President Biden is clearly in a Franklin D. Roosevelt frame of mind. Summing up his policy vision in an address to a joint session of Congress last week, he referenced FDR’s Depression-era motto “We do our part.”

Yet many of us who study Roosevelt’s New Deal cringed at Biden’s reference. This phrase accompanied the Blue Eagle, an emblem created to increase compliance with the National Industrial Recovery Act of 1933. Economists rarely agree on much, but we are nearly unanimous in acknowledging that NIRA was a harmful policy. By using this phrase to justify his own agenda, President Biden should hope he is not repeating FDR’s policy mistakes.

Biden’s team would do well to study the history of the NIRA. The law dramatically increased government control of the economy, giving D.C. bureaucrats the power to approve prices, control worker wages and hours, and limit business operations. It also disallowed many forms of competition across the economy, with the goal of protecting workers and stimulating recovery.

It didn’t work. Prior to the NIRA, Roosevelt had done much right. As a result, industrial production rose an astounding 57% between March and July 1933. But the recovery was brutally derailed when the NIRA arrived on the scene.  Starting Aug. 1, 1933, firms had to abide by the law’s restrictive rules. As though a switch had been flipped, the Depression roared back with a vengeance. Between August and November 1933, manufacturing output fell 49%. 

It turned out that “we do our part” did far more harm than good. Businesses that did their part were allowed to display the Blue Eagle in their store windows and on their packaging. (The accompanying “NRA” abbreviation indicated approval by the National Recovery Administration, created to oversee the law’s implementation.) But President Roosevelt asked Americans to boycott businesses without the emblem. Then, as now, the government of the United States pitted workers and businesses against each other, hurting both in the end.