In 1928, America was a confident and prosperous nation of flappers and speakeasies reveling in exciting new technologies like aeroplanes and telephones. Amid such easy prosperity, America's political parties mainly fretted over cultural issues like re-litigating the national ban on “demon rum.” By 1932, the prosperous flappers and gin-drinkers of the Roaring Twenties were living in the squalor of shantytowns, relying on breadlines and soup kitchens just to eat. People's minds no longer focused on cultural battles but on putting food on their tables and clothes on their backs. No longer a haughty new world power, America now flinched in fear as totalitarian dictatorships spread across Europe. It's hard to fathom what that was like—so rich and comfortable and confident in one moment, and so poor and desperate and scared the next. This national disaster called the Great Depression created America's modern political parties.
Before the Great Depression, America had two political parties, the Democrats and the Republicans. Yet those parties consisted of completely different coalitions of people, who believed a completely different mix of ideas, wrapped into two completely different ideologies, than the Democrats and Republicans of today. When the world fell apart during the Depression, those parties fell apart with it. When America finally made its way through to the other side of the economic catastrophe and a global war, it had two different parties still called Republicans and Democrats but now representing a different mix of people and standing for very different things. The story of our modern Republican and Democratic Parties begins with the destruction of the old ones during the Great Depression and their rebirth during the administration of Franklin Roosevelt.
HOW THE DEPRESSION DESTROYED AMERICA'S PARTIES
When the stock market crashed in 1929, Republican Herbert Hoover had only been president for eight months. He won the White House in a landslide in 1928 over New York governor Al Smith in a campaign fought largely over Prohibition, even though Prohibition was already the law. Although you would never guess it from his reputation today, Hoover actually had one of the most distinguished backgrounds of any American president ever. He was an efficiency whiz kid from his party's progressive wing—he supported Teddy Roosevelt's Progressive Party campaign in 1912—who rose to national acclaim as one of the most successful commerce secretaries in American history under Presidents Harding and Coolidge. He was a Stanford-educated mining engineer whose work earned him an international reputation and personal fortune, had lived in various places around the world, spoke Mandarin Chinese, and wrote an academic mining treatise still in use today.1 He was something of a military hero, having stepped up as a civilian to play a key role in the defense of the American embassy in China when trapped there under siege during the Boxer Rebellion. He was also a renowned humanitarian, having organized, on his own initiative, a massive humanitarian relief mission during the First World War that both helped stranded Americans escape home to the United States and fed and clothed European civilians. At every stage of life, Hoover displayed unusual competence, expertise, and a noble heart. He seemed the perfect president to have at the helm during a national economic meltdown—educated, a self-made businessman, knowledgeable about economics, popular, compassionate, and a wonkish efficiency expert.
Hoover was a perfect president for the Roaring Twenties, elected amid broad prosperity after America's populist and progressive reforms had tamed the excesses of industrialization. With the First World War behind it, America settled fat and happy into its new role as a strong, modern, rich world power. The progressive movement had mostly burned out after putting its great reforms into place. The Fourth Party System's debates over the abuses and downsides of industrialization now over, a new modern economy emerged like a butterfly out of the pain of late nineteenth-century economic disruption. Politics turned trivial in the careless way of a nation enjoying its well-earned respite from worries or consequence because there was little left to debate. Between the flood of petty scandals from the charming but incompetent Harding, and the boring steady hand of Silent Cal, American government was coasting by and things were going well. Then the stock market crashed and the economy fell apart, beginning the most devastating economic crisis in American history.
When the Depression struck, Hoover saw the task for government as cushioning the blow of the downturn the best it could as the nation waited the crisis out. It's a popular presumption that Hoover failed to more aggressively address the destruction of the Depression because, as a pro-business Republican, he wasn't ideologically inclined to wield federal power to combat economic suffering. Except Hoover wasn't a modern free-market libertarian but a progressive who quietly modeled his presidency around Teddy Roosevelt's ideals.2 Hoover's failure to do more was less a failure of ideology than one of judgment and degree.3 America had endured an almost constant cycle of major economic crises before the 1920s—the Panic of 1837, the Panic of 1857, the Panic of 1873, and the Panic of 1893. Each time before, the American economy crashed for a few years and ultimately recovered, leading to another boom. Hoover, like many people, expected the Great Depression would follow the same progression.4 He initially viewed his role as a moral leader who would cheerlead America through the crisis and encourage voluntary measures to address the social ills of the collapse.5 As the Depression progressed, Hoover reached for various policy tools he thought might help cushion the downturn until it inevitably turned. He launched a flurry of new regulations and programs to right the economy. He founded the Reconstruction Finance Corporation to get banks making loans. He worked with unions and industry to keep wages high, and he signed the Davis-Bacon Act to make governments pay union wages. He hiked tariffs in the protectionist Smoot-Hawley Tariff Act in an attempt to protect American jobs. He steeply raised taxes on the wealthy and corporations to pay for these programs to cover declining national tax revenue.6 After each action, Hoover professed to America that the worst was over. Each time, the Depression got more terrible. Only after the crisis had worsened, and then came to seem never-ending, did it become apparent substantial intervention or even structural reform might be necessary. By then it was too late.
By the end of Hoover's term, unemployment was just shy of 25 percent.7 Shantytowns—which people mockingly called “Hoovervilles”—were springing up across America to shelter more and more unemployed Americans. Over the course of just one presidential term, America had tumbled from the golden prosperity of the Roaring Twenties into the abject misery of the 1930s.8 As one would expect, the election of 1932 was an epic disaster for Hoover and his party. The economy was horrible, people were in pain, and no one trusted that things would ever get better. America had come to hate Hoover for presiding over the disintegration of America, and it loathed his party by extension. The Democrats nominated New York governor Franklin Roosevelt for president, the party's failed vice-presidential candidate of 1920. Ironically given what followed, Roosevelt ran a traditional campaign for a Fourth Party System Democrat, vigorously attacking Hoover's spending and deficits and pledging if elected to cut government and bureaucracy.9 Democrats, after all, traditionally distrusted the federal government, thought federal authority should be limited, and sincerely believed in balanced budgets. Yet Roosevelt also promised that, if elected, he would bring about an end to the Depression, giving Americans a “New Deal.” Voters abandoned the Republicans in droves, with even some of the most loyal Republican constituencies bolting for the Democrats. Roosevelt won forty-two of forty-eight states, leaving Hoover with only Pennsylvania and a few holdouts in Republican New England. The Republicans lost 12 seats in the Senate. They lost 101 seats in the House. Roosevelt even won about 30 percent of the African American vote, a historic break given that Republicans had consistently won well over 90 percent of the African American vote since the Civil War. Hoover received a famous telegraph during the campaign asking him to “vote for Roosevelt and make it unanimous.”10 People weren't just voting for Roosevelt. They were voting out the Republicans.
What many people didn't yet realize was that this wasn't a short-term reversal. The election of 1932 permanently destroyed the Republican Party. Many of those traditional Republican voters were never coming back.
FRANKLIN ROOSEVELT CREATES THE NEW DEAL
Franklin Roosevelt wasn't a conviction politician, a political philosopher, or a policy wonk. He wasn't one of those politicians who spend decades defining their beliefs, seeking national office to implement a well-considered plan of change.11 Roosevelt had always been an ordinary office seeker representing the established Democratic Party and its platform with a dose of pragmatism and executive competence. When he promised to bring “a new deal for the American people,” it wasn't an ideological promise to change the direction of American government but rather a stray phrasing in a speech that captured the attention of the press.12 Roosevelt's policy pronouncements during his campaign had been jumbled, often contradictory, and included few of the policies that would come to define his New Deal later.13 Winning the White House, however, made Roosevelt directly responsible for doing what he had attacked Hoover for failing to do—devising a program to end the most devastating economic disaster in American history. Desperate for results and mindful of Hoover's fate, Roosevelt decided to throw every idea he could find at the crisis to see if any might stick.
During the campaign, Roosevelt had already collected a group of intellectuals and academics to help with policy.14 Once in office, with this group as a nucleus, Roosevelt assembled the best public-policy minds he could find to address the crisis. The group, which added and lost members over time, originally centered around a group of professors from Columbia University like law professors Raymond Morley and Adolf Berle and economist Rex Tugwell, and later revolved around Harvard lawyers like Ben Cohen and Felix Frankfurter, alongside the brightest lights of Roosevelt's cabinet such as Interior Secretary Harold Ickes and Labor Secretary Frances Perkins. Roosevelt wasn't partisan in these appointments, stocking his intellectual team and his administration with a fair number of progressives with Republican backgrounds, including some of its most influential members, like Berle, Ickes, Perkins, and Frankfurter.15 As the New Deal progressed, it also wasn't at all unusual for the New Dealers to appoint progressive Republicans instead of Democratic regulars to local New Deal positions, to the irritation of local Democratic politicians expecting opportunities for patronage.16 This wasn't without intent. Roosevelt admired the progressivism of his relative Theodore, and he sincerely hoped progressive Republicans might join the Democrats in a future “realignment of parties.”17 Roosevelt empowered these experts with extraordinary authority to devise aggressive new ideas to bring the Depression to an end. This group of academic policy advisers came to be known as Roosevelt's “brains trust,” popularizing the term. This brain trust created the substance of the New Deal.
Contrary to popular belief, the brain trust's New Deal plan wasn't to spend a great deal of money in a massive burst of Keynesian stimulus.18 That was one result, but it was hardly the motivation at the time. Most of the early New Dealers distrusted spending as a policy mechanism, either out of fiscal conservatism or the belief that spending was a temporary patch that covered up the need for more fundamental reform.19 Roosevelt himself not only ran his campaign on balanced budgets, but like most politicians of his era he genuinely believed in them. Deficit spending to Roosevelt was a necessary evil to endure in order to finance emergency programs, not a goal to enthusiastically pursue. To prove himself a fiscal conservative, Roosevelt even made significant cuts to balance the “regular” federal budget, as distinct from the increase in spending in the “emergency” budget of measures to fight the Depression. The central ideal behind Franklin Roosevelt's first term New Deal agenda wasn't to spend money but—counterintuitively to us today—to raise prices.
The New Dealers, mainly adherents of the New Nationalism progressivism of Teddy Roosevelt, thought the competitive free market was outdated and that a modern society required a cooperatively managed economy of government, industry, and labor.20 They believed “competition in most of its forms is wasteful and costly” and that “unrestricted individual competition is the death, not the life, of trade.”21 They therefore believed the solution to the Depression was to accept concentrations of power and “bigness,” but to control and harness it to impose rational planning on the economy's natural chaos. They further believed too much competition in an economic depression was harmful because it drove down prices, which then drove down wages as businesses lost revenue. Higher prices, they believed, would create healthier firms by increasing their revenue. Those healthier firms could in turn hire more workers and raise wages, increasing employment and the welfare of workers. To this way of thinking, kick-starting the economy would require eliminating so-called “ruinous price competition” between firms. Instead of competing against each other through market competition, firms needed to cooperate to boost their profits. Then government could help coordinate those healthier firms to collectively raise wages and improve working conditions.22 Roosevelt's brain trust began boldly experimenting with every activist policy proposal they thought might increase economic coordination, raise prices, and thereby increase employment.
Some of what the New Dealers tried were simply more aggressive versions of things Hoover had already cautiously tried. Hoover spearheaded unprecedented federal spending in public works to create jobs, totaling billions of dollars, and poured federal money into subsidizing home mortgage loans to save people's homes. Roosevelt's team expanded these initiatives and sent even more federal money to states and localities to create jobs through the building of public works. Roosevelt's team launched an overhaul of the nation's securities and banking laws modeled on prior work of the Hoover administration, creating the modern securities laws and the Securities and Exchange Commission. Roosevelt's team put Americans directly to work on public infrastructure projects financed under the new Public Works Administration and put many unemployed young men to work in environmental conservation on public land under the Civil Conservation Corps.23 They bailed out cash-strapped state and local governments and provided matching funds for them to provide direct relief to citizens. Roosevelt's team also targeted hard-hit rural areas with a rural electrification program and rural poverty programs. The centerpiece of the New Deal, however, which many Americans came to see as the New Deal itself, was its twin economic recovery administrations—the Agricultural Adjustment Administration, regulating the farm economy, and the National Recovery Administration, regulating the industrial economy.24 Both programs had the goal of eliminating competition to drive up prices.
The agricultural program was the simpler of the two programs. The Agricultural Adjustment Administration, or AAA, created a powerful agency with immense discretion to raise farm prices by limiting the production of food, along with some ancillary measures like regulating marketing.25 In practice, the government effectively paid farmers to slaughter a portion of their animals, burn a certain portion of their crops, and leave some of their productive farmland fallow, in order to reduce the overall national supply of food and agricultural products such as cotton.26 The more daring effort of the New Dealers, however, was the National Industrial Recovery Act, which created a National Recovery Administration, or NRA, with a mandate to coordinate the industrial economy. The NRA empowered leaders in each industry to design comprehensive “competition codes” for all firms to follow. The codes were technically voluntary, but only firms that agreed to join their industry's NRA regime could display the Blue Eagle placard in their business or on their product—and the government had, with much success, vigorously encouraged citizens to boycott any business unpatriotic enough not to do its part under the NRA, making the codes practically mandatory.27 The government even launched a national campaign to ensure compliance, which included the largest parade in New York City's history, with a quarter million Americans marching for the Blue Eagle.28 NRA codes governed in detail how each business could create products, how they could sell them, and the minimum prices they could charge. The NRA ultimately approved thousands of rules affecting the specific conduct of every conceivable industry, totaling millions of pages. It also created various boards and authorities, both national and local, to promulgate rules and interpret them, and in some circumstances these were enforced by the courts. Hugh Johnson, former general, businessman, and Roosevelt brain trust member, headed the powerful new agency.29
The NRA intended to coordinate business, labor, and government under a united national industrial policy. It effectively sought to organize American industry into managed industrial cartels run by the heads of the most powerful firms and unions to create a more “rational” industrial policy that was less competitive but more predictable and stable.30 The NRA seems strange today, as the very small-business entrepreneurial energy that many Americans now see as key to a healthy economy—challenging major firms with new innovations and nimble ways—was the threat the NRA sought to stamp out. Novel practices or new methods that make one firm more competitive put downward price pressure on all firms, even forcing some out of business. Forcing every firm to follow the same practices ensures every firm can comfortably compete. The New Dealers hoped this more planned economy would eliminate “ruinous competition” between firms, which they believed was holding down prices and thus wages.
Roosevelt's First New Deal agenda marked a radical departure for the Democrats. The Democratic Party had always taken pride in its Jeffersonian legacy as the party of strong states and small national government. Since the very beginning of the party, Democrats resisted expensive plans for national infrastructure projects and modernization schemes. Traditionally, Democrats didn't like big business, or, really, big anything.31 The First New Deal's expansive projects to centrally manage the economy, build national infrastructure, and provide employment to hordes of unemployed young men ran directly counter to everything for which Democrats had always stood. It had always been Federalists, Whigs, and Republicans who promoted the national industrial policies, internal improvements, and American Systems that Democrats fought fiercely against. Roosevelt's New Deal was progressivism, and not Wilsonian small-government “progressivism” but the progressivism of Teddy Roosevelt's New Nationalism.32 The Democrats under the First New Deal weren't simply expanding the size of the federal government. They had thrown in their lot with bigness—big business, big labor, and experts engaged in national planning in a powerful federal government.33
As Roosevelt reached the end of his first term, this First New Deal agenda ran into resistance. Roosevelt remained popular, as did his New Deal in general, yet the crown jewels of his agenda, the NRA and the AAA, had raised hackles. The AAA wasn't wildly popular for the obvious reason that, at a time when many Americans were literally going hungry, the government was paying farmers to slaughter pigs, spike fruit with kerosene to turn it inedible, and burn bushels of corn—all to drive up the price of food that many Americans already couldn't afford.34 What's more, while the program benefited larger farmers, it devastated small farmers and sharecroppers. When the government ordered landowners to leave land fallow, many landowners pushed sharecroppers off their land while continuing to farm the remainder themselves.35 The program drove up agriculture prices as intended, making larger agricultural businesses more profitable, but at the expense of poorer farmers and sharecroppers who now could no longer make a living at all. Yet problems with the NRA dwarfed those of the AAA.
The NRA effectively granted code-making power to the leaders of the most powerful firms in each industry. Allowing the largest and most politically connected businesses to dictate the daily minutia of how their smaller and less powerful competitors had to conduct business led to the inevitable abuses of rule-making power to hinder rivals.36 Many also feared businesses were using their code-making power to raise prices without also increasing production or wages, taking the extra profit for themselves.37 As complaints mounted, the Senate created an independent review board to assess the NRA codes, appointing the highly respected lawyer Clarence Darrow to lead it. Given Darrow's political views, Roosevelt expected him to be friendly to his New Deal centerpiece. Darrow instead issued three blistering reports that charged business leaders with abusing NRA codes to eliminate low-cost competitors they didn't like, insulating themselves into cartels and monopolies, and creating rules that were ultimately bad for consumers.38 Embarrassed, the administration attempted to sideline Darrow's review board until, after the third report, Darrow resigned in frustration. Roosevelt abolished the review board by executive order.
High-handed enforcement of the NRA codes also led to stark injustices. Journalist John Flynn, once a populist Democrat and early Roosevelt supporter who later became a harsh Roosevelt critic, authored the famous 1948 Roosevelt Myth, in which he wrote about the enforcement regime:
Only the most violent police methods could procure enforcement [of the NRA codes]. In Sidney Hillman's garment industry the code authority employed enforcement police. They roamed through the garment district like storm troopers. They could enter a man's factory, send him out, line up his employees, subject them to minute interrogation, take over his books on the instant. Night work was forbidden. Flying squadrons of these private coat-and-suit police went through the district at night, battering down doors with axes looking for men who were committing the crime of sewing together a pair of pants at night.39
Another famous incident that garnered national attention involved a New Jersey tailor named Jacob Maged. A New Jersey Court sentenced Maged, a Polish immigrant, to serve thirty days in prison and pay a hundred-dollar fine for pressing a suit for 35 cents when the New Jersey state NRA had set the price at 40 cents.40 After a public outcry at the injustice, the judge released him after serving only three days of the sentence, but not without giving him a public lecture from the bench about the importance of the NRA, the government's war on “price cutters,” and the value of community. According to the New York Times, the judge “gave him a little lecture on the importance of cooperation as opposed to individualism” and told him he “should uphold the president and his plan.”41
By 1934, many former Roosevelt allies from the old populist Democratic Party base had reached a breaking point with the First New Deal. Since Jefferson and Jackson, the Democratic Party was proudly suspicious of federal power. It was the Democrats who long opposed national authority, championing the power of states. Democrats fought against the crusading moral reforms of Whig and Republican elites. Democrats distrusted national economic and industrial policy as sops to bankers, speculators, and industrialists living in far-off places like New York City, prizing instead the common sense of ordinary people who labored on farms and worked with their hands. Democrats opposed national efforts to modernize the economy with national industrial policies like Henry Clay's American System. The elite-driven NRA schemes and public works projects of the First New Deal looked to these populist-minded Democrats like a betrayal of everything for which the Democratic Party had always stood.42 Some Democrats blamed the deviation on Roosevelt welcoming so many Republican progressives to infiltrate his administration.43 These critics weren't just a party fringe, but included many of the most important Democrats of the preceding era including its most recent presidential nominees, John W. Davis and Al Smith, both of whom viewed Roosevelt's New Deal with disgust as a repudiation of Democratic Party principles.44
The populist base of the Democratic Party found its champion in Senator Huey Long, the rabble-rousing Democratic boss of Louisiana. Long rose to national attention as Louisiana's governor during the late 1920s by turning the state's poor and working class against its former ruling elites. Long was brash, unconstrained by democratic tradition, and sometimes thuggish. As governor, he converted the Louisiana government into a powerful and often vindictive political machine loyal only to him, hounding enemies out of jobs, harassing journalists, and collecting funds through corruption to reward allies. Armed state policemen constantly followed Long around as personal guards in a show of force.45 Yet Long actively used his vast power to shower tangible benefits on the poor and working Louisianans who enthusiastically supported him. He used the money taken from wealthy elites and corporations to build hospitals, erect public works, and provide free schoolbooks to children.46 While maintaining his complete control over Louisiana from the Senate, in 1934 Long brought his populist revolt national. Attacking Roosevelt as a rich man in bed with bankers and businessmen, and his New Deal as a useless program that left the rich man rich without relieving the masses,47 Long proposed a plan he called “Share Our Wealth” that promised to make “every man a king.” Long's plan would cap personal fortunes and limit top incomes by confiscating all income over one million dollars and personal fortunes over five million to guarantee every American a minimum income, free college education, old-age pensions, veteran's benefits, a free month's vacation, and a maximum thirty-hour work week.48 The plan became a movement that spread over America, with struggling Americans forming their own “Share our Wealth Clubs,” which reached eight million members.49
Long was not alone. Long and his “Share Our Wealth” plan had vocal support from another former Roosevelt supporter, the famous radio priest Father Charles Coughlin.50 Coughlin, whose talk radio show reached millions of Americans, was now attacking Roosevelt as a tool of big business and the banks.51 In fact, Coughlin was attacking all of modern capitalism, and he announced his own movement, the National Union for Social Justice, backing policies like income guarantees, high taxes on the rich, labor protections, and public control of industry for the public good.52 Around the same time, a California medical doctor, Francis Townsend, began attracting national attention for his “Townsend Plan,” which would provide publicly funded old-age pensions for every American.53 In a nation in which the Depression had forced older Americans to helplessly scrounge for food on the streets, the popularity of Townsend's plan boomed, so he began organizing across America for its adoption—and attacking Roosevelt for refusing to endorse him and his plan.54 Roosevelt and his New Deal were under assault from legions of populist Democrats who believed his administration had sold out poor and working people to benefit big business and the rich. Long was clearly gearing up to challenge Roosevelt for the White House in 1936.55 Roosevelt, who believed Long was a dangerous threat to the republic, feared he might win.56
In response to these populist attacks, Roosevelt's brain trust pivoted in 1935 to create a “Second New Deal.”57 Around this time, the influence in Roosevelt's brain trust was shifting away from the Teddy Roosevelt–style New Nationalism progressives, who disliked spending and liked bigness, toward acolytes of Wilson's New Freedom like Louis Brandeis and Felix Frankfurter, who didn't mind spending and distrusted big business—and this new agenda reflected it.58 While the First New Deal was a progressive program to rationally plan the economy through expertise, the Second New Deal would be a populist attempt to steal Huey Long's thunder. The crown jewel of this Second New Deal agenda was a new old-age pension program modeled on the Townsend plan called Social Security, which provided federal social insurance payments in the case of old age or disability. In answer to Long's Share Our Wealth plan, Roosevelt pushed through a tax hike on the richest Americans with the Wealth Tax Act, which came to be called the “Soak the Rich Tax.” Roosevelt's tax plan included a new top marginal tax rate of 79 percent specifically tailored to target one man, John Rockefeller. It also imposed a new tax on the undistributed income of corporations to force them to pay out wages and dividends. In addition to all that, the Roosevelt administration created programs explicitly meant to benefit organized labor, workers, the poor, and even African Americans, such as a new Works Progress Administration. The WPA employed millions of unemployed Americans to create federal projects in nearly every community in America, including parks, roads, public buildings, and bridges, and also funded the works of writers and artists. The Wagner Act created the modern labor union law regime of recognition and collective bargaining. The Fair Labor Standards Act created a minimum wage and maximum work hours—although the terms were far less generous than the ones Long proposed.59 Roosevelt, around this time, even began to identify with Andrew Jackson.60 Roosevelt's stark shift from the progressive First New Deal to the populist Second New Deal shored up his exposed flank. Long didn't challenge Roosevelt in 1936—in fact, an assassin shot and killed him at the end of 1935—and although the supporters of Long, Coughlin, and Townsend attempted to join forces in a third-party challenge in 1936, it was a failure.61
The synthesis of the radically different First and Second New Deals, however, birthed a new American political ideology. The First New Deal was progressive in its confidence in business and its comfort with further empowering corporate leaders, highly educated professionals, and others with great social and economic power. The NRA and the AAA worked with the powerful, deferring to their wisdom and increasing their influence while disregarding the interests of—and at times even victimizing—small-business owners, immigrant shopkeepers, and sharecropper farmers. These programs valued the rational and utilitarian management and stability of the greater system over the interests of the weak, establishing rules that made the rich and powerful more rich and powerful, sent struggling tailors to prison, and pushed penniless sharecroppers off their land as an unfortunate but fair cost to advance the greater good of a larger plan. The Second New Deal did the opposite. Minimum wage laws, Social Security, boastfully punitive taxes on the rich, and vigorous protection of labor unions were about using government to redistribute power and wealth from the rich and powerful to ordinary citizens. In the Second New Deal, progressives put their ideas about planning, modernization, and social science in the service of the populism of Long and Coughlin. What emerged was a new hybrid ideology merging progressivism into traditional Democratic populism. It was progressive in its confidence that neutral experts can use knowledge and planning to continually push the nation toward progress. It was populist in defining progress as moving toward a society that sided with the people against the elite, particularly in empowering the least well off. At the time, it was a surprising synergy. Populists and progressives came from different parts of society, and up to that point in history were mainly on opposite sides of the political debate. Their unlikely combination, something that could only have happened in the heat of the Great Depression, created a new political ideology unlike anything existing in America before. We call that ideology New Deal liberalism.
Roosevelt's New Deal liberalism embodied a new idea about the role of government—that it both could and should plan and coordinate an increasingly complicated industrial society to benefit workers and the least well off. Planners could regulate markets and banks to avoid booms and busts. They could provide work to eliminate economic hardship. They could ensure capital, labor, and government worked together in harmony to plan business processes. They could use taxes and regulations to engineer fairness and allocate wealth. They could leverage resources to provide public works and modernize rural areas across America. Using the modern tools of social science, experts could coordinate and supervise the countless moving parts of the industrial economy to impose rational planning and stability, eliminating chaos and ensuring things never again got so out of hand. Traditional progressivism was moralistic, hoping to improve the lower classes to remake them into mirrors of their upstanding betters. Roosevelt's ideology wasn't about improving the working class and the poor but putting progressivism to work in their service. Traditional populism was suspicious of reformer elites wielding federal power. Roosevelt's ideology trusted it could enlist these reformers as allies. This new ideology, unlike anything that had existed before, has been the heart of the Democratic Party ever since.
THE REACTION AGAINST THE NEW DEAL
Franklin Roosevelt and his New Deal were overwhelmingly popular, but not with everyone. Some people didn't just oppose the New Deal. They feared it and despised the man who implemented it as a tyrant and traitor. From where we stand today, this terrified opposition seems overwrought if not unhinged. Most Americans now consider Roosevelt and his New Deal to be national high points. Roosevelt is mainly remembered as a kindly man in a wheelchair who led America through the Depression with folksy fireside chats and then navigated it through a world war with steely determination. His New Deal not only doesn't seem radical, it now seems traditional and even a bit archaic—a quaint collection of boring government agencies like the FCC and SEC, public-works spending at the time of high unemployment, and some of the most popular government programs ever created, like Social Security. It's easy to forget that, for Americans living through the 1930s, the New Deal was a radical and terrifying revolution imposed at a deeply unstable time in which it was reasonable to fear that the republic might even crumble.
The Great Depression inflicted unthinkable economic pain on ordinary Americans at a scale almost difficult for us to fathom. Overnight, a rich and confident nation had plunged into a desperate and insecure one. In the Depression's first years, American industrial production fell by almost half.62 The stock market dropped by almost 90 percent. At least a quarter of the nation's working population was unemployed. People who thought of themselves as middle class were now living like desperate refugees in their own country. When looking at old photos of Americans suffering through this national devastation the way we look at photos of starving people in war zones, it's sometimes hard to remember that these miserable people hadn't always lived like this. Just a few years before, they were ordinary Americans enjoying comfortable lives in the easy prosperity of the Roaring Twenties. Somebody had suddenly taken all that away, and now they were struggling to survive. As one would expect, the catastrophe caused a widespread collapse in faith in America's government, but also in the republic itself. In 1932, over twenty thousand First World War veterans, many unemployed and homeless, marched on Washington demanding early payment of the “bonus” they had been promised they would receive in 1945. This “Bonus Army” built elaborate camps outside the Capitol, where they organized and even held drills. Some in government feared they might attempt a coup, so they sent in the army. General Douglas MacArthur flooded the camps with tear gas and then charged the veterans with cavalry backed by six tanks under the command of George Patton.63 America was on the brink of collapse.
That people might rise up to demand radical change that might topple the republic was hardly impossible. Just as the nation transformed into a true industrial power, its economy had melted down, leaving ordinary people in misery. People began to wonder whether the American system, designed for a preindustrial agrarian economy, might be inadequate to govern a complex industrial economy. Perhaps liberal democracy and decentralized market capitalism weren't up to the task of administering a vastly larger nation of millions with automobiles, telephones, and factories. Maybe the problem was democracy, capitalism, and the American constitutional system itself?64 It became fashionable in many circles to believe that the Depression had proved America's political and economic system, built ages ago to govern a colonial outpost of independent farmers, was outdated.65 Nor was this wholly irrational. While we often talk about the Great Depression as a global phenomenon, it was really a crisis of Western democratic capitalism. Other systems of government, with strong centralized states, didn't experience the Depression in the same way as liberal-democratic nations with laissez-faire capitalism. Germany as a parliamentary democracy suffered perhaps the worst depression of any Western nation, with employment falling from 20 million Germans to only 11.4 million, while the registered unemployed rose from 1.25 million to 6 million.66 When Hitler and the Nazis came to power, unemployment fell until Germany reached nearly full employment.67 The Soviet Union, a state-directed communist economy with state-directed employment, wasn't directly affected by the global depression in the same way as the world's capitalist economies.68 The Soviet economy was rapidly industrializing, driven by demanding national plans.69 The planning and agricultural collectivization policies the Soviet regime employed to achieve such growth was of course in reality often inefficient, produced substandard products, induced shortages, and spread misery across large portions of the Soviet population, including a brutal famine in Ukraine—facts mostly hidden at the time to the West.70 To Americans, the Soviet Union looked to be thriving as their own country struggled.71
Maybe, people wondered, prosperity in the modern era required a more planned and centralized state like the ones that fascist or communist regimes provided. Maybe America even needed a strong dictator to set things right. Today, people often wonder why so many Americans during the 1930s openly flirted with communism or fascism. While the ranks of communist and fascist parties never swelled to directly threaten an overthrow of the government, many ordinary Americans did attend Communist Party meetings in the 1930s—to their detriment in the congressional hearings of the 1950s—while others who would have never dared to consider actually joining a fascist movement nonetheless openly admired European fascists like Mussolini and looked eagerly through their successes for lessons and models they might bring back to America.72 Others wonder why so many Americans flocked to thuggish and authoritarian figures like Huey Long. Because the Depression was so horrible, many Americans lost faith in the republic and wondered whether the time had come to replace it with a more “modern” system built for the modern world—meaning a strong leader freely wielding public power as a benevolent dictator to manage the new economy.73 In 1934, Congress held extensive hearings on a “Business Plot” in which a group of wealthy businessmen had allegedly sought to entice a popular Marine Corps general to lead a coup against the president with their financial backing.74 In 1935, Sinclair Lewis wrote a popular novel, later adapted for the stage, called It Can't Happen Here, in which a demagogic US Senator modeled on Long transforms the country into a dictatorship after getting elected president—and people took the work seriously as a warning.75 After becoming president, Roosevelt's adviser Adolf Berle reportedly warned him with all seriousness that his presidency would either end with an economic recovery or a revolution—and that the chance was about fifty-fifty which one it would be.76
Roosevelt's New Deal might have saved the republic because it assured Americans their government not only understood the gravity of the crisis but was aggressively pursuing solutions. The very fact that the New Deal was so immense, visibly radical, and a total divorce from traditional government was exactly what gave so many struggling people who had lost faith the hope it might work.77 Had Roosevelt not restored people's hope in the republic, it's impossible to say what might have happened. America's parties would certainly have collapsed—the Republican Party under Hoover effectively already had. That collapse, however, could have unleashed unimaginable forces with unthinkable ideas. Desperate Americans might eventually have become willing to listen to something more radical, whether from a demagogue like Long, a Bonus Army–like revolt, a more competently executed Business Plot, or something worse. Had Roosevelt at the brink of disaster not pursued a course so radical it restored desperate people's faith, a catastrophic realignment could have followed, perhaps one so ugly it brought the entire republic down. Yet the same reason the New Deal restored trust to those who lost it was the reason others feared it. Confidence in the American republic had collapsed, people were desperate, many appeared open to authoritarianism, and a new president backed by an unquestioning congressional majority was pushing through radical and controversial programs, ones significantly strengthening the power of the state and the president in ways unlike anything in the history of America. Not only was the New Deal both radical and controversial, but some of its many aggressive and untried policies turned out to be unwise, poorly implemented, and constitutionally questionable. It was inevitable opposition would rise against Roosevelt and his New Deal.
In the first years of Roosevelt's administration, both the president and his New Deal enjoyed vast popular support as most Americans tacitly agreed to allow the new president as much room as he needed to tackle the Great Depression. Congress was overwhelmingly Democratic, while the progressive faction of what was left of the Republican Party tended to vote for Roosevelt's policies, so the president was free to experiment with overwhelming congressional majorities at his back. As the New Deal dragged on, however, opposition grew, much of it inside Roosevelt's dominant Democratic Party. New three-letter agencies with uncertain new powers were springing up constantly, making people uneasy. Rich farmers were profiting by destroying desperately needed food, while poor farmers were driven from their land. The government had granted leaders of the most powerful businesses the authority to make rules, resulting in millions of pages of competing mandates, directives, and interpretations from various local and national boards designed sometimes to harass competitors. Deficit spending continued, and the emergency looked like it might never end.
Most important, over time many Democrats grew wary of how starkly the New Deal had increased the president's power and the power of his government in an era in which dictatorship was spreading across the world. It was alarming when the government was employing vast armies of young men, complete with military camps and drills and uniforms, often reporting to officials appointed through political patronage for loyalty to the Democratic Party. It was alarming when businesses were asked to place government-issued Blue Eagle placards in their windows to demonstrate loyalty to the president's programs, and when the government encouraged citizens to boycott those who refused. It was alarming when the president wielded his powers to punish one specific person, as with the “Soak the Rich Tax.” Above all, it was alarming when Roosevelt proposed his disastrous Court-Packing Plan.
It was inevitable that people would challenge the New Deal's programs in court, and those challenges finally reached the Supreme Court around the middle of Roosevelt's first term.78 To little surprise, the Court held many New Deal programs unconstitutional—because according to the conventional reading of pre–New Deal Supreme Court constitutional precedent they were mostly unconstitutional. When drafting the New Deal in the mindset of addressing an emergency, the members of the Roosevelt administration put very little thought into how to justify their radical new ideas under existing constitutional law. Yet the New Deal was a radical innovation granting the federal government expansive powers to plan the entire agricultural and industrial economy, things the federal government had never done before, in part because no one thought it could. One Monday in May of 1935, the Court handed down three separate unanimous decisions holding that parts of Roosevelt's New Deal and actions he had taken in implementing it violated the Constitution. New Dealers called it “Black Monday.”
The most important of those three cases was Schechter Poultry Corp. v. United States, striking down as unconstitutional the First New Deal's centerpiece, the National Recovery Administration.79 The government had charged four Jewish immigrants, the Schechter brothers, with violating their industry's NRA code in their kosher poultry business in Brooklyn for failing to follow rules for slaughtering chickens that clashed with Jewish dietary laws. When the Schechters refused to alter their slaughtering practices, the government sent them to prison. The Court held the conviction unconstitutional because Congress couldn't constitutionally delegate its lawmaking power to the code-making authorities under the NRA, and because, under the Constitution's Commerce Clause, it couldn't regulate activity that didn't actually cross a state line. The government couldn't just claim, as it had, that the entire national poultry industry was one great interstate market.80 The Court's reasoning threatened the entire New Deal. The sole constitutional justification for much of the New Deal program was Congress's power to regulate interstate commerce. If the federal government could only regulate actual commerce crossing state lines, much of the New Deal would collapse. It's said the decision drove Roosevelt into a rage, convincing him that the Supreme Court had become his enemy and the chief obstacle to his presidency.81
Modern commentary tends to describe the clash between the Court and the Roosevelt administration in terms of “conservative” and “liberal” politics, noting a majority of the justices had been Republican appointees—although at a time when Republicans were progressives. The disagreement was less partisan or policy-driven than philosophical.82 A bloc of the Court dubbed the “Four Horsemen” (which included two Republicans and two Democrats, one appointed by a Republican) believed in a “formalist” view of the Constitution, construing it strictly according to traditional meanings—thus striking down New Deal innovations.83 The “Three Musketeers,” on the other hand, were Roosevelt's appointees (including a Republican) who believed in what Oliver Wendell Holmes once claimed was a Constitution that acts like a live organism, a living Constitution the interpretation of which judges pragmatically adjust over time—thus wanting to evolve constitutional understandings to uphold what they saw as needed New Deal programs.84 Two swing votes drifted toward the Horsemen.85
Roosevelt first attempted to rally the public against the Court, attacking its “horse-and-buggy definition of interstate commerce” on the radio, which to his surprise earned him significant backlash from the public.86 As he weathered several more adverse rulings, including one striking down the AAA,87 Roosevelt looked for another strategy. In 1937, he settled on a bill giving him authority to immediately appoint a new justice for every justice over the age of seventy, claiming it necessary to reduce the workload on older justices. The Constitution doesn't specifically set out the number of Supreme Court justices, leaving the court's size to Congress. As the republic grew in its early years, Congress had added justices over time, settling on nine in 1869. Nonetheless, everyone immediately saw through Roosevelt's weak justifications about the age and workload of the justices to understand the implications of what he proposed.88 Roosevelt's plan allowed him to instantly appoint six new justices, giving him nine safe votes and a friendly majority. Justice Louis Brandeis, the oldest justice and a strong Roosevelt ally on the Court, was personally insulted.89 Opponents called it an attempted coup of a coequal branch of government to bring the entire federal machine under Roosevelt's control.
Debate over the Court-Packing bill in Congress was intense, and opposition among congressional Democrats made it doubtful it would pass. John Nance Garner, Roosevelt's formerly loyal vice president, left Washington to publicly distance himself from the president he served.90 In the middle of contentious Senate hearings, the Supreme Court handed down a collection of opinions upholding New Deal programs. Justice Owen Roberts, a swing vote, switched his allegiance to the Musketeers. Soon after, Justice Willis Van Devanter, one of the Horsemen, announced his retirement. The Court had sent Roosevelt a message—it would give him what he wanted to save the court's integrity as an institution.91 Roberts's vote is called the “switch in time that saved nine” because, by making the controversial bill unnecessary, Roberts gave Congress the rationale and leverage it needed to force Roosevelt to drop his unwise crusade against the Court.92 After the Roberts switch, the Court now became a consistent New Deal ally, working to justify instead of strike down New Deal programs. A few years later, it even overturned Schechter Poultry, holding that Congress could, under its commerce power, regulate anything that affected interstate commerce in some way—turning the Commerce Clause into the de facto general legislative power it still serves as today, since just about everything theoretically affects commerce in some way. Roosevelt got his constitutional revolution, but at a steep price.
For many Democrats, a direct attack on the American constitutional system of checks and balances was a step too far. When added to the already-controversial First New Deal, the Second New Deal controversies—the “socialism” of Social Security, the openly punitive “Soak the Rich Tax,” and the new armies of young men in federal work programs—had hardened congressional resistance to any radical new programs or government innovations.93 Then the economy crashed again in late 1937, erasing most of the New Deal economic recovery and beginning what many called “Roosevelt's Depression.” After that, Roosevelt, during the 1938 midterm elections, ordered a ruthless “purge” in party primaries of disloyal Democrats whom he felt had insufficiently backed his New Deal.94 When most of the targets of Roosevelt's purge were reelected despite the intervention, a new Congress returned quite unhappy with the president. For the first time, a significant portion of Roosevelt's own party broke with him. Traditional Democrats, particularly in the South, now agreed that Roosevelt was driving too much change too fast, and that not all of it was consistent with the American system they knew.95
A group of Democrats reached across the aisle in Congress to form a coalition with disaffected Republicans to stop any further expansion of the New Deal. This informal alliance took on a name, the “conservative coalition.”96 The ideology of the members of this coalition wasn't exactly “conservative” in the ideological sense in which we use that word now. Many Republicans in Congress at the time, first elected in a prior era, held strongly progressive views. Many Democrats in this coalition believed they were also progressive, although of the Wilsonian New Freedom variety that was their party's heritage. They were conservatives in the sense by which people used the word then, to mean anyone opposing the New Deal. Enough anti–New Deal Democrats now joined this ad hoc alliance with congressional Republicans that Roosevelt would never expand his New Deal further. The Democrats continued to control the federal government for years more. New Deal programs already enacted would not be repealed. The New Deal would remain America's dominant national frame for government for generations. For now, however, this was as far as it would go.
CREATING THE MODERN REPUBLICAN PARTY
While Franklin Roosevelt held office, the Republican Party remained weak and disorganized. Republicans not only struggled to win elections, but the party struggled to define exactly what it believed in Roosevelt's new political era. For a time, many progressive Republicans insisted their party's best path forward was to re-embrace its progressive heritage, including those parts of the New Deal founded in progressive principles.97 That, however, was never a realistic strategy. The old political party of Teddy Roosevelt and Herbert Hoover was clearly dead. In fact, in 1936 many of the most important progressive politicians, like Robert La Follette Jr. and Fiorello La Guardia, advocated for Roosevelt's reelection.98 The only thing Republicans knew in this strange age was that the Republican Party was the political opposition to the Democrats. The arguments people used against Roosevelt and his New Deal, therefore, soon became the arguments this emerging new Republican Party would embrace.
Opponents of Roosevelt's agenda principally leveled two charges against him. First, people feared the president was seizing too much power and his government encroaching too much on traditional American liberty.99 Whether it was all the new regulatory agencies with considerable new powers, the abuses of the National Recovery Administration, the punitive Soak the Rich tax, the Court-Packing scheme, or the overwhelming majorities of the “rubber-stamp” Congress, opponents argued the president's administration was trampling on liberty. Second, people feared Roosevelt's policies were moving the country too far and too fast, violating American traditions and potentially changing the nation's character and culture.100 That Roosevelt's revolution in government was essentially “un-American.” Whether new social welfare programs like Social Security, government centralization, cooperation between governments and unions and large corporations, armies of young men in uniforms laboring under government programs, or boycotts and Blue-Eagle placards, a lot of people saw in the New Deal something that didn't look like traditional America. They worried that people who grew up in this new society wouldn't be the same rowdy and industrious and innovative people who had streamed into the frontier, built railroad empires, or invented motor cars and airplanes. Their concern was that the New Dead would change unwritten rules intertwined in the culture of America, and that America would decline if citizens failed to accept these cultural norms and rules. It was a concern centered around what America's Founders called republican virtue—that a republic needs citizen with specific traits of character because in a republic the people choose the government. These two ideals—defending liberty against growing federal power and protecting the character of the republic—summed up the uneasy sense among the New Deal's opponents that Roosevelt's program was dangerous. These ideals thus became the arguments of the conservative coalition in Congress, and thereby the core principles identified with “conservatism.” Over the years, they would develop into the core of a new Republican Party.
It's no surprise that the first organized opposition to Roosevelt and his New Deal was therefore called the American Liberty League. The league presented itself as a nonpartisan group of Republicans and Democrats organized to defend the Constitution and traditional American liberties against the New Deal. Far from a fringe group of unhappy Republicans, the League's leadership included many prominent Democrats including Al Smith, the 1928 Democrat nominee for president; John Davis, the 1924 Democratic nominee for president; and Dean Acheson, a former chair of the Democratic National Committee.101 Heading into the 1936 election, the Roosevelt administration dismissed the League as a stalking horse for the Republican Party, and for good reason. Yet the principle around which it rallied wasn't opposition to taxes, spending, social welfare programs, or regulation. It was the cause of liberty and fidelity to the American Constitution.
The first Republican campaign of the New Deal era, that of Kansas governor Alf Landon, also centered around the theme of liberty. Landon had been a progressive Republican and was generally supportive of parts of the New Deal.102 Yet under the influence of his party, the theme of his 1936 campaign became the defense of liberty and the Constitution. By the end of his campaign, Landon and his party charged Roosevelt with usurping the power of Congress, creating armies of bureaucrats to supervise the American people, and imposing on Americans' economic liberties:
The President spoke truly when he boasted…“We have built up new instruments of public power.” He spoke truly when he said these instruments could provide “shackles for the liberties of the people…and…enslavement for the public.” These powers were granted with the understanding that they were only temporary. But after the powers had been obtained, and after the emergency was clearly over, we were told that another emergency would be created if the power was given up. In other words, the concentration of power in the hands of the President was not a question of temporary emergency. It was a question of permanent national policy. In my opinion the emergency of 1933 was a mere excuse…. National economic planning—the term used by this Administration to describe its policy—violates the basic ideals of the American system…. The price of economic planning is the loss of economic freedom. And economic freedom and personal liberty go hand in hand.103
Given the historical moment, the radical disruption of the New Deal agenda, the degree of new power it invested in the president, and the overreaches of programs like the AAA and NRA, it was natural that opponents of Franklin Roosevelt and his New Deal agenda, whether Democratic or Republican, found common cause under the principle that the president's policies were eroding liberty in the republic.
The second idea intertwined with these invocations of liberty was that Roosevelt's New Deal was damaging the American system of government and altering its national character. Attacks on the New Deal as “socialism” that would destroy “free enterprise” and sap away “rugged individualism” are so familiar to us now they hardly resonate. These weren't, however, simply claims about preferred economic policies or articulations of a reactionary fear of change. They were claims that Roosevelt's New Deal was too radical, too fast, and that it was effectively changing the character of America by destroying the traditions and values that had caused the nation to thrive and prosper. As Landon's notes for his campaign's whistle-stop speeches claimed, “We have a choice to make between the American system of government and one that is alien to everything this country before has known.”104 When grasping to put these feelings into words, the New Deal's opponents often labeled it as fascist or socialist or sometimes simply un-American. They publicly worried that new programs like Social Security would sap the rugged individualism that had made America thrive. These were all ways of saying they feared Roosevelt's policies were unwittingly destroying the hidden things that had made America special and that they would ultimately break the republic. In the campaigns that followed, the union of these principles—liberty and virtue—coalesced into a new party ideology, one we now call conservatism.
In responding to the crisis of the Depression, Franklin Roosevelt ultimately played a role not unlike that of Andrew Jackson. In the wake of the Depression, Americans worried about how to adapt their institutions to the realities of a new modern industrial world of dense cities, factories, and cars. Roosevelt gave them a program drawing on both populism and progressivism, creating the foundation of the new ideology of New Deal liberalism. In reaction, an opposition coalition formed of those opposed to Roosevelt's plans, which became the nucleus for a new Republican Party. Much like Clay's Whigs, these opponents combined their various and often unrelated concerns and causes into a new ideology taking all their objections into account. It was the start of a new great national debate. On one side Roosevelt and his Democrats proposed New Deal liberalism, holding that America could design and plan a more efficient and prosperous nation that better served working people and the least well off. On the other side, Roosevelt's opponents joined together inside the shattered shell of the Republican Party, objecting to this Democratic solution as “big government” that would trample liberty and damage the culture of the republic. A new Fifth Party System was born.
Franklin Roosevelt presided over the second most dangerous time for the American republic, second only to the Civil War that literally split the nation apart. In such dark times, it's easy to imagine a different history, one in which violent riots, a coup, or the emergence of a dangerous totalitarian leader led to the death of American constitutional government. Roosevelt ushered America through this minefield in one piece and birthed institutions that became staples of American government. Yet in preserving the republic during these hard times, Roosevelt also radically transformed what America was and how it worked. Roosevelt ran for president four times and remained in office until he died. George Washington—who could have become king had he wanted it—famously relinquished the presidency after eight years to return to his farm, keeping in mind the tradition of the Roman dictator Cincinnatus who saved his country and then handed absolute power back to the Roman Senate. Every president after Washington followed his example, stepping down after two consecutive terms even when they didn't want to, and even though the Constitution didn't yet require it. To Democrats, Roosevelt's longevity in office signified the greatness of his agenda. To Republicans, it symbolized exactly why that agenda troubled them.
When Roosevelt finally left the national stage, he hadn't just transformed his party. He had guided America into a great realignment, sparking a new national debate between New Deal liberalism and modern conservatism. Ever since, these two ideologies have dominated America's national discourse. The way America has talked about, debated, and even thought about every national issue since 1932 has always come down to this same ideological fight. On one side stands the principles of populism and progressivism. On the other side stands the principles of liberty and virtue. That's what the Fifth Party System, forged in the Great Depression and then fought across decades of elections through to today, has really been about. For the better part of a century, often without realizing it, America's parties—and all of America—have battled over Franklin Roosevelt and his New Deal.