Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

March 30, 2009


Steven Conn, History News Network - We usually associate the New Deal with the programs it created to put people to work, such as the Works Progress Administration and the Civilian Conservation Corps. Republicans hated these programs. They denounced the WPA as "We Putter Around." The new Republican National Committee chairman, Michael Steele, recently parroted this accusation when he tried to explain that the government never creates jobs, just work.

But the New Deal did provide jobs to hundreds of thousand of unemployed Americans, and while they "puttered" those workers managed to build tens of thousands of bridges, paved countless miles of roads, and planted 3 billion trees.

It's certainly true that those programs by themselves did not end the Great Depression, though they did ease the crisis for the families who gained an income because of the New Deal. So while these short-term programs operated, the New Deal created a set of long-term structural changes to the economy whose impact lasted well beyond the Great Depression.

A few examples: Our bank deposits are protected by the Federal Deposit Insurance Corporation, and the integrity of stock market transactions is guaranteed, or is supposed to be, by the Securities and Exchange Commission, both created as part of the New Deal. Most important, with the passage of Social Security in 1935 future generations of American workers could look forward to a more secure old age. . .

Finally, the New Deal altered the relationship between government and the economy. After World War II, Republicans and Democrats agreed that the government should take a more active role in regulating the economy, that it should use economic policy to promote the greatest good for the greatest number, and that it was obligated to provide a social safety net. They might quibble over the details, but there was a broad consensus around these points.

The result of that consensus was the greatest expansion of the middle class the country has ever experienced. The growth of the economy from the 1940s through the 1960s was widely shared. Conversely, when the economy did go into recession during those decades, the supporting frameworks set up by the New Deal helped keep those downturns relatively short.

In the early 1980s, under the leadership of Ronald Reagan, conservative Republicans set about dismantling this system. Regulations were gutted or not enforced, the social safety net was largely unraveled, and government tax policy shifted money from the middle class to the wealthiest. Since 1980 the result has been a nasty recession in the early 1990s, caused by the failure to regulate the savings and loan industry, and two devastating downturns, one in the early 1980s and the one we're in right now.

More than that, during the 30 years in which we've moved away from the New Deal, the middle class has stagnated. As wealth and assets have shifted to the top 10 percent, the middle class has survived largely on credit cards and home equity loans. Now millions have no way to pay that piper.

The system the New Deal initiated kept us from experiencing a second Great Depression for nearly half a century. We are in our current mess in large measure because we dismantled that system. Republicans would have us be afraid of a new New Deal. But based on the track record of the original, a new New Deal is just what we need.


Anonymous Anonymous said...

the new deal didn't fail because republicans dismantled it. it failed because it was designed to. all of the programs in the New Deal were designed to be temporary fixes. Because these programs were never replaced with something better, our economy and the future generations of this country are well and truly fucked. Not to mention all these social programs that reward the lazy while punishing those who work for what they have... and speaking of social security, i am 26 years old, i pay into the system, i will NEVER get a return on it. My parents, nearing retirement, are more than likely in the same boat. The New Deal was a good idea, but because it was never replaced by something manageable as it was intended, it has turned into one of the worst things that has ever happened to this country.

March 30, 2009 5:33 PM  
Anonymous Mairead said...

Probably you should re-think your conclusions.

It's certainly true that the New Deal was politically motivated, and intended to save capitalism (and FDR) rather than set up long-term protections for working people.

But that was because of the motivations of the people involved, not because there's anything inherently wrong with the ideas underneath.

If you 'NEVER get a return on' your participation in the social-security system, it won't be because there's something wrong with social-security itself, it will be because it wasn't protected ---protected by you and people like you--- from the predators who live by what Adam Smith called "the vile maxim of the masters of mankind": "all for ourselves and nothing for other people".

Adam Smith published The Wealth Of Nations in 1776, the year of the Declaration of Independence. He was a recognised scholar with a doctorate (quite rare in those days), obviously a very smart man, and a close observer of how the world works.

But the greed of the wealthy elites who live by the "vile maxim" is so persistent, blatant, and destructive that, a hundred years later, immigrant millworkers who probably never even heard of Smith or TWON easily saw and diagnosed the same psychopathology in the "masters of mankind" of their day. They called it "the Spirit of the Age: Gain wealth, forgetting all but Self".

So if you want to have a pension available when the ruling class tosses you on the scrap heap, then I'd urge you to stop listening to their lies and focus your energy on changing the system so that they no longer have that power. If you don't do it, you'll have no one to blame but yourself.

March 31, 2009 5:52 AM  
Anonymous wellbasically said...

"the New Deal altered the relationship between government and the economy"

Here in Boston we have a relic of this relationship called the Boston Redevelopment Authority. It takes the power away from the voters and places it in the hands of technocrats and experts, headed by shills for the real estate and growth-over-all industry. So when an area of the city feels depressed, the BRA is more likely to facilitate covering it with a building, whether the locals want it or not.

The New Deal legacy was to tear power away from the locality and place it in the hands of people who claimed to know better. Look at the federal demands that Governor Sanford of SC to take the money... when you take the money you give over your decision making to the federal government. The feds do this because they want to be the "go-to guys" over more and more government decision-making.

When they get the power they will get the corporate attention and campaign contributions.

March 31, 2009 1:06 PM  

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