In this time of supremely self-made meritorious leaderhood in the White House,
I'm reminded -- often -- that it wasn't always worse for our president to be
born on third base like boy emperor Bush. One need simply recall the gentlemanly
child rentier from Hyde Park, shown above, with a Mom who looks to be
as formidable a battleaxe as Georgie's own.
My sense of FDR the "reformer" starts and ends with his risk-taking --
his willingness to advocate a heterodox move -- and his shameless
moving-on after a blooper.
In times of severe novelty and crisis, like now, a restless, easily bored,
annoyingly overconfident risk-taking spirit
is just what the powers that be need at the helm,
if they want to keep the smurfs on board -- even if,
as with FDR, his fearlessness is the result of a lifetime of
I've been reading a soft book on the tweener years
by some bold ex-broker, and it nicely illuminates
Roosevelt the political economist manqué.
The man could be positively spoony on matters economic --
a completely wild and wooly overconfident undereducated
amateur who was very often as dead wrong as he was dead
One of his administration's great early achievements,
deposit insurance -- he personally fought it to the
last House vote. Yes, reader, he was wrong on deposit insurance!
Deposit insurance! And in general, he could be, at best,
"lightly conflicted" on the depths of deficit spending
One sees the zigzags as his head plays off his hidebound
and blatantly silly schoolmarmish analogies to household
finance, against his tireless driving need to "do more till
we fully recover".
Besides his shaky grip on massive deficit budgeteering --
the key to the recovery -- he was also way wrong on -- well,
the list is endless. But here's what's important:
his apparent working rule was, "keep punching".
And he sure did that. He followed his instincts
till they blew up in his face and he took chances
like he was "on the booze", as Keynes remarked.
And in a pinch, where his personal idiosyncratic
notions failed to guide him, he'd follow someone else's
And if that flopped too, if he suffered a knockdown,
he jumped to his feet and threw the opposite
punch. Punch punch punch! Keep punching! In rapid
Take gold pricing and the hallowed gold standard:
FDR was no Cleveland democrat. He was a de facto
"debaser and repudiator" by deepest inclination.
And he had no sense of the sacred cow when it came
to the price of gold or its alleged "spinal necessity"
at the center of any "sound" monetary system.
Nope. One of his first acts in office amounted to
taking us off the "procrustean gold standard".
In a move worthy of Nixon at his best, Roosevelt
"suspended" gold exports. And in a followup move
well beyond Nixon's best, a month later before the
much anticipated "world economic conference",
he allowed the old free-silverist remnants in the
House to slip in an amendment authorizing the
president to devalue the dollar against gold by
up to 50%, and issue a slew of "unbacked dollars."
Man, did this bit of policy send central bankers
worldwide into a frenzy, scrambling for advantage
while solemnly proclaiming the need for "currency
Franklin went on to torpedo the conference itself
that summer, with pre-emptive strikes that scotched
any chance at a return to gold. Such bankster-type
sober moves he waved off, like some louche Moses, as
"a specious fallacy".
Brilliant, brilliant moves -- moves he could no more
defend "theoretically" than he could have written
the Phenomenology Of Spirit.
Actually, that's not quite right. FDR did have a Merlin.
Consider my favorite move against the "good as gold dollar".
After he sank the banksters' worl confab, during the next
few months King Frank spent the better part of each morning
personally buying gold on Uncle's behalf.
Why? For the same reason he did everything else that
first year -- so he could raise the price of cotton,
timber, coal, steel and corn.
Enter here his guru. Ever the gregarious frat-boy, Frank
always had a confederate in these escapades,
and in this case it was an agricultural economist from a
what Franklin surely considered a second-tier university --
namely, Cornell. The chap's name was George Warren
-- bless him.
After an exhaustive study of 213 years of commodity price
moves, George claimed to have unearthed the secret origins
of the trajectory of commodity prices in nothing less than
the rate of increase in the supply of -- gold.
Now as the great Pauli might say, this theory isn't even
important enough to be usefully wrong. But homely as it was,
this notion and his confidence in himself ultimately led to
yet another official indignity aimed at the sacred cow.
Backstory: as everyone recalls, commodity prices had taken
a jagged course down and down since 1930, and by '33 were
in the deepest smelliest of dumpsters -- all of 'em, across
the board, and of course farm mortgages and other such productive
borrowings hadn't adjusted their principal values or payments
commensurately, so producers were getting pretty badly squeezed.
Now enter the Warren theory of absolute commodity prices and --
you end up with Uncle's prez buying up the magic shiny glowing
shit with freshly produced greenbacks.
Was this wrong headed? Well no, it was harmless enough.
But did it work? Why yes it did, in one way. It raised the price of
gold, causing international currency markets to continue
to roil like cheap foil, and yes, it made the respectable
financial community in this country and beyond furious
-- in my book that oughta count as a home run or two right there --
but no, it prolly had next to zero effect on long-run farm relief,
let alone industrial relief.
But as a sample of FDR's contempt for well-heeled authority and
for contemporary academic orthodoxy, this adventure was part of
a process of bold experimentation in a time of failed theory.
So at the end of the day, yes yes yes.
His aim was correct: to reduce our small producer debt burden
we needed -- and got -- producer price inflation.
Keynes would shortly (1936) come up with a theory that led to
a straighter more powerful way to accomplish this than a gold
price tinker, or for that matter FDR's bigger Gyro Gearloose
effort, the NRA.
Roosevelt was a bit like Squire Western in Tom Jones:
off in his methods, but he kept groping for his target and
punching away, and of course, most importantly, he hardly
ever had a problem changing his views swiftly, without the least
sense of shame.
Why not keep a bold posture amidst a world of smoking failures?
"He was just a well-intended amateur" -- like this nation's
founding planters. This rentier gentleman policy dabbler, with
the political kinetics of an alley cat, had a bred-in-the-bone
advantage over his merit class "peers":
You couldn't shame him -- even, or especially,
when he had a mind to betray his
class. And least of all by citing "a recent Harvard study".
Alas, merit rex Obama, on the other hand....