"Houston, we have a problem. ... Yeah, I'm talking to you — David F. Houston. It's me: Woody. We've got some war-socialism policies I'd like to you dismantle."
"Sure, boss. You're talking to the right cat."
"Good. I don't want to go down in history as some kind of high-handed dirigiste, you know."
[Curtain falls. A century passes. The Claremont Institute assumes control of script.]
In my recurring, hotly anticipated(!) series on the economic record of Woodrow Wilson, I have asserted that Wilson--while guilty of many bad things, including civil liberties eviscerations, racism, and woolly-headed adventurism abroad--remained a believer in the fundamental virtues of a free-enterprise system.
My friend and, some months ago, my jouster on these issues, Jonah Goldberg, noted in Liberal Fascism that "Wilson's war socialism was temporary."
This isn't even the half of it.
Not only was it temporary, Wilson was eager to be rid of it.
In his 1964 broadside against Goldwater-style conservatism Order of Battle: A Republican's Call to Reason, New York Sen. Jacob Javits--the kind of Hamiltonian Republican to whom I'm growing ever-more simpatico amid the Tea Party era's freebasing, paper-thin, self-exempting antistatism--wagged a finger at Houston, who served in Wilson's cabinet as Secretary of Agriculture and later Treasury. (An economist and, like Wilson, a former college president, he was one of the principal figures, along with William G. McAdoo, in the determination of which cities would host the 12 Federal Reserve Banks.)
President Woodrow Wilson, perhaps because of preoccupation with the League of Nations or perhaps because he was at heart a states'-rights Jeffersonian Democrat, within thirty days after the 1918 Armistice gave the orders to dismantle virtually all the war agencies and their system of economic controls. ... Not only did he share Wilson's laissez-faire approach to economics, Secretary Houston seemingly failed to recognize the revolution the war had worked in the industrialization of the country or to understand the consequences to us of Europe's devastated economy.
Long story short: Javits believed that Wilson and Houston precipitated a pre-Great Depression depression by eliminating export credits for Europe to buy American goods, especially crops like cotton and wheat. Secretary Houston, wrote Javits, believed the export credit program "was the sole remaining symbol of wartime governmental interfering in business, and that his own Jeffersonian convictions led him to the same conclusions."
Okay. Forget Javits, one of the original RINOs.
Here is Murray Rothbard, a patron saint of libertarianism, in his book A History of Money and Banking in the United States: The Colonial Era to World War II, expounding on the same topic.
In one corner: Wilson and Houston. In the other: War Finance Corporation honcho Eugene Meyer Jr.
The War Finance Corporation was a striking example of a wartime government agency that refused to die. After the war, the investment bankers were worried that Europeans, shorn of American aid, would no longer be able to keep up the bountiful wartime level of American exports. ... While the Wilson administration did not want a permanent government loan program, it persuaded Congress to extend the WFC in March 1919 and to authorize it to lend up to $1 billion over five years to American exporters and to American banks that made export loans.
Sounds like a slice of Glenn Beck's neo-Bircher history of creeping collectivism in America, right?
Not quite. Rothbard goes on: "To counter the dangerously inflationary postwar boom, President Wilson shifted David F. Houston from the post of agriculture secretary to Treasury secretary, and Houston boldly set about shifting America to a more laissez-faire and deflationary course."
Congress, according to Rothbard, later "revived the export lending of the WFC" in the form of an "agricultural export aid bureau," having overturned a Wilson veto of the program — a veto that Wilson specifically asked Houston to write!
Glenn Beck, you are now free to hate Woodrow Wilson with fewer fibers of your being.
And I await a lecture via Beck University on the heroism of the obscure defender of free markets, David F. Houston.
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Corrected on 12/9/10: This blog post originally had an incorrect publication date.