The Naked Socialist
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Progressive Party: After Roosevelt left the White House, he founded the Progressive Party—his so-called Bull Moose Party—and called for a government that intervened in people’s lives and businesses on multiple levels to regulate and control them. Breaking restraints on the federal government was necessary to achieve this. Ruler’s Law: Roosevelt called for a faster, easier way to amend the Constitution, he smothered states’ rights, he forced minimum wages and child labor laws, he restricted work hours for women, he imposed the eight-hour work day, he called for Social Security insurance for everyone, and he granted legal protections of unions. All of these fell into the category of Ruler’s Law, and gave foundation to the New Deal that would come 20 years later.
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598 Justice Robert Grier, 67 U.S. 635 (1862).
599 Kelly & Harbison, The American Constitution, p. 438.
600 Abraham Lincoln letter to A. G. Hodges, April 4, 1864.
601 Messages and Papers of the Presidents, Vol. IX, p. 301.
602 Annals of America, Vol. II, p. 481.
603 Theodore Roosevelt, The Autobiography of Theodore Roosevelt, 1913, emphasis added.
604 Attributed to Roosevelt but may have been taken from Albert J. Beveridge’s speech to the Senate on January 9, 1900. See Congressional Record, Senate, 56th Congress, 1st session, January 9, 1900, pp. 704-712.
Chapter 82: U.S. Presidents and Socialism, continued
—Taft, Wilson, Hoover, FDR, Truman—
In both peace and war, the ruling executives of the United States are bound by oath to uphold, defend and protect the U.S. Constitution. Did they?
By the first decade of the 1900s, freedom in the United States was being threatened—not by an outside force, but by the American people themselves. It seemed people were willing to abandon some of their rights in exchange for a more secure although regimented way of living. It was the beginning of the loss of freedom that would bear costly fruit in the decades that followed.
PRESIDENT: William Howard Taft (served 1909-1913)
LEGACY: A progressive beholden to the Constitution
STORY: Taft was a mixed Progressive. On the one hand, he worked to expand the power of the federal government and judges to create law rather than to apply law. On the other hand he put more emphasis toward constitutional restraints on the presidency.
“The true view of the Executive functions is,” he wrote in 1916, “as I conceive it, that the President can exercise no power which cannot be fairly and reasonably traced to some specific grant of power or justly implied and included within such express grant as proper and necessary to its exercise. Such specific grant must be either in the federal Constitution or in an act of Congress...”605
Income tax, 1913—In 1909, Taft proposed a change to the Constitution to raise more revenue. He pushed for removing the apportionment requirement (sharing identically) so that a personal income tax could be legally taken from every working American. This amendment later became law on February 3, 1913. The new income tax had seven brackets. The lowest bracket was 1 percent on incomes up to $20,000 (equal to $435,292 in 2011 dollars). The highest bracket was 7 percent on incomes above $500,000 (equal to $11.3 million in 2011 dollars).606
PRESIDENT: Woodrow Wilson (served 1913-1921)
LEGACY: Human nature and Constitution must evolve
STORY: Wilson thought the original Constitution was designed for a simpler time and he looked to abolish the restrictions that prohibited him from meeting the challenges of the modern day.
He wanted Congress to delegate some of its law-making responsibilities to “the experts” in the executive branch. He was an elitist and believed people were too ignorant to understand the complexities of politics—they needed government to do for them all those things that were necessary and good.
Wilson’s mentor and sounding board was Colonel E. Mandell House, chief advisor, an advocate of Marxist socialism, and the man Wilson called “my second personality. He is my independent self. His thoughts and mine are one. If I were in his place I would do just as he suggested.”607
Through the formation of federal agencies, Wilson exerted vast amounts of power without direct accountability. From that framework, Wilson proceeded to subvert the Constitution with a long list of progressive reforms that forever changed America.
Federal Reserve Act, 1913—In violation of the Constitution, this Act delegated away Congress’s authority to “coin Money, regulate the Value thereof”608 to so-called experts on the Federal Reserve—men who didn’t have to worry about being reelected. The president could appoint the board and chairman, but the Senate had to confirm them.
Progressive Income Tax—The actual progressive income tax law (different tax rates for different incomes) was passed during President Taft’s administration, but fleshing out the law and putting it into operation fell to Wilson.
Federal Trade Commission Act, 1914—In violation of the Constitution, this Act delegated much of the legislative branch’s power to the executive branch agencies—in particular, power to break up corporations it deemed an interference to free trade.
Clayton Antitrust Act, 1914—Gave government politically corruptible power to prevent certain types of business activity it deemed detrimental to free trade.
Federal Farm Loan Act, 1916—Created a nationwide network of tax-backed lending agencies for farmers.
Child Labor Law, 1916—Wilson’s heavily-promoted Keating-Owen Child Labor Act was passed by Congress but the Court declared it an unconstitutional intrusion into states’ rights.
The 8-hour Work Day, 1916—The Adamson Act of 1916 forced an 8-hour work day for activities that were related to interstate commerce. The Supreme Court deemed it constitutional, but its dissenters said it violated the property and contract rights of employers and employees willing to work more hours, if desired.
Power Let Loose: Wilson believed Congress could do whatever it pleased. “Government does now whatever experience permits or the times demand,” he said.609
Presidential Power: “The President is at liberty,” Wilson wrote, “both in law and conscience, to be as big a man as he can. His capacity will set the limit ...”610
Supported Socialism: “...No line can be drawn between private and public affairs which the State may not cross at will,” Wilson wrote. “That omnipotence of legislation is the first postulate of all just political theory.”611
Unalienable Rights Are Old-fashioned: “The competent leader of men cares little for the internal niceties of other people’s characters: he cares much—everything—for the external use to which they may be put. ...Men are as clay in the hands of the consummate leader.”612
Change by Force: Wilson asked, “...Must not government lay aside all timid scruple and boldly make itself an agency for social reform as well as for political control? ‘Yes,’ say the democrats, ‘perhaps it must.’”613
War-time Civil Rights: In 1918, Wilson pushed a set of amendments to the Espionage Act of 1917 that added personal opinion and speech to the list of crimes punishable by law. It made it a crime to “utter, print, write or publish any disloyal, profane, scurrilous, or abusive language” that referenced the military, the U.S. flag, or the U.S. government in an unpatriotic way. Even the mailman wasn’t required to deliver materials that were anti-American. Although the Court later declared the Act constitutional, Congress repealed Wilson’s amendments in 1921. PRESIDENT: Herbert Hoover (served 1929-1933)
LEGACY: Grandfather of the New Deal
STORY: Hoover was a Progressive at heart, a benevolent socialist, and believed that top-down control of the economy could avert recessions and bring about prosperity. In 1921, he was appointed secretary of commerce where he began his intervention ideas, and later led America into economic ruin.
Created Personal Kingdom: As the newly minted Secretary of Commerce, Hoov
er hired 3,000 government bureaucrats, expanded his department’s budget by 50 percent, and organized 30 new divisions to manage industry, production, and distribution.
Adopted Soviet Model: Just like the Russian central planners of the same time period, Hoover believed administrative manipulation of the economy—central planning—was more effective than any of the time-tested natural laws of economics.614
Intervened in Competition: With his massive influence as secretary, Hoover worked to eliminate what he called “lawlessness” and “destructive competition” that created, in his opinion, too much economic waste. More regulation was his best answer.615
Pushed for Shorter Work Week: Hoover intruded on the rights of employers to make contracts with employees. During his tenure as Secretary of Commerce, the working hours for 75 percent of industry was 54 hours per week. “When I left the White House,” Hoover wrote, “only 4.6 percent were working 60 hours or more.”616
Promoted Stimulus Spending: After the Stock Market Crash in 1929, Hoover called for more spending by federal, state and local governments for public roads, shovel-ready jobs, bridges, and his namesake, the Hoover Dam. With tax revenues collapsing, the government’s redistribution of the wealth to pay for such projects strained to a stop.
Gave Unions Federal Backing: Hoover helped draft the Railway Labor Act in 1926 to guarantee railway unions the right to form unions. This tied the business owners’ hands if they tried to resist the “legal” unionization of their employees, or resisted subsequent union demands. He signed the Norris-LaGuardia Act that quick-started union organizing. This doubled the number of strikes in Hoover’s last year. He bragged that during the 1920s, union wages grew 40 percent compared to non-union wages at 6 percent,617 proving how the government force sadly can circumvent the natural rise in wages that results when workers create more value.
Didn’t Understand Wages: Hoover was convinced higher wages meant more spending and therefore more prosperity. He twisted industry’s arm to keep wages high, rather than leave the free market to set wages. Writing to Congress in December 1929, Hoover said, “I have instituted ... systematic ... cooperation with business ... that wages and therefore consuming power shall not be reduced....” 618
Tax Hike in a Depression? In 1932, Hoover raised the top income tax rate from 25 percent to 63 percent, and from 1 percent to 4 percent for the lowest rate. All of his meddling slowed productivity. Tax revenues dropped from $834 million in 1931 to $427 million in 1932. By 1933 it was $353 million.
Supreme Regulator: Hoover pushed the Agricultural Marketing Act and the Federal Farm Board to control prices. The plan backfired. For example, prices for U.S. wheat ended up double the price of Canada’s wheat, and nobody wanted it. To keep farmers in business, Hoover bought their wheat for $300 million, and ended up throwing it away or dumping it on foreign markets—at the peak of the Depression when many Americans were going hungry.
Hoover’s New Deal: Hoover’s flawed programs pushed a recession into the Great Depression. When Roosevelt took over, his New Deal programs were really a continuation and expansion of Hoover’s original proposals. PRESIDENT: Franklin D. Roosevelt (served 1933-1945)
LEGACY: Father of the New Deal, New Nationalism
STORY: Before Roosevelt took office, signs were present that the Depression had bottomed out and the economy was on the rise. This wasn’t unusual—the economy had recovered from dozens of prior problems without any big government intervention. Despite all the stark suffering with millions of people out of work and billions of dollars lost in savings and investments, there still remained a large 75 percent of the private economy that continued to crank away, offering the same kinds of recovery potential as it had in panics past.
Roosevelt’s New Deal programs scared many business people. Their comfort level for investing in new activities rose and fell with their confidence in the various New Deal ideas put forward.
Stranger Danger: The more Roosevelt intervened with his plethora of programs, the more nervous he made the investors. His policies created an unpredictable investment world with property rights evaporating and various schemes of price fixing, wage fixing, production limitations, and reduction of farm acreage all justifying a great deal of doubt and worry.
“Business leaders sincerely believed that the government was in evil hands,” said historian Herman Krooss in 1970. It led people to believe the government was “preparing the way for socialism, communism, or some other variety of anti-Americanism.”619
In 1939, Joseph Schumpeter took note of this phenomenon of fear. “They are not only, but they feel threatened,” he said.620
If It Ain’t Broke, Don’t Fix It: With the economy slowly recovering when Roosevelt took office, the sudden onslaught of his New Deal legislation panicked investors, and millions of Americans became bewildered and confused. Dozens of new laws and regulations would bury the “old way” forever, and foolishly prolonged the Great Depression by years. By the end of the long Depression, America was less free, and socialism was here to stay.
Economic Bill of Rights: In 1944, Roosevelt declared the Constitution and the Bill of Rights “inadequate to assure us equality in the pursuit of happiness.”621 The solution he proposed was a new Bill of Rights that included economic guarantees.
Every American, he said, has a right to a job, a “living wage,” freedom from unfair competition, a home, medical care, an education, unemployment protection, and retirement security through generous tax-supported Social Security. His list of ideas was a nice taste of double-talk—all promises but no attention to the dissolution of individual rights that implementing such ideas would require.
Before he was finished, Roosevelt used government force to change and control America in a very fundamental and permanent way.
PRESIDENT: Harry S. Truman (served 1945-1953)
LEGACY: Father of Fair Deal, grandfather of health care
STORY: Truman’s major steps toward socialism included his so-called Fair Deal. One of its major promises was a national health-care program. It was an enormous proposal. Truman wanted to build hospitals and clinics all over the U.S., guarantee wages for doctors and nurses so it didn’t matter where they worked, and create a branch of government that would oversee who got the money and if standards were being met.
The most controversial part of the plan was national health insurance—available to everyone, and run by the government. The proposal came to Congress as an expansion of the Social Security Act, and was called the W-M-D bill. It failed to win passage.622
Truman tried to remove recently imposed controls on unions set by the Taft-Hartley Act of 1947. The Act restricted unions’ ability to strike and controlled how their funds could be used in elections. It also allowed states to bypass unions with their own right-to-work laws. The Act gave employees the right to get a job without being forced to join a union. Truman tried to veto the Act but failed.
Truman’s other activities to expand the government were carried forward as if the enumerated powers of Article 1.8 didn’t really exist. By the close of his administration, his actions helped underscore the assumed power of the federal government to use its enormous financial resources to shape America in whatever direction it pleased.
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605 Our Chief Magistrate and His Powers, NY: Columbia University Press, 1916.
606 U.S. Federal Individual Income Tax Rates History, 1913-2011, Nominal and Inflation Brackets.
607 Charles Seymour, The Intimate Papers of Colonel House, Vol. 1, pp. 114-115.
608 U.S. Constitution, Article 1 Section 8.
609 Woodrow Wilson, The State, D.C. Heath & Co., 1889, p. 651, para. 1255.
610 Woodrow Wilson, Constitutional Government in the United States, The Columbia University Press, p. 70, 1908.
611 Woodrow Wilson, Socialism and Democracy, 1887.
612 Woodrow Wilson, Leaders of Me
n, 1890.
613 Woodrow Wilson, Socialism and Democracy, unpublished essay, 1887.
614 William J. Barber, From New Era to New Deal: Herbert Hoover, The Economists, and American Economic Policy, 1921-1933, New York: Cambridge University Press, 1985, p. 15.
615 Herbert Hoover, address to Congress, December 2, 1930.
616 Herbert Hoover, The Memoirs of Herbert Hoover, Volume 2: The Cabinet and the Presidency 1920-1933, p. 104.
617 Bureau of the Census, 1976.
618 Herbert Hoover, State of the Union Address, December 3, 1929.
619 Herman E. Krooss, Executive Opinion: What Business Leaders Said and Thought on Economic Issues, 1920s-1960s, 1970.
620 Joseph A. Schumpeter, Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, 1939.
621 Franklin D. Roosevelt, State of the Union Message to Congress, January 11, 1944.
622 See President Truman’s Proposed Health Program, November 19, 1945, Harry S. Truman library, www.trumanlibrary.org
Chapter 83: U.S. Presidents and Socialism, continued
—Kennedy, Johnson, Nixon, Carter, Reagan—
In both peace and war, the ruling executives of the United States are bound by oath to uphold, defend and protect the U.S. Constitution. Did they?