FDR--Corporate Stooge Or Outright Fascist?

First posted at The Smirking Chimp, October 2, 2009.


So much talk on these pages equating Barack Obama with fascists, and "bowing to his corporate masters".
So, what Presidents have served liberal causes better? FDR is frequently mentioned. But let's suppose, for a minute, that the internet was fully functional in 1933, and this blog was called "The Scowling Vacuum Cleaner", in dishonor of Herbert Hoover.
It's October 1933. People here (at SCV) are howling about FDR. "He only cares about his rich friends and his masters in the banking industry", opines one poster. "He hasn't done anything to help the working class or the poor" says another. Yet another complains that he passed a stimulus bill, but it wasn't enough.
Why are we saying all of these bad things about FDR in October 1933?

Well, for one thing, the first thing he did upon assuming office was to bail out the banks. He declared a "bank holiday", and authorized the Treasury to release more currency to the Federal Reserve. He allowed banks to falsely bolster their balance sheets by authorizing the Treasury to sell Treasury bonds to the Federal Reserve at a discount, on the condition that the Fed would rediscount these securities to individual banks.
In June of 1933, he signed the second Glass-Steagall act, which imposed new regulations on the banking industry. However, the act also created the FDIC, which took away some of the incentive for banks to protect their shareholders deposits, thus rewarding risky behavior by the banks. Sure, the banks paid premiums for the insurance, but the government was on the hook if the FDIC's reserves fell short of the amount needed to pay claims. A huge, potential unfunded liability to the government for the benefit of the banking industry.
Some "Vacuumers" (the participants on this blog) are now complaining that Roosevelt has saved his rich buddies at the expense of the working man. Also complaints about their children's future, since some of these unfunded liabilities were being paid for with borrowed money.
In May of 1933, he submitted, and then signed, his stimulus bill, the Federal Emergency Relief Act (FERA). Among other things, this created the Civilian Conservation Corps, which would eventually employ 300,000 American men. Men only, women not allowed. But things got off to a slow start, and by October of 1933, the Corps had only actually hired about 50,000 or so men.
Plus, there were strings attached. The men had to live in camps under military discipline. They worked hard, long hours. They were paid $30/mo, plus room, board and medical care. But only young men with dependents were eligible for the program, and they were required to send $22-$25 of their $30/mo to dependents.
FERA also provided mortgage relief to farmers and the poor. This was accomplished by government payments to the banks.
Many Vacuumers are now objecting to the stimulus bill. It doesn't do enough, it's too restrictive, why, it's downright authoritarian! It even involves more giveaways to the banks!
Meanwhile, those on the right wing blog "Manifest Republic" ("mannys" for short) are decrying FERA as a "socialist giveaway to the poor".
During his campaign, FDR had promised not to increase the budget deficit, and, indeed, to erase the national debt. So FERA needed to be paid for. One would suppose that such a socialist savior would have done this by increasing taxes on corporations and the rich. But no! He did it by cutting social spending!
In June 1933, by executive order, Roosevelt slashed military pensions by 40%. All widows of veterans, as well as many veterans themselves (500,000 in all) had their benefits eliminated. This, by the way, was the biggest chunk of his initial reduction of "military spending".
Vacuumers are screaming about helping the banks at the expense of poor widows. Mannys complain that the cuts aren't enough.
By October 1933, FDR had signed bills or issued executive orders that:
--Confiscated all gold owned by American citizens, and declared the gold to be the property of the US Treasury, which could then issue currency based on the gold, to be released to the banking system through the Fed.
--Required the securities industry to regulate itself, without any government penalty or supervision. The next year, the Securities and Exchange Commission was created to provide some government oversight. FDR appointed none other than his chief fundraiser, Joseph P Kennedy, to head the Commission.
--Suspended anti-trust laws, and allowed individual industries to agree what on which practices were anti-competitive.
--Continued Hoover's policy of giving low cost loans to the railroads and other heavy industries.
--To his credit, he did issue an executive order in April 1933 allowing the sale of 3.2% alcohol beer, in advance of the repeal of prohibition.
Nevertheless, the Vacuumers are still restless. All they see are big giveaways to the banks, brokerages and big corporations, with crumbs being thrown to the little guy. Mannys are now comparing FDR to his "socialist" cousin, the (now late) TR.
Vacuumers also complain that nothing has really changed at all. Why, FDR might as well be Hoover! He may even be worse! He has a Democratic majority in both houses, yet he still can't get his universal old age pension or health care bills passed. He's kissing the asses of Republicans and conservative Democrats! Serving the whims of his corporate masters!
Yes, in October 1933, Vacuumers are down to debating whether FDR is simply a corporate stooge or actually one of them newfangled fascists.
Fast forward to October 2009. FDR is now almost universally revered by the American left. Obama is almost universally reviled by both sides. His popularity is dropping, just as FDR's was by October 1933.
In 1935, the Social Security Act was passed. It took a few years to get it fully implemented.
Today, we are still working on the universal health care that US Grant first started mumbling about in the 1870's, that TR formally proposed in 1901, and that every Democratic President since FDR has tried to push through Congress, sometimes with Democratic majorities in both houses.
It will certainly be interesting to look back on the current debate and rhetoric regarding Obama when January 2013 rolls around.