Harry Truman once said, “The only thing new in the world is the history you don’t know.” That observation applies especially well to what tens of millions of Americans have been taught about Franklin Delano Roosevelt, the man under whom Truman served as vice president for about a month. Recent scholarship (including a highly acclaimed book, New Deal or Raw Deal, by FEE senior historian Burton Folsom) is thankfully disabusing Americans of the once-popular myth that FDR saved us from the Great Depression.

Another example is a 2004 article by two UCLA economists—Harold L. Cole and Lee E. Ohanian—in the important mainstream Journal of Political Economy. They observed that Franklin Roosevelt extended the Great Depression by seven long years. “The economy was poised for a beautiful recovery,” the authors show, “but that recovery was stalled by these misguided policies.”

In a commentary on Cole and Ohanian’s research, Loyola University economist Thomas DiLorenzo pointed out that six years after FDR took office, unemployment was almost six times the pre-Depression level. Per capita GDP, personal consumption expenditures, and net private investment were all lower in 1939 than they were in 1929.

“The fact that it has taken ‘mainstream’ neoclassical economists so long to recognize [that FDR’s policies exacerbated the disaster],” notes DiLorenzo, “is truly astounding,” but still “better late than never.”

Part of the Great FDR Myth is the notion that he won the presidency in 1932 with a mandate for central planning. My own essay on this period (“Great Myths of the Great Depression”) argued otherwise, based on the very platform and promises on which FDR ran. But until a few months ago I was unaware of a long-forgotten book that makes the case as well as any.

Hell Bent for Election was written by James P. Warburg, a banker who witnessed the 1932 election and the first two years of Roosevelt’s first term from the inside. Warburg, the son of prominent financier and Federal Reserve cofounder Paul Warburg, was no less than a high-level financial adviser to FDR himself.  Disillusioned with the President, he left the administration in 1934 and wrote his book a year later.

Warburg voted for the man who said this on March 2, 1930, as governor of New York:

The doctrine of regulation and legislation by “master minds,” in whose judgment and will all the people may gladly and quietly acquiesce, has been too glaringly apparent at Washington during these last ten years. Were it possible to find “master minds” so unselfish, so willing to decide unhesitatingly against their own personal interests or private prejudices, men almost godlike in their ability to hold the scales of justice with an even hand, such a government might be to the interests of the country; but there are none such on our political horizon, and we cannot expect a complete reversal of all the teachings of history.

What Warburg and the country actually elected in 1932 was a man whose subsequent performance looks little like the platform and promises on which he ran and a lot like those of that year’s Socialist Party candidate, Norman Thomas.

Who campaigned for a “drastic” reduction of 25 percent in federal spending, a balanced federal budget, a rollback of government intrusion into agriculture, and restoration of a sound gold currency? Roosevelt did. Who called the administration of incumbent Herbert Hoover “the greatest spending administration in peace time in all our history” and assailed it for raising taxes and tariffs? Roosevelt did. FDR’s running mate, John Nance Garner, even declared that Hoover “was leading the country down the road to socialism.”

Copying Hoover and the Socialists

It was socialist Norman Thomas, not Franklin Roosevelt, who proposed massive increases in federal spending and deficits and sweeping interventions into the private economy—and he barely mustered 2 percent of the vote. When the dust settled, Warburg shows, we got what Thomas promised, more of what Hoover had been lambasted for, and almost nothing that FDR himself had pledged. FDR employed more “master minds” to plan the economy than perhaps all previous presidents combined.

After detailing the promises and the duplicity, Warburg offered this assessment of the man who betrayed him and the country:

Much as I dislike to say so, it is my honest conviction that Mr. Roosevelt has utterly lost his sense of proportion. He sees himself as the one man who can save the country, as the one man who can “save capitalism from itself,” as the one man who knows what is good for us and what is not. He sees himself as indispensable. And when a man thinks of himself as being indispensable . . . that man is headed for trouble.

Was FDR an economic wizard? Warburg reveals nothing of the sort, observing that FDR was “undeniably and shockingly superficial about anything that relates to finance.” He was driven not by logic, facts, or humility but by “his emotional desires, predilections, and prejudices.”

“Mr. Roosevelt,” wrote Warburg, “gives me the impression that he can really believe what he wants to believe, really think what he wants to think, and really remember what he wants to remember, to a greater extent than anyone I have ever known.” Less charitable observers might diagnose the problem as “delusions of grandeur.”

“I believe that Mr. Roosevelt is so charmed with the fun of brandishing the band leader’s baton at the head of the parade, so pleased with the picture he sees of himself, that he is no longer capable of recognizing that the human power to lead is limited, that the ‘new ideas’ of leadership dished up to him by his bright young men in the Brain Trust are nothing but old ideas that have been tried before, and that one cannot uphold the social order defined in the Constitution and at the same time undermine it,” Warburg lamented.

So if Warburg was right (and I believe he was), Franklin Delano Roosevelt misled the country with his promises in 1932 and put personal ambition and power lust in charge—not a very uncommon thing as politicians go. In any event, the country got a nice little bait-and-switch deal, and the economy languished as a result.

In the world of economics and free exchange, the rule is that you get what you pay for. The 1932 election is perhaps the best example of the rule that prevails all too often in the political world: You get what you voted against.

In every political campaign, we hear the word “compassion” at least a thousand times. Big government programs are supposed to be evidence of compassion; cutting back government is a sign of cold-hearted meanness. By their misuse of the term for partisan advantage, politicians have thoroughly muddied the real meaning of the word.
As Marvin Olasky points out in “The Tragedy of American Compassion,” the original definition of compassion as noted in The Oxford English Dictionary is “suffering together with another, participation in suffering.” The emphasis, as the word itself shows — “com,” which means with, and “passion,” from the Latin term “pati,” meaning to suffer — is on personal involvement with the needy, suffering with them, not just giving to them.
But today most people use the term to mean little more than, as Olasky puts it, “the feeling, or emotion, when a person is moved by the suffering or distress of another, and by the desire to relieve it.” There is a world of difference between those two definitions: One demands personal action; the other, simply a “feeling” that usually is accompanied by a call for someone else — namely, government — to deal with the problem. One describes the Red Cross or the Salvation Army, the other describes the welfare lobby or any politician who votes to rob Peter to pay Paul.
The fact is that government “compassion” is not the same as personal and private compassion. When we expect the government to substitute for what we ourselves ought to do, we expect the impossible and end up with the intolerable. We don’t really solve problems; we just manage them expensively into perpetuity and create a bunch of new ones along the way.
From 1965, the beginning of the so-called War on Poverty, to the mid-1990s, total welfare spending in the United States was $5.4 trillion. In 1965, total government welfare spending was just over 1 percent of gross domestic product (GDP), but 30 years later it had ballooned to 5.1 percent of GDP annually — higher than the record set during the Great Depression. Until welfare reforms that emphasized work began to kick in four years ago, the poverty rate had hardly changed from where it was in 1965. For decades, millions lived lives of demoralizing dependency, families were rewarded for breaking up, and the number of children born out of wedlock soared to the stratosphere — terrible facts brought about, in large part, by “compassionate” government programs.
A person’s willingness to spend government funds on aid programs is not evidence that the person is himself compassionate. Professor William B. Irvine of Wright State University in Dayton, Ohio, once explained, “It would be absurd to take a person’s willingness to increase defense spending as evidence that the person is himself brave, or to take a person’s willingness to spend government money on athletic programs as evidence that the person is himself physically fit.” In the same way as it is possible for a couch potato to favor government funding of athletic teams, it is possible for a person who lacks compassion to favor various government aid programs and, conversely, it is possible for a compassionate person to oppose these programs.
It is a mistake to use a person’s political beliefs as the litmus test of his compassion. Professor Irvine argued that if you want to determine how compassionate an individual is, you are wasting your time if you ask for whom he voted; instead, you should ask what charitable contributions he has made and whether he has done any volunteer work lately. You might also inquire into how he responds to the needs of his relatives, friends, and neighbors.
True compassion is a bulwark of strong families and communities, of liberty and self-reliance, while the false compassion of the second usage is fraught with great danger and dubious results. True compassion is people helping people out of a genuine sense of caring. It is not asking your legislator or congressman to do it for you. True compassion comes from your heart, not from government treasuries. True compassion is a deeply personal thing, not a check from a distant bureaucracy.
The next time you hear someone use the word “compassion,” ask him if he really knows what he’s talking about.

There’s an old story worth retelling about a band of wild hogs which lived along a river in a wild and remote area. These hogs were a stubborn, ornery, independent bunch. They had survived floods, fires, freezes, droughts, hunters, dogs and everything else. No one thought they could ever be captured.

One day a stranger came into a town not far from where the hogs lived and went into the general store. He asked the storekeeper, “Where can I find the hogs? I want to round them up. I could sell the meat for a small fortune.” The storekeeper laughed at such a claim but pointed in the general direction. The stranger left with his one-horse wagon, an ax and a few sacks of corn.

Two months later he returned, went back to the store and asked for help to bring the hogs out. He said he had them all penned up in the woods. People were amazed and came from miles around to hear him tell the story of how he did it.

“The first thing I did,” the stranger said, “was clear a small area of the woods with my ax. Then I put some corn in the center of the clearing. At first, none of the hogs would take the corn. Then after a few days, some of the young ones would come out, snatch some corn and then scamper back into the underbrush. Then the older ones began taking the corn, probably figuring that if they didn’t get it, some of the other ones would. Soon they were all eating the corn. They stopped grubbing for acorns and roots on their own.

“About that time, I started building a fence around the clearing, a little higher each day. At the right moment, I built a trap door and sprung it. Naturally, they squealed and hollered when they knew I had them, but I can pen any animal on the face of the earth if I can first get him to depend on me for a free handout!”

I first heard that story from a wise gentleman named Tom Anderson from Tennessee, many years ago. I’ve thought of it ever since as a fairly good summation of what’s happened to many civilizations in history once people discovered the political process as a way to vote themselves a living instead of working for one. It’s a vivid illustration of the tradeoff expressed in this saying: “A government that’s big enough to give you everything you want is big enough to take away everything you’ve got.” Think of ancient Rome as a case in point: http://fee.org/articles/rome-great-depression/.

Fishing is a favorite pastime of mine, but it occurred to me that fishing has a few things in common with welfare state socialism. First you offer something for nothing to the gullible and unsuspecting; then you hook them, reel them in, and then eat them.

Wild hogs and fish. Whoever said that animals can’t teach us humans a thing or two?!