200 ChaPter^4
a slight bump in the economy. At the same time, he launched what some
referred to as the “Third” New Deal, putting an assistant attorney general,
Thurman Arnold, in charge of a campaign to file anti-trust suits against major
economic conglomerates [such as the American Medical Association] for their
anti-competitive policies, collusion, and other illegal activity. FDR hoped that
holding the biggest businesses accountable would force them to spend and
hire and thus help the economy rebuild, a strategy that had failed already
under Hoover and in the First New Deal. Little came of the effort. Still,
America in 1938 was substantially different than it had been when the depres-
sion hit in 1929 or when FDR took office in 1933. To his supporters,
Roosevelt conducted a “largely successful attempt” to increase the federal
government’s power to restore economic stability, often through regulation,
and promote growth, sometimes with deficit spending, and thus increase mass
purchasing power. FDR was not trying to create a new, collective economy,
but to reform Capitalism and make future depressions less likely, and he
clearly did that. To some degree, Roosevelt even saw that deficit spending
and monetary expansion [increasing the money supply by the Fed] could help
stimulate growth. But doing so within the context of the domestic economy
was not a possibility. Giving the “public” sector—the government that build
roads and post offices and airports and schools and so on—so much money
and responsibility was too similar to Socialism for his critics, so he dared never
come too close to that. What ultimately made the New Deal seem a success,
and solidify FDR’s historical reputation as a great president, was the coming
war in Europe [as we will see in the next chapter], where FDR went “all-in”
with Keynesianism, but with the military, not “radical” public programs for
buildings or jobs. Through it all, Roosevelt remained a Capitalist, and a mod-
erate one at best.FDR, Liberals, and Labor
The 1937 Recession came especially as a blow to working people and the
poor, who more than anyone needed an economic recovery so they could
simply purchase food, housing, health care and other necessities. In the
rebound of 1935, worker’s lives had improved and the New Deal, and in par-
ticular the Wagner Act, got a great deal of credit for the increased standards
of living. Indeed, if any issue can be used to understand and evaluate the New