you were involved in the peace process in some ways the camp david accord which you are part of or i guess the last successful u.s.-led negotiations and as i understand the president carter was at camp david for president sadat -- i believe he sent you out at one point in your pajamas to make sure that was okay? could you just reflect on that a little bit briefly? >> guest: a specific point i will mention, you are concerned it might be some movement among the more extremist elements, whether the egyptians to perhaps do something to him etc. but the basic lesson i learned from that, that specific issue is that the palestinian-israeli problem was never solved by the israelis alone for different

reasons. the israelis are strong and entrenched. there is simply no point for a compromise. so if there is to be a resolution, has to come from the outside. a united states that has been determined and clear in fashioning what will then become acceptable to the two parties and is reasonably fair and in historical perspective and gives justice and self-respect to the palestinians and self-determination as well and give security and self-respect and a permanently constructive role in the middle east with the israelis. ..

, mac >> thank you.

>> good afternoon. we'll come to the cato institute in exile. we're glad to have you here. we are proud to say in about two months fell construction on our building will be complete and we will be back in the auditorium but for now we are glad to be here at the undercroft auditorium to discuss the book "fdr goes to war." a long time ago i went to mayfield kentucky high-school and it was a co-editor of the high school newspaper, the cardinal. i think the the features editor that year was my classmates any dab france to has gone on to bigger things and she got married to burton folsom and to history degrees, worked for president reagan and senator

mitch mcconnell and kentucky. presidential the left door and most recently, has directed hillsdale college free market forum last five years. who are at -- per co-author and has been is a burton folsom, jr. ph.d. from pittsburg and i actually visited there for the first time last fall and saw something that i had never heard of, the cathedral of serving which is the second tallest university building in the world the tallest is in moscow they thought they we're doing something better than capitalism but it is a 42 story building the first few floors are built like a gothic cathedral. it is amazing. go spend some time in the cathedral of learning. but since then being a

different colleges now holds the charros claims share of history and management at hillsdale and serves as senior historian at the foundation for economic education rican find some of his articles. he has published seven books and and when he explains the difference between political entrepreneurs which is a good text for the increasing discussion for the differences between crony capitalism and free enterprise. the work with the administration coming out in the fall 2008 as everybody said we need to emulate what fdr had done. and the newest book is "fdr goes to war" which he co-authored with anita folsom.

as i said in my book 15 years ago, in many ways we're still living in the washington the roosevelt built. welfare state, foreign policy, the president as a dominant figure in the political system, that all goes back to the fdr transformation of politics and policy. it is important to study and understand how fdr governed and change what had gone before. also the additional importance that the libertarian movement arose in opposition to roosevelt's new deal and imperial presidency. if you want to pick a day when did the libertarian movement begin? obviously they have a long pre-history but if you want to put a date it would be

1943 when three women published books about individualism, a free markets and constitutional limited government to bring for the nucleus of those ideas. that is why we occasionally turn from public policy to history and why we're delighted to host this event today so please welcome a co-author of the "fdr goes to war" how expanded executive power, spiraling national debt, and restricted civil liberties shaped wartime america" professor burton folsom. [applause] >> who and let me start with some opening remarks. franklin roosevelt. president. world war ii. of the event. you cannot miss for an exciting book with those topics.

president told the dramatic great then life himself and the biggest military event in the history of the world, world 42. in covering this, you have tremendous go. you will give a history of world war ii, 300 pages readable for people to grasp. the president who conducted the war. pearl harbor and the dramatic attack and a turning point* militarily for the united states in many ways. the generals eisenhower and patent and marshal all conducting enterprises that were essentials two victory. the atomic bomb itself in here you have to give roosevelt credit for thinking ahead for what might make up a little difference in the war. then you have the end finally of the great depression which dominated

the thinking of generation of america coming to an end for the end of world war ii. we work with those elements in the book fdr goes to war. i would like it needed to start by commenting on some of those features of world war ii of franklin roosevelt >> it is the pleasure to be here today with david and kato institute. but yes, in our goal in retained this book was to make it larger than the economics although that is important but to give everybody a book that in 300 pages or so you could -- could get an overview of world war ii whether young person trying to learn, a son who is 26 and i can assure you most of his friends know almost nothing of that entire period. it is amazing.

we have material you probably never heard before so i want to set the stage about the 1930's to explain part of what led through world or to being such an upheaval is the policies of for oakland -- franklin roosevelt during the thirties. to give you some statistics statistics, factory output to increased every decade beginning 1899 for the following 10 years factory output was up. 1909 through 1919 up 3.4%. every year. 1919 o 1929, factory production was up 5.1% each year.

192-93-1939, it decreased slightly every single year during the 1930's. our industrial complex has aged and out of touch with cutting edge innovation going on in europe and elsewhere and suddenly we are faced with the problem of the military complex and we have nothing to compete. i mentioned the army chief of staff at one point testified before congress pleading for enough money so the arm you have enough bullets we're talking literally about to enough bullets demand 100,000 army is.

that you are not for a strong military presence overseas we do think a strong defense of america is our problems. germany was aware that led to the border comes along to the united states is suddenly factories have to be converted. overnight stay restricted products to consumers. overnight january 1942 you could not buy tires for your car. if your tires had been getting aged and you thought next week i will run down two sears roebuck to get a new set you are out of luck. the l.a. to get a new set is to go before the government tire board to prove to have

the essential reason to get a new set of tires. the comet american could no longer purchase all of those were used in the war effort most supported those changes and that was of course, with a wave of patriotism swept through everybody wanted to win the war. fighting men overseas and the way in which the war has begun with japan for the declaration of war was given to the secretary of war that a angered everybody. but what did the government do to suddenly help the economy? it did when it did and it began regulating everything.

so the allocation of almost all materials with a good be used to control the fuel supply and industrial production. the board is one of the most powerful agencies ever created with hundreds of thousands of bureaucrats. looking at every american new york city alone 7 million ration books were issued. the very first week it went into effect spring 1942 and without ration stamps many other items and if they were issued there were unintended consequences discover paying these were easy to copy.

having a picture of world war ii and the solidarity that it is like any other time, there is a craftiness of human nature and the incentive became to seize let's just print or own ration books. big business. also the theft of ration coupons was big business but there is an account of a veteran coming, after serving in the war coming home to central indiana during the latter days of the war and he is that a high school rally in central indiana giving history of fighting the japanese and the hardships endured and went outside to the parts cannot and somebody had broken into his car and had stolen his gas coupons. america was not as solid as the rosy picture painted of

a great many struggles but by and large most did support the war and most did want united states to win it. entrepreneurs had to come up with things on the good side such as aircraft manufacturing because that is where we lagged behind the most glaring example and 1940, henry ford was asked to get behind the mass production of aircraft. before we enter the war but we knew he was good at assembly lines. ford said his son and top executives to california. what of the main places when aircraft were built. because most were put together outside. that sounds unbelievable but putting planes together one at a time and the california sunshine for you could not

build 10,000 bombers and ford had to figure out how to do the assembly line for the be 24 and in typical for fashion he had a farm near michigan and turned his farm land into a bomber plant called willow run and the bomber plant had the largest room to build the twenty-four's even occurred in the assembly line because it was in the county he did not want to go into the county of detroit because he did not want to give democrats' tax money so the assembly line it curved around. another huge success during world war ii the we often don't realize is the development of penicillin. it was not available before world war ii. all the residue mentioned in the book after pearl harbor one of the few success stories in the spring of 42 not one injured man who was

injured by the japanese bomber had to have an invitation due to infection. this is a new world of military medicine because it had prevented the infection and used it liberally and it worked but the problem is that it did not deal with extremely deep wound infections in the abdomen or in the chest and that is so common sell penicillin had to be developed but the british of course, penicillin was discovered in the 1920's and before that chemists knew certain types of mold kill bacteria. but ian fleming publicize the discovery in the 1920's. 1941, the british brought over the strains of penicillin that they had and with their limited capacity because they were so strained only then could they develop enough for five

patience. they tried it on five extremely ill patients in new it worked well and they said to the american and department of agriculture can you grow penicillin? face and we will try. it was a great partnership between the department of agriculture and private pharmaceutical companies in still took the year and a half is still revolutionize medicine in the american public because by 1945 penicillin was available for americans of decisions. we were very quickly sending it overseas so that is a better success story of for al gore to the overall the american public has the challenge of falling together in the wartime emergency knowing the japanese were sailing off the coast of california knowing hitler had overrun europe. that the challenges through the entreprenuership and the

spirit of the people to make these great contributions. now we will talk more about the economic and less -- got us out of the war and the great depression. >> we look at world war ii and franklin roosevelt seems so long ago, 70 years since the bombing of pearl harbor. you don't really realize that much of american politics for form policy to domestic policy is shaped by the defense that happened in world war ii. of franklin roosevelt was very anxious for the active role of government world war ii provides that if he goes into those details. but roosevelt wanted it that way after the war. that is the important thing.

you have franklin roosevelt to create the national resources planning board. they were supposed to take ideas for after the board to run the american economy for roosevelt picks this up in his state of the union speech 19442 talk about the economic bill of rights. it includes the rate to a useful and remunerative job. the right of every family to a decent home the right to a good education. the right to medical care these are rates a roosevelt describes as the new economic bill of rights. sometimes he calls it the second bill of rights.

they roll off the tongue so nicely. the right to a good education to a useful job. roosevelt issued the i's and they become a plan for after world war ii when the war is over common than their rights could be given. if you think about it, if i needed has the right to use old job then somebody has the obligation to provide that job. if i have the right to decent homes then taxpayers have the obligation to provide that home. if david has the right to adequate medical care than hospitals or through federal funding of some kind, those hospitals and physicians are obligated to supply that

medical care. how different this is from the first delivery this the right to free speech is not impose obligations excepted are paid for it. freedom of religion does not obligate anyone it provides the opportunity for someone to practice as the first impose obligations but what we have seen as the hit tax structures set up that roosevelt wants to use after the war to find more federal programs. 1932 the roosevelt was elected president, the income-tax maximum anybody

had to pay with 25%. that was the most anybody had to pay. most americans did not pay income tax at all. of course, in some ways there is a problem with that. but really had 5% of americans paying any income tax rate to 41940. it started at 24% the exemption was only $500 if he made over $500 you started paying a 24%. that increase in a progressive way at a maximum of 94% on all in come over $200,000. that means if you earn 300,000 on your third

comment 100,000 you keep 6,000 and give to the government $94,000. a lot of people thought that might stifle entreprenuership. roosevelt believed it is essential providing decent homes, a good education and adequate medical care so this is the basis of funding for those kinds of actions. so what we see is a dramatic increase of the taxpayer base and tax revenues and we see withholding introduced for the first time. we have a chapter on that money directly out of the paycheck so government can use it right away instead of waiting one year. what we see is the defense of franklin roosevelt by many people. i like to read from one kentucky senator. the state where david and

anita were born. but neither of them agrees on this point*. he said this "all of us owe the government. we all went for everything that we have. said is the basis of obligation. the government can take everything we have if we need it the government can assert their right to have all the taxes it needs for any purpose either now or in any time in the future. the chandler rio expressed on the senate floor and many other quotations like this are the defense of the idea of government becoming the main source not only for the economy to provide jobs are health care but the tax revenue going into the

government so those programs could provide those types of jobs and decent homes a good education. when we got to the end of the war, roosevelt died, harry truman comes then but on these issues trim and is ready to go along. true mint comes 10 but they think the war goes on to 1946. germany surrenders in 1945. he did not know about the atomic bomb when he became president. that was a shock. roosevelt never informed him it was being developed. oddly, the day truman became president he did not know we had an atomic bomb but stalin did. one of the ironies of

history. other russians knew that we had it with the president did not happily the secretary of foretold that to him early in his presidency so now that he knew when he made the decision to use it on japan congress is out of session it takes most of america by surprise the atomic bomb on an hiroshima, nagasaki, congress is out of session and the war is over. the planners did not have a chance to come in with their programs. immediately he was to get them back into session by this time some congressmen said this 94% tax that don't think would get america back on track. the keynesian believe it. the truman secretary of treasury gives you the idea where the americans were who favor this intervention in. maynard keynes came out with his ideas with public

works, stimulate aggregate demand, of waterbury intervention he will eliminate unemployment through that. and then at fred vincent said "japanese have surrendered he wants massive government intervention and history shows us business labor agriculture cannot assure the maintenance of high levels of production. in other words markets don't work. the government must assume the responsibility to take measures broad enough to meet the issues. one reporter i f. stone agrees as to many others. new agency's new ideas and new directions are necessary. and dice the unemployment.

they are no longer available to the alien capitalism. that dealing capitalism no longer has the worst transfusion for the 12 million soldiers are coming home immediately. we have to have programs for them and without massive government programs new programs to build roads, to train people, without the use roosevelt and truman of one do to build the tennessee valley authority but others around the country and other types of public works programs and the use of gm's and the building of public works was very much in truman's mind. we have 12 million veterans. senator kilgore said but i say 80 million unemployed effect of that is worse than the 25% we had when he came

into office. "time" magazine. mothers estimated may be just 10 or 12. i still put it at 20%. predictions are high. what we get is two senators. then chairman of the senate finance committee walter george said this. he supported their revenue active 19452 cut tax rates. if this revenue act has the effect it is hoped to 1/6 today stimulate the expansion of business to bring in revenue to create more jobs at the same time. i think we can get more revenue into the government and more jobs created if we cut the tax rate to allow businesses to expand which

was completely different from the other economic model. in the republican of new jersey said this. the repeal of the excess profits tax in my opinion may raise more revenue for the united states and would be raised if retained and it was raised it was 90%. and if you cut that tax below 90% i think we could create not only more jobs but grow the economy to get more revenue at the same time. and the senator said you cannot get a golden egg out of the dead goose. hawks led enough republicans and cut the corporate tax 90 percent down at 38%.

imagine that. it cuts the personal income tax. it promised more cuts later. this is the first one. more are coming later. it was the capital stock tax. we eliminated that. we eliminated regulation and slash federal spending and no longer be the takes more ammunition. the end results is the massive economic expansion. business is finally. and do these taxes 13 years even the hoover administration was not too good.

now the tax rates our cut it is time to expand if you look at the postwar economy so much we take for granted today. and then mcdonald's gets going. television, xerox, all of these kinds of our entrepreneurs come to the fore after world war ii with a tremendous growth one of the most exciting statistics is we have 39 million people employed civilian employment coming up at 55 million. the stock market increased by 20% 1946. private gnp increase 30% the only time it has done that in history. and further, the experts were estimating i think we

will get $31 million in the federal treasury we have 31 billion. increasing more than 25% because the economy had expanded so much more than people expected. the end result is 3.9 percent unemployment in 1947 the united states has the burgeoning growth rate and rainier of who is trying to the keynesian means to get back on their feet come with united states is able to send tons and tons of food over to feed the europeans to a different points were dying at the rate of one per second. those deaths were curtailed by the free food united states sent over after the war. the economy recovered and we

cut the federal deficit during 1946 through 47. slightly because the revenue so much exceeded expectations. what i say is we have a lot during gold were to four lessons for today what works and what doesn't or the taxes we have come to expect, the economic bill of rights, the right to education was a student loan program, it changes with the housing to a decent home going with urban renewal than the community reinvestment act of the '70s to promise very low interest rates to poor people so they could have homes to a accelerate the mortgage crisis that becomes an hinge to and the right to medical care so i simply say the politics of today have

happily shaped from world or to but if you study more carefully, said we got out of the great depression by freeing up the economy to cut tax rates not by following the prescription to increase and perpetuate the high economic growth that we experienced during world war ii. thank you. [applause] >> host: thank you. now we will open as for questions please wait for the microphone. i'll ask the first question come i read this book and i found it more straight forward and sober history than i thought from that

"fdr goes to war" how expanded executive power, spiraling national debt, and restricted civil liberties shaped wartime america" did the marketers write the subtitle? [laughter] >> guest: this subtitle was developed by simon & schuster publishers but the person who developed it didn't on loan the basis of saying i deduce this from a content of the book and i think today is reasonable we talk about the growth of the production board come in the price control control, rationing, the spiralling national debt, it doubled the first year of roosevelt or the first two terms of his presidency. then increase it is sixfold during world war ii. so what you have at the end is a national debt of $260 billion and the interest so we go from

having to national debt of 20 billion to having the interest rate of 20 billion on the national debt that was almost 300 billion. so the national debt and a gross of the spending and that economic bill of rights you would perpetuate that is a big part of the war and the civil liberties we have not done as much with a record japanese-americans in turn roosevelt using wiretaps extensively. it is essential for national defense. enemies could be sending messages. suddenly he wiretaps republicans that he wiretaps his wife eleanor some reseat the abuse of the civil liberties as well as well as shutting down magazines and

newspapers even so the own attorney general had to fight him. that is a fair deduction of the content of the book although i have to give simon & schuster credit for doing the subtitle price think any dad got the main titled "fdr goes to war." >> my name is steve tisch george per car was thrown by the title of the book that the tax rates had reached prewar levels but the other instances, the rationing direction of production to win the war, the consequences of the expanding debt i am not sure any other president would not have ended up with the same focus after the two potion war. >> part of the premise is

one of the reasons we wound up of the haitian the tuition more because rissole week during the 1930's and we have been for may shin in "fdr goes to war" fdr cut military spending during the 1930's and terms of the percentage of military spending in the federal budget. this was on top of the factoring there who were presidency military budgets were very low. the american military was incredibly weak and behind the rest of the world. we were 17 in terms of military strength and innovation. but as we shows through 40 in 41 through pearl harbor harbor, she has already declared military emergencies.wj

>> the new deal movement in german? was a truman's political maven taye? >> that accounts for some of it. that is a good question. roosevelt had vast experience dealing with congress and having enormous confidence he could get his way on most things but the new deal revival his plan for postwar america of course, he died before he could do that but truman buys into it but remember he did not even know he had an atomic bomb and trying to appoint cabinet members to figure out what is going on

because roosevelt kept him in the dark and as senator he did not have that bit of access. he is still learning the job he had not developed the political skills then could he have achieved this? it is a counter factual question in. i wonder froze about could do it. i am not sure he could have done so. >> what inside of this that is interesting that we point* out is fdr had lost a lot of clout in congress 39 and 40. the court packing scheme 1938 really angered a lot of people. then he tried to purge various members of congress and the senate one was a senator from merrill lynch

and if you notice in the book it leaves the filibuster to defeat several proposals wants before congress adjourns in 1939 and he is delighted to do that because pcs fdr as an enemy. people were very suspicious the way he manipulated. >> and he was sick only working 20 hours per week working from 20 hours per day. the positions said it is stress so roosevelt was only working half time. it is hard to be effective when you only work have time. although walter george was the subject of a purge result tried to get a modern office which is one reason he was so hostile to world

war ii. some of chairman of the senate finance committee opposing you but it is hard to say if he would have tried and if you think roosevelt cannot pull this off the get something then they end up being an ally when they can pull off. it is easier for senator george to do with truman they in a healthy roosevelt. >> and other political change there was the democratic primaries. >> his son democratic senator and if you look at the influence of fdr rating in the waning since lyndon johnson who was in a member of congress with big

government programs of course, from the elections of 1940. >> for example, he wants to put moses annenberg in prison and. a republican paper and if you go after those this on the irs audit that was vulnerable so he does not just pay the fine goes to present than johnson is guilty of misuse of campaign contributions with his supporters and now the irs goes after john sen. so he comes to roosevelt. he has to pull the iras off of johnson so they could continue to be his man in texas then put them on moses

annenberg to make sure they go to prison so fdr did call both of those off. dealing with the executive branch it could be powerful. >> where you both united in the way you viewed economic relations or the lack of with united states and japan leading up through world war ii? how surprised do you believe the united states was with the attack on pearl harbor? >> i think we were pretty united with our view and i did the majority of the work so i will answer first. we do think in we point* out in the early pages 1933 met

even before inaugurated, he talks with two of his advisers and they are a big new dealers part of the brain trust part columbia professors with the government directed economy and of course, those directing the economy should be intellectuals. and fdr mentions that he has always favored china and thinks the war with japan may work sooner better than later so why not? fdr had the flippant side to his nature and level point* out he had never been in a foxhole or the military or shot out. he took that rather lightly if you look at the men that died in the pacific i find

that a policy he let them go into those exposed areas with such bad weapons and many of those men could blame fdr but as far as pearl harbor goes, we cut off the japanese from their resources and interesting study is to read the paper of the ambassador who is in tokyo during the 30's and pleading with washington to pop off the embargo. and to put the embargo off. finn tune out embargo and scrap iron makes it difficult for the japanese to receive that to achieve ascendancy in tokyo.

and do st. fdr knew about pearl harbor? i think he knew an attack was coming the first of december or the first two weeks but where would it be? almost everybody thought probably singapore and the philippines. the japanese had 50,000 troops in saigon in french indochina a. move came there to the philippines or singapore was easy. fdr and a general marshall have the word department to warn the basis to go on high alert but if i had an hour i could go over what half-inch but it is the perfect storm of mistakes. everybody believes they were in command with the attitude

it does not matter because we will not be attacked so why bother. that is a bad way to do with. but 1932, four, 36 come a commander and why you could have the attitude and you were fined and spent two years in hawaii and not do all lot. but december 1941 it was up four way to run things. i don't think fdr directly new that would be pearl harbor but new the attack was coming and i blame him most 1900 anti-aircraft guns and given away hundreds of fire planes. and adderall richardson was fired and of very capable

officer he went to the white house october 1940 which you did not do over two hours keeping the fleet at pearl harbor that we are vulnerable and need to move the fleet and finally it became pretty heated and he chose franklin roosevelt mr. president i have to inform you that most of the leaders of the pacific fleet do not have, -- confidence in you to the the baby. he did not doing anything at that precise moment but would not act on what richard sens said and finally fdr was reelected the next month for a third term and right after the election he fires richardson. i don't know if a movie has gone into the life but he is back in the united states

the day pearl harbor is attacked getting them news and he says i warned them over a year ago. and it still happened. >> >> did fdr acknowledge any limits constitutional limits with the commander in chief of world or to? you mention the and term and also reading historical accounts with the military tribunals that some of the historical accounts i have read said he let it be known through back channels of the supreme court tries to challenge my authority to execute these people i will execute them anyway. i just wonder if you colleges any limits on the commander of chief.

>> i have not seen any if they did i have not run across a he tended not to talk about that. but you judge by actions and i have not seen any indications. i never felt those restrictions applied. >> of d.r. reminds me sometimes maybe bill clinton reminds me of fdr because both men are very smart and careful not to step on a land mine if they don't have to. fdr frequently ignored the constitution. >> asking a follow-up we have debated a good bit whether the new deal model is a good model for getting out of the great recession today. and have been people on both sides. should there be a similar

debate differs of both treatment of civil liberties is a model for what we have done since 9/11 or should be or is cautionary? >> roosevelt by putting 110 japanese americans and internment camps has gone way beyond anything we have seen today but keep in mind there was a political angola. not only did he endures doing that the motive seems to be heavy political. we would talk about this often because the japanese were such good workers to be so successful in the vegetable injury -- industry many anglo-saxon and spoke competitive pressures. if you would pull california you would find the majority of non japanese that thought if we get them out of the way this is a good thing but roosevelt played to that to

put them in the internment camp even though j. edgar hoover said they are not dangerous. don't do this. he did it anyway and the attorney general did not like it but roosevelt enjoyed the political success of removing them not only are they removed and cannot vote against me but they are removed and those people will be voting for roosevelt. he will pick up house seats in california pro finally the western coordinator said where they still here? they have been here years we let some of them now they are joining the army and highly decorated. why are we letting this group? you may indicate an individual who shows signs that you show whole group of people the sexual and grandma all the hauled into the camps. it is atrocious.