But for now were glad to be undercroft auditorium to discuss this book fdr goes to war. A long time ago, i went to Mayfield High School in mayfield, kentucky, and in my senior year i was the coeditor of the high school newspaper, the cardinal, and i think the features editor that year was my classmate anita prince, and she has gone on to bigger things. She got married for one thing to burt folsom. She got two degrees. She worked for president reagan and she was the president elector and most recently she has directed hillsdale colleges Free Market Forum for five years. Her coauthor and husband is burton folsom, jr. , who holds a ph. D. From the university of pittsburgh. I actually visited pitt for the first time last fall and saw something id never heard of, which im surprised at. The cathedral of learning which is the second tallest University Building in the world the tallest one you might guess as in moscow where they always thought building something bigger they were doing Something Better than capitalism but this is a 42story University Building and the first floors are built like a gothic cathedral. If youre in pittsburgh, spend some time in the cathedral of learning. But burt has taught in a double of colleges and now holds the Charles Klein chair of history and management at hillsdale college. He also serves as Senior Historian at the foundation of Senior Foundation where you can find some of his articles and he has pushed several books into the myth of the robber barons now its in his sixth edition in which he explains of the market entrepreneurs and political entrepreneurs which is a good text for todays increasing discussion between capitalism and enterprise. His work on the administration of Flynn Roosevelt began with his book new deal or raw deal how fdrs economic legacy has damaged america. That came out in the fall of 2008 just as everybody was saying we needed to emulate what fdr had done and so it got a lot of attention and his newest book is fdr goes to war in which he coauthored with anita. As i said in my book libertarianism as a primer were still living in the washington that roosevelt built and the president in the political system that all goes back fdrs policy and its important to understood how fdr governed and what he changed what had gone before. And it also, i think, has an additional importance for libertarians and that is that the Libertarian Movement sort of arose in opposition to roosevelts new deal and imperial presidency. And i think particularly if you wanted to pick a date and say, when did the Libertarian Movement began, obviously, political movements have long prehistories and histories but if you wanted to put a date, you might say it was 1943 when three women, rose wilder lane, Isabelle Patterson and ayn rand all published books about individualism, free markets and constitutionally limited government and sort of brought together the nucleus of a movement of new ideas and so thats why we occasionally turn here from Public Policy to history and to why we are delighted to host this event today, so please welcome the coauthor of fdr goes to war how expanded executive power Spiraling National Debt and restricted Civil Liberties shaped wartime america. Professor burton folsom. [applause] let me just start with some opening remarks. We got Franklin Roosevelt, the president , world war ii the event you cant miss an event book with those topics. You have a president just bold dramatic greater than life himself. You have the biggest military event in the history of the world, world war ii. And what were trying to do in this book is give a history of world war ii, 300 pages, readable for today for people to grasp the war itself, the president who conducted the war we have a chapter of pearl harbor, and aneatlia wrote the section on midway, the turning point militarily for the United States in many ways. You have the generals, eisenhower, patton, all conducting enterprises that were essential to victory for the United States. You have the atomic bomb itself and we have to give removes some credit of thinking ahead of what might be developed that might make a pivotal difference in the war and then you have the end finally of the Great Depression which dominated the thinking of a generation of americans. Coming to an end at the end of world war ii. You have a lot to work with. We work with those elements in the book, fdr goes to war and i would like anita to start off by commenting of some of these features of world war ii and franklin. Go ahead. Its a pleasure to be here today for cato and my old friend david boaz, thank you so much for coming, but, yes, as burt just said our goal in writing this book was to make it larger than just an economic text, although that is very important. But its to give everyone a book that in 300 pages or so you can read and you can get an overview of world war ii, whether youre a young person trying to learn about world war ii. We have a son whos 26 years old and i can assure you most of his friends know almost nothing about that entire period. Its just amazing. Also, we have material that we think youve probably never heard before. So to get right into it, i want to set the stage a little bit about the 1930s and to explain that part of what led to world war ii being such an upevil for the United States were the policies of Franklin Roosevelt during the 1930s, to give you some statistics and ill be brief on those, for instance. Factory output, the output increased every decade beginning in 1899 for the following 10 years factory output was up 14 . 1919 to 1929, the roaring 20s, Factory Production was up 5. 1 each year. But 1929 to 1939, it decreased slightly every single year during the 1930s. So our industrial complex, of course, by 1939 has aged its out of touch with cutting Edge Innovations that are going on in europe and elsewhere. And suddenly were faced with this with this problem of a military complex in europe and we cant we dont have anything to compete with them. In the book i mentioned the army chief of staff Douglas Mcarthur at one point testified before congress in 1935 pleading for enough money so that his army would have enough bullets for 100,000 soldiers. Were not talking about stealth bombers or complex weapons here. Were talking literally about just even enough bullets to man 100,000 army. And even and i can certainly understand if youre not for a Strong Military american presence overseas, which we dont necessarily need. I do think a Strong Defense of america wards off problems. And in the 1930s we certainly didnt have that and germany was aware of that and so was japan and that leads to a lot of problems. Well, the war, of course, comes along to the United States in late 1941 and suddenly factories have to be converted. What are you going to do . Well, overnight for one thing they restricted products to consumers. Overnight in january, 1942, you could not buy tires for your car. If your tires had been getting a little aged and you thought, oh, well, next week ill run down to Sears Roebuck and get a new set of tires, you are out of luck. And the only way you could get another set of tires was to go before the governments tire board and prove that you had an essential reason for getting a new set of tires. Likewise, radios, bicycles, clocks even clocks, the common american could no longer purchase after the spring of 1942. All of those mechanisms were used in the war effort. Now, most americans supported the sudden changes. And that was, of course, with the wave of patriotism that swept through, everyone wanted to win the war. Most people did. Many people had new knew fighting men overseas and the way the war had began with japan bombing pearl harbor before the declaration of war was given to the secretary of state and that angered everyone but what did the government do to suddenly help the American Economy meet the war emergency . Well, it did what it does a lot of time and it began regulating everything. The federal war production board took control of the allocation of almost all materials in the United States and said, where they would be used, it took control of the fuel supply and it took control of the war production. The wpd is one of the most powerful agencies ever created by the federal government and would employ literally hundreds of thousands of bureaucrats by the end of the war. The government issued ration books to every american, even babies. 7 million ration books were issued the very first week that rationing went into effect which was the spring of 1942 and, of course, without rationed stamps from the rations books you couldnt purchase shoes, meat, gasoline, many items. And as as soon as the ration books were issued, theres always these unintended consequences. Crooks discovered that these ration books were easy to copy. Now, sometimes we have a picture of world war ii and the solidarity of the American People, but its like any other time. Theres a great deal of craftiness in the human nature and it came to thieves, lets just print their own ration books and they did by the hundreds of thousands. It was big business. And the theft of ration coupons was big business. There is an account of a veteran coming home after serving in the war overseas, coming back home to Central Indiana during the latter days of the war, and hes at a rally, a high school rally in Central Indiana giving his story a fighting the japanese and all of these hardships he endured and he went outside to the parking lot after the rally and someone had broken into his car and stolen his gas coupons. So america wasnt quite as solid as sometimes i think the rosy picture that is painted of the war years. There were a great many struggles but by and large most americans supported the war and, of course, wanted the United States to win it. Entrepreneurs had to come up with new things on the good side such as aircraft manufacturer, thats where we lag behind almost the most glaring example. For instance, in 1940, henry ford was asked to get behind mass production of aircraft. This is before we entered the war, but they knew that he was good at Assembly Lines. What can we do to mass produce airplanes . The ford sent his son edsel and top executives out to california. California 1940 was one of the main places where aircraft was built and that seems strange and why . Because most were put together outside. That sounds just unbelievable they were putting planes together one at a time out in the california sunshine. Well, you cant build 10,000 bombers doing that. It would take you forever in a day. Ford had to figure out how to do an Assembly Line for b24s and in typical henry ford fashion, he owned a farm near michigan. He turned his farm land into a bomber plant called willow run and the bomber plant had the largest room in the world to build b24s. It even had a curve in the Assembly Line because it was in a county and he didnt want to go over in the county where detroit was because he didnt want to give those democrats any tax money so the Assembly Line curved around, too. Another huge success during world war ii that we often dont realize is the development of penicillin. Penicillin was not available before world war ii. Now, sulfa was developed and one of the great successes not one injured man who was injured by the japanese bombing at pearl harbor had had to have an amputation due to infection. This was a new this was a new world in the military medicine. Because the sulfa prevented the infections and they used it liberally and it worked. The problem with sulfa it didnt deal with extremely deep wound infections in the abdomen or the chest and those are so common in war, so penicillin had to be developed and that was done with the help of the british. The british, of course penicillin had been discovered in the 1920s. And even before that, chemists knew certain types of mold killed bacteria and sir ian fleming publicized penicillin and the british brought their strains of penicillin of what they had and because they were so constrained with the war they were able to develop enough penicillin with five patients and they tried it with five extremely ill patients and they knew it worked extremely well and they brought it over to the American Department of agriculture, do you think you can grow penicillin and they said well try and it was a Great Partnership between the department of agriculture and private pharmaceutical companies. It still took a year and a half but it revolutionized medicine for the american soldier and then eventually the American Public because by 1945, penicillin was available for american citizens. And we were very soon very quickly sending it overseas. So thats one of the Better Success stories of world war ii. But overall, the american pebble met the challenge of pulling together in this wartime emergency knowing that the japanese were sailing off the coast of california and knowing that hitler had overrun europe, they met the challenge and through the entrepreneurship and the spirit of the American People made these great contributions. Now, burt is going to come and talk a little bit about the economic and what got us out of at the end of the war and of the Great Depression. Burt . Thank you, anita. You know, we look at world war ii and franklin it seems so long ago, its 70 years since the bombing at pearl harbor, and you dont really realize that much of american politics from Foreign Policy to domestic policy is shaped by the events that happened in world war ii. Franklin roosevelt was very anxious for an active role of government in the American Economy. Of course, world war provides it in a big way and it has gone into some details but roosevelt wanted it that way and you have during the war Franklin Roosevelt created the National Resources planning board. They were supposed to take ideas for after the war to run the American Economy. Roosevelt picked this up and in his state of the union speech in 1944, he talked about the economic bill of rights. The economic bill of rights and i quote from parts of it include the right to a useful and remunerative job. And the right of every family to a decent home. The right to a good education. , the right to good medical care. These become new rights which roosevelt described as the new economic bill of rights. Sometimes he called it the second bill of rights. And they roll off the tongue so nicely, dont they . Right to a decent home. Dont we all want decent homes. The right to a good education. The right to a useful and remunerative job. Roosevelt issued these and these become the plan for after world war ii, when the war is over, then these rights can be given for. Now, if you think about it, if anita has a right to a useful and remunerative job, then someone here has an obligation to provide that job. If i have a right to a decent home, taxpayers have an obligation to provide that home if david has a right to adequate medical care, then theres hospitals or through federal funding of some kind, those hospitals, those physicians are obligated to supply that medical care. The right to free speech does not impose obligations to you to even listen to the speech least of all pay for it. The right for freedom of religion, were in a church here, the right of freedom of religion does not obligate anyone to go to a certain church. It just provides the opportunity for someone to practice freedom of religion. The first bill of rights by the founders are rights. The second bill of rights impose obligations and involve the government in a big way. Now, what we see in the war is a huge tax structure being set up which roosevelt will want to use after the war and will be used after the war to fund more federal programs. In 1932, the year that Franklin Roosevelt was elected president , the income tax maximum that anybody had to pay was 25 . Thats the most anybody had to pay. Top incomes. Most americans did not pay income tax at all. In some ways theres a problem with that. But we only had about 5 of americans pay any income tax right before the war in 1940. By the end of the war, twothirds of American Families were paying the federal income tax. And it started at 24 . The exemption was only 500. If you made over 500, you started paying at 24 . That then increased in a progressive way up to a maximum of 94 on all income over 200,000. That means that if you earn 300,000 on your third 100,000, you keep 6,000, you give to the government 94,000. A lot of people, thought, hey, that might stifle entrepreneurship. Roosevelt believed its essentially for providing good homes, decent educations, medical care, this will be the basis for the funding of those kinds of actions. So what we see is a dramatic increase in the Taxpayer Base and in tax revenue. We see withholding reduced for the first time. Withholding, we have a chapter on that that will be introduced that wi