Jim Huntzinger | On March 26, 2020

Franklin Delano Roosevelt, December 1943.

The malicious symbol of the NRA (National Recovery Administration) was the Blue Eagle; as evil often does cloak itself in something seemingly good, or in this case– patriotic.

The NRA soon demanded that all of its advocates use the new prescribed vocabulary. Companies joined with the Administration in distributing handbooks with titles such as Pointed Paragraphs for Speakers. Economic collusion was renamed “cooperation”; elimination of competition became ”codes of fair competition”; and “ethical behavior” was defined as forced maintenance of prices.

Most famous of the symbols was the Blue Eagle, which every company was pressured to display. Hugh Johnson explained the Blue Eagle’s function: “To play any game, you must of course know who you are playing with and who against. That is the reason for baseball uniforms and that is the reason for the Blue Eagle.” Those displaying the Blue Eagle were virtuous, Johnson suggested, and those without it were enemies of the people: “All we want is to make it very clear just what side everybody is playing on.”

Public relations managers organized hundreds of thousands of schoolchildren to go door to door asking for pledges to buy products only from Blue Eagle businesses.[1]

Under the Blue Eagle emblem and NRA codes it represented, government and corporate coercion put a stop on competiveness by portraying “Cutting prices [as] ‘chiseling’ and the equivalent of treason.”[2]

In fact, James Warburg, a member of the Brain Trust, would describe it as “[i]f we had had a Nazi or Fascist party in 1932, perhaps it might have written a platform that would conform to what Mr. Roosevelt tried to foist upon the country under the wings of the Blue Eagle.”[3] Warburg goes on to warn the public of their “unpleasant surprise at the degree to which Mr. Roosevelt has fulfilled the promises of the Socialist platform. Most of us, I think, are only vaguely aware of what Socialism is.”[4]

Professors C. J. McNair and Richard Vangermeersch explain the core and function, which was also the destructiveness, of the program:

The essence of the NIRA was a quid pro quo for business. In exchange for agreeing to hire additional workers and for ensuring that all employees would be paid a solid, living wage, a company would be allowed to pass the resulting increase in cost through to the government and the market at large. Built into the structure of the cost codes was a full recovery model that guaranteed a fair and reasonable profit to any company supporting the New Deal policies and programs designed to repair the damaged economy. Excess capacity, like all forms of excess cost, was to be recovered through increased costs and prices.

It is difficult to believe that consumers would willingly pay a higher price for goods, but the NIRA had a deal for everyone involved. Companies that signed the cost code for their industry would be awarded a Blue Eagle insignia that could be placed in letterheads, in shop windows, and on products. FDR, in his fireside chat of July 24, 1933, asked housewives and families to help the nation recover by patronizing companies that displayed the Blue Eagle and to boycott those that did not. Paying a higher price was turned into a patriotic act, a symbolic joining of hands in the drive to help the nation help itself.[5]

FDR was a dictator. For the first time in U.S. history a president, with the capitulation of Congress, grabbed complete power over the American economy and its resources. “By executive order and legislative statute,” writes historian and Hillsdale College Professor Burton Folsom and his wife Anita, “FDR gained the power to disregard tariffs, close any radio station, order the military to take over any land, rent any building in the District of Columbia, close any stock exchange, and change labor regulations – and this was just the beginning.” Under Roosevelt’s dictatorial powers, “The number of regulatory agencies mushroomed until no one could follow all of them: The BEW, WPB, WMC, NWLB, CAS. ODT, and OC were only a few.”[6]  As we will see citizens, now subjects, would be jailed or fined for the most benign actions – like pricing dry cleaning above the dictated price.

Jim Huntzinger

Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.

Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.