Is the Drought a New Dust Bowl? No, Thanks to the New Deal

Jul 26, 2012David Woolner

When FDR tackled an environmental crisis, he didn't just put people to work to fix it in the short-term -- he solved it for the long-run.

When FDR tackled an environmental crisis, he didn't just put people to work to fix it in the short-term -- he solved it for the long-run.

The severe drought that has afflicted more than half of the country this summer has led some commentators to wonder whether the country might be headed for another Dust Bowl. The consensus among most experts is that the answer is no – and the reasons for this stem in part from the lessons learned and the actions taken by the Roosevelt administration in response to the unprecedented environmental crisis that the nation suffered in the early to mid-1930s.

As those who lived through it will attest, the Dust Bowl was unlike any previous environmental catastrophe the United States had ever experienced. The dust storms it generated buried homes and farm equipment, killed livestock, and on some occasions even darkened cities on the East Coast. The dust storms also represented a serious health risk to humans. At the height of the crisis, for example, physicians across the Midwest reported thousands of cases of what came to be known as “dust pneumonia,” which sometimes resulted in the death of the patient. The Dust Bowl laid bare millions of acres of farmland, left roughly half a million Americans homeless, and forced hundreds of thousands of people off the land. Indeed, between 1932 and 1940 it is estimated that 2.5 million people abandoned the plains for other regions of the country, with an estimated three to four hundred thousand heading to California alone.

In response to this unprecedented social and environmental catastrophe, the Roosevelt administration established a number of programs, such as the Resettlement Administration, that were designed to help those who had been driven off the land by the disaster. But it also recognized that the only way to deal with the crisis over the long term was to attack the root causes. In other words, it had to address the environmental degradation that led to the conditions that helped give rise to the Dust Bowl in the first place. Foremost among these was the state of the soil, which, thanks to over-plowing and grazing, the planting of inappropriate crops, and poor husbandry, was in abysmal shape.

Thanks in part to his experience as an amateur farmer and forester, FDR recognized that the key issue was soil conservation, and he established the Soil Erosion Service within his first six months in office. This initiative, which in 1935 became the Soil Conservation Service and later the Natural Resources Conservation Service, marked the first major federal commitment to the preservation of privately held natural resources. Under the auspices of this program, farmers learned new agricultural techniques, such as contour plowing, that helped preserve and protect the fertility of the soil. Equally significant was FDR’s initiation of the Prairie States Forestry Project in 1935. Here the goal was to create a “shelter belt” from the Texas Panhandle to the Canadian border. This program literally changed the face of the nation. Over the course of the next seven years, the U.S Forestry Service, working in conjunction with the Civilian Conservation Corps (CCC), the newly established Works Progress Administration (WPA), and local farmers, planted roughly 220 million trees, creating 18,000 miles of windbreaks on some 30,000 farms.

It is thanks to the New Deal’s establishment of the Soil Conservation Service and the planting of the Great Plains Shelter Belt that we have not experienced another Dust Bowl—even in the face of such severe conditions as this summer’s dry spell or the even more extensive drought the nation experienced in 1956. As was typical of most New Deal infrastructure projects, the programs the government designed to combat this unprecedented environmental disaster were not developed merely as a means to provide jobs and short-term work relief to those who were suffering unemployment. Rather, they were part of a large-scale effort to bring about a long-term solution to a very difficult environmental problem. This emphasis on long-term environmental planning, which recognizes the need create a balance between stewardship and managed exploitation and which sees the federal government as playing a crucial role in establishing the parameters of that balance, is now referred to as sustainable development.

In confronting the terrible conditions of the Dust Bowl, FDR once urged the American people to be ready “to fit and not fight the ways of nature.” Today, as we face the consequences of what the vast majority of scientific opinion recognizes as climate change—whatever its immediate causes—we would do well build on this lesson. If nothing else, this summer’s drought should remind us of our responsibility to ourselves and to our children to protect and preserve both our environment and our natural resources. With the right vision and political will, we too could turn the onset of the Great Drought of 2012 into an opportunity to provide millions of unemployed Americans work in developing green energy while at the same time building a cleaner, more secure future for our children. 

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

 

Drought land image via Shutterstock.com.

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Is Obama Using FDR's Playbook in Attacking Mitt Romney With Bain Capital?

Jul 16, 2012David Woolner

Obama's attacks on Bain follow in FDR's 1936 re-election footsteps except for one key aspect: a full-throated case for government.

Yes, there are still determined groups…[who would]…steal the livery of great national constitutional ideals to serve discredited special interests. As guardians and trustees for great groups of individual stockholders they wrongfully seek to carry the property and the interests entrusted to them into the arena of partisan politics…

Obama's attacks on Bain follow in FDR's 1936 re-election footsteps except for one key aspect: a full-throated case for government.

Yes, there are still determined groups…[who would]…steal the livery of great national constitutional ideals to serve discredited special interests. As guardians and trustees for great groups of individual stockholders they wrongfully seek to carry the property and the interests entrusted to them into the arena of partisan politics…

The principle that they would instill into government if they succeed in seizing power is well shown by the principles which many of them have instilled into their own affairs: autocracy toward labor, toward stockholders, toward consumers, toward public sentiment. Autocrats in smaller things, they seek autocracy in bigger things. “By their fruits ye shall know them.” - Franklin D. Roosevelt, 1936

In seeking to identify Republican presidential hopeful Mitt Romney as an unfeeling member of the nation’s wealthy elite, President Obama is using tactics reminiscent of those used by Franklin Roosevelt in his own bid for re-election in 1936. In that campaign, FDR sought to draw a clear distinction between what he and his Democratic colleagues represented—the interests of the average working American—versus what he saw as the Republican promotion of a return to the economic status quo. But unlike FDR, President Obama is shying away the argument that government must be the countervailing force against entrenched financial interests.

By 1936, conservative critics of the New Deal had launched a persistent and hard-hitting campaign against FDR's policies, labeling them un-American and contrary to the Constitution. At the forefront of this effort was the American Liberty League, a privately funded anti-government organization that ruthlessly attacked his economic policies as little more than a drive to usurp the constitution and take the United States down the path toward socialism. But thanks to the fact that the Liberty League was never a truly populist movement (although it tried to portray itself as such), as well as the fact that it was financed by some of the most powerful business interests in the county, including the leaders of the DuPont Company, Chase National Bank, Standard Oil, and a number of other wealthy individuals and corporations, FDR was able to discredit its efforts as little more than a poorly concealed attempt to restore the country to the laissez-faire economic policies of the past.

In doing so, FDR reminded the American people again and again that the rightwing drive to restore these policies was not based on the elite’s desire to protect and promote free enterprise, but rather based on their unabashed desire to protect and promote their own wealth and power. Under such an economic system, which had been in place during the 1920s, the “savings of the average family, the capital of the small-businessmen, the investments set aside for old age,” what FDR rightly called “other people’s money,” were the tools with which the economic elite dug itself in. Indeed, as he went on in perhaps his most famous 1936 campaign address, it was critical not to forget how:

Throughout the nation, opportunity was limited by monopoly. Individual initiative was crushed in the cogs of a great machine. The field open for free business was more and more restricted. Private enterprise, indeed, became too private. It became privileged enterprise, not free enterprise.

In our own era marked by declining wages, the outsourcing of jobs, and an ever-increasing share of the nation’s wealth residing in the hands of the financial barons of Wall Street—whose willingness to risk “other people’s money” has hardly diminished—FDR’s assault on what he identified as “the privileged princes of these new economic dynasties” rings as true today as it did in the mid 1930s.

It is for this reason that President Obama’s attacks on Mitt Romney’s record as the head of Bain Capital have proven so effective. Having been burned in the 2007-2008 financial collapse that led to the worst economic crisis since the Great Depression, the American people still harbor a good deal of hostility towards the bonus- and bailout-receiving bank executives whose reckless behavior brought the nation and the rest of the world to the brink of economic ruin. Based on the response to the president’s efforts to paint Romney as one of these elite, it also appears that they remain skeptical of the financial titans' ability to pull us out of the Great Recession. What is missing from the president's attacks, however, is the one key element that FDR used in convincing the American people that they should support his re-election in 1936: the clear and unequivocal case for government.

In the wake of the more than 30-year assault on government launched by Ronald Reagan in 1980, President Obama and the Democratic Party may be loath to use the case for government as part of their strategy to win the 2012 election. But as FDR pointed out in the mid 1930s, we have now reached a point like the 1920s where for too many of us “the political equality we once had won” has become “meaningless in the face of economic inequality.” Why? Because, as was the case in America’s gilded age, “a small group” has “concentrated into their own hands an almost complete control over other people's property, other people's money, other  people's labor—other people's lives.”  As a consequence, we also find, as FDR did, that “for too many of us life…[is] no longer free; liberty no longer real; men…[can] no longer follow the pursuit of happiness.”

To counter such entrenched economic interests, FDR insisted that “the American citizen could appeal only to the organized power of government,” and he urged his fellow citizens to vote for him and his party as the best means to ensure that government by, of, and for the people would continue to flourish. For, as he often noted, what was really at stake in this struggle between the average citizen and the interests of the wealthy was the state of democracy itself. In the same election speech, for example, he also observed:

Unhappy events abroad have re-taught us two simple truths about the liberty of a democratic people. The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself.

The second truth is that the liberty of a democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.

FDR’s belief in the need for government to serve as an active instrument of social and economic justice won him the greatest electoral landslide in American history. It also helped preserve American democracy in an age when democratic government was under siege worldwide. Surely these are two lessons the Obama administration might turn to as it struggles to win the hearts and minds of the American people at this critical moment in our history.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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President Obama and FDR: Rumors of Political Demise at the Hands of the Supreme Court Greatly Exaggerated

Jun 28, 2012David Woolner

Despite the handwringing, neither president suffered a huge political blow at the hands of the Supreme Court.

Despite the handwringing, neither president suffered a huge political blow at the hands of the Supreme Court.

There is no question that the Supreme Court’s decision to uphold the Patient Protection and Affordable Health Care Act represents a major victory for Barak Obama’s presidency. Struggling in the polls thanks to the continued sluggish performance of the economy, a defeat on the constitutionality of this signature piece of legislation had led many analysts to predict that, had the decision gone the other way, President Obama’s ability to effect further change would be finished. Others argued that a ruling striking down the health care law would have meant the end of President Obama’s political career. But if history is any guide, these dire predictions may have been too severe.

Roughly 75 years ago, when Franklin Roosevelt was engaged in his own struggle with the Supreme Court, it appeared for a time as if the fate of his presidency—and the New Deal—also hung in the balance. In May of 1935, for example, the Court struck down the National Industrial Recovery Act and the Agricultural Adjustment Act, two key provisions of the New Deal. FDR was livid and, fearing for the fate of such landmark pieces of legislation as the 1935 National Labor Relations Act and Social Security Act, he eventually decided to take on the Supreme Court by unleashing his famous “Court Packing Plan” in February 1937. The plan argued that the president should be allowed to add up to six new judges to the bench in cases where a sitting justice who had served at least ten years on the bench refused to retire after reaching his seventieth birthday.

The president was perfectly within his legal bounds to request a change in the make-up of the Court, and he certainly was not alone in his call for judicial reform. But given the widespread support for the make-up at the time and the means by which the president unveiled his proposal—it was launched without warning and without any effort to secure congressional support before it was put forward—the plan soon ran into fierce opposition, even from some members of Roosevelt’s own party. As time went on, what congressional support there was for the plan eroded, and after some months the bill was quietly allowed to die in the Senate before it ever came to a vote.

Most historians agree that the launch and demise of FDR’s court packing scheme was a major political blow which, when coupled with the Roosevelt recession of 1937, resulted in the strengthening of the anti-New Deal coalition in Congress in the midterm elections of 1938. This certainly made it harder for FDR to push further New Deal reforms in the coming years, but it did not bring about the judicial reversals that FDR feared. On the contrary, from that moment forward the Court upheld every New Deal statute that came before it, launching a new era of jurisprudence that fundamentally altered its character and the nature of its decisions.

The setbacks that President Roosevelt experienced at the hands of the Court in the mid 1930s, then, did not result in the undermining of the New Deal. Thanks to a shift in attitude in the Court about the role of government in the maintenance of the social and economic health of the nation, we still enjoy Social Security, unemployment insurance, a federal minimum wage, and a host of other New Deal provisions. Nor did the Court’s action’s result in the political demise of Franklin Roosevelt, who would go on to win reelection to an unprecedented third and fourth terms.

In the decades since Roosevelt’s showdown with the Supreme Court, a debate has raged about how much his decision to confront the Court may have led to the change in attitude among the justices regarding the constitutionality of the New Deal. A number of historians—and Roosevelt himself—have claimed that the president may have lost the battle but won the war. In other words, it was the pressure from the president that led to the shift in the Court’s outlook.

But more recent scholarship tends to support the idea that the Court’s about-face reflects the slow evolution of 20th century constitutional law that predates the New Deal. The court, in essence, was heading toward supporting greater federal intervention in the economy, but had not quite reached this point when FDR launched his flurry of programs and reforms. One strong argument in favor of this view stems from the fact that in early 1937—before FDR announced his court reform proposal—the court reversed itself and ruled in favor of two other New Deal provisions that had been brought before it. Ironically, one of the justices who changed his position was Owen Roberts, a conservative Hoover appointee who would continue to serve on the court until 1945. Given his change in attitude, it is Associate Justice Owen Roberts—a man whom the current chief Justice John G. Roberts (no relation) apparently admires—who is most often credited with saving the New Deal or, as was said at the time, carrying out “the switch in time that saved nine.” Today, it appears that it was Chief Justice Roberts, who cast the decisive vote in favor of the Patient Protection and Affordable Health Care Act, who will make it possible for millions of uninsured Americans to finally gain access to what many consider a fundamental human right: affordable health care. 

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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The Senate’s Dimon Hearing Was Sadly No Pecora Commission

Jun 14, 2012David Woolner

Rather than digging up the truth behind Wall Street's behavior, Congress seems content to let the possibility of another crash loom.

Rather than digging up the truth behind Wall Street's behavior, Congress seems content to let the possibility of another crash loom.

Jamie Dimon’s testimony before the Senate Banking Committee yesterday has led some critics to charge that the Senators tasked with getting to the bottom of what led to JPMorgan Chase’s staggering $2-to-$5 billion dollar loss in the derivatives market have dropped the ball. In spite of Mr. Dimon’s frank admission that JPMorgan Chase, like the nation’s other big banks, was sometimes led astray by “greed, arrogance, hubris [and] lack of attention to detail,” and his additional observation that the instigation of the yet-to-be imposed Volcker Rule could have reduced the losses, Dimon faced few really tough questions. As a result, we learned little, if anything, from the hearings about the true nature of the decisions that led to the loss, or how Mr. Dimon and the CEOs of our nation’s other too big to fail banks might avoid such large losses in the future. This is particularly important if what he calls the “vague and unnecessary” Volcker Rule is ultimately watered down to the point of ineffectiveness.

Given the level of campaign contributions members of the Senate Banking Committee—on both sides of the aisle—have received from the banking industry, perhaps we should not be surprised by the coddling Mr. Dimon received in the Senate hearing room. But things were not always so cordial. Roughly 80 years ago, in the wake of the 1929 financial sector crash, the very same Senate Banking Committee, under the leadership of the committee’s indomitable chief counsel Ferdinand Pecora, excoriated members of Wall Street’s financial elite. The result was a series of revelations about the behavior—what Mr. Dimon accurately calls the “greed, arrogance [and] hubris”—of Wall Street that outraged the nation and shocked Congress into action.

In the spring of 1933, for example, under the grilling many top executives received at the hands of Pecora, who cut his teeth as a prosecutor as the Assistant Attorney General for the State of New York, the Senate Banking Committee learned that top executives at National City Bank (now Citibank) had bundled a series of bad loans to Latin American countries into securities and sold them to unsuspecting investors. The Committee also learned that these same executives had received large interest-free loans from National City’s coffers and that, as J.P. Morgan, Jr. admitted, it was fairly common practice among the members of Wall Street’s banking and financial elite to keep a list of influential “friends” who were given the opportunity to purchase stocks at drastically reduced prices. Most shocking, however, was the revelation that Mr. Morgan, who as head of the nation’s largest bank was the Warren Buffet of his day, had paid no income taxes between 1930 and 1933. Nor was he alone, for the committee soon learned that many of the nation’s other top bankers had also paid little or no income tax in the years since the 1929 crash.

These disclosures, coupled with additional revelations about excessive salaries and bonuses, outraged the public and helped inspire the incoming Roosevelt administration and Congress to push through some of the most important banking and financial reforms in American history. It is thanks in part to the work of the Senate Banking Committee, then, that the nation benefitted from such reforms as the Glass-Steagall Act, which separated commercial from investment banking and gave us the Federal Deposit Insurance Corporation; the 1933 Truth in Securities Act, which required the securities industry to provide potential investors with complete and accurate financial information about any financial product individuals or firms might wish to purchase; and the 1934 Securities and Exchange Act, which created the Securities and Exchange Commission.

Of course, the vast majority of the financial sector in 1933 and '34 vehemently opposed these reforms. But thanks to the willingness of the Senate Banking Committee to root out and expose many of the unethical practices that contributed to the collapse of the American economy, all Americans, from Wall Street to Main Street, were able to reap the benefits of a properly regulated financial sector for decades to come.

Today, most mainstream economists agree that it has been our return to the reckless and largely unregulated financial practices we saw in the 1920s, coupled with the dismantling of such key New Deal reforms as the Glass-Stegall Act, that led to the 2007-08 collapse of the world’s economy and the onset of the Great Recession. Yet the gentle treatment Mr. Dimon received at the hands of the current Senate Banking Committee pales in comparison to the penetrating line of inquiry pursued by its predecessors. This is unfortunate, for it represents yet another lost opportunity at the hands of our dysfunctional government to provide the kind of leadership required to bring about meaningful financial reform. Sadly, it seems that we would rather run the risk of another financial collapse than confront the truth about the unsustainable nature of an industry driven solely by the desire to accumulate vast quantities of wealth by whatever means necessary, no matter what the cost to the millions of Americans who still believe in an honest day’s pay for an honest day’s work.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Bloomberg's Soda Ban Recalls New Deal-era Nutrition Programs

Jun 1, 2012David Woolner

Despite conservatives' recoiling at food and nutrition standards set by the government, they have a long and important history.

Despite conservatives' recoiling at food and nutrition standards set by the government, they have a long and important history.

New York Mayor Michael Bloomberg’s recent announcement that his administration plans to ban the sale of large size sugary drinks to combat the growing problem of obesity has once again brought the question of the government’s role in nutrition and public health to the forefront of the nation’s discourse. In a similar move earlier this year, the Obama administration announced that it was issuing new rules for the nation’s subsidized school meal program, which would add more fruit and green vegetables to school breakfasts and lunches, also as a means of combatting the growing problem of obesity among our nation’s youth.

Most Americans are highly supportive of these moves and regard the school meal program—formally the National School Lunch Program—with favor. But like so many of the social programs that we now take for granted, few Americans probably realize that its history and its relationship to concerns over the nourishment of the nation’s children is rooted in the New Deal.

Prior to the New Deal, at the beginning of the 20th century, it had become more and more obvious that millions of Americans were suffering from malnutrition. This fact was confirmed by the initiation of the military draft in World War I, where it was determined that a shocking number of young men across the country were ineligible for military service due to their poor physical condition. Equally important was the simultaneous realization that widespread malnutrition among the nation’s school children was having an enormous negative effect on the ability of millions of young people to achieve basic academic standards. Armed with this alarming information, an emerging class of experts trained in the science of nutrition began to argue that it was time to instigate programs aimed at alleviating this critical problem.

One of the suggested reforms was the initiation of a national school lunch program designed to help lessen the problem of hunger among the nation’s youth. The idea of serving hot lunches to hungry students in the nation’s public schools was in fact not new, as many progressive-minded reformers had been advocating for it for some time. One result of these early efforts was the establishment of privately funded school lunch programs in a number of American cities, including New York and Chicago, which by the early 1920s had been partially embraced by their local school boards. However, it would not be until the onset of the Great Depression and the subsequent arrival of the New Deal that we would see direct federal involvement in the issue.

Like many of the locally based public or private relief programs that were in place by the early 1930s, most establshed local and state school lunch programs found it impossible to continue in the face of the crisis that now confronted the nation. The devastating drop in local revenue due to the drastic downturn in the economy was one reason; a second was the inability of the millions of impoverished students to pay even the meager “at cost” fees that many districts charged in exchange for school lunches.

The economic collapse also meant that a good share of the nation’s farm production went begging for a market. Moreover, as surpluses of farm products continued to mount, their prices declined to a point where farm income provided only a meager subsistence. It soon became apparent that one way to tackle the growing problem of malnutrition among Depression-era young people was to link it to agricultural aid through the school lunch program. In 1935, therefore, under the auspices of an Amendment to Agricultural Adjustment Act, Congress passed Public Law 320, which created the Commodity Donation Program. Under its terms, the Secretary of Agriculture was provided the funds and charged with the responsibility for removing “price-depressing surplus foods from the market through government purchase” and disposing of this surplus “through exports and domestic donations to consumers in such a way as not to interfere with normal sales."

Needy families and school lunch programs became constructive outlets for the commodities purchased by the Department of Agriculture under the terms of this legislation. And as the food used for school lunches would not otherwise be purchased in the marketplace, farmers benefitted by obtaining an outlet for their products at a reasonable price. The purchase and distribution of the food was assigned to the Federal Surplus Commodities Corporation, which had been established in 1933 as the Federal Surplus Relief Corporation to distribute surplus dairy products, pork, and wheat to the needy. By March 1937, nearly 4,000 schools were receiving food and serving 342,031 children daily. Two years later, the number of schools participating had grown to just over 14,000 and the number of children being served had climbed to 892,259.

As was the case with many New Deal programs, the Federal Surplus Commodities Corporation employed special representatives in each state to work with state and local school authorities, parent teacher associations, and similar organizations in an effort to expand the school lunch program. These efforts were enormously successful, and by 1942 the number of schools participating increased by over 75,000 and the number of pupils participating exceeded 6 million.

As a further benefit to the economy, many of the individuals involved in preparing and distributing the school lunches were employed by the Works Progress Administration (WPA). The Community Service Division of the WPA employed thousands of needy women in nearly every city, town, and rural community of the country. The supervisory staff chosen to spearhead the effort to prepare and distribute the lunches was most often chosen from people who had special knowledge in the preparation of food. In addition, manuals were developed at the state and district supervisory levels, which did much to improve the quality of the meals served as well as to set standards for equipment, sanitation, and safety in the lunch program. A further benefit of the WPA’s involvement in the program was that much of the labor was provided without cost to a school district. As such, lunch prices were held to a minimum and more children were able to participate, with the result that the program expanded rapidly throughout the nation.

Not surprisingly, the onset of World War II had a significant effect on the school lunch program. The rise of defense industries, for example, resulted in a sharp drop in the number of people employed by the WPA, and in early 1943 the agency's activities came to a close. In the meantime, the enormous amount of food required to support the U.S. Armed Forces and the Allied war effort soon depleted farm surpluses, and the quantities of food available for the school lunch programs declined sharply. But by this point federal government support for the school lunch program had gained enormous popularity, both among the public and in Congress, and in 1943 the latter voted to authorize the funding needed to continue the program for another year. Similar laws were enacted in 1944 and 1945, so that the school lunch program continued in spite of the demands of the war.

Congress finally decided to make the program permanent with the passage of the National School Lunch Act of 1946, which among other things declared that “as a measure of national security, to safeguard the health and well-being of the Nation's children and to encourage the domestic consumption of nutritious agricultural commodities” the federal government would provide assistance to the States to provide “an adequate supply of food and other facilities for the establishment, maintenance, operation and expansion of nonprofit school lunch programs.”

The national school lunch program that emerged from the New Deal is just one more example of how the sensible use of nation’s national resources—including government revenue—may be used to improve our nation’s economic and physical well-being. In the years since the New Deal, however, the school lunch program has often come under assault from conservatives as too expensive. One result was an effort to privatize much of the program in the 1970s and '80s. As a result, many districts adopted “kid friendly” fast foods menus of pizza and fries while allowing vending machines – which dispensed the very sugary drinks Mayor Bloomberg is now limiting – to be placed within school buildings. Most experts now agree that this was a mistake and that, as was the case in the 1930s, it is critical for those in a position of responsibility to ensure that the food served to our young people meets basic nutritional standards.

Given all of this, it would appear that attacks on government nutrition programs follow the same pattern of our abandonment of the Glass-Steagall Act, our move away from proper regulation of the banking and financial sector, and our refusal to recognize the short- and long-term benefits of a massive infrastructure building program. We turn away from the common-sense ideas of the New Deal at our peril.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Curing the Causes, Not the Symptoms, of the Job and Debt Crises Facing Today’s Graduates

May 24, 2012David Woolner

The country is doing little to make college an affordable and realistic goal for American families.

We have believed wholeheartedly in investing the money of all the people on the education of the people. That conviction, backed up by taxes and dollars, is no accident, for it is the logical application of our faith in democracy.

The country is doing little to make college an affordable and realistic goal for American families.

We have believed wholeheartedly in investing the money of all the people on the education of the people. That conviction, backed up by taxes and dollars, is no accident, for it is the logical application of our faith in democracy.

Man's present day control of the affairs of nature is the direct result of investment in education. And the democratization of education has made it possible for outstanding ability, which would otherwise be completely lost, to make its outstanding contribution to the commonweal. We cannot afford to overlook any source of human raw material. Genius flowers in most unexpected places; "it is the impetus of the undistinguished host that hurls forth a Diomed or a Hector." –Franklin D Roosevelt

As has been widely reported in the press of late, students graduating from college this spring are not just facing a jobs crisis; they are also facing a debt crisis. The New York Times recently reported, for example, that the average debt burden for graduating college seniors is now approaching $25,000, with ten percent of all graduates owing more than $50,000 and three percent owing more than $100,000. Taken together, total student loan debt in the United States now exceeds $1 trillion—more than all credit card debt in the country.

Equally daunting are the job prospects that current graduates face. It is estimated that more than half of all 2012 graduates will still be out of work a year from now, as was the case for the 2010 and 2011 graduating classes. What is more, even those graduates lucky enough to find a job will earn wages far below their counterparts who graduated in the years before the Great Recession, making it all the harder for them to keep up with—much less pay down—their student loans.

Facing high debt, bleak job prospects, and low wages, many students (and parents) are asking themselves if the high cost of education is really worth it. Current statistics suggest that pursuing a college degree is still a good investment. The unemployment rate among 21- to 24-year-olds with a college education is roughly half what it is for those with only a high school diploma, and the lifetime earnings of a college graduate still exceed the earnings of those without a four-year degree. But if—as some economists argue—our economic problems are more structural than cyclical and high unemployment and low wages will be with us for some time, then taking on a significant debt burden in the pursuit of higher education may in fact be a mistake.

In light of growing concerns about student debt, the Obama administration is pushing a proposal that would require schools to provide straightforward, standardized information on how much debt students should expect to incur over the course of their tenure in college. In addition, a bill has been put forward in the Senate that would require lenders and college financial aid officers to provide students with better information about their borrowing options, including the difference in cost between federal loans and private loans.

While these are welcome steps, they really boil down to treating the symptoms, not the disease. The real issue confronting students today is not the value of a higher education, but the cost. President Obama alluded to this in his 2012 State of the Union address, when he argued that our nation’s colleges and universities should do more to bring down the price of tuition. He also urged the states to make education a higher priority in their budgets. But the truth is that over the past ten years, state support for higher education has declined by about 25 percent, while the cost of tuition and fees at state schools has increased 72 percent.

Like the growing disparity in wealth and income that has emerged in this second Gilded Age, this combination of the decline in state support coupled with the rise in fees for both public and private colleges has rendered the dream of higher education less and less affordable for working families. And, as we have seen, those who do choose to pursue their educational ambitions do so at a huge cost, a cost that is becoming more suspect in a society where good jobs with decent wages are becoming a thing of the past.

In the middle of the 1930s, Franklin Roosevelt confronted a society that was equally burdened by the perils of structural inequality. But he was not content to merely provide relief to those suffering from the despair of unemployment or the scourge of poverty. Indeed, FDR often characterized the relief measures he initiated as temporary. What really concerned him was the far deeper question of structural reform: how to rid America of the one-third the nation that was “ill-clad, ill-housed, ill-nourished.”

It was this motivation that led to some of the most profound pieces of legislation that came out of the New Deal, including the Social Security Act, the National Labor Relations Act, the Fair Labor Standards Act, and the National Housing Act. It also gave us such critical financial reforms as the separation of commercial and investment banking and the creation of the Federal Deposit Insurance Corporation under Glass-Steagall, as well as the establishment of the Securities and Exchange Commission.

Roughly ten years later, as the Second World War was drawing to a close, FDR returned to this theme with his call for “a second bill of rights”—an “economic bill of rights”—that would include not only the right to “a useful and remunerative job” with an adequate income, but also the “right to a good education.”

To make good on the latter, the Roosevelt administration passed the “G.I Bill of Rights” later that year. The G.I. Bill represents one of the most significant government-led commitments to higher education and job training in our nation’s history. Under its terms, returning veterans received a host of benefits, including full tuition and book and living expense payments for those wishing to pursue a higher education. For those not wishing to go to college, the act also provided support for vocational training. The impact of the G.I Bill on postwar America was tremendous. In the next seven years, approximately 8 million veterans would take advantage of the education benefits. As a result, millions of Americans who might never have dreamed of going to college were able to do so, Millions more enhanced their earning power and job prospects through the vocational training and other educational benefits.

Of course, the G.I. Bill was not free; it required serious expenditures on the part of the federal government. But for FDR and his generation, this was an investment in America’s future well worth making. It was, as Roosevelt liked to say, an investment in our nation’s most precious resource, its “human capital.” To neglect America’s human capital, to cut back on our support for education, was simply not an option, for in FDR’s view if “we skimp on that capital, if we exhaust our natural resources and weaken the capacity of our human beings, then we shall go the way of all weak nations.”

If we are serious about the need to improve our economy, keep America competitive, and provide a hopeful and prosperous future for our children, then perhaps it is time we confronted the real issue that stands at the root of the student debt and jobs crisis: the woefully inadequate level of public support for higher education. No doubt the deficit soothsayers in Congress and elsewhere will tell us that we cannot afford such an investment. But the legacy of the 1930s and 40s suggests quite the opposite. Thanks to the G.I. Bill and the many other provisions of the New Deal, the better educated and better paid work force that emerged in the decades after World War II made the American economy—and the American worker—the envy of the world.

FDR warned us that “no country, however rich, can afford the waste of its human resources.” Yet the unfair burden we have placed on this generation of Americans—a generation that increasingly sees little reason to pursue post secondary education at such high costs and falling gains—suggests that we have chosen to abandon this lesson. In doing so, we have done much more than merely turn our backs on the millions of young people who dream of going to college. We have turned our backs on America.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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J.P. Morgan Will Keep Gambling with “Other People’s Money” Without a New Glass-Steagall

May 17, 2012David Woolner

FDR recognized that our financial system -- and our economy -- depend on a stable banking sector.

When I speak of high finance as a harmful factor in recent years, I am speaking about a minority which includes the type of individual who speculates with other people’s money…and also the type of individual who says that popular government cannot be trusted…

FDR recognized that our financial system -- and our economy -- depend on a stable banking sector.

When I speak of high finance as a harmful factor in recent years, I am speaking about a minority which includes the type of individual who speculates with other people’s money…and also the type of individual who says that popular government cannot be trusted…

High finance of this type refused to permit Government credit to go directly to the industrialist, to the business man, to the home owner, to the farmer. They wanted it to trickle down from the top, through the intricate arrangements which they controlled and by which they were able to levy tribute on every business in the land.

…They did not want Government supervision over financial markets through which they manipulated their monopolies with other people’s money.

And in the face of their demands that Government do nothing that they called "unsound," the Government, hypnotized by its indebtedness to them, stood by and let the depression drive industry and business toward bankruptcy. –Franklin D Roosevelt, 1936

The recent news that the nation’s largest bank, JPMorgan Chase, has lost $ 2 billion in trades over the past six weeks and is likely to rack up losses in excess of $3 billion before the dust settles has led to increasing calls for the resurrection of the 1933 Glass-Steagall Act. Passed in the wake of the 1929 financial crisis that led to the onset of the Great Depression, the Glass-Steagall Act established the Federal Deposit Insurance Corporation (FDIC), which virtually ended 1930s-style bank runs, and also separated commercial from investment banking as a further guarantee of the average American’s savings.

The latter provision was put in place because of the widespread consensus among lawmakers at the time that a) it would be a mistake to allow investment bankers access to funds that were guaranteed by the government, and b) that giving investment bankers access to federally insured deposits would undermine the whole purpose of the FDIC. The FDIC was meant to provide the average American and small business person with access to stable and secure banking services for savings, mortgages, and commercial loans. In layman’s terms, this meant that financial speculators would not be able to get their hands on working Americans’ money or mortgages.

Of course, much like today, a good share of the financial sector vehemently opposed those reforms. The president of the American Bankers Association, for example, insisted that the bill’s provisions for deposit insurance were “unsound, unscientific and dangerous.” But other prominent bankers, including Winthrop Aldrich, the president of the Chase National Bank of New York and precursor to JPMorgan Chase, argued in favor of the bill, including its call for the separation of commercial and investment banking. Aldrich even went so far as to insist that the “spirit of speculation should be eradicated from the management of commercial banks, and commercial banks should not be permitted to underwrite securities.”

Flash forward to today. The likes of former Citigroup Chairmen John Reed and Richard Parsons have admitted that the repeal of Glass-Steagall contributed to the 2008 financial crisis. The current Chairman of JPMorgan Chase, Jamie Dimon himself, has admitted that Chase made “a terrible, egregious mistake” in engaging in what he termed “sloppy” and “stupid” activity in the past six weeks. Isn’t it time we recognized that common sense regulation of the banking and financial sector is vital to the overall health of our economy?

Contrary to what free market fundamentalists have been telling us again and again this campaign season, the basic banking and financial structure that was put in place in the early years of the Roosevelt administration was not put in place to strangle the free market. It was put in place to protect the free market—and it did so with great aplomb for over half a century.

If we truly wish to restore the confidence and integrity of our financial system and protect ourselves from another financial disaster, then we will need to do more than merely instigate the Volcker Rule and the other half-measures contained in the 2010 Dodd-Frank Reform Act—half-measures, which we should note, Jamie Dimon and other titans of Wall Street have so vehemently opposed.

It would be far better to heed the advice of Elizabeth Warren, Robert Reich, and a growing number of economists and members of the business community that it is time to do what the British government is essentially about to do: resurrect the Glass-Steagall Act. Doing so would not only help protect the commercial banking industry from the vicissitudes of Wall Street. It would also reduce this size of the too-big-to-fail behemoths like JPMorgan Chase, who seem quite content to gamble with what FDR called “other people’s money” in their endless pursuit of greater and greater wealth and power.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

 

Financial crisis image via Shutterstock.

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FDR's New Deal Shattered the Austerity Myth

May 7, 2012David Woolner

FDR understood that prosperity would be created through growth, not austerity, and today's leaders may finally be learning the same lesson.

To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.

FDR understood that prosperity would be created through growth, not austerity, and today's leaders may finally be learning the same lesson.

To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.

…This debt is not going to be paid by oppressive taxation on future generations. It is not going to be paid by taking away the hard-won savings of the present generation. It is going to be paid out of an increased national income and increased individual incomes produced by increasing national prosperity. — Franklin Roosevelt, 1936

The recent news that the U.K. and other major European economies have officially entered a double dip recession has led many observers to argue, as the New York Times did last week, that the economic policies followed by the Obama administration have been better than the austerity measures pursued by his European counterparts. Indeed, most mainstream economists now agree with the voters in France, who, in electing François Hollande as their next president, have endorsed the idea that “austerity need not be Europe’s fate.”

There is a growing recognition on both sides of the Atlantic that President Obama's approach, which has combined stimulus spending, capital injections, and quantitative easing, is largely responsible for the fragile yet steady recovery the United States has been experiencing since 2010. Granted, the U.S. economy remains weak, and as such there is real concern that the downturn in Europe might drag the U.S. back into recession. But there is another, perhaps greater risk to the U.S. recovery that emanates from our own shores: the incessant demand for European-style federal budget cuts from American austerity hawks.

As evidenced by last summer’s debt ceiling debacle or the draconian budget proposed this spring by Rep. Paul Ryan, the right wing of the Republican party will seemingly stop at nothing to achieve its goal of cutting the size of government. Moreover, its unremitting sky-is-falling rhetoric—which is based largely on fear—has become so pervasive in our political discourse that the question of cutting the federal deficit receives nearly equal footing with the issue of job creation in the media and on the campaign trail. We are told again and again that the way to create jobs is to reduce spending and cut the size of government. Never mind that these policies have failed in Europe over the past two years, while President Obama’s rejection of austerity has resulted in sustained economic growth over exactly the same period.

Roughly three-quarters of a century ago, a similar argument raged between Franklin Roosevelt, who firmly believed that it was right and proper for the government to intervene in the economy during a time of crisis, and those on the extreme right who insisted the way to end the Great Depression was to reduce the federal deficit and balance the budget, no matter what the short-term costs.

FDR had little time for such arguments, which he viewed as not only selfish, but un-American. In his view, most Americans, “if they know both sides of a question and are asked to support the public good, will step forward and lay aside selfishness.” But, he went on:

…we must admit that there are some people who honestly believe in a wholly different theory of government than the one our Constitution provides.

You know their reasoning. They say that in the competition of life for the good things of life “some people are successful because they have better brains or are more efficient; the wise, the swift and the strong are able to outstrip their fellowmen.” And they say that that is nature itself and you cannot do anything about it and it is just too bad if some, the minority of people, get left behind.

For Roosevelt, however—and the vast majority of Americans who voted for him over the course of four terms in office—such an attitude was unacceptable. They understood that there were times in the life of a nation when government had a duty to intervene in the economy, even if it meant going into debt. Thanks to their efforts, and to their faith in government, we continue to enjoy Social Security, unemployment insurance, Federal Deposit Insurance, and a host of other beneficial programs that came from the New Deal.

Conservative commentators today are fond of arguing that the New Deal did not work, that it was the war, rather than New Deal spending, which finally got the United States out of the Great Depression. What they fail to mention, of course, is that New Deal spending did work, just not enough to pull us out of the deep trough we were in. For that we needed much more spending, the kind of spending—and borrowing—that occurred in World War II. According to the logic of today’s budget hawks, such a massive level of deficit and debt should have brought the U.S. economy to a screeching halt once the war was over. But that did not happen. On the contrary, the period of economic growth that occurred in the United States after the war was the largest and longest the world had ever seen.

Much like the 1930s, our slow climb out of the Great Recession has been made all the more difficult and painful thanks in large part to the unwillingness of austerity hawks in Congress to pass the president’s ill-fated jobs bill and other pieces of stimulus legislation. Sadly, they seem far more interested in promoting the myth of austerity and the evils of short-term deficit spending than they do in confronting the overwhelming evidence from Europe and our own history that now is the time not to cut the federal budget, but to expand it.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Rediscovering Government

Franklin D. Roosevelt: Socialist or “Champion of Freedom”?

Apr 20, 2012David Woolner

President Obama is not the first president to be smeared by conservatives for suggesting that the country prospers when we all prosper.

In recommending this program I am thinking not only of the immediate economic needs of the people of the Nation, but also of their personal liberties—the most precious possession of all Americans. I am thinking of our democracy. I am thinking of the recent trend in other parts of the world away from the democratic ideal.

President Obama is not the first president to be smeared by conservatives for suggesting that the country prospers when we all prosper.

In recommending this program I am thinking not only of the immediate economic needs of the people of the Nation, but also of their personal liberties—the most precious possession of all Americans. I am thinking of our democracy. I am thinking of the recent trend in other parts of the world away from the democratic ideal.

Democracy has disappeared in several other great nations—disappeared not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion, government weakness,—weakness through lack of leadership in government. Finally, in desperation, they chose to sacrifice liberty in the hope of getting something to eat. We in America know that our own democratic institutions can be preserved and made to work. But in order to preserve them we need to act together, to meet the problems of the Nation boldly, and to prove that the practical operation of democratic government is equal to the task of protecting the security of the people. —Franklin D. Roosevelt, April 1938

One of the consistent arguments that conservative Republicans are hurling against President Obama and the Democrats this election season is that President Obama’s support for federal intervention in the economy, through such programs as his ill-fated jobs bill or the Patient Protection and Affordable Health Care Act, represents an attack on individual liberty. They claim the promotion of government intervention in the economy is somehow “un-American” and that what the president really wants is to turn the United States toward socialism. We have even heard the charge, uttered by one right-wing conservative Congressman, that a significant number of liberal members of the House of Representatives are in fact “members of the Communist Party.”

The use of such tactics to discredit those who believe in government intervention in the economy is not new, of course. Franklin Roosevelt faced similar charges when he ran for re-election in 1936. Like President Obama and those in Congress who favor government programs to put people to work and ensure that all Americans can enjoy a healthy and productive life, FDR’s New Deal—including his passage of unemployment insurance and Social Security—was attacked as “undisguised state socialism” by one senator. Others went so far as to insist that FDR was a communist, including FDR’s erstwhile colleague Al Smith, who, as one of the founders of the right-wing American Liberty League, warned in the 1936 election that “the people could either breathe the clear fresh air of America, or the foul breath of Soviet Russia.”

FDR brushed aside these attacks in part by insisting that we were a rich nation that could “afford to pay for security and prosperity without having to sacrifice our liberties into the bargain.” He also turned to our nation’s history, reminding the American people that in the first century of our republic, when “we were short of capital, short of workers, and short of industrial production, but…were rich…in free land, and free timber and free mineral wealth,” the federal government “rightly assumed the duty of promoting business and relieving depression by giving subsidies of land and other resources.” Thus, he said, “from our earliest days we have had a tradition of substantial government help to our system of private enterprise.”

FDR then acknowledged that economic conditions were very different in the mid 1930s from what they were in the 19th century, but not because the nation was poorer than it had once been. On the contrary, in many ways the nation was richer, “because now we have plenty of capital, banks and insurance companies loaded with idle money; plenty of industrial productive capacity and many millions of workers looking for jobs.” In light of this, he insisted that he was “following tradition as well as necessity” by striving to use government “to put idle money and idle men to work, to increase our public wealth and to build up the health and strength of the people—to help our system of private enterprise to function again.”

This last point is critical, for as FDR well understood, it was the failure of the free market to provide the average American with basic economic security—in other words, a decent job at a decent wage—that got us into the crisis in the first place. Prosperity, in short, was not dependent on the concentration of wealth in the hands of a few, but rather on the economic strength of the millions of men and women who make up America’s vast working and middle class. For without their purchasing power—or what he called the “fair distribution of buying power”—a strong, vibrant economy was not possible.

Moreover, the same principle held true for the health and maintenance of America’s democratic system of governance. Indeed, as FDR saw it, the events of the 1920s and 30s made it obvious that “democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself.” Viewed from this perspective, the real threat to our individual liberties came not from government, but from the “heedless self interest” of those in positions of vast wealth and power, whose greed crushed individual initiative and so restricted “the field open for free business” that private enterprise “became too private….it became privileged enterprise, not free enterprise.” In such a system, the political equality the American people once enjoyed became “meaningless in the face of economic inequality,” and as such “life was no longer free; liberty no longer real; men could no longer follow the pursuit of happiness.”

For Roosevelt, then, government intervention in the economy was not about destroying individual liberty; it was about restoring individual liberty. It was about making capitalism work in such a way as to ensure equal economic opportunity for all Americans, not just the privileged few at the top. Above all else, it was about preserving our democratic way of life at a time when anti-democratic forces were on the rise the world over.

This is a good reminder for President Obama and others who understand that it is quite natural for our government to take steps to restore the balance of economic opportunity in our free market economy in times of high unemployment and economic distress. They might also do well to remind themselves and the American people this election season of FDR’s maxim that “[t]he true conservative seeks to protect the system of private property and free enterprise by correcting such injustices and inequalities as arise from it. That the most serious threat to our institutions comes from those who refuse to face the need for change.”

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

In his April 1945 eulogy of President Roosevelt, British Prime Minister Winston Churchill characterized FDR as a "Champion of Freedom."

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Progress on Trial: How FDR Fought to Make SCOTUS Serve the Greater Good

Mar 30, 2012David Woolner

FDR struggled to make a reactionary Court recognize that the government served a greater purpose than defending property. Today President Obama faces a similar battle over health care reform.

FDR struggled to make a reactionary Court recognize that the government served a greater purpose than defending property. Today President Obama faces a similar battle over health care reform.

In our generation, a new idea has come to dominate thought about government, the idea that the resources of the nation can be made to produce a far higher standard of living for the masses of the people if only government is intelligent and energetic in giving the right direction to economic life. - Franklin D. Roosevelt

The hearings of the Supreme Court this week over the Patient Protection and Affordable Health Care Act have led some commentators to compare President Obama's potential difficulties with the Supreme Court to the troubles FDR had with the Court in the mid 1930s, when some of the key provisions of the New Deal were struck down as unconstitutional. In response to the Court challenge, Roosevelt ultimately decided to pursue a court reform effort -- his famous "court-packing" scheme -- that aroused widespread opposition from both the public and those holding public office, even among members of his own party.

Most historians agree that Roosevelt's attempt to alter the Court in 1937 was both ill-conceived and badly handled. But the debate over the legal dimensions of FDR's attempt to alter the make-up of the Court -- like today's debate over the legality of Obama administration's Affordable Health Care Act -- has to a certain extent obscured the real issue that stood at the heart of the New Deal reforms: how the nation might, as FDR said, "use the agencies of government to assist in the establishment of means to provide sound and adequate protection against the vicissitudes of modern life."

Using government to pursue this goal was somewhat of a novel idea in early 20th century America. But it was not something that FDR came up with on his own. As the nation made the 19th-to-20th century transition from an agrarian to a modern industrial economy, questions about the health, safety, and living conditions of the working class -- more appropriately called the working poor -- gave rise to ever-increasing calls for social legislation to protect working Americans, including women and children, from dangerous employment practices like starvation wages and other forms of economic exploitation. The same sentiments also gave rise to a series of laws, such as the 1906 Pure Food and Drug Act, to protect American consumers from tainted foods and poisonous and/or useless "medicines," as well as anti-trust legislation to prevent the establishment of anti-free market monopolies that would lead to exploitative prices of key commodities and other goods and services.

Not surprisingly, all of these efforts aroused considerable opposition from conservative business interests, who frequently argued that such legislation was an infringement on their liberties. This was especially true in FDR's day, when, in the wake of the 1929-1932 financial crisis and the failure of the free market to provide adequate levels of employment to roughly 25 percent of the American workforce, the Roosevelt administration launched a series of efforts to reform the financial sector, offer employment to the jobless, and provide a basic measure of economic security to the average American through Social Security, unemployment insurance, and the right to collective bargaining.

Even before many of these measures were fully put in place, FDR anticipated what the wealthy conservative opposition would say about them. In a June, 1934 Fireside Chat on the subject, for example, FDR noted that a "few timid people, who fear progress," would try to give "strange names" to these efforts.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

Sometimes they will call it 'Fascism,' sometimes 'Communism,' sometimes 'Regimentation,' sometimes 'Socialism.'

But, in so doing, they are trying to make very complex and theoretical something that is really very simple and very practical.

I believe in practical explanations and in practical policies. I believe that what we are doing today is a necessary fulfillment of what Americans have always been doing -- a fulfillment of old and tested American ideals...

All that we do seeks to fulfill the historic traditions of the American people...We are restoring confidence and well-being under the rule of the people themselves. We remain, as John Marshall said a century ago, 'emphatically and truly, a government of the people.' Our Government 'in form and in substance . . . emanates from them. Its powers are granted by them, and are to be exercised directly on them, and for their benefits.'

What emerged from the New Deal, then, was an attempt to use government as an instrument to provide basic economic safeguards within the free enterprise system, to mitigate the worst excesses of capitalism, so that all Americans could enjoy its benefits.

As was the case in previous governmental efforts to provide a measure of social and economic protection for the average American citizen, these measures were challenged in the Supreme Court as an infringement of contract and property rights, and up until 1937 -- the year that FDR's struggle with the Court came to its head -- the Court tended to rule in favor of property. For progressives like Theodore Roosevelt, this tendency on the part of the Court was unacceptable. Indeed, roughly two decades before his cousin Franklin was sworn in as President, TR articulated his firm belief that government had a responsibility to serve as "the steward of the public welfare." As such, he insisted that the judiciary should "be interested primarily in human welfare rather than in property... just as... the representative body shall represent all the people rather than any one class or section of the people."

It was this basic idea that government had a responsibility to serve the "public welfare" that animated both the social justice legislation of the progressive era and the social and economic reform legislation of the New Deal. Hence, FDR's frustration with the inability of the Court to embrace this fundamental  -- or what he would term modern --concept was not unique and in fact had led many other public figures before him to call for some type of judicial reform.

This is not to say that FDR was correct in pursuing his so-called Court packing scheme; he was most surely wrong to do so. But we should not allow this misguided attempt to bring the Supreme Court into the modern world to mask the reasons why he -- and others -- felt such drastic measures might be necessary. In the end, of course, the Court would reverse itself and from 1937 forward would uphold every New Deal provision that came before it, including two prior pieces of legislation -- the Agricultural Adjustment Act and a minimum wage law -- that the Court had previously struck down.

In the decades that followed the New Deal, Americans came to accept and understand the idea of government as the keeper of the public welfare. But in the past two decades, this basic concept of governance has come under a sustained assault from the same special interests that fought this idea in FDR's day. As a result, President Obama's attempt to provide equal access to health care for the nearly 50 million Americans who remain uninsured through the so-called individual mandate has been attacked as an infringement on our liberties. But in embracing this point of view, the Court (should it decide to strike down the law) will have failed to take in the larger argument that the purpose of the law is to provide a means to secure a greater good for all. Viewed from this perspective, requiring all Americans to purchase health care is perhaps the most important step we can take "to provide sound and adequate protection against the vicissitudes of modern life."

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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