At The Big Picture, Marshall Auerback, an economist and global portfolio strategist for RAB Capital, persuasively lays out the case for a New “New Deal.” The abstract is inside.
Historical revisionists have done much to dismiss the economic achievements of the New Deal, some even going so far as to suggest that FDR’s fiscal policies worsened the crisis. Such arguments have been made popular during the past 25 years by economists and historians keen to debunk the effectiveness of Keynesian economics in favor of the neo-liberal Washington Consensus. We suggest, on the contrary, that mainstream economics and policy have been unable to come to grips with our current socio-economic problems because of a lack of historical memory.
In particular, the key to evaluating Roosevelt’s performance in combating the Depression is the statistical treatment of many millions of unemployed engaged in his massive workfare programs. Including such ‘workfare’ recipients as employed presents a radically different picture for the New Deal, showing unemployment dropping by almost two-thirds from a high of 25%. Treating these men and women as unemployed while soldiers in Germany and France were treated as having jobs has made the Roosevelt administration’s economic performance appear uncompetitive, but it is fairer to argue that the people employed in government public works and conservation programs were just as authentically (and much more usefully) employed as draftees in what became garrison states. Meanwhile Roosevelt was rebuilding America at a historic bargain cost.
As President Barack Obama confronts the most serious economic crisis since the Great Depression, it behooves him to embrace the legacy of Franklin Delano Roosevelt and introduce a new “New Deal” as soon as possible.
This paper is certainly worth a full read. I can’t help but quote where Auerback lists some of the accomplishments of the New Deal, putting to rest the folderol emanating from quarters like CPAC. Roosevelt saved capitalism, period.
The key to evaluating Roosevelt’s performance in combating the Depression is the statistical treatment of many millions of unemployed engaged in his massive workfare programs. The government hired about 60 per cent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York’s Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown.
It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country’s entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.
What’s maddening, in the context of today’s conservative claims that the New Deal was ineffective, is that people are familiar with most of the accomplishments. Many of the electrons making it possible for you to view this likely came from the BPA, if you’re in the Northwest. Yet conservatives prance around claiming things that simply are not true, especially when it comes to the “mini-depression” that occurred precisely because FDR temporarily abandoned his New Deal spending in favor of fiscal austerity.
Auerback asks a simple question about spending, deficits and debt: if spending is so terrible, why did the U.S. economy prosper so much after World War II? He also notes that we were giving 2% of our GNP to Europe in the form of the Marshall Plan, which led to a remarkable economic expansion both here and in Europe.
It is, in my view, conservatives who will have destroyed capitalism in our era if they succeed in preventing a New “New Deal,” even as they nonsensically scream about “socialism.” They will destroy this country before they change their ways or their minds, and the last eight years are proof positive of that. The mind boggles at people who so badly want to sit atop a heap of economic ruins, just to say “we won.” No wonder they always call progressives mentally ill, they’re projecting like crazy. So to speak.
This isn’t some simple “honest difference of opinion,” where the relative merits can be sorted out and argued. You cannot have a reasonable national discussion if one side will not accept reality, historical and otherwise, as a condition of the discussion. While there is always room for increasing our understanding of history, if someone were to claim that George Washington lost the Revolutionary War, and stick to that claim despite overwhelming evidence to the contrary, they would pretty much erode any credibility they might have had.
And so it is with today’s conservatives and their claims about FDR and the New Deal. There is no meaningful national discussion possible, because the deluded and ridiculous nature of conservative views regarding FDR prevents it. And that’s a crying shame, because as Auerback points out, we have the advantage of being able to learn from the New Deal, unlike FDR. As proposals are trotted out regarding the financial system and recovery, our stilted national discourse revolves largely around personalities and the views of obstructionist Republicans (and a fair number of Democrats) in Washington, D.C. Vital issues like doing something meaningful about the insolvent large banks are not being addressed in an adequate fashion, and the obstreperous opposition of conservatives (both Democratic and Republican) is at fault.
Sometimes legacy journalists and others want to demand that bloggers “listen to the other side” because they might learn something. In ordinary times this would be true.
These are not ordinary times. The only thing one can learn from today’s movement conservatives is that their tribalism has no apparent boundaries, and the conservative movement exists excusively to provide a platform for whatever cultural and racial resentments can be fanned and turned into political fuel. Whether they put a pretty, sexy face on it, a supposedly blue-collar, regular-Sam face on it or a bloated, drug-addled face on it, the craziness and purpose is always the same. Our tribe our tribe our tribe!
That’s not just outrageous in this time of crisis, it’s also pathetic. For people who always claim to be so damn patriotic, it’s also inexcusable.
The American people really need to ask themselves if they’re going to allow these fools to finish off this noble experiment once and for all.