the end justifies the means’ approach to fooling and bamboozling the voting masses. (Many of whom were tragically desperate, and aching for the coming of a true savior.) How an elite, puffed up with hubris, arrogant and inflexible, dragged down the Old Jeffersonian America. If it ever existed?
But against that, I think it also shows the tragedy of good intentions, real problems, real hurt, real despair. I refuse to believe there was not a great deal of good in the motivations of many of the key New Deal players.Some led extraordinarily dedicated lives. Good did come out of it. As usual, nothing is black and white.

If you are considering this book, check out the “contents ” page. It is laid out well, very clear, and it makes it very easy to leaf back and forwards afterward and look something up.
This is an excellent read. Now I need to go read another book which is more sympathetic to FDR, and once again contrast the arguments. I’m wide open to reading suggestions. I have several more FDR books on my wish list, and I shall review them all over time. Trying very hard not to be biased, and willing to sincerely weigh all counter arguments…
Peace. Enjoy the read.
PS: Please “comment ” constructively if you feel I am missing the point, or if you can recommend further reading to illustrate positive New Deal accomplishments not properly brought out in this book.


Last edited by Francis Meyrick on April 6, 2009, 6:46 am

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