“Goo-Goo”? Gag Me.


Paul Krugman wants Barack Obama to “make government cool” and figures that the best way to do that is to follow through on the “clean government” standard supposedly set by Franklin Delano Roosevelt and the New Deal.

Amity Shlaes reminds us just how “good government” FDR really was when she discusses the prosecution–or persecution–of former Treasury Secretary Andrew Mellon by the Roosevelt Administration:

When the Crash came in 1929, Mellon expected blame, and he got it. He took the hostility in stride and coolly capitalized on the downturn to stock his gallery with new pictures–acquiring Jan van Eyck’s “Annunciation” and Raphael’s “Alba Madonna” from the Hermitage in Leningrad. He got bargains because Stalin, desperate for hard currency, was selling works the communists considered decadent.

Such purchases by a Cabinet member would be cause for controversy today–an official from one sovereign state taking advantage of another. But the United States at the time did not recognize the government of Soviet Russia. Men of Mellon’s era were intensely hostile to communism. They believed that by removing the art from the Bolsheviks’ hands, they were rescuing it from thieves. Mellon hid the pictures in a locked room at the Corcoran, a forerunner of the National Gallery. The old man and his colleague David Finley would visit them monthly.

As Crash deepened into Depression, animosity mounted. A freshman Democratic congressman from Texas–Wright Patman–tried to have Mellon impeached. By 1932, Mellon was moving out of the Treasury and onto the liner Majestic, crossing the Atlantic to become U.S. ambassador in London. There he arranged, through Finley, the acquisition of the anonymous 1616 painting of Pocahontas that hangs in the National Portrait Gallery today.

Back home in the 1930s, Mellon endured years of prosecution by Franklin Roosevelt’s administration. At the Treasury, Henry Morgenthau, one of Mellon’s own successors, led campaigns against him with FDR’s assent. The Treasury charged that Mellon had not paid enough taxes. Morgenthau told the prosecutor, “I consider that Mr. Mellon is not on trial, but the privileged rich.”

[. . .]

In 1934, as one of his first acts as secretary, Morgenthau established the Painting and Sculpture Section of the Procurement Division at the Treasury Department. The regional art that Morgenthau’s juries picked was far removed from Mellon’s choices: workers or families in the familiar realist style that still hangs in our post offices today. Republicans complained that Washington had established a “New Deal Aesthetics Ministry” and wondered whether, if their candidate, Alf Landon, won in 1936, the country would be decorated with “Landon Art.” Mellon, above all, was merely betting that his paintings would age better than Morgenthau’s–and so enrich the people more–literally. A glimpse at the contemporary art market suggests he was correct.

But at the time Mellon’s prosecutors were undaunted. Even gifts of paintings to trusts for the gallery became public targets. The assaults preoccupied Mellon, and irritated him because they spoiled the surprise of his gift. In fact, critics charged that Mellon was planning the gallery to appease his enemies in government and get them to drop their case. But when biographer David Cannadine later combed through Mellon’s papers, he found no evidence that Mellon worked a cynical deal with his pursuers. And Mellon was indeed exonerated of the tax charges, though only after his death.

On December 31, 1936, Mellon, now 81 years old, called at the White House, and, over tea, unfolded his plans to donate a fully stocked art museum to the nation. Roosevelt accepted. During the spring of 1937, Mellon’s health faded, but not his resolve. His art dealer, Joseph Duveen, drove him around Washington, pointing to grimy limestone government buildings. The gallery, Duveen argued, must be elegant. Mellon agreed and promised to buy Tennessee pink marble to house his art. “Thanks,” Mellon said to Duveen. “It’s been the most expensive ride of my life.”

[. . .]

The National Gallery opened in March 1941, nearly four years after Mellon’s death. Franklin Roosevelt himself told a crowd of 8,000 that “the giver of this building has matched the richness of his gift with the modesty of his spirit.” It was a concession that the prosecution of Mellon had been wrong.

Bruce Bartlett wrote about FDR’s supposed “goo-gooism” as well:

. . . Roosevelt often had his political enemies audited by the Internal Revenue Service. He also used the Federal Bureau of Investigation to investigate and tap the phones of journalists and newspaper publishers who opposed his policies.

Yeah, I can see how this is an example we want to follow.


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Jim...

Warner Todd Huston (Diary) Saturday, December 27th at 4:55AM EST (link)

Jim Powell’s book FDR’s Folly was also a great expose on the failure that is FDR (pre WWII).

But, is it just me, or is it utterly impossible for anyone to take Krugman seriously? His thinking — if it be properly called such — is so slipshod and infused with solipsism that it boggles the mind.

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Andrew Mellon-supply side economist.

Diogenes314 (Diary) Saturday, December 27th at 9:21AM EST (link)

He was one of the main reasons the economy thrived in the twenties…

Andrew Mellon’s plan had four main points:

1. Cut the top income tax rate from 77 to 25 percent
2. Cut taxes on low incomes
3. Reduce the Federal Estate tax
4. Efficiency in government

Mellon believed that the income tax should remain progressive, but with lower rates than those enacted during World War I. He thought that the top income earners would only willingly pay their taxes if rates were 25% or lower. Mellon proposed tax rate cuts, which Congress enacted in the Revenue Acts of 1921, 1924, and 1926. The top marginal tax rate was cut from 73% to 58% in 1922, 50% in 1923, 46% in 1924, 25% in 1925, and 24% in 1929. Rates in lower brackets were also cut substantially, relieving burdens on the middle-class, working-class, and poor households.

By 1926 65% of the income tax revenue came from incomes $300,000 and higher, when five years prior, less than 20% did. During this same period, the overall tax burden on those that earned less than $10,000 dropped from $155 million to $32.5 million.[3]

Mellon also championed preferential treatment for “earned” income relative to “unearned” income. As he argued in his 1924 book, Taxation: The People’s Business:

The fairness of taxing more lightly income from wages, salaries or from investments is beyond question. In the first case, the income is uncertain and limited in duration; sickness or death destroys it and old age diminishes it; in the other, the source of income continues; the income may be disposed of during a man’s life and it descends to his heirs. Surely we can afford to make a distinction between the people whose only capital is their mettle and physical energy and the people whose income is derived from investments. Such a distinction would mean much to millions of American workers and would be an added inspiration to the man who must provide a competence during his few productive years to care for himself and his family when his earnings capacity is at an end.

Mellon’s policy reduced the public debt (largely inherited from World War I obligations) from almost $26 billion in 1921 to about $16 billion in 1930, but then the Depression caused it to rise again. By 1935, Franklin Roosevelt had gone back to high tax rates and wiped out Andrew Mellon’s initiatives. The top tax rate went to 80% by 1935 and the federal government increased excise taxes to make up for the lost revenue.

If Hoover would have listened to AM instead of trying to ‘fix’ the economy after the Crash, he would have been a two term president and FDR a historical footnote.