When Franklin Delano Roosevelt (1882-1945) took the oath of office on March 4, 1933, the national unemployment rate stood at 25 percent, in part because of the interventionist liberal economic policies of the Hoover administration. But even in the depths of the Depression, millions of Americans saw the cigarette-smoking, martini-drinking FDR as a beacon of hope, since he had pledged during his victorious 1932 campaign to balance the federal budget. As Roosevelt delivered his Inaugural Address on a cold, gray Saturday afternoon, the new president's signature phrase ("We have nothing to fear but fear itself") implied that he would restore economic confidence by following prudent policies to strengthen the free-market system that always has been, as we have learned, the source of American greatness.

Little known to most voters, though, Roosevelt and his closest economics advisers (Raymond Moley, Rexford Tugwell) had been influenced by the socialist-leaning doctrines of a controversial European economist named John Maynard Keynes (1883-1946). During his first months in office – known as the Hundred Days after the brief second French dictatorship of Napoleon Bonaparte (1769-1821) – Roosevelt enacted a dizzying series of policies designed to centralize economic power in the hands of Ivy-League-educated bureaucrats in Washington. read on ...