Richard Posner Reviews 'Supreme Power: Franklin Roosevelt vs. the Supreme Court'
By Jeff Shesol
(W.W. Norton, 656 pp., $27.95)
In 1937 President Roosevelt tried to “pack” the Supreme Court--increase its size so that he could fill the vacancies thus created with liberals, who would shift the balance of power from the conservative majority that had invalidated a number of New Deal laws. Surprisingly--considering the overwhelming margin by which Roosevelt had been re-elected in 1936, the Democrats’ lock on both houses of Congress, and the pertinacity with which he pushed his plan--the Court-packing bill never even came to a vote.
This episode, I would guess, is known to few Americans, and interests still fewer--mainly students of the Supreme Court. It is therefore surprising that in 2010 a book of more than six hundred pages should appear written not by a law professor or an academic historian but by a speechwriter for President Clinton, and aimed at a popular audience, though its seventy-two pages of notes and bibliography attest to the depth of the author’s scholarship. It is still more surprising that Jeff Shesol’s book should be timely, for the light it casts on the politics of our current economic situation and on the situation itself. The book is also splendid to read. It will fascinate anyone who is interested in Roosevelt, the New Deal, the 1930s, Congress, the presidency, the Great Depression, judges, the Supreme Court, or constitutional law.
When Roosevelt was inaugurated in March 1933, the American economy was in dreadful shape. The unemployment rate was 25 percent; the banking system was in a state of near paralysis because the fear and actuality of numerous bank failures had caused massive withdrawals (there was no deposit insurance); economic output had fallen by one-third since 1929, and prices had fallen by 20 percent. Falling prices sound like a good thing, but they can be a disaster. Because wages even in a depression tend to be sticky, falling prices reduce firms’ revenues but not their labor costs, so they have to lay off workers to bring their costs in line with their shrunken revenues. And consumers who expect prices to continue falling will hold off on buying. Desperate to get them to open their wallets, firms have to cut prices even more drastically and thus lay off even more of their workers to control their costs, accelerating the economy’s swoon.
Roosevelt did four things immediately upon taking office to restart the economy. The first was to boost public confidence by delivering an inspiring inaugural address, inspiring not only in content (“we have nothing to fear but fear itself”--false, but reassuring) but also in the upbeat manner of his delivery. Confidence is all-important in getting businessmen to invest and consumers to buy; without confidence, both groups tend to hoard their money rather than spend it, and economic activity droops.