Why the Democrats Oppose Economic Freedom
The
seeds of the modern bureaucratic or administrative state go back to the
Progressive Era of American history in the early 20th century. But
progressive regulation morphed into the hyper-control of our present
federal government during the New Deal. Modern students, whose history
education has been directed by teachers who “accept” the reality of a
federal leviathan, are often unaware of the fact that before 1916 there
was no income tax in the United States, and that federal revenues were
primarily through import duties. The income tax was justified by the
need to support the ever-expanding regulatory environment being promoted
by Democrats, with a small amount of crossover by Republicans.
Woodrow
Wilson and the Democrats were far more drawn to the big government idea
and ideal than their Republican confreres. Under Wilson, the Sherman
Antitrust Act of 1890 was replaced with the more powerful antitrust
tool, the Clayton Antitrust Act. The Federal Reserve came into being under Wilson.
Further, the 16th Amendment allowing a federal income tax was enacted
in 1916, although the move to establish that institution had begun
before Wilson took office, having been passed by Congress in 1909. More
importantly, under Wilson, the U.S. became involved in World War I, and
in the prosecution of that war, various federal governmental controls
over industry were enacted in order to promote the war effort, not the
least of which was the War Industries Board under Bernard Baruch.
So
the progressive emphasis was to curb the greed and concomitant excesses
of the business community that were manifesting in an America which, in
the late 19th and early 20th centuries, moved from being a prosperous
agriculture-based society to being an industrialized manufacturing and
mining mega-power on the world stage. Competition was to be promoted.
The Federal Reserve was created as a backup and institution of last
resort when cyclical banking downturns took place, and, as we became
more involved in international markets, military buildup became
necessary as we needed to protect far-flung property and trading
interests throughout the world.
By
the time of the New Deal, the regulatory ideal of progressivism began
to give way to government planning which involved federal control or
even ownership of business, and federal engagement with previously
private markets on an unprecedented scale. Franklin D. Roosevelt’s
administration set up the “alphabet agencies” which performed functions
that were controlling or active in unprecedented ways. The Tennessee
Valley Authority (TVA) actually produced electricity and functioned
alongside private electric companies. The premise was that the TVA
(clearly a socialist venture) was delivering electric power to many
citizens who were not getting it because they were living in a market
that was not profitable for private companies to establish generating
plants. So, according to TVA justifiers, the federal government was
supplementing the private sector, i.e., meeting a need that the private
sector was not meeting, but not going into competition with the private
sector in those markets it was already serving.
The federal government also became an employer of vast numbers of people through its public works projects,
undertaken by the Works Progress Administration (WPA), the Public Works
Administration (PWA), the Civilian Conservation Corps (CCC), National
Youth Administration (NYA), and many others too numerous to list. And
the feds became lenders of choice to many, especially in the
agricultural sector. With vast government apparatchiks in the
regulatory agencies and these vast employment programs, the federal
government was no longer locked into the progressive ideal of protecting
workers, but increasingly became the employer of vast numbers of
people, thus going into competition with the private sector as the
employer of record. However, unlike the private sector, the employees
were not supported by markets, but by the taxpayers, government
borrowing (increase of the national debt), and printing of money.
Productivity was not the centerpiece for paying those federal bills.
The
Agricultural Adjustment Act (AAA) was passed as an effort to keep farm
income up by controlling production. By limiting production, the prices
of farm products from hogs to corn could remain elevated. Thus, under
AAA, the feds authorized themselves to pay farmers for destroying crops
or otherwise limiting crop production, even killing 6.4 million pigs. This clearly went beyond regulating market practices to maintain competition as in the progressive era, but intervened to control markets at both the production and price ends of enterprise.
However,
the centerpiece of New Deal legislation was the National Industrial
Recovery Act (NIRA) which set up the National Recovery Administration.
This signal piece of legislation called for price and wage fixing by
various industries working hand-in-glove with the federal agency
administering the program. Companies participating in these associations
were authorized to imprint their products with a Blue Eagle indicating
their “cooperation.” Here we see the most important shift away from the
earlier progressivism. Under progressivism, competition was being
promoted – by the Republicans under the Sherman Antitrust Act and by the
Democrats under the updated and more powerful Clayton Antitrust Act.
Under
the NIRA, what might otherwise be called a “trust,” “cartel,”
“monopoly,” or “oligopoly” by the pro-competition progressives were, so
to speak, under federal blessing. Price and wage fixing would be
considered okay as long as they were aligned with federal economic goals
and policies. Thus, the shift in orientation from regulation under
progressivism to governmental control under the supervision of a brain
trust of demand side, Keynesian economists. Wilson had believed in the
importance of experts in our new scientific marketplace, but Roosevelt
stepped up our dependence on so-called experts to a degree Wilson could
not have imagined, and the New Deal was implemented.
Both
the AAA and the NRA were declared unconstitutional. However, the AAA
was rewritten with adjustments to meet the Supreme Court’s objections,
and a new AAA was passed and upheld. In the famous case of Schechter Poultry Corp. v. the United States
(1935), the NIRA was deemed to be unconstitutional. The Blue Eagle
disappeared from products, and wage and price controls under so-called
“voluntary agreement” were disbanded.
But
the socialist and communist left had tasted blood. The NIRA whetted the
appetite of the “reds” who admired Vladimir Lenin’s and Josef Stalin’s
iron man appropriations of the means of production in the USSR for the
supposed collective good. In fact, FDR’s rapport with Stalin
during WWII is a well-established fact, and that “rapport” should not
be surprising in light of the radical expansion of government control
during the New Deal. The new expert class of left-wing professors and
advocates operating during the Roosevelt years saw that the battle cry “workers of the world, unite”
was needed more than ever before as the capitalist colossus marched
onwards. Those leftists dominate the Democrat Party to this very day,
and their hatred for free markets is poisoning our society.
seeds of the modern bureaucratic or administrative state go back to the
Progressive Era of American history in the early 20th century. But
progressive regulation morphed into the hyper-control of our present
federal government during the New Deal. Modern students, whose history
education has been directed by teachers who “accept” the reality of a
federal leviathan, are often unaware of the fact that before 1916 there
was no income tax in the United States, and that federal revenues were
primarily through import duties. The income tax was justified by the
need to support the ever-expanding regulatory environment being promoted
by Democrats, with a small amount of crossover by Republicans.
Woodrow
Wilson and the Democrats were far more drawn to the big government idea
and ideal than their Republican confreres. Under Wilson, the Sherman
Antitrust Act of 1890 was replaced with the more powerful antitrust
tool, the Clayton Antitrust Act. The Federal Reserve came into being under Wilson.
Further, the 16th Amendment allowing a federal income tax was enacted
in 1916, although the move to establish that institution had begun
before Wilson took office, having been passed by Congress in 1909. More
importantly, under Wilson, the U.S. became involved in World War I, and
in the prosecution of that war, various federal governmental controls
over industry were enacted in order to promote the war effort, not the
least of which was the War Industries Board under Bernard Baruch.
So
the progressive emphasis was to curb the greed and concomitant excesses
of the business community that were manifesting in an America which, in
the late 19th and early 20th centuries, moved from being a prosperous
agriculture-based society to being an industrialized manufacturing and
mining mega-power on the world stage. Competition was to be promoted.
The Federal Reserve was created as a backup and institution of last
resort when cyclical banking downturns took place, and, as we became
more involved in international markets, military buildup became
necessary as we needed to protect far-flung property and trading
interests throughout the world.
By
the time of the New Deal, the regulatory ideal of progressivism began
to give way to government planning which involved federal control or
even ownership of business, and federal engagement with previously
private markets on an unprecedented scale. Franklin D. Roosevelt’s
administration set up the “alphabet agencies” which performed functions
that were controlling or active in unprecedented ways. The Tennessee
Valley Authority (TVA) actually produced electricity and functioned
alongside private electric companies. The premise was that the TVA
(clearly a socialist venture) was delivering electric power to many
citizens who were not getting it because they were living in a market
that was not profitable for private companies to establish generating
plants. So, according to TVA justifiers, the federal government was
supplementing the private sector, i.e., meeting a need that the private
sector was not meeting, but not going into competition with the private
sector in those markets it was already serving.
The federal government also became an employer of vast numbers of people through its public works projects,
undertaken by the Works Progress Administration (WPA), the Public Works
Administration (PWA), the Civilian Conservation Corps (CCC), National
Youth Administration (NYA), and many others too numerous to list. And
the feds became lenders of choice to many, especially in the
agricultural sector. With vast government apparatchiks in the
regulatory agencies and these vast employment programs, the federal
government was no longer locked into the progressive ideal of protecting
workers, but increasingly became the employer of vast numbers of
people, thus going into competition with the private sector as the
employer of record. However, unlike the private sector, the employees
were not supported by markets, but by the taxpayers, government
borrowing (increase of the national debt), and printing of money.
Productivity was not the centerpiece for paying those federal bills.
The
Agricultural Adjustment Act (AAA) was passed as an effort to keep farm
income up by controlling production. By limiting production, the prices
of farm products from hogs to corn could remain elevated. Thus, under
AAA, the feds authorized themselves to pay farmers for destroying crops
or otherwise limiting crop production, even killing 6.4 million pigs. This clearly went beyond regulating market practices to maintain competition as in the progressive era, but intervened to control markets at both the production and price ends of enterprise.
However,
the centerpiece of New Deal legislation was the National Industrial
Recovery Act (NIRA) which set up the National Recovery Administration.
This signal piece of legislation called for price and wage fixing by
various industries working hand-in-glove with the federal agency
administering the program. Companies participating in these associations
were authorized to imprint their products with a Blue Eagle indicating
their “cooperation.” Here we see the most important shift away from the
earlier progressivism. Under progressivism, competition was being
promoted – by the Republicans under the Sherman Antitrust Act and by the
Democrats under the updated and more powerful Clayton Antitrust Act.
Under
the NIRA, what might otherwise be called a “trust,” “cartel,”
“monopoly,” or “oligopoly” by the pro-competition progressives were, so
to speak, under federal blessing. Price and wage fixing would be
considered okay as long as they were aligned with federal economic goals
and policies. Thus, the shift in orientation from regulation under
progressivism to governmental control under the supervision of a brain
trust of demand side, Keynesian economists. Wilson had believed in the
importance of experts in our new scientific marketplace, but Roosevelt
stepped up our dependence on so-called experts to a degree Wilson could
not have imagined, and the New Deal was implemented.
Both
the AAA and the NRA were declared unconstitutional. However, the AAA
was rewritten with adjustments to meet the Supreme Court’s objections,
and a new AAA was passed and upheld. In the famous case of Schechter Poultry Corp. v. the United States
(1935), the NIRA was deemed to be unconstitutional. The Blue Eagle
disappeared from products, and wage and price controls under so-called
“voluntary agreement” were disbanded.
But
the socialist and communist left had tasted blood. The NIRA whetted the
appetite of the “reds” who admired Vladimir Lenin’s and Josef Stalin’s
iron man appropriations of the means of production in the USSR for the
supposed collective good. In fact, FDR’s rapport with Stalin
during WWII is a well-established fact, and that “rapport” should not
be surprising in light of the radical expansion of government control
during the New Deal. The new expert class of left-wing professors and
advocates operating during the Roosevelt years saw that the battle cry “workers of the world, unite”
was needed more than ever before as the capitalist colossus marched
onwards. Those leftists dominate the Democrat Party to this very day,
and their hatred for free markets is poisoning our society.
