The Psychology of the New Deal


UNFORTUNATELY the depression and the recovery concern, not the abstractions of economics and politics, but people, the behavior and prospects of existent and future American citizens.

It is not the CCC that matters: it is the boys in the camp. It was not the AAA that was good or bad, beneficial or harmful; it was what the AAA did to the American people, the farmer, the manufacturer, the laborer, the consumer. It is not the budget that should excite our interest; it is the effect that high taxes will have upon the present generation and its grandchildren.

In an effort to diagnose the current condition of the American as a person, it is essential that slogans and captions be avoided, that the improvisations of publicists be recognized as designed to deceive as often as to describe. Such phrases as the New Deal or the Raw Deal, the Abundant Life or the Money Changers, add little to an understanding of the problems that confront the American people. They are evidences only of partisanships which shift from time to time with astonishing facility.

Our politicians, who pride themselves on their loyalty to the people, are often careless of human values. They usually think and act only in the interest of a particular, articulate coterie that applies political pressure for some special legislation. The Congressional Record, for instance, reads more like the minutes of a body of representatives of special interests than a parliament functioning for the whole people of the United States. There are Congressmen that represent potatoes and Senators that represent silver; there are Congressmen that speak for the American Federation of Labor and Senators that speak for the American Legion.

Few ever rise to ask, What is happening to the American people? What is being done to-day that will affect the lives, the thinking, the social characteristics of our children and grandchildren? In this ’Après moi le déluge’ attitude of our representatives lies perhaps the greatest peril besetting the American people. This country will continue to exist after the Roosevelt Administration has ceased to be more than history; it is therefore impossible longer to ignore what it has done to us as human beings. We can survive without potatoes, but what are we to be without character?


The recovery period can no more be isolated from the American history that preceded it than a man can be psychologically divorced from his ancestors. Had there been no depression, there would have been no recovery. But, more important than that, neither the depression nor the recovery could have plagued us had there been no boom. The recovery exists, and acts as it does, because the way had been paved for it.

Human beings behave as they do during the recovery because, during the boom and the depression, disobedience and disrespect for law, for parents, for teachers, for leadership, for everything that is robust and strong and vital and worthy of permanence, were being propagated.

The Roman holiday of the boom in morals, as in economics, must be paid for. We have forgotten the flapper, but flapperdom will plague us for another generation or two. We are beginning to forget Ponzi and Florida booms and all the other manifestations of mental syncopation, but we continue to pay for them.

During the recovery, we built roads and attempted to rebuild some industries, but little has been done to rebuild character, to strengthen the family, to restore respect for authority. Even Professor Tugwell has discovered this weakness in our system, for in his famous California speech he cried, ‘Discipline is our only lack.’ The depression and the recovery have emphasized the necessity for money, for the mere possession of material security; the danger is that when again material security is assured, we shall, as a people, have nothing else.

Prohibition broke down respect for law. It was fashionable to bootleg; it was heroic to drink a forbidden cocktail. Prohibition was a particularly evil institution, not only because it caused lawbreaking to be justified, but because it permitted the lawbreaker to be accepted as a gentleman. Here commenced an attitude toward the law which, in the Roosevelt Administration, reached a height of contempt. For whereas, during the boom, drinking forbidden whiskey was done in the best families, during the recovery it became the style to attack the Constitution.

The law, upon respect for which depends the very existence of the country, becomes trivial when Congress passes measures in the hope and anticipation of a Supreme Court repudiation. A supine and characterless legislature undermines public confidence in itself, and therefore in the law of which it is the parent. Congress must have heard the relief of the nation at its adjournment last summer; yet it was not shocked into sensitiveness.

The generation which is now beginning to feel the oats of maturity has little respect for our national lawmakers. It knows no great figures in Congress, although there is occasionally some praise for Borah, Glass, and Norris. Most of Congress is ungrammatical, pedestrian, small. Youth is disillusioned about these men who should be its leaders; they cannot lead because they are too susceptible to pressure groups. They follow haphazardly — and the young people of the country not only are unled, but they have no respect for leadership. It’s all a racket, they say.


And, curiously enough, they are right. It is all a racket. Everything seems to have a racket. Education is a racket. Youth knows that many colleges do not educate and that many professors are not educated. They know that courses have become easy, even trifling. An elective system has been expanded until in many universities students take trivial subjects to make up the necessary number of points without regard to the cultural value of the course. They know that in many state universities the system of marking has been brought down so that the class average will pass no matter how low that average may be. During the depression, many students continued at colleges only because there were no jobs and a college was preferable to a CCC camp. This is also true in high schools and public schools. As Nicholas Murray Butler once said: —

The school becomes an obstacle to education when it subordinates or neglects discipline, when it endeavors to substitute elaborate paraphernalia for the very simple instrumentalities of true education, and when by the glorification of various mystical methods of teaching it prevents the direct imparting of knowledge and discipline by strong personality, which is education’s surest instrument of effectiveness.

The political professor, having once achieved some distinction as a scholar, has discovered in the Foundations and the government a profitable racket. Washington these days is full of scholars who multiply statistics on everything, but add little to the solution of practical problems. These professors send forth mimeographed statements of their views concerning everything under the sun, for their personal significance depends not upon achievement but upon the cumulative effect of newspaper copy. There can be little question that the group popularly known as the Brain Trust, and the current group, offensively termed the ‘Hot Dogs,’hurt themselves by this mad craving for publicity.

Too often do young men and women come to believe that publicity alone is the path to greatness, and that the fogey who actually plugs away at a job unheard and unsung is a stupid dodderer who fails to understand his lime. The publicity hunt among the Washington professors during the past three or four years has been a distressing spectacle of waning dignity and public morals. It is a racket.

Business has been subjected to rackets in an astonishing manner. Not only must it submit to the labor racket, which is often little short of blackmail, and to the pressure of government, which often substitutes political careerism for national interests, but to racketeering organizations within itself.

Business men are constantly complaining of the large number of futile and useless organizations to which they must belong because they dare not refuse to continue to pay dues. Every business man is called upon to join organizations representing not only his industry, but collateral associations to exploit every idea he favors and every scheme he opposes. Men solicit funds to preach doctrines that they claim will solve problems and they attack so-called subversive movements many of which are magnified to justify the expenditures of terrifically active offices. A business man recently told me that the cost of these associations was almost prohibitive, yet he dared not refuse to join each new one lest his attitude be misunderstood by his associates.

Just as many workers pay dues and high initiation fees to unions because they are afraid not to, so business and industry contribute to this racket of futility. It was bad enough during the boom, when business could afford to pay; it became a veritable canker under the codes. Not only did business have to submit for two years to a law which the Supreme Court eventually declared unconstitutional, but it had to pay for Code Authorities, code lawyers, code experts, code statisticians, until the racket in the code was a greater nuisance than the code itself.

I have heard men refer to their legitimate business and jobs as rackets. Citizens look upon their representatives as engaged in a racket. The families of Congressmen who act as secretaries and clerks are regarded by their neighbors as benefiting by a racket.

From the standpoint of national morals, the racket is a menace, because it involves not only a disregard for the law, but a general assumption that anything goes. Parents permit and even encourage their daughters to exhibit themselves in racketeering fiestas in the hope of a movie contract. Anything goes.


The huge increase in government jobs is as much political racketeering as relief. The Civil Service was ignored; salaries were assigned without regard to the current market for similar work; thousands were employed doing nothing useful at a comfortable salary. To such as these, real work will always be irksome, because they will rarely be paid as well for doing something as they were for doing nothing. Furthermore, too many citizens have reached the unfortunate conclusion that the government owes them a living. Louis Howe says it is not a living that the government owes, but an opportunity for a living. He speaks as the President’s secretary and a government official, and not as a relief worker.

In every city it is evident that men and women resist real employment because they can live on the government. In some of the Middle-Western and Northwestern agricultural states, although thousands were on relief, there was a shortage of hands for the crops. In large cities there is a shortage of domestic employees in spite of a devastating relief roll. Even in staid old New England townships, men and women look forward to living on the town not only as a legal right but as an end to be anticipated. The popular Townsend Plan is only a publicized political manifestation of this tendency.

The dignity of working for a living and for the social advantages of success has been subordinated to a novel theory of the right to a livelihood, even if that right induces laziness, profligacy, and national bankruptcy.

Now the question may be asked, ‘Would you have these poor people starve?’ To which Mr. Roosevelt might reply, ‘That would mean a revolution.’ It is obvious that this dread of revolution has been used by political organizers to cajole otherwise thoughtful citizens into agreeing to the acceptance of a state-managed sociology. They would have us believe that the only way to correct unemployment and to prevent starvation is to sacrifice respect for law and personal dignity. The recovery found no other method, and the process of social demoralization continues.

The scramble of politicians for public funds for their districts, the bartering of votes for patronage and relief money, attacks directly the dignity of government and of national leadership, and if in a measure such tactics do lessen unemployment, they break down the force and even the value of government. What a tragedy it is, then, that this loss of dignity, this debasing of officialdom, has not succeeded in reducing unemployment sufficiently to solve, at any rate, the only problem which seemed to justify the sacrifice!


The extravagance of government is not unusual in this country. ‘Bigness’ is a characteristic of the land, and all our governments do their business on a vast scale. The new municipal buildings and courthouses and ‘ milliondollar high schools ’ which dot cities all over this land mark an era of civic extravagance which gained its competitive momentum during the boom and ended only when the stock market popped in 1929. The extravagance of the boom seemed to have, in the minds of the myopic, this justification: there was plenty of money — why not use it for civic purposes? The fact that few seemed to ‘pay as you go’ was also characteristic of a people who believed that prosperity could only manifest itself by eternal indebtedness.

Extravagance was the keynote of the boom. Iowa farmers left their work to live like barons in Los Angeles. Cloak and suit manufacturers in New York left their machines and models to build enormous skyscrapers. Bond salesmen turned even cooks and kitchen maids into prospective millionaires.

The depression, it was hoped, would sober the nation. Men would realize that eternal credit is, like perpetual motion, a fallacy that inevitably must reach an end. Surely, after such a blow, the Federal Government, the states and municipalities, and private individuals would calm their souls and rest from living beyond their means. Hunger drove some to jump out of windows, but most men realized that a million on paper is hardly worth the paper it is written on unless with it comes the satisfaction of security from financial loss and social disaster.

There were many who cursed the depression, and therefore Mr. Roosevelt was elected President, but few mature persons sought a return to the fictions and mirages of the boom. Yet that is exactly what the recovery sought and failed to attain. The hope of another boom, another period of wealth suddenly gained without working for it, produced in a dangerously large number of Americans a psychological alteration: personal independence, an essential American characteristic, lost its meaning for them.

The recovery sought to restore the boom by a hocus-pocus process called ‘priming the pump.’ This, it is said, an English economist invented for his own country, which rejected it. The theory was that, if the government spent enough money to get production moving, the boom would return.

Here we have an astonishing paradox — namely, that when the government, to restore the boom, spent money beyond its income, the value of all money depreciated. ‘Priming the pump,’ then, instead of restoring the boom by increasing extravagance, only served to frighten honest, hard-working, thrifty citizens into phobias concerning the value of their earnings, whereas the new loafing population, which had begun to live on government as a habit, struck for higher pay because the prices of goods had increased. A banker said to me that, since the government was going to take everything away from him, the only course left was to spend everything as rapidly as possible. At the same time workers on relief in many cities struck because they were dissatisfied with the form and content of the charity they were receiving from the government.

Extravagance is still extravagance, whether you call it ‘credit expansion,’ or ‘ the abundant life,’ or ’the equalization of society.’ It amounts to encouraging a thriftless system in which no provision is made for a rainy day, on the assumption that when it pours the government will provide. My banker friend and the WPA workers had developed the same conception of life — namely, that thrift has no future; ultimately the government gets your money and wastes it.

From the days of the Pilgrim Fathers to the recovery, thrift was as American as it still is Scotch. During the recovery, thrift has become taboo. It is almost unpatriotic to fail to spend; to many it has become utterly futile to save. When the new Federal tax bill passed Congress, New Yorkers entered upon a spending spree equal to the maddest days of the boom. Department stores reported wonderful sales; new night clubs opened; the theatrical season started with a characteristic bang. The stock market showed peak prices without justification in terms of earnings.

Yet, taxes will have to be paid, and if money is only spent, and not nurtured by reinvestment, the end must inevitably be diminished spending and increased distress. A thriftless society can only lead to economic and moral bankruptcy.


The real menace to the future of the country in this manifestation of the boom and the recovery is that the immature generation of the period reaches manhood with a grandiose conception of man’s needs for mere living. This is best expressed in the ‘white collar’ attitude of American youth, the unwillingness of young people to do whatever is available for bread, but to insist upon some particular ‘white collar’ work, even ‘ boon-doggling.‘

Alvin Johnson wrote in 1934: ‘The nation’s youth are warned that there is no real place for them; as they emerge into manhood and womanhood they have to force themselves into overcrowded employment, displacing the generation of their parents while that generation still embodies valuable productive power and while its needs are perhaps greater than ever.’

Yet industry complains that it is unable to find skilled labor to replace the men who have disappeared or who have grown inefficient during the depression. In several industries, schools have been founded to train apprentices, with results that are far from satisfactory. Youth is in many respects justified in its complaint that it was born at the wrong time, but too few young people seem to be willing to take the bit in their teeth and start where the work is hardest.

It must be admitted that the recovery faced many dilemmas. For instance, if it had said courageously to high-school boys, ‘There is no use trying to be bond salesmen and saxophone players; the time has come for you to use common sense and become plumbers’ apprentices,’ there would have been trouble; for the plumbers’ union limits the number of apprentices to keep the price of plumbing absurdly high. And that is true in many other trades.

So the boys who want to wear white collars now wear khaki shirts in CCC camps and play at work which can more effectively be done by machines. They complain bitterly that there are no chances left for a young man; yet industrialists complain that young men nowadays make slow and incompetent workers.


The recovery, seeking to restore the boom, which is very different from merely ending the depression, feared most of all the checks and balances placed upon the Executive under our system of law. An emergency was declared, and was nationally accepted. In terms of the emergency, Congress delegated to the President permissive powers of vast dimensions. Until the Supreme Court denied the right of Congress to delegate limitless powers, the President of the United States was virtually a dictator with no one to gainsay him but the lone voice of the late Huey Long in Congress.

The demand for wide permissive powers was the definite manifestation of a vast impatience. ‘How deep are the sources of your indignation?’ Professor Tugwell asked. ‘. . . Or do they lie deeper, so that your wrath may sustain a genuine reconstruction of American life?’ This impatience would not have reached such an extraordinary pitch were it not that these young gentlemen were products of an era of disrespect for the law and for the constitutional processes of our country. In many of the younger generation, the current instability and prospective hopelessness encourage an admiration, and in some even a worship, of other countries and other ways of life. To many there can be no end to pessimism except in the abandonment of democratic processes. They are impatient for that end to come. If a bureaucracy will bring stability, then they favor such bureaucracies.

But they are not alone in their impatience. Lord Hewart of Bury, Lord Chief Justice of England, wrote a book in 1929 entitled The New Despotism, in which he describes exactly the same form of impatience in his country. He says: —

‘It is possible, no doubt, that the public official who decides questions in pursuance of the powers given to his department does act, or pursuades himself that he acts, on some general rules or principles. But, if so, they are entirely unknown to anybody outside the department, and of what value is a so-called law of which nobody has any knowledge?’

Now, is that not exactly how this country responded to rules and regulations, and hearings and trials, and inquisitions under the recovery? The difference, however, between England and the United States is that so many of us can still laugh at impatient officials and the British take them seriously.

Again Lord Hewart says: ‘How is it to be expected that a party against whom a decision has been given in a hole-and-corner fashion, and without any grounds being specified, should believe that he has had justice? Even the party in whose favor a dispute is decided must, in such circumstances, be tempted to look upon the result as a piece of luck.’

And that was exactly what happened in most code decisions and labor hearings and similar extrajudicial preoccupations of young impatience — except that to impatience was added the racket, the association between politics and the evasion of the law.

The impatience of the young recovery exponents was naturally stimulated by the American system of presidential elections. They started in March 1933, and they were to restore the boom by the spring of 1936. A bare three years was theirs to remake the American political, social, and economic system — a bare three years during which the abundant life was to replace work and thrift. It was a brave and daring impatience, for, in spite of the wholehearted support of the leaders of organized labor and the timid support of the more assertive industrialists, most Americans were in time too befuddled to do more than evade the regulations of the recovery. Some lawyers earned fees in the process, but anyone with any candor will admit that the NRA was as dead as a dodo when General Johnson left it and that the Schechter Decision was more an obituary than a deathblow. It was a further example of the disregard of law and disrespect for government while the law still stood.

The nervousness of the impatience never really carried over to any large elements among the people. Labor never followed either the government or the radical labor leaders into fields foreign to American experience. The farmer accepted the subsidies of the AAA as he had accepted Hoover subsidies, but it never occurred to him that a change in the form of government or even of the economic system was in any way associated with these checks. The business man found himself in confusion until the market place became sufficiently active to consume his principal attentions; whereupon he deserted politics for profits, unless he was one of the few who looked far ahead. Even the unemployed on relief have in no way responded to the promptings of impatience — as long as relief has not stopped.

In a word, what have the excitement, the impatience, the class irritability, the stressing of economic groupings, accomplished? Primarily, they have definitely raised the question of the form of government in the United States. The talk wherever one goes is over questions of the Constitution, the powers of the President, the Supreme Court, Slates’ rights, regional differences, Fascism — what sort of government we are to have in the future. And it is my observation that, whereas Germany may love Hitler and Italy may pride itself on its Mussolini, the American people still adhere to a Congress which they no longer honor and respect and to a Supreme Court which has taken away their processing checks.

That, perhaps, is the real strength of this country — namely, that just as no one started a revolution because of the depression, so will no one abolish the Supreme Court because it opposes the recovery. Even those who live on recovery checks say that the extravagance of the government is awful, ‘ but we might as well have it as anyone else.’


Certain characteristics of the recovery will inevitably leave a mark upon the rising generation. Ugliest of all these characteristics is the lack of principle among the New Dealers and their opponents. It was not until Ogden Mills made a speech attacking the New Deal that any Republican said a word in opposition, although many might have spoken in Congress. Business men saw their industries being hampered and imperiled by inexperience and experimentalism, yet they sat about Washington helping to keep alive the NRA which they hated. Clergymen jumped on each new band wagon, the most recent one being in support of the Constitution. Editors gave the New Deal a honeymoon period, as though what was wrong after the honeymoon was not wrong during it. And so it went.

This opportunism, this careerism, is unfortunate, particularly when university professors and clergymen are concerned. They, at least, are paid to be decent men. And again, as one travels about the United States, skepticism of professorial and clerical wisdom grows more evident, particularly as a weariness with politics and talk — endless talk — becomes more apparent .

During the boom, the captains of industry developed the habit of talking pontifically for publication. Much that they said was ghost-written and intellectually beneath contempt. During the depression nearly all of them were silent, because they had other things to think about, and really because many of them had been sobered into shame. The recovery let loose, again, a plethora of wisdom, first in support of the NRA and then in opposition to it; first in support of the New Deal, and then in support of the Liberty League. It is a sorry and discouraging performance, because it lacks in dignity and strength of character.

This country is unfortunate in that ‘His Majesty’s Loyal Opposition’ really has no place. Under the British parliamentary system, the rôle of the opposition is recognized not only as constitutional but as essential to the proper functioning of the state. In the United States, the opposition is invariably personal, from which most decent men shrink. Debate even in the Senate is on such a low level because it too easily deals with commonplace personal affairs rather than with principles, with sectionalism rather than with national interest.

‘The opposition’ is not a fully understood institution even in Congress, and among the people, these days, it is variously described as consisting of Communists, Fascists, or paid propagandists of the Liberty League. Few of the impatient leaders of the recovery are willing to recognize that in a democratic state ‘ the opposition ’ is as essential as life itself. Those who disagree with the impatient ones are enemies, chiselers, monopolists.

Just as, in economics, thrift has departed, so, in human relations, dignity has gone by the board. During the early days of the depression, men avoided relief as offensive to dignity, and then, during the recovery, they demanded relief as a right. Dependence may be unavoidable or inevitable, but it is never dignified.

The loss of dignity in the mass has been reflected by a similar loss of dignity among the great. Instead of supporting the tone of the mass, the leadership of the nation has played down to the greatest common denominator. Take, for instance, the various share-the-wealth proposals, the Townsend Plan, the lunatic ideas that come out of Los Angeles and St. Paul, the schemes for pegging the prices of agricultural commodities and silver, the insistence of the Federal Government that cities and towns spend money, the low quality of political debate, Congressional emphasis on the soldiers’ bonus, the declining standards of public education — one sees evidences of leadership not only bowing low before the multitude, but actually bending its knee to the least intelligent.

Youth is quickly conscious of fraud and froth among its mentors. As one travels about the United States, the most obvious reaction is the cynicism of the current younger generation. Agnosticism is applied not only to religion but to everything. Young people will tell you that they would not defend their own country; that all they want is a bit of fun in life; that government is a racket which they would like to get into for what it is worth. The pacifist youth objects to war because munition makers make money out of it, but many an R.O.T.C. patriot says that he joins so that he can be an officer and not a private in the next war.

But there are other attitudes. Communism in Russia is a political and economic system; some elements among American youth, however, turn to Communism as a release from pessimism. I recently sat with a young woman of college years who extolled Soviet Russia, while I argued standards of living. She admitted the higher standard of living in the United States, but almost shouted at me: ‘I can do without beefsteaks if only I can find something useful to do.’

And that is not Communism. It is a search for activity. It is a denunciation of futility. It is a protest against the pessimism of the generation.

A boy who in 1929 was sixteen, and unable to get a job, is now approaching 23, and he still has not earned his day’s bread. He has been kept by his parents, by his town, or by one of the Federal relief agencies. He has passed out of youth into manhood without the thrill and passion of doing something for himself. In my youth such a boy might black boots or sell newspapers and still go to college. To-day he goes to a CCC camp or does nothing.

Nothing to do — nothing to hope to do — nothing to look forward to. What can we expect of such a generation?


Yet, there is so much to do — and there is the rub. Industry faces a lack of skilled workers who used to be imported from European countries. In spite of the machine, a world of important human activity is open to young people. A new form of apprenticeship is coming into existence in the schools which are being established for trained workers. Perhaps the greatest lack in industry to-day is trained foremen. Subsistence farming has not altogether failed, and as one travels the countryside one sees young men who are raising food for newly created families. Even out of the CCC camps comes a new interest in forestry and woodcraft which can be turned to good account under private enterprise.

In the cities, with their turmoil of conflicting ideas and purposes, in the colleges where disillusioned youth sits upon its haunches, frightened men face a frightening future. But, curiously, among the workers who have suffered most, and the farmers who have suffered longest, there is ample evidence of hope, not so much for economic revival, as for the persistence of simple individual virtues. The high cost of foodstuffs and the increasing cost of taxes have undoubtedly set simple folks to thinking. I have met farmers in many states who raise the question of taxes in every conversation, and workers are becoming insistent upon a larger weekly pay envelope even if it means more hours of work. The company unions speak of that. High prices and taxes are realities to simple folks.

Taxes will be high for a long time in the United States. They will increase every year for a generation. They will cat into the income of those who work and those who accept charity.

Taxes cannot be bluffed away — you pay them and swear. They reduce earnings; they reduce the allowance for food; they reduce the allowance for amusement. Men may spend profligately to-day to cheat the tax collector, but he will catch up with spendthrift and hoarder, with the hard worker and the shiftless. He will put his indelible mark upon each one of us. When the cost of taxes affects every stratum of American society, this country will awaken to an understanding of the evils of a vast part of the nation living on the government.

Perhaps the young man in Fargo, North Dakota, who wanted to work day and night to make a future for himself and his family, while his wife wondered why he could not limit his activities to a nine-to-five task, gave me a cue to the future: —

‘This country won’t go to the devil. When it comes back, I want to be on top where I can do something and be somebody.’

That sentiment is what made the country before the depression. And that sentiment is still there to be used in building up a land ravaged by the social effects of the depression on the character of its citizens.