Progressives and FDR by Wittgenstein

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									Today’s Lecture:

The Dawn of the Progressives and Franklin Delano Roosevelt

Number:

13

Lecture Organization: • Class Announcements • Brief Review • Social Transformation • Rise of Progressivism • Conservative Interlude

• Great Depression
• Franklin Delano Roosevelt
Time

Class Announcements

exam -- Here are the results A=8 B=8 C =10 D=5 F=5 (you can retake the exam if you want to; schedule an appointment)

Class Announcements

essay -- final version handed in by Wednesday. -- Hand in first draft and comment sheet (Hand in notes back again if you took them back)

Class Announcements

notes -- should have them graded and returned Thursday Website -- hope to have it current by late Thursday

Questions?
Time

Brief Review

parties -- role of parties in the late 1800s and early 1900s Tammany Hall -- party controlled:

• jobs
• government services (great depression broke it)

Brief Review

parties -- some other things parties did: Organized Congress -- “Czar leadership” Nomination Process -- You couldn’t get nominated if you broke from party ranks -- no such thing as party primaries (had party caucus) [explain this]

Brief Review

The Point 1. Party is not a team; it is a union 2. Powerful structure that controls, organizes politics 3. Its primary responsibility:

A. organize the political marketplace
B. select candidates Question: C. Enforce conformity with the Union’s program Are parties like this today? D. Provide benefits (spoils, services) when you win 4. “A machine”
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Political Party

Jobs

Government services

Controlled candidates

Controlled governing institutions

Time

Social Transformation
Hamilton’s America Arrives -- America will go through large scale social transformation in the post civil war years. Hamilton’s America will come to pass; while Jefferson’s begins to die out Banking Becomes a common practice everywhere Manufacturing Becomes a common practice everywhere Corporations Becomes a common practice everywhere Urbanization The cities begin to swell Industrialization Takes off in the 1800s

Social Transformation
Large Scale Production -- From 1863-1899, index of manufacturing production rose by more than 700 percent • Andrew Carnegie Innovations in Steel production (Bessemer technology)

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Social Transformation
New Economic Goliaths -- Mergers, Trusts, Monopolies, Oligopolies
Massive Mergers -Two thirds of the largest 75 industrial companies in the united states had not existed just a few years earlier. The reason why they hadn't existed was that, under the McKinley administration, there were massive mergers going on, so that companies were growing into large trusts and monopolies.

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Social Transformation
New Economic Goliaths -- Mergers, Trusts, Monopolies, Oligopolies -- New “economic Godzillas in an agrarian legal order” Fundamentally-important point (explain)

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Social Transformation
Population -- doubled between 1870 and 1900

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Social Transformation
Immigration -- vast amounts from eastern and central Europe

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Social Transformation
Labor Movement -- Labor unions form -- 8 hours a day, 48 hour work week -- Terrible strikes in the late 1800s (Eugene debs)

• violence, death
-- anti-strike laws (jail) -- sit down strikes

-- people are demanding labor reform
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Social Transformation
Capitalism gets sick?

-- New phenomenon: the roller coaster ride
-- Left unabated and unchecked, the new industrial capitalism seemed to have fits of boom and bust -- sort of “bipolar” (highs too high, lows too low) -- For example -- depression in 1870s and 1890s (1890’s would have been America’s “great depression” if it would not have been for the Great Depression. Mention how overproduction sent prices down (and farmers Copyright, Sean Wilson. 17 5/21/2009 just kept producing to the max) 2007

Social Transformation
Should there be rules for capitalism? -- Certain kinds of abuses would occur -- worker injuries, child labor, unsafe products -- the Upton Sinclair book

Famous book written by Upton Sinclair, called the “The Jungle,” which chronicled how the manufacturers of beef -specifically, sausages -- had worked on conveyor belts, and rats would jump up on the conveyor belts and be chopped up and put into the sausages. The manufactures of the sausages didn’t care
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Social Transformation
Transformation in the organization of political ideology -- something fascinating results -- how political ideology is organized, changes

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Farmers

Steelworkers
Coal Miners etc

Plantation Hegemony

The forces of Labor capital

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A new rationalization for the power center! No more states rights!
Laissez Plantation Faire Hegemony

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Laissez Faire

Progressivism

Time
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The Rise of Progressivism

what progressives want regulate the economy -- government regulation of the new forms of power

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The Rise of Progressivism

what progressives want labor reform -- the right to collective bargaining -- the right to strike

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The Rise of Progressivism

what progressives want social reforms • women voting • direct election of senators • party primaries

• ending Tammany Hall and party corruption;
• civil service reform and the end of the “spoils” system • graduated income tax • social welfare programs
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The Rise of Progressivism

what progressives want administrative state • -- FDA, EPA, IRS, FBI. CIA, SEC, Federal Reserve Board, SSA, Veteran's Affairs, etc. •-- Bureaucratic State.

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The Rise of Progressivism

early progressive presidents “Teddy Toosevelt” (TR) Woodrow Wilson Republican Democrat

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We Bought the Son of a Bitch -Business men would later complain about TR that they got less than what they paid for. Because he was unbeatable, business leaders had no choice but to contribute to his campaign. Hence, "we are getting less than what we are paying for,“ they said. Andrew Carnegie's partner, Frick, says "We bought the son of a bitch, but then he did not stay bought."

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An immune system for the capitalistic body -Wilson believed that the Federal Trade Commission was only policing specific bad practices, rather than otherwise being a big brother for industry and business. It was merely helping to guide capitalistic enterprise to the proper end. It was sort of like an immune system for the capitalistic body.

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Jefferson is outdated --He said that "Jefferson's view of limited government belonged to an age which was without railways and telegraph lines." He came to realize that government must change and adapt with the times of this new industrial era, if it was to perform its function.

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The Rise of Progressivism

early progressive presidents ideological legacy? -- a moderate radical (or a radical moderate)? -- progressive for their day, but compared to FDR (and by today’s standard) the laws enacted were a vigorous diet of moderate reforms

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The Rise of Progressivism

early progressive presidents reactionary electorate -- America needed a break from all this progressivism

Time
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The Conservative Interlude

Harding-Coolidge -- the antithesis of progressivism
The Antithesis of Progressivism -Harding was the antithesis of progressive ideology; he was the exact opposite of the high-minded notions of Roosevelt and Wilson. The country needed a break from progressivism. That is why Harding came in. His theme was “if you elect me, I am going to take the country back to normalcy.” When he comes into office, he has a huge landslide. He captured both houses of congress. He serves a little over 2 years and dies of an apparent heart attack. Calvin Coolidge was his successor. Coolidge went down in American history as someone who did pretty much nothing of any significance in the white house.

The Conservative Interlude

Herbert Hoover -- Hoover is the embodiment of business culture

Pro business -Hoover is also the embodiment of the business culture. Hoover’s impulse is to use American government not as Wilson did, but as a hand maiden for American business. If you build wealth in the business community, it will trickle down. Coolidge once said, “the business of America is business.” (Coolidge and Hoover had the same outlook).

The Conservative Interlude

Herbert Hoover -- prosperity in the 1920s (roaring twenties) -- national consumer culture -- toasters, refrigerators, national advertising, (is this really what makes us American?) -- millions of Americans were not putting their savings into the stock market

The Conservative Interlude

Herbert Hoover dip in business cycle -- Germany can’t make good on its war debt -- business cycle was ready for a down-turn anyway Hoover’s prescription -- don’t worry; it will take care of itself

No Chicken Little Hoover tries to rally the public and calm the fears. What he says is: don’t worry; the fundamentals of our economy are sound. Our economic institutions are the greatest in the world; our system of free enterprise capitalism will correct itself. We’ve been through these business cycles before. There was a famous panic in 1873; there was a panic in the 1890s; it will eventually correct itself. Prosperity, he said, is right around the corner. His campaign was based on the idea that there would be a chicken in every pot and a car in every garage.

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The Conservative Interlude

Herbert Hoover dip in business cycle -- Germany can’t make good on its war debt -- business cycle was ready for a down-turn anyway Hoover’s prescription -- don’t worry; it will take care of itself (what Hoover and the others represented)

Laissez faire What these presidents represented was a return to the laissez faire era of the late 19th century. And a return to the notion of, yes, the president is important, but the Congress is at least equally as important, and what is most important is the private sector.

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Something will come along that will fundamentally change American politics

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The Great Depression

statistics -- massive collapse of the economic system
The great depression -- From 1929 to 1932, stock prices in America fell 75%. 25% of the labor force was unemployed. Farm income was slashed. Corporate profits were in the red. The banking system collapsed and real per capita gross national product dropped by 1/3. (Today we consider it a great crises if GNP drops 1 percent). When Hoover is running for re-election, more than 25% of the country remains unemployed

Statistics -- Great depression and new deal: the stock market lost almost 90% of its value (between 1929-1933), and industrial production fell by more than 50%. 15 million workers -- almost a third of the workforce -- lost their jobs. In 1919, farm income was 17 billion. By 1932 it was 5 billion.

The Great Depression
capitalism “broke” -- this was not simply a “recession” -- the banking-system collapsed (imagine what the American economy would be like if the system of finance collapsed today)
Hooverville -- "Shack cities" developed -- when that happened, people termed it "Hooverville."

Reporter’s quote: “the hungry, falling upon heaps of refuse and digging it with sticks and hands.”

Franklin Delano Roosevelt

his philosophy
Political philosophy – A reporter asked him, "are you a communist," FDR said "no." The reporter asked, "are you a capitalist," FDR said "no." The reporter asked, "are you a socialist," and FDR said "no." And the frustrated reporter said, "then what is your philosophy?" And FDR said, "philosophy? philosophy? I'm a Christian and I’m a Democrat.

Franklin Delano Roosevelt

1932 election -- Interesting strategy: • the country needs experimentation (note how odd that is) • analogy to the war powers

Roosevelt on the campaign trail:-- “the country needs bold and persistent experimentation to restore the shattered economy.”

Roosevelt on the campaign trail:-- FDR had an interesting way of campaigning against the depression. He would use military language: it is an all-out war against the depression. He would help the common person, end prohibition, bring relief to farmers and workers, increase benefits to business, to offer immediate relief/public works to the unemployed, and he promised to get this all done with a balanced budget.

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Franklin Delano Roosevelt

First 100 days -- All sorts of new government programs -- The most productive first 100 days in history (The FDIC law passed in something like 24 hours)

1.The federal deposit insurance corporation (FDIC) 2. Emergency Farm Mortgage Act 3. Emergency Homeowners Loan Corporation 4. Federal Emergency Relief Association (assistance to needy Americans) 5. Civil Works Administration, Civilian Conservation Core and the Public Works Administration (programs for the unemployed). 6. Federal Surplus Relief Corporation, distributed food to the poor 7. Tennessee Valley Authority (provided electricity and economic development for quite a number of states in the Tennessee river area) 8. The Security Act, followed by the Security and Exchange Commission (began the regulation of the securities market. The stock and bond markets had been notoriously unregulated. irregularities in those markets had contributed, many thought, to the great depression. Joseph Kennedy was the first chairman of this commission). 9. The agricultural adjustment administration (AAA) and the national recovery administration (NRA) were designed to break the depression in agriculture and industry. The AAA reduced agricultural production in order to boost prices 10. the NRA suspended the anti trust laws to authorize the negotiation of compensation, production, Copyright Sean Wilson. 2007. the 1/18/2007 (C) and pricing agreements enforced by 47 authority of the federal govt.

The First Term
second “New Deal” -- Social Security Act
the Social Security Act, which created the modern social security system, provided old age pensions, unemployment compensation, and financial assistance to the disabled and for mothers with dependent children (it established the principle that Americans had certain entitlements from government. The idea was that this act was providing assistance to those who could not fend for themselves in the dog eat dog free market world. The social security act was financed by payroll taxes, and may have impeded economic recovery a bit;

The First Term
second “New Deal” -- More serious regulation of utilities -- significant progressive taxation policy (“tax the rich”) -- National Labor Relations Act • the right to strike (considered illegal prior to this) • a perpetual federal forum for resolving labor disputes
The National Labor Relations Act -- [the Wagner Act] created a National Labor Relations Board, which gave collective bargaining and organization of workers the sanction and protection of the federal government (this would forever submit the loyalty of the labor movement to the democratic party).

The First Term
second “New Deal” -- work programs for the employable -- entitlement programs for people who could not work
The Works Progress Administration -- providing remunerative work for more than 3 million Americans. These workers would be the most loyal of the fdr voters, leaving republicans to charge that he was buying his votes;

New Deal
Did it Work?
Economic impact -- Although recovery was far from complete, from 1933 to 1936, unemployment dropped 1/3, manufacturing production and farm parity prices increased 50 percent, wholesale and retail trade nearly doubled, and real per capita economic growth soared by nearly 30 percent.

The New American Hegemony
how FDR changed American politics -- No other election victory in American history every experienced two realignments successively in the same direction -- “The gift that kept giving” …

The Gift That Kept Giving

1929
House Dems House Rep: 163 267

1931
216 218

1933
313 117

1935
332 103

1937
333 89

Senate Dems
Senate Rep

39
56

47
48

59
36

69
25

75
17

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The New American Hegemony
“tax and spend politicians” -- new phrase invented by FDR insiders
Tax and spend politicians -- This began a new era of criticism of democrats for being tax and spend politicians. It is a little different though: what they do is "tax and tax and spend and spend and get elected and get elected." The idea: the benefits go to people who turn around and vote for them as a functional exchange. It is sort of a larger scale kind of Tammany Hall in some respects (without the corruption). By the way, that tax and spend quote came from a democrat inside FDR administration.

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