Franklin Roosevelt’s New Deal is, perhaps, the greatest single dupe ever foisted on the American people. According to the revisionist narrative, the era represented a vindication of the progressive messianic complex. If modern revisionists are to be believed, the New Deal rescued an America reeling from an economic disaster caused by a clueless and non-interventionist government and fundamentally re-structured the American economy all while achieving fundamental and long-lasting reforms in social welfare and justice that have benefited ensuing generations of Americans. As you might have guessed from reading this blog, I don’t subscribe to a revisionist line of thinking. In my view, the New Deal represents a unilateral roll-out of the progressive agenda on the American people and the hijacking of the Democratic Party as a means of implementing this agenda. Not only did the federal government undergo a massive expansion in size and scope but it was achieved through egregious transgression of the constitutional process. If anything is to be learned from this chapter in American history it is, in the words of Benjamin Franklin:
“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.”
One of the earlier attacks on the personal freedoms of American citizens came in 1933 with FDR’s Executive Order 6102. The directive, made the hoarding of monetary gold by any person or organization criminal. The order required all in possession of gold to return said gold to Federal Reserve Bank in exchange for a set amount of paper currency per ounce. Not only did this law set a dangerous precedent that normalizes and encourages economic collectivization by the federal government but it was done in the name of economic necessity. Proponents argued that in order for the Federal Reserve needed to increase its gold reserves in order to maintain the reserve ratios it had set for itself. Following the order American citizens were subjected to federal raids and seizures of gold exceeding the allowable limit. Not only were American individuals and businesses deprived of their property but foreign companies too. It wasn’t until 1974, nearly 41 years later, that the private ownership and trade of gold was once again fully legalized.
The economic freedoms of private businesses and citizens were further infringed with the passage of the Agricultural Adjustment Act (1938) and the decision in Wickard v. Filburn (1942). The Agricultural Adjustment Act granted the Agricultural Adjustment Agency the power to regulate the private production of wheat, cotton, corn, hogs, rice, tobacco, and milk. In future amendments to the law, the list was expanded to include rye, flax, barley, grain, sorghum, cattle, peanuts, sugarbeets, sugarcane, and potatoes. The federal government chose to regulate these specific products because they were deemed to be in overproduction. According to the New Deal proponents, regulation (i.e “destruction”) of crop surpluses grown privately was essential for a full and complete economic recovery. The controversy surrounding this legislation finally came to a head in the 1942 supreme court case, Wickard v. Filburn. The defendant, Roscoe Filburn, was an Ohio wheat farmer who grew wheat in excess of the limits set forth by the government. The excess wheat was grown purely for subsistence, that is, personal consumption not for sale. In court, Filburn argued that the Agricultural Adjustment Act didn’t apply to his surplus of wheat because it didn’t fall under the domain of commerce which the federal government was given the power to regulate under the Interstate Commerce Clause of the U.S Constitution. Against previous rulings by lower courts, the Supreme Court ruled that the surplus did fall under the category of “commerce” because growing wheat for personal use affected the amount of wheat that would be bought for chicken feed! This ridiculous ruling not only defies basic economic sense (the price of chicken will be higher if Filburn has to buy other people’s wheat) but set a dangerous precedent for the interpretation of the Commerce Clause (Art. 1, Sect. 8, Clause 3) in future supreme court cases.
The failed Judicial Procedures Reform Bill of 1937 was another constitutional near-disaster. Had the bill passed, the office of the president would have expanded its powers on Caesarean proportions. Had it passed, the bill would have allowed the president to appoint a new supreme court justice whenever a sitting justice reached the age of seventy. The legislation allowed for up to 6 justices sitting on the same court to be appointed in this manner. The impetus behind this conspiracy, which was so see-through that it became known as the “court-packing scheme,” was Roosevelt’s desire to create a court that favored his legislation. Publicly, this motivation was presented as a measure to ensure that no one party ever controlled too many branches of the federal government, never mind the will of the people. With the creation of highly-publicized social assistance programs the New Deal heralded a new era of dependency on government. The New Deal certainly laid the foundations for an American welfare state whose complete construction is being debated to this day. The creation of Social Security in 1935 saddled generations of American taxpayers with deficits and anxiety over the impending insolvency of this huge social “safety net.” In 1935, under the Social Security Act, the Aid to Families with Dependent Children (AFDC) was established. The program was a precursor to the modern-day Temporary Assistance for Needy Families (TANF) better known as welfare. The AFDC was and, in some circles, is considered radical for its direct financial support of single, unemployed, and unwed mothers. Research conducted in previous decades, most notably the Moynihan Report, found that programs such as the AFDC encouraged out-of-wedlock births and the general disintegration of the working-class family unit. It wasn’t until 1996 that the AFDC was reformed with the passage of the Personal Responsibility and Work Opportunity Reconciliation Act.
The National Housing Acts of 1934 and 1937 laid the foundations for the large-scale construction of public housing projects and redlining practices that promoted inner city decay and racial segregation that dominated the middle part of the 20th century. To be fair, the legislation did create the Federal Savings and Loan Insurance Corporation, which insured deposits in savings and loan institutions until it was consolidated with the FDIC in 1989. However, the creation of the United States Housing Authority ushered in a new era of large-scale public housing projects that concentrated and magnified the miseries of the urban poor. To build these housing projects, neighborhoods were razed, stripping residents and businessmen of their land ownership in the process. The Federal Housing Administration only magnified these problems with their racist redlining and blacklisting tactics whereby neighborhoods were evaluated for the relative “stability” of lending to and insuring residents, often based on a locale’s racial demographics. As a result, banks and insurance companies refused to do business in certain neighborhoods, stifling many of the otherwise upwardly-bound poor. There are too many pieces of the New Deal to examine fully and satisfactorily in one post. One thing is clear; the New Deal has left our nation with a legacy that we are still grappling with and will continue to grapple with for some time.