How Perry misreads the New Deal
The New Deal has been targeted by conservative politicians for decades. But no one in recent memory has placed an attack on the New Deal at the forefront of a political campaign as assiduously as has Texas Gov. Rick Perry, R.
Perry has famously labeled Social Security a ”monstrous lie.” Perhaps less well known is that a much broader attack on the New Deal lies at the core of his book/political manifesto ”Fed Up!”
Perry’s book draws heavily from several libertarian denunciations of the Roosevelt administration — chief among them Burton Folsom’s book ”New Deal or Raw Deal?” and Jim Powell’s ”FDR’s Folly” — to paint the New Deal as the foundation of an ”abuse of federal power” by Democratic administrations and Congresses, abetted by the Supreme Court, that has persisted for generations.
All this from a Depression-era program that ”failed.” Although Perry repeatedly pins that label on the New Deal, he never quite specifies what he means. That’s unsurprising, given that the U.S. real gross national product grew at a blistering 8 percent a year through most of the New Deal period and that its most important component, Social Security, today provides benefits to 54 million Americans, at rock-bottom administrative cost and without a whiff of scandal.
Instead, Perry damns the New Deal as the ultimate expression of ”statism,” which he defines as belief in ”the primacy of government over the individual.” Perry lists its tangible consequences: ”higher taxes, more regulation, more spending, government-run health care, activist judges, choice over life, open borders, capitulation to our enemies, a more powerful Washington, and generally a bigger and more active government than not.”
Indeed, to Perry the New Deal’s central flaw is its magnitude. ”The country was given the AAA, the CCC, the FERA, the RFC, the NIRA, the SEC, the PWA, the TVA, and more,” he writes. ”Now, I could tell you what each stood for, but do you care?”
Since he won’t say, I’ll help: His list includes three work-relief programs (the Civilian Conservation Corps, the Federal Emergency Relief Administration and the Public Works Administration) that saved millions of American families from destitution; the nation’s watchdog over investment bankers and Wall Street manipulators (the Securities and Exchange Commission); and an agency that lifted an entire region out of crushing poverty (the Tennessee Valley Authority). He names the National Industrial Recovery Act as among the ”most radical” acts of the New Deal, without mentioning that its provisions amounted virtually to a wish list of big business, including the suspension of antitrust enforcement and the right to form cartels and fix prices.
Who needed Social Security, Perry writes, since during the Depression ”private pensions were largely solvent and performing”? The source of this claim is hard to find; Perry doesn’t cite one.
But if his point is that America’s elderly and retirees were being taken care of by private plans, we know that’s fantasy. In 1935, some 155,000 retirees were receiving payments from industrial and union pension plans; but 700,000 Americans over 65 were being sustained by government emergency relief and an additional 100,000 were in ”public almshouses,” as it was termed in congressional testimony. The largest group of workers covered by private pensions were 1.5 million railroad employees whose retirement plans had become so impaired that the government was forced to take over their retirement system that year.
Perry also republishes a favorite conservative reproach to the New Deal — a quotation from FDR’s Treasury Secretary Henry Morgenthau Jr., who in mid-1939 lamented to Democrats on the House Ways and Means Committee: ”We are spending more than we have ever spent before and it does not work . . . I say after eight years of this administration we have just as much unemployment as when we started . . . and an enormous debt to boot!”
Let’s take a close look at Morgenthau’s quote. What is commonly presented — and the version on Page 48 of ”Fed Up” is no exception — is craftily redacted. Missing is this line, which doesn’t quite fit a conservative narrative: ”We have never begun to tax the people in this country the way they should be. . . . People who have it should pay.” (The full quote comes from Morgenthau’s diary, which is in the collection of the FDR Library.)
More to the point, however, Morgenthau was simply wrong, and not merely in miscalculating the length of the Roosevelt administration up to that point as eight years, not six. The number of unemployed had in fact fallen sharply over those six years, from 11.5 million men and women at the end of 1932 to about 6.2 million in 1939. The unemployment rate would settle at 11.3 percent at the end of 1939, down from nearly 23 percent when Roosevelt took office. At the time Morgenthau spoke, the U.S. working population had increased more than 25 percent, to some 49 million, including about 3.2 million workers employed on government construction programs, from fewer than 39 million in 1932.
Skepticism about government is hardly novel in political campaigns, nor is debate about the societal transformation wrought by the New Deal. Perry has made it clear that he intends to join the debate, which is healthy. But he has also implicitly signaled that he intends to employ misconception, misrepresentation and misquotation, which is not.
Michael Hiltzik, a winner of the 1999 Pulitzer Prize for beat reporting, is most recently the author of ”The New Deal: A Modern History.”