I was really stunned by the other half of Reconstruction, which we never paid any attention to, which was the money debate. There was a huge debate about money during the same time—these were these great issues: what do we do about the ex-slaves and what do we do with the money? Because the North used greenbacks to finance the Civil War; they didn't want to tax people, so they just printed money, they made it legal tender. I think 240 million dollars in greenbacks, which are purely paper money—they have no value other that what people are willing to believe is in them. And they're very successful during the war: they don't cause a lot of inflation, they allow Lincoln to prosecute the war without having to raise taxes, and keep the sort of massive dissent under control.

But after the war what do you do with them? That's an interesting question. One argument is you just get rid of the greenbacks—they're not real money; they don't have any real value; they're a lie; they're a fraud and a cheat. "Burn 'em," some people would say. "Contract them" and—they call it contracting the currency—"bring 'em back in and burn 'em, destroy them and go back to real money," which at the time was supposed to be gold. And the other argument is that we need more paper money—money is just a social convenience—it's whatever we say it is, and we should get rid of gold. The document comes out of that debate—it comes out of this debate about the nature of money.

And as I started to look at it, I got really fascinated by that question. I mean, why not use paper money? What's the argument for gold? And when I started to read the arguments for gold, they became really fascinating and absurd. I mean they're superficially rational. Economists in the 19th century would go through this long rational explanation about prices and supply and demand and then you'll finally get to the core of the metaphor, which is gold just is valuable, because it is. And that's always there: it just is. And sometimes they'll say, God made it to be money. And they'll say this; I see this again and again: God made gold to be money. Okay, this is the money, this is going to be burned for heat, I mean it's really…it's that clear. And there's this what you'd have to call a fetish about gold. That it has this magical value—that's independent of what people think—it just has this magical value. And I got really interested in that question.

So this Nast cartoon was produced as part of the attack on paper money. Nast was a really strong hard-money guy, and he referred to paper money as the "rag baby," that was his name for it. Cause paper money was also referred to as "rag money." It was made out of rags—old rags, rags and trash, and inflated paper trash he'd say. This was part of an argument against paper money. And it's a really good expression of the gold standard position. It's a really strong expression of the gold standard position. And because Nast is good, it's pretty coherent.

What does it embody? Well in this thing the rag baby cannot embody a real baby. He's pointing out the futility of trying to embody qualities in things they don't have. And it's connected to forms of economic prosperity—like this is a house and lot—these are symbols of economic success. Or this is a cow, which I think refers to farming—you know it refers to the sentimental symbolic place farming has in American life, it's where real values are, it's where real work comes from. This is money by Act of Congress, this is milk by Act of Congress—you can't feed yourself on pure paper—it's not a rag baby, but a real baby. So it became a really good embodiment of the problem of substituting signs for things. And it seems like a pretty straightforward, and generally commonsensical point of view. I mean you can't hand a baby a milk card and get a baby to drink it. I mean it's a witty expression of that.

But because of the structure of it, with the signs, it's really also, I think, critique of advertising in the 19th century, and the emerging culture of mass sort of…signage—advertisements, placards, billboards, competing signs. It's also a comment on the chaoticness of post-Civil War life. And so it's not just commenting about money, it's also commenting about, what would you call it? The virtualness of industrial capitalism. Industrial capitalism is increasingly virtual, where you market something as a chair that looks like a handmade chair but it's actually stamped-on pressed and there are 20 thousand of them. The watch looks like it's gold but it's actually plated in some new technological process. There's a quote from Henry Ward Beecher where he says that we live in a culture of lies—lying flour in our bread, our clothes are lies: they look like things they're not. And it's partly a commentary on that commercial world. And it uses money as the door to open that kind of critique.

One of the things that's unconsciously revealed here is a certain amount of anxiety about reproduction. Why choose a rag baby? Why choose to embody it that way? A baby in some ways is a symbol of concreteness. It's a new life but it's made out of two other forms of life, and its unimpeachably real. It's the symbol of a kind of realness, and the idea of declaring something a baby which isn't a baby, is kind of the ultimate expression of the arrogance of people. You can't create life—life is the most basic thing you can't make—and you can't make a baby out of parts or pieces. So it has something…it's not unlike Frankenstein—it seems to me it has some of that same concern about generation and reproduction.

So one of the things I'd say is that it's not an accident that he chose a rag baby. And you could say, it has a lot of values; on the one hand it mocks children's fantasy play, and it says that paper money is a child's foolishness, sort of a foolish childish act.

It was the most naked, I think, and frank description of the gold standard position. You can't substitute paper for the real thing. An idea can't be a thing. A thing has to be something material. But of course, in fact, it's an economy where a house and lot is just a piece of paper. And in fact, the ownership of the house and lot is purely a fictional paper title. Ownership doesn't exist physically, it only exists in law. It only exists in custom. And for the purposes of the market a paper representation of a house and lot is exactly as good as a house and lot. So that was sort of interesting to me. The cow—obviously you can't milk a piece of paper, but you can buy and sell symbolic cows which are nothing more than pieces of paper. And from the perspective of the greenbackers, the money itself is an embodiment of all these other tangible physical goods, which are part of the United States. So it seemed like a nice way to get at both a really strong expression of the gold standard position and some of the incoherences of it at the same time.

The first thing I'd ask them is why did he choose to make paper money into a rag doll? What are the rhetorical strategies of this thing? And the claim that paper money is a rag baby is an interesting claim to make; I mean why does he choose to symbolize it that way? Why not call it, you know, a scarecrow? Why a baby? Why a rag baby? And then I'd ask why would he want to have it in the form of this weird impossible situation of a shelf with signs put around it. I would want to ask them why the argument takes that form. Try to get them to say, "Well, maybe it has something to do with the commercial street, and the world of signs and advertising.”

If I had to describe a methodology, I'd say you have to have some factual context. You have to understand why certain terms appear. You have to know what's going on in the era the document appeared in, but beyond that you want an attitude of skepticism about the rhetoric, about the strategies of argument the document makes. You want to be able to question not just the points the argument makes, but the means by which the arguments get there. The more complicated way to say this is you don't just want the answer to the question—you want to know what does asking that question do? What effects does asking that question produce; what kind of outcomes does that question always point towards?

The first thing I do when I'm talking about reading images is I say there's absolutely nothing in an image that can be taken for granted. And if you're going to read it, you have to go sector by sector. You have to ask the "why" question about every piece of an image. Why is this particular thing here and not somewhere else? Why do you choose to draw it this way? You have to really interrogate images. I mean that's the basic method I want to bring when I'm using an image. There's nothing in it that's a product of chance—well, if there is something in it that's a product of chance it might be more interesting than the things that are in there deliberately.

The first thing they'd want to do is take careful notes, either on paper or mentally, about what the thing depicts and how it depicts it. And sometimes just writing it down is a big help. You know, it's a baby and it's in front of…I find when I'm taking notes, that when I write down the image I often learn a lot about it. So the first thing they want to do is give it a careful formal study of the structure of the thing—what is it depicting and how?

You have to have some sense of what the historical references are. So if they see this as railroad stock, they would have to investigate something about railroad stock and feelings about the railroad in the 1870s. They'd have to discover some sense of historical context. But I'd also want to know something about Nast. Particularly because he's such a…there's so much stuff by Nast, and he has such a strong influence. He's a very powerful artist. I would want them to investigate how else Nast depicted babies; how else he depicted money; how he depicted business and finance in general. So I'd want them to have some sense of the author, and the author's characteristic forms of…his rhetorical tricks—the author's characteristic rhetorical style. And how does this deviate from his characteristic style.

I would ask them to look for other iterations of that phrase. You know, where else does "rag baby" show up and who else uses it? Well, one thing I'd ask them to do is look at how else Nast drew babies. I mean what else did Nast do with babies and how else did they appear in his work. Did he sentimentalize them as the exact opposite of this? Or, how were babies depicted in the popular culture generally? And I think the answer usually is they're highly sentimentalized. They're the objects around which real feeling is generated, and the objects that represent genuineness. So I'd ask them to contextualize it—what is the context of babyhood?

Well, the document that I have here in front of me is a copy of Franklin Roosevelt’s second inaugural address—delivered in January 1937; and it happens to be the first presidential inauguration that took place in January. Since George Washington’s time down to the '30s inaugurations happened in March and that was changed to January, so that’s a kind of historical factoid that gives this a little bit of interest. But this document, as much as any single document can, reminds us of what the New Deal was all about, what its relationship to the Great Depression of the 1930s was, and what its implications were for this society going forward. And I think as much as any single document can reveal, it shows us what Franklin Roosevelt’s deepest intentions were, what his highest priorities were, what his agenda was in the period of the 1930s.

So this is 1937. He’d come to power—come to the presidency three years earlier in 1933, when the unemployment rate was 25%—the most god-awful economic crisis that ever struck this society. Here he is being re-inaugurated for a second term four years later. Quite obviously and not surprisingly, as any president would do under the circumstances, he's bragging a bit about the things he accomplished during his first term; drawing the contrast between how bad things were when he took office and how much better they are now. He goes through a little bit of a list of the specific things that are better: unemployment is down and gross national product is up and so on and so forth. Then he says, kind of summarily, he said, “Our progress out of the Depression is obvious.” That’s the kind of summary statement of what he’s talking about. And he says again, further on the same note, he says, “We have come far from the days of stagnation and despair.”

Now so far this is standard presidential boilerplate on any situation, who wouldn’t—under the circumstances—pat himself on the back for the things he’s accomplished in the preceding four years. But then he says something absolutely extraordinary in the annals of presidential addresses, especially inaugural addresses. It’s a sentence that when I first read it just leapt off the page at me for its surprising quality and for its explanatory quality. After having just gone through this little recital of how things are better now than they were, he says, “Such symptoms of prosperity may become portents of disaster.” Now wait a minute, what’s he saying? Prosperity’s returning, we’re better off, the Depression is lifting, we’re going ahead on a much more confident basis than we were; but this—these “symptoms of prosperity may become portents of disaster.” The sentence doesn’t explain itself, you really have to know what the context was and know something about Roosevelt’s ultimate intentions, and ultimately the consequences of what he tried to accomplish and did accomplish in the 1930s.

That single sentence—"such symptoms of prosperity may become portents of disaster"—is such a shock and such a surprise. If you read it all carefully you realize, why would he say that at the moment of his own greatest self-congratulation upon being reelected/reinaugurated? So I think if you can get students to focus on that sentence: Why would a president in that moment in that particular circumstance say such a thing? What could be on his mind that he would so apparently undercut his own agenda on this occasion? I think what explains it—where the answer lies is in that immediately subsequent passage about the third of the nation. So there’s a way to connect something that’s quite surprising about "prosperity is a portent of disaster" with something that is maybe a little bit familiar, which is the "I see one third of the nation ill-housed, ill-clad, and ill-nourished." So you can put those two together and I think it’s a very effective teaching combination.

When I teach this document, I usually asking the class—before I’ve asked them to read the whole document—I ask them if they’ve heard the phrase “I see one third of the nation ill-housed, ill-clad, and ill-nourished.” As time goes by, I suppose, fewer students have ever heard it at all, but most of them usually have had—it’s got some echo in their brains someplace, they’ve heard it or a version of it someplace or other.

So then I explain this is a speech that Roosevelt gave in the midst of the Great Depression, what do you think he was talking about? Again, not without reason, most students will say, “Well, he’s talking about all those people who are unemployed and having such hard times during the Depression.” And I say, “Well, fair enough, but now let's read the rest of the speech and see what he’s really talking about.” Then when they hit that sentence, if I give them the space and if I tee them up properly, that when they get to that sentence—“Such symptoms of prosperity may become portents of disaster”—that does bring them up short. They say, “Wait, what’s he talking about here? How could any president undercut his own self-congratulation for the return of prosperity?” I make the point that what follows this is this lyrical litany about the one third of the nation, and that’s his real objective. This goes to a deeper point, it seems to me, and it goes to the point of putting to rest that idea that the New Deal was just whatever Roosevelt threw at the wall, whatever stuck became the New Deal.

I believe, and I think this document goes along way to making the case, that Roosevelt had a vision, and it’s proper to call him a visionary. In fact, in my reading of the evidence he had this vision before the Depression ever happened. You can see this in his private correspondence in the 1920s [and] in his prior political career, that the major thing he wanted to accomplish if he ever got the chance was to make American society more secure, less risky, and more inclusive. To bring more people into the mainstream of American life and to reduce elements of risk that perpetually over the previous century had brought people into the mainstream and then ejected them from it again. Life was unstable for so many people, for millions of people. That’s what he wanted to change, and the New Deal put in place a series of structural reforms that accomplished a lot of that objective.

[The New Deal put in place a series of structural reforms that accomplished a lot of that objective.] The Federal Deposit Insurance Corporation—which gave federal guarantees to bank deposits—at a stroke ended the century-old or more practice of panicked runs on banks when times got tough. Banks failed—between 1931 and 1933, over 5,000 banks failed in this country. Between 1933 and the end of the 20th century, probably fewer than 500 banks failed, I don’t know the exact number but in that order of magnitude. Why? Because the FDIC imparted a measure of stability, predictability, risk reduction to banking. Glass-Steagall Act, which is actually where the FDIC legislation is embedded as well, separated investment from commercial banking. It made the day-to-day operations that the average citizen dealt with a different beast from the big investment banking houses like Goldman Sachs and Lehmans Brothers and so on and so on. Which for a long time, until the opening years of the 20th [21st] century, protected the core banking system from the speculative and risky activities that go on in the investment banking business.

The Home-Owners Loan Corporation, which became the Federal Housing Authority, created a system of private insurance overseen by the federal government that stabilized mortgage lending and made that a lot less risky. Its that structural reform which actually built suburbia and built the Sun Belt in the decades after World War II because mortgage money was so much more available than it had been earlier. It [also] changed the terms on which people could buy homes—it changed them drastically. So we went from a society in which only about 40% of citizens owned their own homes as the Great Depression opened, to a society in which about 60% of Americans owned their own homes by 1960. So it didn’t take, it took about a generation for this to work its effects.

The Securities and Exchange Commission is another New Deal era reform that brought a measure of transparency and open information/accessible information into stock market trading. Again, that did a lot to dampen—not eliminate entirely—but to dampen a lot of the speculative fevers that had driven Wall Street up and down and sidewise over the preceding century. So its no accident, it’s absolutely no accident, that in the 70 years or so after the New Deal this society saw no economic crisis even remotely approaching the scale, volatility, and explosive character of the Great Depression of the '30s.

The Great Depression of the '30s is a unique event, and it’s a singular event in its severity, but it’s in a family of events that go back into the 1830s; there’s centuries worth of these kinds of severe economic shocks to the system. The New Deal put a very substantial end to that for the remainder of the 20th century at least. That was not an accident, that was part of a conscious design on Roosevelt’s part to remake the society, bring new institutions into being, reduce risk, bring elements of security into the lives of millions of citizens and institutions and economic sectors like banking, investing, and so on. That didn’t just happen; it was part of a conscious political program. And it seems to me this speech, this second inaugural address, is about as succinct and pointed a piece of documentary evidence that you can find that makes that case.

All of these things were part of a very coherent, unified program to make life less risky. It was—it became less risky for millions upon millions of people in the two or three generations following the 1930s. So we see here a glimpse, you might say, into Roosevelt’s deepest ideological agenda when he tells us prosperity might be a portent of disaster because his reform agenda is not yet accomplished.