The New Dealers: Power Politics in the Age of Roosevelt. - book reviews

National Review, Oct 18, 1993 by David Frum

The New Dealers: Power Politics in the Age of Roosevelt, by Jordan A. Schwarz (Knopf, 411 pp., $27.50)

WHEN candidate Bill Clinton promised to blast America back to prosperity with "public investment," he tapped into a deep vein of liberal sentimentality about the pharaonic federal projects of the New Deal. In less ideologically driven circles, however, the reputation of those projects has been sliding for some time: environmentalists now dislike the era's dams and highways, architects loathe its tower-in-a-field public housing, and economic historians pooh-pooh the projects' stimulative effect. Jordan Schwarz's new book pretends to be a history of the New Deal: in fact, it is a confused and confusing attempt to prove that Mr. Clinton and the New Deal sentimentalists are right, that America can pave its way to prosperity.

Mr. Schwarz has set out to show nothing less than that the New Deal amounted to a coherent project to revive a depressed American economy.

The New Dealers ... sought to create long-term markets by building an infrastructure in undeveloped regions of America. The New Dealers believed that national economic growth was stifled by the monopolization of capital and manufacturing in the Northeast quadrant of the country--making the South and West undeveloped countries. They concluded that relief and recovery were stopgap solutions to the problems of unemployment and stagnation; poverty required development through hitherto unimagined quantities of public investment that could inspire labor mobility and private investment .... Thus the New Deal's lasting contribution to America's postwar economic growth is a revolution in expanded credit supported by public capital.

That last sentence, at least, sounds right. But Mr. Schwarz's effort to prove his generalization is, unfortunately, a failure.

Schwarz has assembled a large jumble of facts about a collection of lower-echelon New Dealers, and he is determined to make use of them, whether they are new or not, whether they advance his argument or not. It sometimes seems that Schwarz regards historical facts as a sort of intellectual artillery: bombard the reader with enough of them, and you so weaken his defenses that even the most lightly armored thesis will be able to charge forward without resistance.

And Schwarz's thesis is indeed lightly armored. It's an interesting quirk of historiography that the New Deal's supporters tend to argue that it was an intellectually incoherent event. The left-wing historian Alan Brinkley approvingly cites the reply of Alvin Hansen--one of the most important New Deal economic policymakers--when asked in 1940 whether the "basic principle" of the New Deal was sound: "I really do not know what the basic principle of the New Deal is." It has typically been the Roosevelt Administration's detractors--on the Right and the far Left--who have claimed to have identified an interior unity in its policies.

Schwarz is unusual among admirers of the New Deal in agreeing with the detractors. But he justifies his agreement only by leaving a lot out of his story. To him, the cartels of the National Recovery Act of 1933-34, the pro-union labor code of 1935, and the Social Security Act of 1935 are sideshows: the rebuilding of consumption power through public works in underdeveloped regions of the country is the main event. The core of the New Deal, as he sees it, was Jesse Jones's Reconstruction Finance Corporation, which lent money to regional banks to finance local business, bypassing the allegedly parsimonious metropolitan banks of New York. RFC led to the great public-works projects of the later New Deal: Bonneville Dam on the Washington-Oregon border, the stupendous Hoover Dam in Nevada, the Houston Ship Canal, and the vast Tennessee Valley Authority.

This is all true as far as it goes. But it does not go nearly far enough. If any one place in the United States grabbed a disproportionate share of public investment, it was not the South and West but New York City: the aptly named FDR Drive, the George Washington and Triboro Bridges, the public housing of East Harlem and downtown Brooklyn, and many other monuments. Was this also part of a coherent plan to redevelop the country? Or was it simply a reward to loyal Democratic voters? A state-by-state analysis of where the New Deal's money was spent would show that underdevelopment mattered a lot less than overendowment in the Electoral College.

Nor is it true that the New Deal devoted its resources primarily to "investment." The hunk of money that traveled south to build the TVA was equaled by the lavish regular stipends paid to cotton farmers by the New Deal's agricultural programs, programs that not even Bill Clinton could characterize as "investment." Schwarz also pays scant attention to the most successful of the New Deal's spending programs: the great rearmament begun in 1938, with the purpose not of creating an aircraft industry in Washington and California but of beating the Germans and Japanese.