Roosevelt believed that only the public sector could deliver the long-term finance that would electrify America. Cheap power would stimulate consumer demand in the new manufacturing industries, transform farm production and raise the standard of living. Electrification became the symbol and the battleground of this new style of government. Roosevelt floated the dollar, reformed the banking system and, with the Securities and Exchange Commission, assaulted Wall Street's short-selling millionaires. Thousands of out-of-work writers and photographers were employed to portray the daily life of America's towns and cities and evangelise for the New Deal. The scale of his ambition is still breathtaking: new towns were created, vast cooperative farms were tested, trade unions were given statutory rights (including the closed shop), and workers won a minimum wage and the promise of a pension.
With his "brain trust" of outside experts, FDR transformed the way federal government did business, centralising power at the expense of individual states. By the election of 1932, Roosevelt alone seemed to have the answer, and in his first 100 days he set about proving it. Meanwhile, first world war veterans demanding an advance on their pensions were set alight in their tents. People might still have jobs, but in many cities there was literally no cash. The depression devastated international trade and finance systems and wrought a peculiarly personal kind of crisis across America. And even later, as it looked to the Supreme Court to end Roosevelt's centralising tendencies and willingness to compete directly with private enterprise, the right accepted that government had a role to play. The important distinction between Hoover and early Roosevelt was at first largely one of degree.
Hoover's response to the 1929 crash had been partly orthodox economics - deflation and tariffs - but he was readily attracted to the new ideas of government intervention in major capital projects. The Republican President Hoover laid the foundations for Roosevelt's New Deal. Adam Smith's invisible hand could be supplanted by a beneficent one. Most persuasive of all was the idea that government could manage capitalism to ameliorate its excesses and ease - or even end - the pain of its failures. Earnest delegations visited Mussolini and Hitler as well as Stalin to examine modern methods of organising the state. Communism or maybe even fascism (Oswald Mosley went fishing with Roosevelt in the late 1920s) seemed to offer a possible alternative to the silent laissez-faire of Coolidge in America and Baldwin in Britain. This is a story of the days when the Wall Street crash made most people believe capitalism had failed. The mission of Amity Shlaes, a Bloomberg columnist with libertarian tendencies, is to bring the focus back to Sumner's taxpayer.
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