As Bryan Caplan and Brad DeLong continue to argue about FDR (and seeing Dan Gross, Economist's View, James Hamilton, Tyler Cowen, et al), I have to get this off my chest. I think FDR was a horrible president. My son takes better care of his ant farm than this guy took care of the economy. If ever there was someone in power who looked only at partial derivatives, it was FDR. If there was ever someone who focused on producers and ignored consumers, it was FDR. If there was anyone who thought self-interest was only present among businessmen, not government or union workers, it was FDR. His economic views are indistinguishable from a typical campus left-winger after 10 bong hits.

Perhaps I should not be so harsh, as FDR came into the presidency when anti-capitalist ideology was ascendant. At that time George Bernard Shaw and Walter Duranty were useful idiots to Stalin's genocidal regime, and it appeared Socialism 'worked' in stark contrast to capitalisms failing in the West (ah, the cost of a free press). Republican Herbert Hoover, president from 1929-32, raised tariffs an average of 59% in 1930, and as a percentage of national income taxes doubled from 11.6% in 1929 to 21.1% in 1932. He encouraged an investigation of the stock market, focusing on short-selling as a cause of the market decline. This was the conservative.

But just when you think things can't get worse, they do. Sure the economy rebounded, but free markets with strong property rights grow naturally--they are like weeds, not precious flowers--and the economy would have bounced back much faster and stronger had Calvin Coolidge been President. FDR promoted the National Recovery Administration (NRA), which encouraged cartels dominated by big business. Much of this was later struck down, but the tone was established an cartels were encouraged throughout his administration. The NRA tried to enforce 'minimum selling prices' in things like apparel and dry cleaning, encouraging price fixing and discouraging new business. The NRA sanctioned labor unions as monopoly bargaining agents in the workplace, strikes grew as a reflection of this new power, all part of a strategy to raise wages. FDR introduced the great idea of paying farmers to take acreage out of production, mandated price fixing for various crops such as dairy, corn, cotton and wheat, and permitted price fixing for other commodities.

The undistributed profits tax signed in 1936 introduced a tax on retained earnings--they key source of funds for corporate investment--which ranged from from 10% to 74% of retained earnings. This was repealed in 1939 upon the advocacy of FDR's allies such as Joseph Kennedy and Harry Hopkins. As I mentioned previously, I think this tax was very important in explaining the severity of the 1937 plunge, but when taxes came up below plan, Treasury secretary Morgenthau branded businessmen as 'fascists' for not delivering for him: "The question is whether we are going to have a Fascist government in this country or a government of the people, whether rich men are going to be able to defy Government and refuse to bear their burdens". Pot, meet kettle.

In 1933 the new SEC increased all sorts of disclosure requirements, which basically just applies a fixed cost to issuing equity, part of his plan to help large extant (and connected) firms while hindering potential entrants. He kept the archaic unit banking systems that withheld the free-lunch of diversification (Canada had no unit banks, and no bank failures), and made it worse by separating commercial banking from investment banking (a detour not emulated and eventually repealed). New federal program spending (WPA, CWA, FERA grants) was highly political, as little New Deal spending went to southern states that gave FDR big winning margins in 1932, but instead to battleground states that would be key to his 1936 re-election.

In 1942 FDR issued a message to Congress and declared "No American Citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year". The Treasury sent a memorandum to the Ways and Means Committee calling for a 100% tax on incomes over $25,000 ($275k today). It didn't pass, though the top rate peaked at 94% on incomes over $200k in 1944-5.

Sure, it could have been worse: he wasn't Mussolini or Mugabe. But he was bad.