FDR pioneered Obama's policies and there was no happy ending

Roosevelt, too, pursued the dual purposes of revenue and social good. In 1935 he signed legislation known as the "soak the rich" law. FDR, more radical than Obama in his class hostility, spoke explicitly of the need for "very high taxes." Roosevelt's tax trap was the undistributed-profits tax, which hit businesses that chose not to disgorge their cash as dividends or wages. The idea was to goad companies into action.

The outcome was not what the New Dealers envisioned. Horrified by what they perceived as an existential threat, businesses stopped buying equipment and postponed expansion. They hired lawyers to find ways around the undistributed-profits tax. In May 1938, after months of unemployment rates in the high teens, the Democratic Congress cut back the detested tax. That bill became law without the president's signature.

Then there is labor policy. Obama announced this year that the federal government would award contracts to firms with more generous pay and benefit packages. With its support of private- and public-sector unions -- recall its treatment of the automakers' unions in the 2009 bailout -- the administration generally wants wages or compensation to be high.

Roosevelt's flamboyant pursuit of a similar goal cost the economy dearly. The National Industrial Recovery Act and, later, the Wagner Act gave workers the power to demand higher wages. They got them. But employers struck back, choosing not to hire or rehiring many fewer workers than they otherwise might have. In the later 1930s, the divide deepened between those with jobs and the unemployed. Economists Harold Cole and Lee Ohanian wrote in the Journal of Political Economy that the politically driven wage increases were the most important factor in the double-digit unemployment of the later 1930s. A popular Gershwin song of the period, "Nice Work If You Can Get It," captured the bitterness.

What about the third factor, the entrepreneurial environment? The Obama administration places a premium on action. When it comes to spending, the idea seems to be that any spending is better than none. Big new laws -- financial reform -- are put forward to inspire confidence.

But change that is too arbitrary and too frequent petrifies firms, especially before their rules have been tested in the courts. As Verizon Communications chief executive Ivan Seidenberg noted recently in a Business Roundtable speech: "By reaching into virtually every sector of economic life, government is injecting uncertainty into the marketplace and making it harder to raise capital and create new businesses."

Amity Shlaes asks why Glenn Beck so infuriates the professoriate

Drive them crazy. That's what Glenn Beck seems to specialize in doing, whether the "them" at issue is fellow radio hosts, fellow tv hosts, or, now, professors at universities. This last group is opening its own front in the war against the television king. An associate professor, Joseph Palermo of California State/Sacramento, took to the Huffington Post to mock the broadcaster as "Glenn Beck, Ph.D." I personally noticed this since Professor Palermo mentioned me by name, in tandem with author Jonah Goldberg, as an effort to "misinform" the gullible.

The rage at first seems odd, coming from professors. Why should these serene Yodas care what a man on television bellows? Yet they are on the warpath. The academic fury is at first directed at interpretation. Mr. Beck's explanation of how the Framers viewed religion, Mr. Beck's depiction of how Franklin Roosevelt's policy affected the Great Depression; Mr. Beck's argument that regulation is currently curtailing liberty in general -- all fall short in academic eyes. Prof. Palermo, for example, calls Mr. Beck's views as "stupid and false." But the real issue, the reason professors are on the attack, is not specific content. It is rather the professional and, in the end, economic, threat that Mr. Beck represents. To academics, Mr. Beck is more dangerous than any other radio show host, and they know it.

To understand the nature of the Beck challenge, you have to recall that our system of higher education is a throwback to medieval economics: a guild. As in the classic guild, members require a lengthy period of training, with formal stages. To be in any way authoritative, a writer must have a Ph.D., a guild seal. Members of this guild have enormous discretion when it comes to the conferring of the seal - also typical. In the humanities and social sciences, Ph.D.s. and, it goes without saying, tenure-track posts -- are usually awarded to those not hostile to the master professors' views. For many decades top universities have been especially rigorous in this practice, with the result that it is difficult to find non-progressives with top credentials in the humanities. The guild demands much from its apprentices, graduate students, including dull work in obscure texts. Indeed it is proud of that obscurity, for it distinguishes academic work from, say, the easy popular histories on bookstore shelves or tv.

In the field of history, the guild also maintains a monopoly on education by generating curricula, syllabi, and, of course, a canon, a set list of texts for each period of the past. Of course the academic guild, generally on the progressive side, has made many concessions to conservatives or classical liberals. Professors have assigned the odd conservative book; they mentioned the opponents' arguments. But such offerings have generally been presented as an afterthought, secondary, less authoritative. Looking back at their education many adults saw through this pretense of fairness. They resented the guild monolith. Something was missing.

Enter Mr. Beck.