RAW DEAL, BUT UNIVERSAL (via Tom Corcoran):

Why Did FDR's New Deal Harm Blacks? (Jim Powell, 12/03/03, Cato)

Good intentions are over-rated. Franklin Delano Roosevelt's New Deal, for instance, has been hailed for its lofty goals of reforming the American economy and helping the under-privileged. Yet mounting evidence, developed by dozens of economists across the country, shows that the New Deal prolonged joblessness for millions, and black people were especially hard hit.

The flagship of the New Deal was the National Industrial Recovery Act, passed in June 1933. It authorized the president to issue executive orders establishing some 700 industrial cartels, which restricted output and forced wages and prices above market levels. The minimum wage regulations made it illegal for employers to hire people who weren't worth the minimum because they lacked skills. As a result, some 500,000 blacks, particularly in the South, were estimated to have lost their jobs.

Marginal workers, like unskilled blacks, desperately needed an expanding economy to create more jobs. Yet New Deal policies made it harder for employers to hire people. FDR tripled federal taxes between 1933 and 1940. Social Security excise taxes on payrolls discouraged employers from hiring. New Deal securities laws made it harder for employers to raise capital. New Deal antitrust lawsuits harassed some 150 employers and whole industries. Whatever the merits of such policies might have been, it was bizarre to disrupt private sector employment when the median unemployment rate was 17 percent. [...]

What about New Deal spending programs? They were channeled away from the poorest people, including millions of blacks, who lived in the South. These people were already on FDR's side, so, from a political standpoint, there wasn't anything for FDR, as an incumbent, to gain by giving them money. The bulk of New Deal spending went to western states and eastern states where previous election returns had been relatively close, because FDR was focused on winning the next election. Moreover, getting congressional funding required giving states the power to administer programs like the Works Progress Administration (WPA). Indiana Democratic county chairman V.G. Coplen told FDR's 1932 and 1936 campaign manager James Farley, "use these Democratic projects to make votes for the Democratic party."

It seems unfair to even hint that an ideology and programs that damaged the entire country had a racist component.

Posted by Orrin Judd at December 6, 2003 4:25 PM