Changes

Roosevelt and the State Department promoted a "Good Neighbor" policy toward Latin America, which meant that the U.S. would no longer try to prevent or overthrow dictatorships or governments ruinous to the people. An immediate result was the takeover of [[Cuba]] by a military dictatorship.

Roosevelt and the State Department promoted a "Good Neighbor" policy toward Latin America, which meant that the U.S. would no longer try to prevent or overthrow dictatorships or governments ruinous to the people. An immediate result was the takeover of [[Cuba]] by a military dictatorship.

Finally realizing the dangers posed by the Nazis, Roosevelt reversed course in 1938 and sought to repeal the neutrality laws.  However not all the New Dealers went along with FDR; many remained isolationist.

Finally realizing the dangers posed by the Nazis, Roosevelt reversed course in 1938 and sought to repeal the neutrality laws.  However, not all the New Dealers went along with FDR; many remained isolationist.

==Relief, Recovery, and Reform==

==Relief, Recovery, and Reform==

===World Comparisons===

===World Comparisons===

Britain was unable to adopt major programs to stop its depression.  That led to collapse of the Labour government and replacement in 1931 by a National coalition (predominantly Conservative). There was no equivalent "New Deal" government intervention in Britain, which allowing self correcting market mechanism to operate, brought about a higher level of sustained employment and recovered more quickly from the Depression. In Canada, Conservative Prime Minister [[R. B. Bennett]] pushed for a program similar to the New Deal but failed to get it enacted and was defeated for reelection by the Liberals under [[William Mackenzie King]]. In New Zealand a series of economic and social policies similar to the New Deal were adopted after the election of the first Labour Government in 1935 [http://www.teara.govt.nz/1966/H/HistoryEconomic/LabourPolicy/en].

Britain was unable to adopt major programs to stop its depression.  That led to collapse of the Labour government and replacement in 1931 by a National coalition (predominantly Conservative). There was no equivalent "New Deal" government intervention in Britain, which allowing self-correcting market mechanism to operate, brought about a higher level of sustained employment and recovered more quickly from the Depression. In Canada, Conservative Prime Minister [[R. B. Bennett]] pushed for a program similar to the New Deal but failed to get it enacted and was defeated for reelection by the Liberals under [[William Mackenzie King]]. In New Zealand a series of economic and social policies similar to the New Deal were adopted after the election of the first Labour Government in 1935 [http://www.teara.govt.nz/1966/H/HistoryEconomic/LabourPolicy/en].

In [[Nazi Germany]], economic recovery was pursued through wage controls, suppression of unions, and big government spending programs on [[Autobahn|infrastructure]] and public works; as in the United States, large-scale armament spending came later in the 1930s. In [[Mussolini]]'s Italy, the economic controls of his corporate state were tightened.

In [[Nazi Germany]], economic recovery was pursued through wage controls, suppression of unions, and big government spending programs on [[Autobahn|infrastructure]] and public works; as in the United States, large-scale armament spending came later in the 1930s. In [[Mussolini]]'s Italy, the economic controls of his corporate state were tightened.

The failure of Credit Anstalt, a large commercial bank in Austria in 1931, brought a new wave of financial panic to Wall Street. By March 4, all banks in the country were virtually closed by their governors, and Roosevelt kept them all closed until he could pass new legislation.<ref>for details see "Bottom" in ''Time Magazine'' (March 13, 1933) online at [http://www.time.com/time/printout/0,8816,745289,00.html]</ref>  On March 9, Roosevelt sent to Congress the [[Emergency Banking Act]], drafted in large part by Hoover's administration; the act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed.  Three-quarters of the banks in the [[Federal Reserve System]] reopened within the next three days. Billions of dollars in "hoarded" currency and gold flowed back into them within a month, thus stabilizing the banking system. All was normal by April. During all of 1933, 4,004 small local banks were permanently closed and were merged into larger banks.  (Their depositors eventually received 85 cents on the dollar of their deposits.)  Congress created the [[Federal Deposit Insurance Corporation]] in June, which insured deposits for up to $5,000, although Roosevelt opposed it support was overwhelming.  The establishment of the FDIC virtually ended the era of "runs" on banks.   

The failure of Credit Anstalt, a large commercial bank in Austria in 1931, brought a new wave of financial panic to Wall Street. By March 4, all banks in the country were virtually closed by their governors, and Roosevelt kept them all closed until he could pass new legislation.<ref>for details see "Bottom" in ''Time Magazine'' (March 13, 1933) online at [http://www.time.com/time/printout/0,8816,745289,00.html]</ref>  On March 9, Roosevelt sent to Congress the [[Emergency Banking Act]], drafted in large part by Hoover's administration; the act was passed and signed into law the same day. It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed.  Three-quarters of the banks in the [[Federal Reserve System]] reopened within the next three days. Billions of dollars in "hoarded" currency and gold flowed back into them within a month, thus stabilizing the banking system. All was normal by April. During all of 1933, 4,004 small local banks were permanently closed and were merged into larger banks.  (Their depositors eventually received 85 cents on the dollar of their deposits.)  Congress created the [[Federal Deposit Insurance Corporation]] in June, which insured deposits for up to $5,000, although Roosevelt opposed it support was overwhelming.  The establishment of the FDIC virtually ended the era of "runs" on banks.   

The Banking Act of 1935 removed the Secretary of the Treasury from the Federal Reserve Board of Governors and established the [[Federal Open Market Committee]] to control market operations of the the Federal Reserve, the buying and selling of Government securities the Federal Reserve System.

The Banking Act of 1935 removed the Secretary of the Treasury from the Federal Reserve Board of Governors and established the [[Federal Open Market Committee]] to control market operations of the Federal Reserve, the buying and selling of Government securities the Federal Reserve System.

===Economic growth===

===Economic growth===

===Minimum wage===

===Minimum wage===

Shortly after his election FDR forced the Congress to scrap minimum wage and maximum hour legislation which the Senate had already passed.<ref>''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 2, Ch. 3., [http://www.rooseveltmyth.com/book/fdrmyth_Chapter_Three___The_Forgotten_De.htm ''The Forgotten Deprssion''].</ref>  

Shortly after his election FDR forced the Congress to scrap minimum wage and maximum hour legislation which the Senate had already passed.<ref>''The Roosevelt Myth'', John T. Flynn, Fox and Wilkes, 1948, Book 2, Ch. 3., [http://www.rooseveltmyth.com/book/fdrmyth_Chapter_Three___The_Forgotten_De.htm ''The Forgotten Deprssion''].</ref>  

===The Farm Programs ===

===The Farm Programs ===

The milk program was especially problematic—and indeed still is in the 21st century, with state governments having a major role.

The milk program was especially problematic—and indeed still is in the 21st century, with state governments having a major role.

The main farm program was the [[Agricultural Adjustment Administration]] or AAA, enacted in 1933.  The government rented land from farmers to take it out of production, therby hoping the reduce the surpluses that caused such low prices.  By 1936 conditions had dramatically improved in agriculture. Although the holy grail of 100% parity was not reached until 1943, incomes were much higher rising from $4.7 billion in 1932 to $8.7 billion in 1936. The heavy burden of debt that had soured the 1920s was mostly paid off or refinanced.  The chimerical vision of escaping to the rich cities no longer enthralled the farm youth.

The main farm program was the [[Agricultural Adjustment Administration]] or AAA, enacted in 1933.  The government rented land from farmers to take it out of production, thereby hoping the reduce the surpluses that caused such low prices.  By 1936 conditions had dramatically improved in agriculture. Although the holy grail of 100% parity was not reached until 1943, incomes were much higher rising from $4.7 billion in 1932 to $8.7 billion in 1936. The heavy burden of debt that had soured the 1920s was mostly paid off or refinanced.  The chimerical vision of escaping to the rich cities no longer enthralled the farm youth.

The main causes of the return to prosperity include the overall improved national economy, the severe draught of 1934 that reduced output and caused prices to rise.  The AAA payments to farmers were a help.  The acreage reduction program had little effect except in cotton and tobacco. In other crops the farmers improved their efficiency on the remaining acreage and output stayed level. In cotton and tobacco, however, prices were much higher and since the great majority of Southerners lived in rural areas and depended on these crops, the New Deal was very well regarded.<ref>Benedict, ''Farm Policies,'' p 353</ref>

The main causes of the return to prosperity include the overall improved national economy, the severe draught of 1934 that reduced output and caused prices to rise.  The AAA payments to farmers were a help.  The acreage reduction program had little effect except in cotton and tobacco. In other crops the farmers improved their efficiency on the remaining acreage and output stayed level. In cotton and tobacco, however, prices were much higher and since the great majority of Southerners lived in rural areas and depended on these crops, the New Deal was very well regarded.<ref>Benedict, ''Farm Policies,'' p 353</ref>

===The NRA "Blue Eagle" campaign===

===The NRA "Blue Eagle" campaign===

New Deal economists argued that cut-throat competition had hurt many businesses and that with prices having fallen 20% and more, "deflation" exacerbated the burden of debt and would delay recovery.  They rejected a strong move in Congress to limit the workweek to 30 hours. Instead their remedy, designed in cooperation with the Chamber of Commerce (representing big business), was the NIRA. It included billions in stimulus funds for the PWA to spend, and sought to to raise prices, give more bargaining power for unions (so the workers could purchase more) and reduce harmful competition.<ref>Unions in 1933-35 were small and weak; they took off after 1935.</ref> At the center of the NIRA was the National Recovery Administration (NRA), headed by former General [[Hugh Samuel Johnson]], who had been a senior economic official in World War I.  Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35 to 45 hours, and the abolition of [[child labor]]. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.<ref>Arthur Schlesinger, Jr. ''The Coming of the New Deal'' (1959), 87-135</ref>  

New Deal economists argued that cut-throat competition had hurt many businesses and that with prices having fallen 20% and more, "deflation" exacerbated the burden of debt and would delay recovery.  They rejected a strong move in Congress to limit the workweek to 30 hours. Instead their remedy, designed in cooperation with the Chamber of Commerce (representing big business), was the NIRA. It included billions in stimulus funds for the PWA to spend, and sought to raise prices, give more bargaining power for unions (so the workers could purchase more) and reduce harmful competition.<ref>Unions in 1933-35 were small and weak; they took off after 1935.</ref> At the center of the NIRA was the National Recovery Administration (NRA), headed by former General [[Hugh Samuel Johnson]], who had been a senior economic official in World War I.  Johnson called on every business establishment in the nation to accept a stopgap "blanket code": a minimum wage of between 20 and 45 cents per hour, a maximum workweek of 35 to 45 hours, and the abolition of [[child labor]]. Johnson and Roosevelt contended that the "blanket code" would raise consumer purchasing power and increase employment.<ref>Arthur Schlesinger, Jr. ''The Coming of the New Deal'' (1959), 87-135</ref>  

To mobilize political support for the NRA, Johnson launched the "NRA [[Blue Eagle]]" publicity campaign to boost what he called "industrial self-government." The NRA brought together leaders in each industry to design specific sets of codes for that industry; the most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. In a remarkably short time, the NRA announced agreements from almost every major industry in the nation. By March 1934, industrial production was 45% higher than in March 1933.<ref>Federal Reserve System, ''National Summary of Business Conditions'' (1936)</ref> According to some economists, the NRA increased the cost of doing business by forty percent.<ref name="Reed">Reed, Lawrence W. [http://www.mackinac.org/archives/1998/sp1998-01.pdf ''Great Myths of the Great Depression''] Mackinac Center for Public Policy.</ref> Donald Richberg, who soon replaced Johnson as the head of the NRA said:

To mobilize political support for the NRA, Johnson launched the "NRA [[Blue Eagle]]" publicity campaign to boost what he called "industrial self-government." The NRA brought together leaders in each industry to design specific sets of codes for that industry; the most important provisions were anti-deflationary floors below which no company would lower prices or wages, and agreements on maintaining employment and production. In a remarkably short time, the NRA announced agreements from almost every major industry in the nation. By March 1934, industrial production was 45% higher than in March 1933.<ref>Federal Reserve System, ''National Summary of Business Conditions'' (1936)</ref> According to some economists, the NRA increased the cost of doing business by forty percent.<ref name="Reed">Reed, Lawrence W. [http://www.mackinac.org/archives/1998/sp1998-01.pdf ''Great Myths of the Great Depression''] Mackinac Center for Public Policy.</ref> Donald Richberg, who soon replaced Johnson as the head of the NRA said:

==Stagnation of the economy: Negative supply side==

==Stagnation of the economy: Negative supply side==

Supply side economics<ref>The term was invented in the 1970s.</ref> can have a goal of expanding the supply of labor and capital, as typified the [[Ronald Reagan]] administration in the 1980s. But it can also be the reverse or "negative supply side,"  trying to reduce the unemployed, for example, by moving millions of people out of the labor force, as by relief agencies (CCC, WPA etc), retirement (Social Security, Old Age pensions) or (staring in 1940) the military draft.\

Supply side economics<ref>The term was invented in the 1970s.</ref> can have a goal of expanding the supply of labor and capital, as typified the [[Ronald Reagan]] administration in the 1980s. But it can also be the reverse or "negative supply side,"  trying to reduce the unemployed, for example, by moving millions of people out of the labor force, as by relief agencies (CCC, WPA etc.), retirement (Social Security, Old Age pensions) or (staring in 1940) the military draft.\

   

   

===Practice===

===Practice===

===Theory===

===Theory===

The New Dealers promoted negative supply side because they believed in the theory of economic maturity developed by Alvin Hansen to the effect that the American economy by the late 1920s was fully grown and would not be growing any more.  Recovery meant return to the levels of the 1920s, but it seemed unlikely there would be much future growth.  There seemed to be no new industries—the most important new industry in the 1930s was radio, but it employed few people. Therefore pro-growth solutions, New Dealers argued, were a mistake, especially because they gave a lot of leeway to big business.<ref>George Terborgh, ''The Bogey of Economic Maturity'' (1945) is a systematic refutation.  [http://www.questia.com/googleScholar.qst;jsessionid=LZXTJhxhfZFGMG8K0TbQMs2GvQX0NBvy2Gk2Tp7PLb59fkLll6Qs!-508003271!-1404068679?docId=8860128 online edition]</ref>

The New Dealers promoted negative supply side because they believed in the theory of economic maturity developed by Alvin Hansen to the effect that the American economy by the late 1920s was fully grown and would not be growing any more.  Recovery meant return to the levels of the 1920s, but it seemed unlikely there would be much future growth.  There seemed to be no new industries—the most important new industry in the 1930s was radio, but it employed few people. Therefore, pro-growth solutions, New Dealers argued, were a mistake, especially because they gave a lot of leeway to big business.<ref>George Terborgh, ''The Bogey of Economic Maturity'' (1945) is a systematic refutation.  [http://www.questia.com/googleScholar.qst;jsessionid=LZXTJhxhfZFGMG8K0TbQMs2GvQX0NBvy2Gk2Tp7PLb59fkLll6Qs!-508003271!-1404068679?docId=8860128 online edition]</ref>

The most prominent spokesman for "economic maturity" was Harvard economist Alvin Hansen (1887-1975)<ref>Alvin H. Hansen, "Economic Progress and Declining Population Growth," ''American Economic Review,'' Vol. 29, No. 1 (Mar., 1939), pp. 1-15 [http://www.jstor.org/stable/1806983 in JSTOR]</ref> who called it "secular stagnation."  In the late 1930s Hansen argued that "secular stagnation" had set in, so that the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth. The only solution, he argued, was constant deficit spending by the federal government. Critics, such as George Terborgh, attacked Hansen as a pessimist and defeatist for advancing his secular stagnation thesis. Hansen replied that secular stagnation was just another name for Keynes's underemployment equilibrium. However, the sustained economic growth beginning in 1940 undercut Hansen's predictions and his stagnation model was forgotten.<ref>W. Robert Brazelton, "Alvin Harvey Hansen: Economic Growth and a More Perfect Society: The Economist's Role in Defining the Stagnation Thesis and in Popularizing Keynesianism," ''American Journal of Economics and Sociology,'' Vol. 48, No. 4 (Oct., 1989), pp. 427-440 [http://www.jstor.org/stable/3487557 in JSTOR]</ref>

The most prominent spokesman for "economic maturity" was Harvard economist Alvin Hansen (1887-1975)<ref>Alvin H. Hansen, "Economic Progress and Declining Population Growth," ''American Economic Review,'' Vol. 29, No. 1 (Mar., 1939), pp. 1-15 [http://www.jstor.org/stable/1806983 in JSTOR]</ref> who called it "secular stagnation."  In the late 1930s Hansen argued that "secular stagnation" had set in, so that the American economy would never grow rapidly again, because all the growth ingredients had played out, including technological innovation and population growth. The only solution, he argued, was constant deficit spending by the federal government. Critics, such as George Terborgh, attacked Hansen as a pessimist and defeatist for advancing his secular stagnation thesis. Hansen replied that secular stagnation was just another name for Keynes's underemployment equilibrium. However, the sustained economic growth beginning in 1940 undercut Hansen's predictions and his stagnation model was forgotten.<ref>W. Robert Brazelton, "Alvin Harvey Hansen: Economic Growth and a More Perfect Society: The Economist's Role in Defining the Stagnation Thesis and in Popularizing Keynesianism," ''American Journal of Economics and Sociology,'' Vol. 48, No. 4 (Oct., 1989), pp. 427-440 [http://www.jstor.org/stable/3487557 in JSTOR]</ref>

===Fiscal Conservatism===

===Fiscal Conservatism===

Fiscal conservatism was a key component of the New Deal, as Zelizer (2000) demonstrates.  It was supported by Wall Street and local investors and most of the business community;  mainstream academic economists believed in it, as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees.  Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits.  Public opinion polls consistently showed public opposition to deficits and debt.  Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably [[Lewis Douglas]] the Director of Budget from 1933 to 1934, and [[Henry Morgenthau Jr.]], Secretary of the Treasury from 1934 to 1945.  They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits.  Personally the president embraced their fiscal conservatism.  Politically, he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen.  On the other hand there was enormous pressure to act–and spending money on high visibility programs attracted Roosevelt, especially if it tied millions of voters to him, as did the WPA.   

Fiscal conservatism was a key component of the New Deal, as Zelizer (2000) demonstrates.  It was supported by Wall Street and local investors and most of the business community;  mainstream academic economists believed in it, as apparently did the majority of the public. Conservative southern Democrats, who favored balanced budgets and opposed new taxes, controlled Congress and its major committees.  Even liberal Democrats at the time regarded balanced budgets as essential to economic stability in the long run, although they were more willing to accept short-term deficits.  Public opinion polls consistently showed public opposition to deficits and debt.  Throughout his terms, Roosevelt recruited fiscal conservatives to serve in his administration, most notably [[Lewis Douglas]] the Director of Budget from 1933 to 1934, and [[Henry Morgenthau Jr.]], Secretary of the Treasury from 1934 to 1945.  They defined policy in terms of budgetary cost and tax burdens rather than needs, rights, obligations, or political benefits.  Personally the president embraced their fiscal conservatism.  Politically, he realized that fiscal conservatism enjoyed a strong wide base of support among voters, leading Democrats, and businessmen.  On the other hand, there was enormous pressure to act–and spending money on high visibility programs attracted Roosevelt, especially if it tied millions of voters to him, as did the WPA.   

Douglas proved too inflexible, and quit in 1934.  Morgenthau made it his highest priority to stay close to Roosevelt, no matter what.  Douglas' position, like many of the [[Old Right]] was grounded in a basic distrust of politicians and the deeply ingrained fear that government spending always involved a degree of patronage and corruption that offended his Progressive sense of efficiency.  The Economy Act of 1933, passed early in the Hundred Days, was Douglas' great achievement. It  reduced federal expenditures by $500 million, to be achieved by reducing veterans’ payments and federal salaries.  Douglas cut government spending through executive orders that cut the military budget by $125 million, $75 million from the Post Office, $12 million from Commerce, $75 million from government salaries, and $100 million from staff layoffs.  As Freidel concludes, "The economy program was not a minor aberration of the spring of 1933, or a hypocritical concession to delighted conservatives. Rather it was an integral part of Roosevelt's overall New Deal."<ref>Freidel 1990, p. 96</ref> Revenues were so low that borrowing was necessary (only the richest 3% paid any income tax before 1942.)  Douglas therefore hated the relief programs, which he said reduced business confidence, threatened the government’s future credit, and had the "destructive psychological effects of making mendicants of self-respecting American citizens."<ref>Zelizer</ref> Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.   

Douglas proved too inflexible, and quit in 1934.  Morgenthau made it his highest priority to stay close to Roosevelt, no matter what.  Douglas' position, like many of the [[Old Right]] was grounded in a basic distrust of politicians and the deeply ingrained fear that government spending always involved a degree of patronage and corruption that offended his Progressive sense of efficiency.  The Economy Act of 1933, passed early in the Hundred Days, was Douglas' great achievement. It  reduced federal expenditures by $500 million, to be achieved by reducing veterans’ payments and federal salaries.  Douglas cut government spending through executive orders that cut the military budget by $125 million, $75 million from the Post Office, $12 million from Commerce, $75 million from government salaries, and $100 million from staff layoffs.  As Freidel concludes, "The economy program was not a minor aberration of the spring of 1933, or a hypocritical concession to delighted conservatives. Rather it was an integral part of Roosevelt's overall New Deal."<ref>Freidel 1990, p. 96</ref> Revenues were so low that borrowing was necessary (only the richest 3% paid any income tax before 1942.)  Douglas therefore hated the relief programs, which he said reduced business confidence, threatened the government’s future credit, and had the "destructive psychological effects of making mendicants of self-respecting American citizens."<ref>Zelizer</ref> Roosevelt was pulled toward greater spending by Hopkins and Ickes, and as the 1936 election approached he decided to gain votes by attacking big business.   

Since 1933 politicians and pundits have often called for a "new deal" regarding this or that political object.  That is, they demand a completely new, large-scale approach to a project. As Arthur A. Ekirch Jr. (1971) has shown, the New Deal stimulated utopianism in American political and social thought on a wide range of issues.

Since 1933 politicians and pundits have often called for a "new deal" regarding this or that political object.  That is, they demand a completely new, large-scale approach to a project. As Arthur A. Ekirch Jr. (1971) has shown, the New Deal stimulated utopianism in American political and social thought on a wide range of issues.

In Canada, Conservative Prime Minister [[Richard B. Bennett]] in 1935 proposed a "new deal" of regulation , taxation, and social insurance that was a copy of the American program; Bennett's proposals were not enacted and he was defeated for reelection in October 1935.  

In Canada, Conservative Prime Minister [[Richard B. Bennett]] in 1935 proposed a "new deal" of regulation, taxation, and social insurance that was a copy of the American program; Bennett's proposals were not enacted and he was defeated for reelection in October 1935.  

In accordance with the rise of the use of U.S. political phraseology in Britain, the [[Labour Party (UK)|Labour]] Government has termed some of its employment programs 'New Deal'.

In accordance with the rise of the use of U.S. political phraseology in Britain, the [[Labour Party (UK)|Labour]] Government has termed some of its employment programs 'New Deal'.

===National Recovery Act===

===National Recovery Act===

In 1933 Italian Premier [[Benito Mussolini]] was a towering figure. Dr. Nicholas Murray Butler,<ref>[http://www.time.com/time/magazine/article/0,9171,774563-4,00.html Axis (1936-1943)], ''[[TIME magazine]]'', Sep. 20, 1943,</ref>  President of Columbia University and [[Nobel Prize for Peace]], said of [[fascism]], it is as a “form of government of the very first order of excellence”; and found it “safe to predict that just as [[Oliver Cromwell|Cromwell]] made modern England, so Mussolini would make modern Italy.” <ref>[http://www.marxists.org/history/etol/writers/wright/1943/10/italy.htm What To Do With Italy?], John G. Wright, From Fourth International, Vol.4 No.10, October 1943, pp.308-311.</ref>  Chariman [[Sol Bloom]] of the Foreign Affairs Committee of the U. S. House of Representatives, suggested Mussolini was a great man and had something the [[United States]] government might well look to for imitation.<ref>John T. Flynn, ''As We Go Marching'', Doubleday, 1944, p. 70.</ref> What they liked particularly was his [[corporative]] system. Mussolini organized each trade or industrial group or professional group into a state supervised trade association. Mussolini called it a corporative.<ref>[http://www.cmre.org/GeneSmileypresentation.pdf The New Deal and Corporatism], Prof. Emeritus Gene Smiley, Marquette University, Presented at the Committee for Monetary Research and Education,October 19, 2006,</ref>  These corporatives operated under state supervision and provided economic planning of production, quality, prices, distribution, labor standards, etc.  The National Recovery Act, or NRA as it came to be called, provided that a corporative system in America for each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a [[Code Authority]]. In [[Nazi]] Germany such government run planning authorities built on the Italian model were called [[industrial cartel]]s. This was the same as fascism.<ref>[http://www.rooseveltmyth.com/book/hbzfrm.htm ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 1, Ch. 5.</ref>  These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA that had the effect of ending the downward spiral of deflation and falling prices, but which risked the long-term effect of stifling innovation and favoring big business over small.  Anti­-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now Roosevelt suspended the anti-trust laws and compelled men to combine.  

In 1933 Italian Premier [[Benito Mussolini]] was a towering figure. Dr. Nicholas Murray Butler,<ref>[http://www.time.com/time/magazine/article/0,9171,774563-4,00.html Axis (1936-1943)], ''[[TIME magazine]]'', Sep. 20, 1943,</ref>  President of Columbia University and [[Nobel Prize for Peace]], said of [[fascism]], it is as a “form of government of the very first order of excellence”; and found it “safe to predict that just as [[Oliver Cromwell|Cromwell]] made modern England, so Mussolini would make modern Italy.” <ref>[http://www.marxists.org/history/etol/writers/wright/1943/10/italy.htm What To Do With Italy?], John G. Wright, From Fourth International, Vol.4 No.10, October 1943, pp.308-311.</ref>  Chairman [[Sol Bloom]] of the Foreign Affairs Committee of the U. S. House of Representatives, suggested Mussolini was a great man and had something the [[United States]] government might well look to for imitation.<ref>John T. Flynn, ''As We Go Marching'', Doubleday, 1944, p. 70.</ref> What they liked particularly was his [[corporative]] system. Mussolini organized each trade or industrial group or professional group into a state supervised trade association. Mussolini called it a corporative.<ref>[http://www.cmre.org/GeneSmileypresentation.pdf The New Deal and Corporatism], Prof. Emeritus Gene Smiley, Marquette University, Presented at the Committee for Monetary Research and Education,October 19, 2006,</ref>  These corporatives operated under state supervision and provided economic planning of production, quality, prices, distribution, labor standards, etc.  The National Recovery Act, or NRA as it came to be called, provided that a corporative system in America for each industry should be organized into a federally supervised trade association. It was not called a corporative. It was called a [[Code Authority]]. In [[Nazi]] Germany such government run planning authorities built on the Italian model were called [[industrial cartel]]s. This was the same as fascism.<ref>[http://www.rooseveltmyth.com/book/hbzfrm.htm ''The Roosevelt Myth''], John T. Flynn, Fox and Wilkes, 1948, Book 1, Ch. 5.</ref>  These code authorities could regulate production, quantities, qualities, prices, distribution methods, etc., under the supervision of the NRA that had the effect of ending the downward spiral of deflation and falling prices, but which risked the long-term effect of stifling innovation and favoring big business over small.  Anti­-trust laws forbade such organizations. Roosevelt had denounced Hoover for not enforcing these laws sufficiently. Now Roosevelt suspended the anti-trust laws and compelled men to combine.  

The NRA Act provided an appropriation of $3,300,000,000 which the President was given to be spent at his own discretion. He had a sum of money equal to what the government spent in the previous ten years outside of discretionary spending. Roosevelt decided how it should be spent and where. If a congressman or senator needed an appropriation for his district, instead of introducing a bill in Congress, he went to Roosevelt to ask for it. All over the country, states, cities, counties, business organizations, institutions of all sorts wanted projects of all kinds. Instead of going to Congress they went to the President.  

The NRA Act provided an appropriation of $3,300,000,000 which the President was given to be spent at his own discretion. He had a sum of money equal to what the government spent in the previous ten years outside of discretionary spending. Roosevelt decided how it should be spent and where. If a congressman or senator needed an appropriation for his district, instead of introducing a bill in Congress, he went to Roosevelt to ask for it. All over the country, states, cities, counties, business organizations, institutions of all sorts wanted projects of all kinds. Instead of going to Congress they went to the President.