Why the New Deal was a Bad Deal

“Now, the rest of the story” (Thank you, Paul Harvey.) about the “New Deal” – what did these members of the Roosevelt “brains trust” and the President actually accomplish over his first two terms and prior to the industrial explosion required to win the Second World War? In October 1929, before Black Friday, the unemployment rate was about 5% and the Dow-Jones Industrial Average stood at 343. Over the next several weeks the Dow lost 39% of its value. Three and a half years later, on Roosevelt’s Inauguration Day in March 1933, the unemployment rate was about 23% (it reached its Depression peak of 25% later that year) and the Dow was under 100. All this happened under Republican President Herbert Hoover, who had never expressed any sense of urgency to repair the economic damage that occurred in 1929.

 By August 1937, after many of the “First 100 Days” initiatives had run their course – mostly through Supreme Court debunking, the unemployment rate was about 13.5% and the Dow had recovered to 190 but then a strange thing happened.

 A new banking crisis developed with the same fear-of-failure that had accompanied the Crash of ’29 and which had dominated Roosevelt’s First 100 Days in 1933. By November 1937, the unemployment rate was approaching 19% and the Dow had fallen to 114 – a 40% drop in value! This was Roosevelt’s Stock Market Crash (somehow lost to history by corrupt progressive/liberal academics) and could not be blamed on Herbert Hoover. (For context, the stock market selloff experienced in October 1987 resulted in an economic loss of about 23% but fully recovered in only 22 months – not the 100 months and a world war it took to recover from Roosevelt’s crash in 1937.) Near the end of FDR’s second term in 1939, unemployment was still about 15% and the Dow was in the mid-100s. The Gross National Product (GDP) had just barely returned to pre-1929 crash levels.

 In summary, for all of the Federal Government spending and for all of the new and coercive projects created by the New Deal over the previous eight years, unemployment was reduced by only one-third and the economy, as measured by the Dow, had recovered only one-quarter of its lost value. By any measure, the New Deal was an abject economic failure and a Constitutional fiasco.

 This, of course, was considerably different from the fawning, glowing picture of the “Age of Roosevelt” painted by establishment liberals ever since. Roosevelt’s numerous intellectual/artistic make-work projects in his New Deal actually created a new phenomenon in America – formerly a nation of rugged individuals – the “Cult of Celebrity”. This phenomenon has come to dominate every facet of information production, processing and dissemination and can only exist with an audience of the uninformed, non-informed, ill-informed, misinformed and dis-informed and this is where the obsequious academics, intellectuals, artists, writers, celebrities and the press come into play.

 From the day the ailing Roosevelt died of a cerebral hemorrhage in Warm Springs, Georgia, in the company of two of the three women (Lucy Mercer and Daisy Suckley) with which he had had long running, extraordinary and intimate relationships, these agents of propaganda began to inculcate their associates in their respective disciplines with modern day liberal canards about the alleged successes of the New Deal which still dominate Democrat social and political philosophy.

 One person I did not mention earlier as having come to one of my parent’s “salon” gatherings at our New York home in the years following the end of World War II was Eleanor Roosevelt herself. She came with Adlai Stevenson in the mid-1950s and I remember it was a big deal to have Mrs. Roosevelt to dinner, even for the other extraordinary people who were there.

 Looking back on her contribution to the nation and the world throughout some of the most trying times in history, I believe that of all of the major players in the Progressive movement from just after the Civil War until the American intelligentsia was fully compromised in the early 1960s, Eleanor Roosevelt was perhaps the one true believer in its ideals.

 Spared the political realities and responsibilities of most of the leading progressives of that period (because she was the keeper of the secrets and wife of Franklin Delano Roosevelt), she plunged headlong and headstrong into the worthy causes in which she believed – the plight of the poor and needy; the discrimination and exploitation of blacks in America; the status of women in an industrial society; the vulnerability of refugees in post-war society after both world wars, among others. (What would she think of the mess her Democrat Party has made of these issues since the Johnson administration?)

 Perhaps because of the psychological hardships she endured even though she was a child of privilege, she expressed a truly extraordinary empathy for the defenseless, the disenfranchised and the disheartened. After all, she had been a disappointment to her own mother because she was not born beautiful; she believed (as children do) that it was her fault that her mother disliked her before she died so young and, after his death from alcohol abuse, that she had somehow been responsible for her father’s death, also.

 “She also endured a long and difficult relationship with FDR’s mother, Sara Delano Roosevelt, second wife of his father, James. She was popularly characterized, after the success of Dore Schary’s Sunrise at Campobello, as the quintessential domineering mother-in-law who not only spoiled her son and grandchildren, but took every opportunity to undercut Eleanor’s confidence and authority. In fact, according to family, ‘the relationship between Sara and Eleanor varied from close to distant at different times.’

 Sara built Franklin and Eleanor a six-story house, on 65th Street, between Madison and Park Avenues in 1906, as a gift to her son and daughter-in-law. There was only one string attached. Her. ‘You were never quite sure when she would appear, day or night,’ Eleanor reminisced many years later. Sara, formidable and domineering, had seen to the installation of connecting doors, from her own home next door, to the second-floor drawing room and the children’s’ bedrooms on the fourth floor, allowing her to assert dominion over the fledgling household.

After the children were born, the relationship grew tense as the women differed and sometimes clashed over parenting issues. FDR’s affair with Lucy Mercer brought the women closer together as Sara was firmly in Eleanor’s corner. It is not known what Sara knew of FDR’s other dalliances or his continuing relationship with Lucy Mercer after his promise to Eleanor to end it.

Yet Sara’s strong disapproval of the activists, with whom Eleanor later grew close, soured their relationship. FDR, who refused to take sides and often refused to negotiate a truce, exacerbated the tensions. By the time Eleanor had become First Lady, she clearly felt Sara was more a critic than friend.”

I believe that the true nature of the relationship, and the domination of that relationship by Sara – perhaps a sad reminder of the strained relationship with her own mother – is revealed by the fact that Eleanor was never able to tell her mother-in-law to mind her own business, when required – and do so within the boundaries of a decorum to which they both adhered.

She was betrayed by her husband after delivering six children (five of whom survived) in the first decade of their marriage. His involvement with her private secretary, Lucy Mercer, began almost immediately after the birth of their last child in 1916. Eleanor discovered the affair in 1918. Franklin Roosevelt was planning to divorce Eleanor but was dissuaded by his mother. Their marriage, from then on, was purely a political one.

 There would be one final betrayal – after promising her in 1918 to never see Lucy Mercer again – he had maintained a secret (though distant) relationship with her throughout the years (he always sent her a secret invitation to his inaugurations) and it was she who was in his office with him in Warm Springs, GA when he died.

 It was truly admirable and inspirational of Eleanor, with all of her personal burdens, to spend virtually all of her energy in the service of the less fortunate in society and I believe she was the one person who most truly embodied the spirit of giving that the remarkable Roosevelt family took such pride in instilling in each generation.

 Now, without their demi-god – to the post-New Deal progressive/liberals – truth in academia, public education, the arts and the press was to be sacrificed to the new-god of liberalism. In the end, Roosevelt’s legacy is that he coerced – some would say seduced – much of the intelligentsia of this country into abandoning their independence from the federal government. Now his acolytes had a stake in the government’s coercion of rights from the People themselves.

 The truth was dead and here is another cautionary tale much like the one my “Auntie” proposed that began this discussion. Once the lure of favored status and access to power became irresistible, these intellectual groups began to play fast and loose with the truth, they abandoned their objectivity and betrayed the trust of the People. Shortly, their arrogance would enable a young Congressman from California to change the rules of the political game forever – as we shall soon see.

 I believe a few words about FDR’s last two terms, those dominated by world war, would be appropriate at this point.

 By the day of his third inauguration (the first held in January (1941) following the November 1940 election), he had been trying mightily, but in vain, to change American public opinion about the wars going on in Europe (since September 1, 1939) and in the Far East (since 1931). America, as a whole, was not interested primarily because they had been up-to-their-eyeballs in the Depression since 1929 and in the Dust Bowl since 1931. They were not ready to tackle another crisis.

 Although not with the passion he displayed about social initiatives but, with a practical sense, he persisted in making the case to the People in speeches and “fireside chats” and to Congress with legislation to supply England with war material. He had finally succeeded with his creative “lend-lease” program in March 1941 and then the Japanese Empire attacked our military facilities in Hawaii on December 7, 1941 – his famous “Day of Infamy”. He obtained a declaration of war from the Congress two days later.

 As a wartime leader, he was magnificent. One could say that he gave his life for his country because the strain of leading the most powerful nation on earth against two implacable foes destroyed his health and caused his premature death at age 64 in April of 1945.

 The war plans and aims he developed with Winston Churchill, England’s unwavering Prime minister and good friend (unconditional surrender first of Germany and then of Japan), were militarily sound and gave time for the industrial giant that was America to build the greatest war machine ever created to defeat two of history’s most powerful and brutal warlords, Hitler in Europe and Tojo in Japan.

 Perhaps not surprising in light of the presence of so many advisors who were, at the very least, sympathetic to Stalin’s Soviet Union, Roosevelt never really appreciated Stalin’s goal of domination over the European countries adjoining Russia. Over Churchill’s vehement objections, he agreed to Stalin’s proposal for a post-war division of Europe into spheres of influence, with Stalin controlling all of Eastern Europe. This, of course, led to the Cold War, 45 years of tension between East and West that produced a nuclear standoff between the two.

 Nevertheless, America could not have hoped for a better wartime President, Commander-in-Chief and inspirational leader than Franklin Roosevelt.

 The success of the shared struggle against Nazism led many liberals to expect that, after the war, Washington and Moscow would maintain friendly relations while the United States embarked on a fresh round of New Deal-style economic and social reforms with the assistance of the Export-Import Bank. These hopes went unfulfilled, and instead American liberals (the Roosevelt wing and the Truman wing) descended into a state of civil war. Now, rather than the anticipated postwar cooperation, US-Soviet relations became increasingly tense.

 At home, the vast majority of Americans proved to be far more inward looking and interested in building quiet, normal lives after fifteen years of war and economic Depression than they were in embarking on new strategic projects overseas. Faced with the questions of how to deal with Moscow and keep reform alive, liberals divided into two opposing camps.

 On the far-left were the Progressives, led by former Vice President Henry Wallace – at worst a secret Soviet sympathizer, at the very least a dupe who viewed Soviet intentions as benign – advocated reaching an accommodation with Moscow, and remained willing to work with American Communists on domestic issues. To their right (the near-left), but still near the center of the political spectrum, were moderate liberals – more committed to truth than their new adversaries. They supported President Truman and his 1947 policy of containing the Soviet Union. The next struggle between Progressives and the truth came in the early 1950s during the Alger Hiss espionage case.

 The Hiss case is, perhaps, the quintessential and defining episode in the battle between the truth and the progressive/liberal/Democrat cabal and illustrates clearly the passion of the cabal for supremacy in the flow of information to the American people. Understanding its truth is important to our discussion of the danger that the cabal presents to the Constitution.

 Briefly; in the late 1940s, an admitted former Communist agent, Whittaker Chambers, named Alger Hiss, at that time a well-respected, socially popular and fairly senior member of the State Department, as a fellow spy during the 1930s. Hiss denied all charges but was brought to trial after Congressional hearings chaired by a young Richard Nixon (R-CA). He was never found guilty of spying but of perjury and served time in prison. He spent the rest of his life working with various press/media/academia friends to clear his name of its communist and treasonous stain. The progressive/liberal consensus has always been and, amazingly and irrationally, continues to be, that he was framed. Chambers has been dismissed over the years by the cabal as a bumbling pervert and deceitful misfit. Here is the truth.

“Whittaker Chambers was an American writer and editor. Chambers was born in Philadelphia in 1901. His family moved to Lynbrook, Long Island, where he grew up and attended school. Chambers described his childhood as troubled because of his parents’ separation and their need to care for their mentally ill grandmother. Chambers’ brother committed suicide shortly after withdrawing from his first year of college. Chambers would cite his brother’s troubled life and eventual suicide as one of many reasons that he was drawn to communism as a young man.

After graduating from high school in 1919, Chambers worked at a variety of jobs before attending  Williams College in 1920. He later enrolled as a day student at Columbia University (again, Columbia!). At Columbia his fellow students included Meyer Schapiro, Louis Zukofsky, Clifton Fadiman. John Gassner, Lionel Trilling (who later fictionalized him as a main character in his novel The Middle of the Journey), and Guy Endore. In the intellectual environment of Columbia he gained friends and respect. His professors and fellow students found him a talented writer and believed he might become a major poet or novelist.

Early in his sophomore year, Chambers wrote a play called A Play for Puppets [which satirized Christianity] for Columbia’s literary magazine The Morningside, which he edited. The work was deemed blasphemous by many students and administrators, and the controversy spread to New York City newspapers. [My, how times have changed!] Later, the play would be used against Chambers during his testimony against Alger Hiss. Disheartened over the controversy, Chambers left Columbia in 1925. 

From Columbia, Chambers also knew Isaiah Oggins, who had gone into the Soviet underground a few years earlier; Chambers’ wife, Esther Shemitz Chambers, knew Oggins’ wife, Nerma Berman Oggins, from the Rand School of Social Science, the ILGWU(International Ladies Garment Workers Union), and The World Tomorrow, a pacifist magazine.

In 1924, Chambers read Vladimir Lenin’s Soviets at Work and was deeply affected by it. He now saw the dysfunctional nature of his family, he would write, as “in miniature the whole crisis of the middle class”; a malaise from which Communism promised liberation. Chambers’ biographer Sam Tanenhaus wrote that Lenin’s authoritarianism was “precisely what attracts Chambers… He had at last found his church”; that is, he became a Marxist. In 1925, Chambers joined the Communist Party of the United States (CPUSA) (then known as the Workers Party of America).

 Chambers wrote and edited for Communist publications, including The Daily Worker  newspaper and The New Masses magazine. Combining his literary talents with his devotion to Communism, Chambers wrote four short stories in 1931 about  proletarian hardship and revolt, including Can You Make Out Their Voices?, considered by critics as one of the best pieces of fiction from the American Communist movement. 

 Hallie Flanagan co-adapted and produced it as a play entitled Can You Hear Their Voices? staged across America and in many other countries. Chambers also worked as a translator during this period; among his works was the English version of Felix Salten’s 1923 novel Bambi, A Life in the Woods – later made into the Disney classic animated film in 1942.

Chambers was recruited to join the “Communist underground” and began his career as a spy, working for a GRU apparatus headed by Alexander Ulanofsky (aka Ulrich). Later, his main controller in the underground was Josef Peters (whom CPUSA General Secretary Earl Browder later replaced with Rudy Baker).

In the early 1930s, Chambers married the young artist Esther Shemitz. Shemitz, who had studied at the Art Student League and integrated herself into New York City’s intellectual circles, met Chambers at the 1926 textile strike in Passaic, New Jersey. They then underwent a stormy courtship that faced resistance from their comrades, with Chambers having climbed through her window at five o’clock in the morning to propose. Shemitz has been identified as “a pacifist rather than a revolutionary.” 

The couple had two children, a son, John, and a daughter, Ellen, during the 1930s. Ellen had two sons, Steve and John. Communist leadership had demanded that the family abort the first pregnancy, but Chambers secretly refused. His decision marked a key point in his gradual disillusionment with communism. He regarded the birth of his first child as “the most miraculous thing that had ever happened in my life”.

Chambers claimed Peters introduced him to Harold Ware (although he later curiously denied he had ever been introduced to Ware), and that he was head of a Communist underground cell in Washington that reportedly included 17 members of the Roosevelt administration. Chambers worked in Washington as an organizer among Communists in the city and as a courier between New York and Washington for stolen documents which were delivered to Boris Bykov, the GRU station chief.

Using the codename “Karl” or “Carl”, Chambers served during the mid-1930s as a courier between various covert sources and Soviet intelligence. Chambers carried on his espionage activities from 1932 until 1937 or 1938 even while his faith in Communism was waning.

He became increasingly disturbed by Joseph Stalin’s Great Purge which began in 1936. He was also fearful for his own life, having noted the murder in Switzerland of Ignatz Reiss, a high-ranking Soviet spy who had broken with Stalin, and the disappearance of Chambers’ friend and fellow spy Juliet Poyntz in the United States.

Poyntz, who had been an ILGWU organizer and a teacher at Barnard College (sister school to Columbia University – Columbia, again!), had mysteriously vanished in June 1937, shortly after she had visited Moscow, witnessed Stalin’s purge of party faithful and returned disillusioned with the Communist cause. Discussions with confederates convinced Chambers that she had been kidnapped by Soviet secret agents and murdered.

Now fearful for himself, Chambers ignored several orders that he travel to Moscow, worried that he might be “purged.” He also started concealing some of the documents he collected from his sources. He planned to use these, along with several rolls of microfilm photographs of documents, as a “life preserver” to prevent the Soviets from killing him and his family.

In 1938, Chambers broke with Communism and took his family into hiding, storing the “life preserver” at the home of his nephew and his parents. Initially he had no plans to give information on his espionage activities to the U.S. government. His espionage contacts were his friends, and he had no desire to inform on them.

The August 1939 the Hitler-Stalin non-aggression pact, [known as the Molotov–Ribbentrop Pact, named after the Soviet foreign minister Vyacheslav Molotov and the German foreign minister Joachim von Ribbentrop] was a non-aggression pact signed between Nazi Germany and the Soviet Union in Moscow on August 23, 1939. The pact remained in force until the German government broke it by launching an attack on the Soviet positions in eastern Poland on June 22, 1941) drove Chambers to take action against the Soviet Union. 

In September 1939, at the urging of anti-Communist, Russian-born journalist Isaac Don Levine, Chambers and Levine met with Assistant Secretary of State Adolf Berle. Levine had introduced Chambers to Walter Krivitsky, who was already informing American and British authorities about Soviet agents who held posts in both governments. Krivitsky told Chambers it was their duty to inform. Chambers agreed to reveal what he knew on the condition of immunity from prosecution.

During the meeting, which took place at Berle’s home, Woodley Mansion in Washington, Chambers named 18 current and former government employees as spies or Communist sympathizers. Many names mentioned held relatively minor posts or were already under suspicion. Some names, however, were more significant and surprising: Alger Hiss, his brother Donald Hiss, and Laurence Duggan – who were all respected, mid-level officials in the State Department – and Lauchlin Currie, a special assistant to Franklin Roosevelt. Another person named had worked on a top-secret [Norden] bombsight project at the Aberdeen Proving Grounds [one of the most tightly held secrets of the war].

Berle found Chambers’ information somewhat tentative, unclear, and uncorroborated but not dismissible, because there was no clear motive for Chambers to lie about all of the members of this disparate group. He took the information to the White House, but the President dismissed it out-of-hand, to which Berle made little, if any, objection. Berle kept his notes, however (later, evidence during Hiss’ perjury trials).

Berle notified the Federal Bureau of Investigation (FBI) of Chambers’s information in March 1940. In February 1941, Krivitsky was found dead in his hotel room. While police ruled the death a suicide, it was widely speculated that Krivitsky had been killed by Soviet intelligence. Worried that the Soviets might try to kill Chambers too, Berle again told the FBI about his interview with Chambers. Nevertheless, the FBI took no immediate action, in line with the political orientation of the United States, which viewed the potential threat from the USSR as minor, when compared to that of Nazi Germany.

By the time of the Berle meeting, Chambers had come out of hiding after a year and joined the staff of Time magazine  (April 1939). He landed a cover story within a month on James Joyce’s latest book, Finnegan’s Wake. He started at the back of the magazine, reviewing books and film with James Agee and then Calvin Fixx. When Fixx died in October 1942,  Wilder Hobson succeeded him as Chambers’ assistant editor in Arts & Entertainment. Other writers working for Chambers in that section included: novelist Nigel Dennis, future New York Times Book Review editor Harvey Breit, and poets Howard Moss and Weldon Kees. 

During this time, a struggle arose between those, like Theodore H. White and Richard Lauterbach – who raised criticism of what they saw as the elitism, corruption and ineptitude of Chiang Kai-shek‘s regime in China and advocated greater cooperation with Mao’s Communist Red Army in the struggle against Japanese imperialism – and Chambers and others like Willi Schlamm who adhered to a staunchly pro-Chiang, anti-communist perspective (and who both later joined the founding editorial board of William F. Buckley, Jr’s National Review). 

Time founder Henry R. Luce, who grew up in China and was a personal friend of Chiang and his wife, came down squarely on the side of Chambers to the point that White complained that his stories were being censored by the editors, and even suppressed in their entirety, and left Time shortly after the war as a result. 

With Luce’s blessing, Chambers received a promotion to senior editor in September 1943 and was made a member of Time’s “Senior Group”, which determined editorial policy, in December. Luce and Chambers’ prescient understanding of Mao’s designs for China was later vindicated.

(The FBI finally did interview Chambers in May 1942 and June 1945, without further action. Only in November 1945, when Elizabeth Bentley (with whom Chambers had no connection) defected and corroborated much of Chambers’s story, did the FBI begin to take Chambers seriously). During this period, Chambers and his family became Quakers, attending Pipe Creek Friends Meetinghouse near his Maryland farm.

Next time: The Hiss Affair.

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