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Wednesday, April 17, 2013

Progressivism — The Scourge To Our Constitutional Form Of Government, Part 2

“A conservative is someone who makes no changes and consults his grandmother when in doubt.” — Woodrow Wilson

In the first part of this commentary I covered the beginnings of the rise of Progressivism in the United Sates with the administrations of Theodore Roosevelt and Woodrow Wilson. In this second part we will explore the administration succeeding Wilson up to the beginning of World War Two.

In the election of 1920 the people were fed up with the 8 years of Wilson’s tyrannical progressive policies. The Republican candidate Warren G. Harding defeated the Democratic ticket of James Cox and Franklin Roosevelt garnering 60% of the popular vote and an Electoral College margin of 404 to 127.

Former president Theodore Roosevelt had been the frontrunner for the441px-Warren_G_Harding-Harris_&_Ewing Republican nomination, but his health collapsed in 1918. He died in January 1919, leaving no obvious heir to his progressive legacy. As a result, both major parties ultimately turned to dark horse candidates from the electoral-vote-rich state of Ohio. To help his campaign, Cox chose future president Franklin D. Roosevelt (a fifth cousin of Theodore) as his running mate. Harding virtually ignored Cox and essentially campaigned against Wilson, calling for a return to "normalcy." With an almost 4-to-1 spending advantage, Harding won a landslide victory.

Harding's promise was to return the United States to pre-world war mentality; without the thought of war tainting the minds of the American people. During the campaign he stated:

"America’s present need is not heroics, but healing; not nostrums, but normalcy; not revolution, but restoration; not agitation, but adjustment; not surgery, but serenity; not the dramatic, but the dispassionate; not experiment, but equipoise; not submergence in internationality, but sustainment in triumphant nationality."

This election was the first since the ratification of the Nineteenth Amendment on August 18, 1920, and thus the first in which women had the right to vote in all 48 states (in the 1916 presidential election, about 30 states had permitted women to participate). As a result, the total popular vote increased dramatically, from 18.5 million in 1916 to 26.8 million in 1920. This election is also notable for being the first of three in which a sitting U.S. senator was elected president (the others were 1960 and 2008).

The election was dominated by the aftermath of World War I and a hostile response to certain policies of Woodrow Wilson, as well as the massive reaction against the reformist zeal of the Progressive Era. The wartime economic boom had collapsed. Politicians were arguing over peace treaties and the question of America's entry into the League of Nations, which was overturned because of the return to non-interventionist opinion, a continuation of the nation's opinion since the early 1800s. Overseas, there were wars and revolutions. At home, 1919 was marked by major strikes in the meatpacking and steel industries, and large-scale race riots in Chicago and other cities. Anarchist attacks on Wall Street produced fears of radicals and terrorists. The Irish Catholic and German communities were outraged at Wilson's foreign policy, and his political position was critically weakened after he suffered a severe stroke in 1919 that rendered him unable to speak on his own behalf.

Harding's Treasury Secretary, Andrew Mellon, ordered a study that claimed to demonstrate that as income tax rates were increased, money was driven underground or abroad. Mellon concluded that lower rates would increase tax revenues. Based on this advice, Harding cut taxes, starting in 1922. The top marginal rate was reduced annually in four stages from 73% in 1921 to 25% in 1925. Taxes were cut for lower incomes starting in 1923.

Revenues to the treasury increased substantially. Unemployment also continued to fall. Libertarian historian Thomas Woods contends that the tax cuts ended the Depression of 1920–1921 and were responsible for creating a decade-long expansion.

Although Harding’s administration was racked with scandals like Tea Pot Dome and crony appointments the nation entered into one of the greatest growth periods in our history. While Harding began to stem the rushing tide he did not reverse it. Upon his unexpected death on August 2, 1923 at the Palace Hotel in San Francisco his Vice President Calvin Coolidge was sworn in as President of the United States.

A Republican lawyer from Vermont, Coolidge worked his way up the ladder ofCalvin_Coolidge-Garo Massachusetts state politics, eventually becoming governor of that state. His conduct during the Boston Police Strike of 1919 thrust him into the national spotlight and gave him a reputation as a man of decisive action. Soon after, he was elected as the 29th Vice President in 1920 and succeeded to the Presidency upon the sudden death of Warren G. Harding in 1923. Elected in his own right in 1924, he gained a reputation as a small-government conservative, and also as a man who said very little.

Coolidge restored public confidence in the White House after the scandals of his predecessor's administration, and left office with considerable popularity. As a Coolidge biographer put it, "He embodied the spirit and hopes of the middle class, could interpret their longings and express their opinions. That he did represent the genius of the average is the most convincing proof of his strength." Some later criticized Coolidge as part of a general criticism of laissez-faire government. His reputation underwent a renaissance during the Ronald Reagan Administration, but the ultimate assessment of his presidency is still divided between those who approve of his reduction of the size of government programs and Progressives who believe the federal government should be more involved in regulating and controlling the economy.

In the election of 1924 Coolidge was returned to the White House by a margin of 54% of the popular vote and an Electoral College margin of 382 to 138 over his Democratic opponent John Davis carrying 35 states to Davis’ 12.

During Coolidge's presidency the United States experienced the period of rapid economic growth known as the "Roaring Twenties". He left the administration's industrial policy in the hands of his activist Secretary of Commerce, Herbert Hoover, who energetically used government auspices to promote business efficiency and develop airlines and radio. With the exception of favoring increased tariffs, Coolidge disdained regulation, and carried about this belief by appointing commissioners to the Federal Trade Commission and the Interstate Commerce Commission who did little to restrict the activities of businesses under their jurisdiction — the regulatory state under Coolidge was, as one biographer described it, "thin to the point of invisibility."

Although not an isolationist, Coolidge was reluctant to enter into foreign alliances. Coolidge saw the landslide Republican victory of 1920 as a rejection of the Wilsonian idea that the United States should join the League of Nations. While not completely opposed to the idea, Coolidge believed the League, as then constituted, did not serve American interests, and he did not advocate membership in it. He spoke in favor of the United States joining the Permanent Court of International Justice, provided that the nation would not be bound by advisory decisions. The Senate eventually approved joining the Court (with reservations) in 1926. The League of Nations accepted the reservations, but it suggested some modifications of their own. The Senate failed to act; the United States never joined the World Court.

Coolidge's economic policy has often been misquoted as "generally speaking, the business of the American people is business". Some have criticized Coolidge as an adherent of the laissez-faire ideology, which they claim led to the Great Depression. On the other hand, other historians offer some context based on Coolidge's sense of federalism: As Governor of Massachusetts, Coolidge supported wages and hours legislation, opposed child labor, imposed economic controls during World War I, favored safety measures in factories, and even worker representation on corporate boards. Did he support these measures while president? No, because in the 1920s, such matters were considered the responsibilities of state and local governments. Amity Shlaes writes in Hillsdale College’s February edition of Imprimis:

“Finally, a lesson about politics. The popularity of Harding and Coolidge, and the success of their policies—especially Coolidge’s—following a long period of Progressive ascendancy, should give today’s conservatives hope. Coolidge in the 1920s, like Grover Cleveland in the previous century, distinguished government austerity from private-sector austerity, combined a policy of deficit cuts with one of tax cuts, and made a moral case for saying “no.” A political leader who does the same today is likely to find an electorate more inclined to respond “yes” than he or she expects.”

Coolidge rejected running again in 1928 as he believed he had been in the White House long enough and the people were growing tired of him He reluctantly supported Herbert Hoover at the Republican Convention, a man he really did not care for. On one occasion he remarked that "for six years that man has given me unsolicited advice—all of it bad." Even so, Coolidge had no desire to split the party by publicly opposing the popular commerce secretary's nomination.

With the majority of Americans satisfied with Coolidge’s domestic and foreign policies and the good economy Hoover won by a landslide over his Democratic opponent Al Smith, the Governor of New York, with 58% of the popular vote and a margin in the Electoral College of 444 to 87 carrying 40 states.

Hoover entered office with a plan to reform the nation's regulatory system,HerbertHoover believing that a federal bureaucracy should have limited regulation over a country's economic system. A self-described progressive and reformer, Hoover saw the presidency as a vehicle for improving the conditions of all Americans by encouraging public-private cooperation — what he termed "volunteerism". Hoover saw volunteerism as preferable to governmental coercion or intervention which he saw as opposed to the American ideals of individualism and self-reliance. Long before he had entered politics, he had denounced laissez-faire thinking.

October 22, 1928 Hoover gave his famous Rugged Individualism speech where he stated:

“Bureaucracy is ever desirous of spreading its influence and its power. You cannot give to a government the mastery of the daily working life of a people without at the same time giving it mastery of the peoples’ souls and thoughts. Every expansion of government means that government in order to protect itself from political consequences of its errors and wrongs is driven onward and onward without peace to greater and greater control of the country’s press and platform. Free speech does not live many hours after free industry and free commerce die.

It is false liberalism that interprets itself into the Government operation of business. The bureaucratization of our country would poison the very roots of liberalism that is free speech, free assembly, free press, political equality and equality of opportunity. It is the road, not to more liberty, but to less liberty. Liberalism should be found not striving to spread bureaucracy, but striving to set bounds to it. True liberalism seeks freedom first in the confident belief that without freedom the pursuit of all other blessings and benefits is vain. That belief is the foundation of all American progress, political as well as economic. Liberalism is a force truly of the spirit, a force proceeding from the deep realization that economic freedom cannot be sacrificed if political freedom is to be preserved. Even if governmental conduct of business could give us more efficiency instead of giving us decreased efficiency, the fundamental objection to it would remain unaltered and unabated. It would destroy political equality. It would cramp and cripple mental and spiritual energies of our people. It would dry up the spirit of liberty and progress. It would extinguish equality of opportunity, and for these reasons fundamentally and primarily it must be resisted. For a hundred and fifty years liberalism has found its true spirit in the American system, not in the European systems.

I wish to say something more on what I believe is the outstanding ideal in our whole political, economic and social system -- that is equality of opportunity. We have carried this ideal farther into our life than has any other nation in the world. Equality of opportunity is the right of every American, rich or poor, foreign or native born, without respect to race or faith or color, to attain that position in life to which his ability and character entitle him. We must carry this ideal further than to economic and political fields alone. The first steps to equality of opportunity are that there should be no child in America that has not been born and does not live under sound conditions of health, that does not have full opportunity for education from the beginning to the end of our institutions, that is not free from injurious labor, that does not have stimulation to accomplish to the fullest of its capacities.

It is a matter for concern to our Government that we shall strengthen the safeguards to health, that we shall strengthen the bureaus given to research, that we shall strengthen our educational system at every point, that we shall develop cooperation by our Federal Government with state governments and with the voluntary bodies of the country that we may bring not only better understanding but action in these matters.

Furthermore, equality of opportunity in my vision requires an equal opportunity to the people in every section of our country. In these past few years some groups in our country have lagged behind others in the march of progress. They have not had the same opportunity. I refer more particularly to those engaged in the textile, coal and in the agricultural industries. We can assist in solving these problems by cooperation of our Government. To the agricultural industry we shall need advance initial capital to assist them, to stabilize and conduct their own industry. But this proposal is that they shall conduct it themselves, not by the Government. It is in the interest of our cities that we shall bring agriculture into full stability and prosperity. I know you will cooperate gladly in the faith that in the common prosperity of our country lies its future.”

As you can by reading Hoover’s words while touting rugged individualism he was actually expressing progressive ideas of government intervention into the lives and economy of the America.

Prior to the start of the Great Depression, Hoover's first Treasury Secretary, Andrew Mellon, had proposed and seen enacted, numerous tax cuts, which cut the top income tax rate from 73% to 24%. When combined with the sharp decline in incomes during the early depression, the result was a serious deficit in the federal budget. Congress, desperate to increase federal revenue, enacted the Revenue Act of 1932, which was the largest peacetime tax increase in history. The Act increased taxes across the board, so that top earners were taxed at 63% on their net income. The 1932 Act also increased the tax on the net income of corporations from 12% to 13.75%.

The final attempt of the Hoover Administration to rescue the economy occurred in 1932 with the passage of the Emergency Relief and Construction Act, which authorized funds for public works programs and the creation of the Reconstruction Finance Corporation (RFC). The RFC's initial goal was to provide government-secured loans to financial institutions, railroads and farmers. The RFC had minimal impact at the time, but was adopted by President Franklin D. Roosevelt and greatly expanded as part of his New Deal. These programs were the first “bail outs” of private industries by government and increased the national debt from 20% of GDP to 40% not unlike what is happening today under Obama.

To pay for these and other government programs and to make up for revenue lost due to the Depression, in addition to the Revenue Act of 1932 Hoover agreed to roll back several tax cuts that his Administration had enacted on upper incomes. The estate tax was doubled and corporate taxes were raised by almost 15%. Also, a "check tax" was included that placed a 2-cent tax (over 30 cents in today's economy) on all bank checks. Hoover also encouraged Congress to investigate the New York Stock Exchange, and this pressure resulted in various reforms. All of these measures did little or nothing to mitigate the effects of the Depression.

For this reason, years later, libertarians argued that Hoover's economics were statist. Franklin D. Roosevelt blasted the Republican incumbent for spending and taxing too much, increasing national debt, raising tariffs, and blocking trade, as well as placing millions on the government dole. Roosevelt attacked Hoover for "reckless and extravagant" spending, of thinking "that we ought to center control of everything in Washington as rapidly as possible." Roosevelt's running mate, John Nance Garner, accused the Republican of "leading the country down the path of socialism".

Even so, New Dealer Rexford Tugwell later remarked that although no one would say so at the time, "practically the whole New Deal was extrapolated from programs that Hoover started."

Although Hoover had come to detest the presidency, he agreed to run again in 1932, not only as a matter of pride, but also because he feared that no other likely Republican candidate would deal with the depression without resorting to what Hoover considered dangerously radical measures.

Hoover was nominated by the Republicans for a second term. He had originally planned to make only one or two major speeches, and to leave the rest of the campaigning to proxies, but when polls showed the entire Republican ticket facing a resounding defeat at the polls, Hoover agreed to an expanded schedule of public addresses. In his nine major radio addresses Hoover primarily defended his administration and his philosophy. The apologetic approach did not allow Hoover to refute Democratic nominee Franklin Roosevelt's charge that he was personally responsible for the depression.

In his campaign trips around the country, Hoover was faced with perhaps the most hostile crowds of any sitting president. Besides having his train and motorcades pelted with eggs and rotten fruit, he was often heckled while speaking, and on several occasions, the Secret Service halted attempts to kill Hoover by disgruntled citizens, including capturing one man nearing Hoover carrying sticks of dynamite, and another already having removed several spikes from the rails in front of the President's train.

The election of 1932 was a disaster for the Republican Party. Franklin Roosevelt and his running mate John Nance Garner defeated Hoover by a margin of 57% to 40% in the popular vote and 472 to 59 in the Electoral College. Hoover carried only 6 states to FDR’s 42. The voters also gave Roosevelt a Democrat controlled House and Senate — a condition that would last until the end of WWII. Roosevelt had near dictatorial powers and he would use them.

Roosevelt's "First 100 Days" concentrated on the first part of his strategy:FDR_in_1933 immediate relief. From March 9 to June 16, 1933, he sent Congress a record number of bills, all of which passed easily. To propose programs, Roosevelt relied on leading Senators such as George Norris, Robert F. Wagner and Hugo Black, as well as his Brain Trust of academic advisers. Like Hoover, he saw the Depression caused in part by people no longer spending or investing because they were afraid. Roosevelt believed he could cure these ills with increased federal spending, higher taxes and the police power of the federal government. As for the Constitution it was just a bothersome document that was getting in the way of the masterminds of his “Brain Trust.”

Relief measures included the continuation of Hoover's major relief program for the unemployed under its new name: Federal Emergency Relief Administration. The most popular of all New Deal agencies — and Roosevelt's favorite — was the Civilian Conservation Corps (CCC), which hired 250,000 unemployed young men to work on rural local projects. While no doubt, as I have stated, the CCC provided valuable and needed public works it was still reducing unemployment by expanding government.

Congress also gave the Federal Trade Commission broad new regulatory powers and provided mortgage relief to millions of farmers and homeowners. Roosevelt expanded a Hoover agency, the Reconstruction Finance Corporation, making it a major source of financing for railroads and industry. Roosevelt made agricultural relief a high priority and set up the first Agricultural Adjustment Administration (AAA). The AAA tried to force higher prices for commodities by paying farmers to take land out of crops and to cut herds. While this seemed like a good policy at the time the unintended and tyrannical consequences were and still are severe (See Wickard v Filburn). It was a total revision of the Interstate Commerce Clause enumerated in Article I, Section 8 of the Constitution.

Reform of the economy was the goal of the National Industrial Recovery Act (NIRA) of 1933. It tried to end cutthroat competition by forcing industries to come up with codes that established the rules of operation for all firms within specific industries, such as minimum prices, agreements not to compete, and production restrictions. Industry leaders negotiated the codes which were then approved by NIRA officials. Industry needed to raise wages as a condition for approval. Provisions encouraged unions and suspended anti-trust laws. The NIRA was found to be unconstitutional by unanimous decision of the U.S. Supreme Court on May 27, 1935. (See Schechter Poultry Corp. vs. United States).In this decision the U.S. Supreme Court found that the NIRA invalidated regulations of the poultry industry according to the non-delegation doctrine and as an invalid use of Congress's power under the commerce clause. This was a unanimous decision that rendered the National Industrial Recovery Act, a main component of President Roosevelt's New Deal, unconstitutional.

Roosevelt opposed the decision, saying "The fundamental purposes and principles of the NIRA are sound. To abandon them is unthinkable. It would spell the return to industrial and labor chaos." The Judicial Procedures Reform Bill of 1937 was a legislative initiative proposed Roosevelt to add more justices to the U.S. Supreme Court. Roosevelt's purpose was to obtain favorable rulings regarding New Deal legislation that had been previously ruled unconstitutional. The central and most controversial provision of the bill would have granted the President power to appoint an additional Justice to the U.S. Supreme Court, up to a maximum of six, for every sitting member over the age of 70 years and 6 months. On March 29, the Supreme Court published its opinion upholding a Washington state minimum wage law in West Coast Hotel Co. v. Parrish by a 5–4 ruling, after Associate Justice Owen Roberts had joined with the wing of the bench more sympathetic to the New Deal. Since Roberts had previously ruled against most New Deal legislation, his perceived about-face was widely interpreted by contemporaries as an effort to maintain the Court's judicial independence by alleviating the political pressure to create a court friendlier to the New Deal. His move came to be known as "the switch in time that saved nine."

In 1937 the Supreme Court, with Robert’s concurrence, in the case of the National Labor Relations Board v. Jones & Laughlin Steel Corporation that declared that the National Labor Relations Act of 1935 (commonly known as the Wagner Act) was constitutional by a 5-4 decision. This decision reversed the interpretation of the Commerce Clause enumerated in Article I, Section 8 and it effectively spelled the end to the Court's striking down of New Deal economic legislation, and greatly increased Congress's power under the Commerce Clause. The act established the federal rights of workers to organize unions, to engage in collective bargaining, and to take part in strikes — the unintended consequences of this are enormous today. Roosevelt’s threat to pack the Court had succeeded and now his power was unlimited as farmer Filburn would discover in 1942. The Progressives had won a major victory that is still with us when it comes to the Court. It is an odd coincidence that it was Justice Owen Roberts who flip-flopped on the Roosevelt’s New Deal programs and it was Justice John Roberts who went out of his way to find enough whole cloth to declare ObamaCare as a tax and Constitutional. Beware of any judge with the last name of Roberts.

In 1933, major new banking regulations were passed. In 1934, the Securities and Exchange Commission was created to regulate Wall Street.

Recovery was pursued through "pump-priming" (that is, federal spending — also called stimulus). The NIRA included $3.3 billion of spending through the Public Works Administration to stimulate the economy, which was to be handled by Interior Secretary Harold Ickes. Roosevelt worked with Republican Senator George Norris to create the largest government-owned industrial enterprise in American history — the Tennessee Valley Authority (TVA) — which built dams and power stations, controlled floods, and modernized agriculture and home conditions in the poverty-stricken Tennessee Valley. It could also be considered one of the greatest overreaches of federal power in the history of the United States something Grover Cleveland or Calvin Coolidge would never have sanctioned. The TVA's service area covers most of Tennessee, portions of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, and Virginia. It was the first large regional planning agency of the federal government and remains the largest. The development of TVA was probably in violation of not only Article I, Section 8, but also of the 5th and 10th Amendments. It put the U.S. government squarely in the public utilities business something our Founders had no intention of doing. TVA, like education, demonstrates what the corrosive power of federal dollars (taxpayer’s money) can accomplish.

Executive Order 6102 declared that all privately held gold of American citizens was to be sold to the U.S. Treasury and the price raised from $20 to $35 per ounce. Exceptions were made for jewelers, coin collectors and a few others. The goal was to counter the deflation which was paralyzing the economy.

Roosevelt tried to keep his campaign promise by cutting the federal budget — including a reduction in military spending from $752 million in 1932 to $531 million in 1934 and a 40% cuts in spending on veterans' benefits — by removing 500,000 veterans and widows from the pension rolls and reducing benefits for the remainder, as well as cutting the salaries of federal employees and reducing spending on research and education. However, this was soon seen to be a mistake and most benefits were restored or increased by 1934. These benefit cuts also did not last. In June 1933 Roosevelt restored $50 million in pension payments, and Congress added another $46 million more. Veterans groups like the American Legion and the Veterans of Foreign Wars won their campaign to transform their benefits from payments due in 1945 to immediate cash when Congress overrode the President's veto and passed the Bonus Act in January 1936.

Roosevelt also kept his promise to push for repeal of Prohibition. On March 23, 1933, he signed the Cullen–Harrison Act redefining 3.2% alcohol as the maximum allowed. That act was preceded by Congressional action in the drafting and passage of the 21st Amendment, which was ratified later that year. The repeal of prohibition also brought in new tax revenues and helped Roosevelt keep a major campaign promise.

All of Roosevelt’s New Deal programs, while adding to the power and size of the federal government, did little to reduce unemployment or rejuvenate the private sector economy. The average unemployment rates during the depression were:

  • 1929: 3.2%
  • 1930: 8.9%
  • 1931: 16.3%
  • 1932: 24.1%
  • 1933: 24.9%
  • 1934: 21.7%
  • 1935: 20.1%
  • 1936: 16.9%
  • 1937: 14.3%
  • 1938: 19.0%
  • 1939: 17.2%3

Full employment (below 5%) did not return until the war years of the early 1940s. (Click here for a timeline of the Great Depression.)

The shining star in the early years of the Roosevelt Administration was the passage of the Social Security Act in 1935. The Social Security Act was drafted during Franklin Delano Roosevelt's first term by the President's Committee on Economic Security, under Frances Perkins, and passed by Congress as part of the Second New Deal. The act was an attempt to limit what were seen as dangers in the modern American life, including old age, poverty, unemployment, and the burdens of widows and fatherless children. By signing this act on August 14, 1935, President Roosevelt became the first president to advocate federal assistance for the elderly. It was also the beginning of federal entitlements and the largest Ponzi scheme in the history of the world where one generation would pay for the retirement of the preceding generation.

While considered by many to be unconstitutional in 1937 the Supreme Court upheld the Social Security Act in Helvering v. Davis as constitutional by deeming it a tax, not an entitlement. The Court held that Social Security was constitutionally permissible as an exercise of the federal power to spend for the general welfare, and did not contravene the 10th Amendment. The Court defended the constitutionality of the Social Security Act of 1935, requiring only that welfare spending be for the common benefit as distinguished from some mere local purpose. It affirmed a District Court decree that held that the tax upon employees was not properly at issue, and that the tax upon employers was constitutional.

In writing for the majority Justice Benjamin N. Cardozo stated that this decision supported the right of the Congress to interpret the "general welfare" clause in the U.S. Constitution. Cardozo stated:

"Congress may spend money in aid of the 'general welfare'. There have been great statesmen in our history who have stood for other views. The line must still be drawn between one welfare and another, between particular and general. Where this shall be placed cannot be known through a formula in advance of the event. The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment. This is now familiar law."

In 2008 50,898,244 out of a population of 310 million were receiving Social Security checks (16% of the population) amounting to $615,344,000,000 dollars. This number is growing exponentially as we are running out of people to pay for it.

On September 23, 1932, during his campaign for the presidency, Roosevelt gave an address to the Commonwealth Club in San Francisco where he laid out his progressive ideology:

“As I see it, the task of Government in its relation to business is to assist the development of an economic declaration of rights, an economic constitutional order. This is the common task of statesman and business man. It is the minimum requirement of a more permanently safe order of things.

The Declaration of Independence discusses the problem of Government in terms of a contract. Government is a relation of give and take, a contract, perforce, if we would follow the thinking out of which it grew. Under such a contract rulers were accorded power, and the people consented to that power on consideration that they be accorded certain rights. The task of statesmanship has always been the re-definition of these rights in terms of a changing and growing social order. New conditions impose new requirements upon Government and those who conduct Government.

Every man has a right to his own property; which means a right to be assured, to the fullest extent attainable, in the safety of his savings. By no other means can men carry the burdens of those parts of life which, in the nature of things, afford no chance of labor; childhood, sickness, old age. In all thought of property, this right is paramount; all other property rights must yield to it. If, in accord with this principle, we must restrict the operations of the speculator, the manipulator, even the financier, I believe we must accept the restriction as needful, not to hamper individualism but to protect it.

The final term of the high contract was for liberty and the pursuit of happiness. We have learned a great deal of both in the past century. We know that individual liberty and individual happiness mean nothing unless both are ordered in the sense that one man’s meat is not another man’s poison. We know that the old "rights of personal competency," the right to read, to think, to speak, to choose and live a mode of life, must be respected at all hazards. We know that liberty to do anything which deprives others of those elemental rights is outside the protection of any compact; and that Government in this regard is the maintenance of a balance, within which every individual may have a place if he will take it; in which every individual may find safety if he wishes it; in which every individual may attain such power as his ability permits, consistent with his assuming the accompanying responsibility.

Faith in America, faith in our tradition of personal responsibility, faith in our institutions, faith in ourselves demand that we recognize the new terms of the old social contract. We shall fulfill them, as we fulfilled the obligation of the apparent Utopia which Jefferson imagined for us in 1776, and which Jefferson, Roosevelt and Wilson sought to bring to realization. We must do so, lest a rising tide of misery, engendered by our common failure, engulf us all. But failure is not an American habit; and in the strength of great hope we must all shoulder our common load.”

The final act of the progressive Roosevelt was the issuance of Executive Order 9066 interning over 100,000 innocent Japanese-Americans in “relocation camps” in violation of the 5th and 6th Amendments to the Constitution.

On November 10, 1937, Henry Morgenthau, U.S. Secretary of the Treasury during the administration of Franklin D. Roosevelt, gave a speech to the Academy of Political Science at New York's Hotel Astor, in which he noted that the Depression had required deficit spending, but that the government needed to cut spending to revive the economy. In his speech, he said:

"We want to see private business expand. We believe that one of the most important ways of achieving these ends at this time is to continue progress toward a balance of the federal budget.

We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. I say after eight years of this Administration we have just as much unemployment as when we started and an enormous debt to boot."

This was Roosevelt’s legacy of progressivism. The Great Depression was the war the progressives were looking for.

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