Economic historian Burton Folsom’s “New Deal or Raw Deal?” is a truly important book. Thoroughly researched, well organized and fluently written, this reader-friendly study of President Franklin Roosevelt’s New Deal is “the real deal”—a fascinating, illuminating study of the politics and economics of a key turning point in American history. Folsom, professor of history at Hillsdale College in Michigan, succeeds in making an old story come alive with superb narrative skills, crackling insights, vivid vignettes, and an ability to connect the dots like no author before him.
Having been fairly familiar with the Great Depression and New Deal, I confess that I didn’t approach this book with much enthusiasm. However, once I started to read it, I was immediately hooked. It took only three paragraphs for Folsom to share the first of his many splendidly informative revelations—specifically, this May 9, 1939, confession by FDR confidante and Treasury Secretary Henry Morgenthau: “We are spending more than we have ever spent before and it does not work.… I say after eight years of this administration we have just as much unemployment as when we started … And an enormous debt to boot!”
In succeeding chapters, Folsom proceeds to unfold the human cruelties, economic absurdities, and Depression-lengthening effects of FDR’s efforts to impose central planning, American-style, through government programs like the National Industrial Recovery Act and Agricultural Adjustment Act.
One of Folsom’s most effective techniques is to let primary sources and black-and-white data tell the story. For example, the portrayal of FDR’s character isn’t pretty. Roosevelt comes across as ruthless, mean, and egomaniacal. He took deceitfulness to a new level for presidents (forever changing the office for the worse) as typified by his denunciation of Herbert Hoover for running deficits, raising taxes, and attempting to “center control of everything in Washington”—and then adopting those same harmful practices once he was elected. Partisans on the left may try to dismiss Folsom’s treatment of FDR as a conservative hatchet job, but the weakness in that argument is that the most damning commentaries were not Folsom’s opinions, but those of FDR’s inner circle—his thoroughly Democratic associates and even his own family—told in their own words.
The most uncanny feature of “New Deal or Raw Deal?” is its timeliness. Although released before we knew that Barack Obama would be president, the book shows repeated parallels between the New Deal and the present administration, beginning with the personal similarities between FDR and Obama. Both were gifted with appealing voices, personal charisma, media savvy, and winsome oratory. The most significant parallel is their philosophy of governing. Indeed, Obama seems to be running plays taken straight from the FDR playbook. Examples abound:
In 1936, FDR stated that he wanted “to give” Americans “a greater distribution … of wealth;” in 2008, Obama famously told Joe the Plumber that he intended to “spread the wealth around.”
FDR created the Federal Communications Commission, which politicized the granting of radio-station licenses to muzzle political opponents; Obama’s allies have contemplated imposition of the “fairness doctrine” to accomplish the same objective.
FDR, according to his son, Elliott, politicized the Internal Revenue Service, using it to persecute political enemies, but persuaded the IRS to ignore the tax shenanigans of valuable political allies, such as young congressman Lyndon Johnson, the future president; Obama has sanctioned punitive taxes on business executives, but has shielded political allies from accountability for their millions of ill-gotten gains at Fannie Mae, etc.
FDR’s political allies engaged in voter fraud, as have—according to court decisions—Obama’s friends in ACORN.
The New Deal’s economic burden fell most heavily on lower-income Americans due to its reliance on increased excise taxes on common consumer goods—a mistake that Obama may repeat if he follows through on his cap-and-trade scheme, which would amount to an excise tax on energy.
Federal spending during FDR’s first five years was greater than total federal spending under the 31 presidents who preceded him; total new federal debt under Obama may exceed the total accumulated under all 43 of his predecessors.
One of the most sobering lessons to be learned from “New Deal or Raw Deal?” is that government spending buys votes and sways elections. Folsom’s research on FDR’s reelection victory in 1936 shows that vote totals correlated highly with how much money various New Deal programs funneled into specific districts. Where no or little federal money was dispensed, FDR’s Republican opponent, Alf Landon, often received more votes. In those districts, voters were influenced primarily by the dismal economic conditions that prevailed. But the more federal money that poured into a district, the more voters overlooked the general economic malaise and rewarded FDR’s largesse with votes. Similarly today, the danger is that many Americans may continue to repay Obama’s handouts with votes, even if they cause the economy to continue to sink.
“New Deal or Raw Deal?” is an eye-opening book. If you read only one history of the New Deal, make sure that this is the one.