Showing posts with label National Industrial Recovery Act. Show all posts
Showing posts with label National Industrial Recovery Act. Show all posts

Tuesday, May 4, 2010

How Much Incivility Can We Tolerate?


Paragon of Incivility?





Probably Not a Fascist


On May 1, President Obama, speaking at the University of Michigan’s Commencement, denounced those who, on the left and right, use extreme rhetoric to demonize their opponents. For instance, he criticized those who characterize his own policies as socialistic or “soviet style.” At the same time, he also criticized those who refer to those on the right as “fascists” or “right wing nut jobs.”


The very next day, in a column that did not mention the President’s address, George Will noted that “hysteria about domestic fascism . . . is a liberal tradition[,]” a hysteria fanned by none other than FDR himself. According to Will:



In his 1944 State of the Union address, FDR identified opponents of his domestic agenda as fascists. Declaring that his "one supreme objective" was "security," including "economic security, social security, moral security," he issued a dire warning: Woodrow Wilson's progressive policies had been frustrated by "rightist reaction" and "if history were to repeat itself and we were to return to the so-called 'normalcy' of the 1920s -- then it is certain that even though we shall have conquered our enemies on the battlefields abroad, we shall have yielded to the spirit of Fascism here at home.

FDR’s remarks, it should be noted, were not off the cuff or unreflective. They were, to reemphasize, prepared and delivered as part of the State of the Union address. Moreover, they were, to be frank, a bit goofy. To the extent that FDR’s economic agenda involved greater economic centralization --- and it usually did --- it’s hard to see how resistance to that agenda could be equated even remotely with Fascism. Indeed, in the early 1930s it was FDR, over the existence of some Republicans, who proposed and then enforced legislation, e.g., the National Industrial Recovery Act, the Agricultural Adjustment Act and the Bituminous Coal Act, each of which facilitated and immunized from antitrust attack state-sanctioned cartels, all in the name of stimulating the economy. Fortunately, the Supreme Court unanimously struck down the National Industrial Recovery Act and also struck down the Coal and Agricultural Acts as well, thereby voiding provisions that had to that point discouraged economic recovery by interfering with the natural functioning of the price system. Indeed, after the Court struck down the NIRA, it is said that Justice Brandeis asked a lawyer from the Department of Justice to convey to President Roosevelt that the Court would tolerate no more “centralization.” Still, in the late 1930s, FDR's allies in Congress re-regulated numerous industries, including trucking, air transportation and agriculture, all with a view toward limiting entry and increasing prices.

FDR’s resort to the sort of tactics that President Obama decried contains two possible lessons, lessons that may not be mutually exclusive.


First, the sort of incivility that President Obama identifies is deeply-rooted and will be difficult to eliminate.

Second, our Republic seems to tolerate this sort of unsupported and extreme rhetoric, perhaps on the theory that the voters can sort the wheat from chaff. It's hard to imagine, for instance, that many took seriously FDR's claim that resistance to his agenda would lead to or was motivated by Fascism. It's even possible that this sort of rhetoric boomeranged. Indeed, by 1946, Republicans were in charge of both Houses of Congress, after what the Chicago Tribune called "the greatest Republican Victory since Appomattax." (The Republicans picked up 55 seats in the House and 13 in the Senate.) One doubts that the American people believed they were electing Fascists when they gave the Republicans the landslide that made William Martin of Massachusetts, pictured above, Speaker of the House.
By the way, to read Will's column, go here:




Thursday, November 26, 2009

Should Presidents Use Thanksgiving Proclamations to Advocate Their Policies?


Do We Need More (or less) FDR?


Over at the Nation, John Nichols, is criticizing the tone and content of President Obama's Thanksgiving proclamation, calling for "another helping of FDR." According to Nichols, FDR departed from George Washington's example and used the proclamations as a platform to defend his policy initiatives. Nichols thinks this is a good thing and that Obama should do the same.

http://www.thenation.com/blogs/thebeat/500820/another_helping_of_fdr_please
Nichols quotes some of FDR's proclamations at length.

For instance, FDR's 1933 proclamation included the following:

"May we be grateful for the passing of dark days; for the new spirit of dependence one on another; for the closer unity of all parts of our wide land; for the greater friendship between employers and those who toil."

Moreover, his 1934 proclamation included the following:

"During the past year we have been given courage and fortitude to meet the problems which have confronted us in our national life. Our sense of social justice has deepened. We have been given vision to make new provisions for human welfare and happiness, and in a spirit of mutual helpfulness we have cooperated to translate vision into reality,"

Nichols criticizes Obama for being like Washington and George W. Bush and using the proclamation to emphasize themes that all Americans can endorse, regardless of party affiliation.

I respectfully disagree with Nichols.

1. Roosevelt was obviously referring to his economic recovery package, particularly the National Industrial Recovery Act (NIRA), passed in the summer of 1933. The plan fostered "unity," "dependence," and "social justice" by coercively requiring members of more than 500 different industries to fix prices and adopt other practices, including minimum wages, that disproportionately raised the costs of small businesses and thus fostered the exercise of market power by large entenched firms. The NIRA also required participating firms to bargain collectively with labor cartels known as unions, thereby further enhancing wages above the market level and further disadvantaging small business and racial minorities.

The Supreme Court unanimously declared the NIRA unconstitutional in 1935, and economists from both sides of the spectrum, including the Chair of President Obama's Council of Economic advisors, Christina Roemer, a William and Mary alumna, have argued that the NIRA significantly slowed economic recovery and thus exacerbated the misery caused by the great Depression. Empirical tests have confirmed this result.

The Supreme Court also struck down the Agricultural Adjustment Act and the Bituminous Coal Act, provisions that had similar price-raising, and recovery-stalling, effects.

In short, FDR's unconstitutional economic recovery plan was nothing to celebrate, and it's unfortunate to say the least that he enshrined arguments, albeit somewhat indirectly, for his plan in his Thanksgiving proclamation. Such proclamations should withstand the test of time and speak to timeless values. Roosevelt's arguments for his plan do not pass this test.

2. Some traditions and days should be above politics. Presidents should follow in George Washington's footsteps and use such proclamations to celebrate that which brings us together, not what divides us. Many small businessmen and racial minorities were anything but thankful for President Roosevelt's policies. Kudos to President Obama for taking the right approach here.