President Obama is cozying up to the "Occupy Wall Street" movement, intending to make resentment of big business a central theme of his re-election campaign. Here he's following the lead of Franklin D. Roosevelt, who tried to convince the public that Wall Street was to blame for the double-dip recession that plagued his second administration.
In late 1937 the American economy, which had been recovering slowly since 1932, contracted even more sharply than it had after the stock market crash in late 1929. Industrial production fell by a third, stock prices fell by 50%, durable goods production by almost 80%. Payrolls fell 35%, and unemployment climbed back to 20%.
Roosevelt was initially nonplused, slow to appreciate the severity of the downturn. But once he saw the need for action, he called Congress into special session and undertook a massive new public-spending program.
Roosevelt and his advisers blamed the recession on a "capital strike," trying to deflect public alarm about the United Auto Workers' sit-down strikes—really illegal occupations of assembly plants—onto the shoulders of corporations. They even claimed that big business was deliberately refusing to invest and increase payrolls as part of a political gambit to destroy the New Deal.
Privately, FDR told Robert Jackson, head of the Justice Department's antitrust division (and a future Supreme Court justice), "Bob, I'm sick of sitting here kissing [businessmen's] asses to get them to" invest and increase employment. Publicly, Jackson agreed in a December 1937 speech that the country faced a "strike of capital" by business in order to get New Deal legislation repealed. He denounced the notion that the president's program was antibusiness. Given the "astounding profits under the present administration," he said, "big business will never be able to convince the American people that it has been imposed on, destroyed, or even threatened. It has merely been saved from ruin and restored to arrogance."
