Excerpt
We Do Our Part
CHAPTER 1
The Age of Roosevelt
“I want to get out of this Wall Street racket.”
This sentence was part of a letter written by Jerome Frank in early 1933 seeking help in landing a job with Franklin D. Roosevelt’s new administration in Washington. At age fortythree, Frank had already established himself as a successful lawyer in New York and as one of the nation’s most original legal thinkers. He soon became the general counsel of the New Deal’s Agricultural Adjustment Administration. Fifteen of the twenty-six lawyers who joined him to defend the AAA from conservative attacks in the courts were recent graduates of Harvard Law School. They and Frank were part of the flood of talented, mostly young people attracted to Washington by the New Deal.
This was, of course, the exact opposite of what has happened since the early 1980s. Steve Rattner, a graduate of Brown University who in the 1970s had emerged as an able young reporter covering Washington for The New York Times, decided to leave journalism to go to Wall Street in 1982. “It begins to get to you after a time that you are writing about people who have far more power than you, more influence and more money and are not any more capable,” Rattner’s wife explained. “Why in the world are you traipsing around the world and writing about them when you are smart enough to make the money and have the influence commensurate to theirs?”
By the end of 1984 Rattner’s friend the journalist Walter Shapiro was writing an article, subtitled “Money Madness in Manhattan,” announcing that Wall Street had become the destination of choice for the best and brightest. By 1985 there were more investment banks conducting job interviews at Harvard than any other profession. (In 2012, Harvard officials had become so disturbed by the trend that they formed a special task force to consider how to reconnect their graduates with public service.) And by 1987 Oliver Stone was making a movie called Wall Street with the intention of disclosing the evils of the financial world, some of which had already become obvious.
The effect of the movie, however, was not what Stone expected. Michael Douglas, the actor who portrayed the movie’s villain, Gordon Gekko (whose motto was “Greed, for want of a better word, is good”), found himself hailed as a role model. Instead of being offended by Gordon Gekko’s corner cutting, ambitious young people who watched the movie hungered for the money Gekko made and the lifestyle it conferred: limousines, luxurious apartments, beachfront houses, and beautiful women. Twentythree years after the movie came out, Douglas said in an interview that he was still being stopped by Wall Streeters who would say, “Man, I want to tell you, you’re the biggest single reason I got into this business. I watched Wall Street and found I wanted to be Gordon Gekko.”
In the 1930s, however, the attitude of most people toward attaining wealth found perfect expression in the title of a play that became a big hit on Broadway in 1936 and was made into a popular movie in 1938: You Can’t Take It with You. Carrie Lee Nelson, who became an army nurse during World War II, recalled, “We just didn’t care that much about having a lot of money.” Perhaps nothing better illustrates the difference in values between the 1930s and more recent times than the way the leading character was changed when the 1940 movie The Shop Around the Corner was redone as You’ve Got Mail in 1998. In the 1940 version, the hero, played by James Stewart, is a clerk in a small retail store. By 1998, with Tom Hanks in the role, he had to be not only a store owner but the rich owner of a chain of big stores. The Hanks character was living in Manhattan, where, as Walter Shapiro had observed back in 1984, “something . . . makes it hard to think of anything other than how much money you don’t have.” The hunger for more and more money may have first become obvious in New York, but it soon spread throughout the country, fueled by the need for more and more things, like the new electronic devices that seemed to appear every other month, and for larger and larger homes with more and more rooms to house all those new things.
The change in attitude toward money was reflected in a change in political philosophy. This change could be seen in Ronald Reagan’s personal journey from ardent supporter of FDR and the New Deal in the 1930s to champion of conservatism—as eloquent in its advocacy as Roosevelt had been in the cause of liberalism. These disparities in attitudes toward money and politics are just two of the differences between then and now to be explored in this book. It is a story about Washington, D.C., and the nation its leaders govern, beginning with the era of Franklin D. Roosevelt. FDR was president from 1933 to 1945, but the values of those days generally prevailed into the mid1960s and, in a few respects, including those values governing the distribution of income, through the 1970s. It is also a story about how the city and the country changed, sometimes gradually and sometimes with eyeblinking rapidity as we made the transition to the era of Ronald Reagan, whose presidency in the 1980s was characterized by a set of values that—as with FDR’s before him—have continued to rule much of our political and economic life long after his administration ended.
There are countless ways that life is much better today than it was back then. The most recent development is the treatment of gays, who are now accepted to an extent unimaginable in the Roosevelt era. But that era was better in one important way: People were considerably more willing then to share the burdens and benefits of society. For example, for two decades, the top income tax rate was 90 percent. For a bit more than two decades, men from all walks of life felt an obligation to serve in the military. The most dramatic difference, the one that people today are most aware of, is that incomes were much more equal, with workers, executives, and owners each receiving a much fairer share. Contrast this with the Reagan era, which from the beginning saw a decline in the workers’ share and an increase in that of executives and owners.
In telling the story of what was good about the Roosevelt era, my aim is not to urge that we go back to that world and try to recreate it. It is, rather, to show that as a people we are capable of the kind of behavior that was so admirable then, and that there is no reason why we are not capable of the same kind of behavior today.
If the New Dealers didn’t come to Washington to make money, why did they come? Of course they wanted to make a decent living, and a government salary was welcome in those days. But government salaries were not going to make them rich. Indeed, back then, public service was rarely looked upon as a way to cash in. It’s revealing to recall that through the entire decade of the 1930s only eight retiring congressmen became lobbyists, whereas among retirees from the class of 2010 alone, fortyone became lobbyists.
Jack Abramoff offers some insight on this development. Abramoff was a successful lobbyist during the early George W. Bush years, with friends such as Karl Rove, Grover Norquist, and House majority leader Tom DeLay. His career was cut short when his corruption became a bit too blatant, and he ended up doing time in prison. Afterward, he explained to an interviewer how he would reel in members of Congress and their staffs. First he would show them the good life that a lobbyist could lead, traveling in private jets and dining in the fanciest restaurants. Then, “I would say or my staff would say to him or her at some point, ‘You know, when you’re done working on the Hill, we’d very much like for you to consider coming to work for us.’ Now, the moment I said that to them or any of our staff said that to them, that was it. We owned them.”
Jerome Frank said he had come to Washington because the struggle against the Depression seemed to be “the equivalent of war. I want to sign up for the duration.” Certainly there was an excitement about being where the action was. For Charles Wyzanski, Jr., a lawyer at the Department of Labor, it was a “feeling that one really counted, that what we did was very important.” For Francis Biddle it was “the satisfaction derived from sinking individual effort into the community itself, the common good and the common end.” Their cause seemed far more important than any individual.
Adlai Stevenson, who, like Jerome Frank, came to Washington as a young New Deal attorney in 1933, observed that people were working twelve hours a day and sleeping on couches. And they were getting things done, sometimes with remarkable speed.
In the first months of 1933 there had been a rash of bank failures. Depositors in the remaining banks worried that theirs would fail, too, so they withdrew their money, causing more banks to fail. In his first week in office, after his inauguration on March 4, Franklin Roosevelt closed all the banks for four days, Congress passed the Emergency Banking Act providing federal aid for banks sound enough to survive, and Roosevelt gave a fireside chat explaining what the government had done and why. On March 13, the healthy banks started reopening, the panic withdrawals stopped, and the banking system did not face another crisis for more than half a century. The people had believed FDR when he told them in his fireside chat that it “is safer to keep your money in a reopened bank than under the mattress.”
Walter Lippmann, an influential columnist and not always a friend of FDR, wrote, “In one week the nation which had lost confidence in everything and everybody had regained confidence in the government and in itself.” That probably overstates what happened in one week but it does capture the spirit of how, in the early years of the New Deal, one action after another demonstrated that government was making life significantly better for most Americans.
The New Dealers persuaded Congress to enact a record amount of legislation in the first hundred days of the new administration, including the Agricultural Adjustment Act, the Federal Emergency Relief Act, the National Industrial Recovery Act, and the law authorizing the Civilian Conservation Corps. By July the CCC had put 275,000 young men to work clearing roadsides and planting trees in forests that had been severely depleted by a rapacious timber industry and by farmers hungry for more land to till. That fall and winter, Harry Hopkins, the head of the Federal Emergency Relief Administration, established the Civil Works Administration, which put four million people to work in two months, an incredible accomplishment.
How did the New Dealers do so much so fast? They thought they had no choice. They had to act. And they had to think big. They couldn’t just sit there or take tiny tentative steps the way Herbert Hoover had done. They had to risk making mistakes, and they made some lulus.
In 1933, millions of Americans flocked to movie theaters to see “The Three Little Pigs,” Walt Disney’s longest cartoon to date, in which the pigs foil their foe and end up singing “Who’s Afraid of the Big Bad Wolf?” The song became immensely popular, with the wolf widely understood to symbolize the Depression. Meanwhile, the Agricultural Adjustment Administration was pushing a program to slaughter small pigs to help put a floor under hog prices. Needless to say, this did not make a favorable impression on the nation’s children or on many of their parents.
But the New Dealers did enough right to get the country going again. By restoring the people’s confidence that the government could solve problems, even major ones, they inspired Americans to believe in themselves and the ability of the government they chose to do great things—which is exactly what it proceeded to do, from ending the Depression to winning World War II to providing a college education for millions of veterans to saving Western Europe with the Marshall Plan to building the interstate highway system and sending men to the moon.
Needless to say, making New Deal programs such as the CCC and the CWA work required able people to run them. But they weren’t just drawn from the Harvard Law School. Harry Hopkins, who led the CWA, was an Iowan who had graduated from Grinnell College. The CWA in Missouri was run by Harry S. Truman, a graduate of Independence High School. FDR delegated the running of the CCC to the army. Among the officers it assigned to the task were Colonel George C. Marshall, a graduate of the Virginia Military Institute, and Major Dwight D. Eisenhower, a graduate of the U.S. Military Academy.
Democratic majorities in Congress were also an important factor in speedy action on the New Deal measures. In 1933 the Democratic margin in the Senate was 59 to 36, and in the House it was 311 to 117. By 1935 the Democrats’ lead in the Senate had grown to 60 to 35 and in the House to 322 to 103. Indeed, from the Roosevelt administration through that of Lyndon Johnson, the Democrats controlled Congress and the White House twentyeight of thirtysix years. But in the years since, from 1981 to 2016, they have controlled both houses of Congress and the White House for only four years.
Another important factor in the success of the New Deal was the fact that there were actually liberal Republicans in those days. In the Senate, a dozen or so of them voted at one time or another for New Deal measures, and in the House a couple of dozen. “The admirable trait in Roosevelt has been that he has the guts to try,” observed one of the liberal Republicans in the Senate, Hiram Johnson of California. “He does it all with the rarest good nature. . . . We have exchanged for a frown [Hoover] in the White House a smile. . . . Where there was hesitation and vacillation, always weighing the political consequences, feebleness, timidity and duplicity, there are now courage and boldness and real action.”
In addition to the liberal Republicans there were liberal southern Democrats. Although almost all of them were conservative on racial issues, a substantial number were liberal on other New Deal programs. In the Texas delegation alone, the liberals included Sam Rayburn, Wright Patman, and Maury Maverick.
