“Congress Lacks Courage And Vision”: FDR Put Humanity First, The Sequester Puts It Last
FDR placed the needs of the American people above petty budgetary concerns, but today’s leaders lack his courage and vision.
In 1933 we reversed the policy of the previous Administration. For the first time since the depression you had a Congress and an Administration in Washington which had the courage to provide the necessary resources which private interests no longer had or no longer dared to risk.
This cost money. We knew, and you knew, in March, 1933, that it would cost money. We knew, and you knew, that it would cost money for several years to come. The people understood that in 1933. They understood it in 1934, when they gave the Administration a full endorsement of its policy. They knew in 1935, and they know in 1936, that the plan is working.—FDR, 1936
Eighty years ago this month, at the height of the worst economic crisis in our nation’s history, Franklin D. Roosevelt delivered on his promise to launch a New Deal for the American people. Not wedded to any one program, idea, or ideology, the New Deal was founded on the very simple premise that when the free market failed to provide basic economic security for the average American, government had a responsibility to provide that security. In Roosevelt’s day, this meant imposing the first-ever meaningful regulation of the stock market, shoring up the nation’s financial system by guaranteeing private deposits and separating commercial from investment banking, and providing jobs to the millions of unemployed through government expenditures on infrastructure. The Roosevelt administration also launched the country’s first nationwide program of unemployment insurance to help the unemployed bridge the gap between jobs as well as Social Security to ensure that the elderly, after years of work and toil, would not suddenly find themselves utterly destitute.
Conservative critics of FDR’s polices say that these programs did not work—that unemployment remained high throughout the 1930s and that it was only World War II that brought us out of the Great Depression. As such, these same critics continually argue that the deficit spending that fueled the New Deal was the root cause of its inability to bring the unemployment rate down to acceptable levels. In short, they argue that government spending and government programs do not work, and that only the free market can provide the economic stimulus necessary to get the economy back on its feet again.
But as is the case today with the naysayers on climate change, the empirical evidence suggests that nothing could be further from the truth. During FDR’s first term, for example, the average annual growth rate for the U.S. economy was 11 percent. Compare that to the paltry 0.8 percent we witnessed in the first term of the Obama administration. The nationwide unemployment rate also fell, from its all-time high of 25 percent in 1933 to 14 percent by 1935, which at the time represented the largest and fastest drop in unemployment in our nation’s history.
But far more damning to the conservative critique is the argument that tries to invalidate the New Deal by positing that it was World War II and not the relief programs of the 1930s that brought us out of the Great Depression. Conservatives love to trumpet this fact and often use it as part of their argument against deficit spending, never stopping for a moment to consider that government expenditures—and deficits—in World War II made the New Deal look like small potatoes. In fact, deficit spending in the New Deal never topped 6 percent of GNP, while in World War II it ran as high as 28 percent. In other words, World War II was the New Deal on steroids. Viewed from this perspective, it is FDR’s critics on the left—not the right—who possess the stronger argument. The problem with the New Deal was that it did not go far enough. In other words, the government should have spent more money, not less, if it was going to be successful in bringing the economic crisis to an end.
All this is not to say that free enterprise is incapable of producing economic growth—it most certainly is. But there are times when capitalism, left to its own devices, can fail. Franklin Roosevelt was willing to acknowledge this, and he spent the better part of his tenure in office trying to put in place programs that would make capitalism work for the average American, not just those at the top. Hence, his agenda was not to subvert or destroy the free market system, but rather to save it.
It took vision and courage to launch the New Deal—the vision to understand that when the free market systems falls short or fails, government has a responsibility to take direct measures to get the economy moving again, and the courage to engage in deficit spending at a time when orthodox economic theory argued that the only proper response to an economic recession or depression was to slash government spending and balance the budget.
Unfortunately, the leadership we possess in Washington today lacks the vision and the courage to follow FDR’s example and put in place the sort of common-sense programs that would stimulate the economy and put people back to work. Instead of providing jobs for millions by spending money on our failing infrastructure—now ranked 24th in the world—or investing in programs that would reverse the falling education rates of our children, or providing greater federal support for the basic scientific research that may unlock untold benefits for future generations, we instead speak of nothing but the deficit and the sequester, as if cutting spending in the midst of recession is the magic bullet that will lead us out of our economic malaise.
Franklin Roosevelt faced similar critics, who, much like today’s deficit hawks, insisted that he must cut spending and balance the budget no matter what the consequences for the average American. But FDR would have none of this. “To balance our budget in 1933 or 1934 or 1935,” he said,
would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.
As it turns out, FDR’s decision to put “humanity first” was not only the right moral decision, it was also the right economic decision. For the deficit spending that he finally unleashed in World War II, coupled with the social and economic reforms put in place during the New Deal, led to one of the longest periods of economic prosperity in America’s history and the birth of the modern American middle class.
Sadly, all of the evidence to date suggests that our leaders in Washington are quite happy “to pass by on the other side” and let the sequester proceed without so much as a fight. With roughly 16 million people across the country still unemployed, this is surely “a crime against the American people.”
By: David Woolner, The National Memo, March 3, 2013
“The First Progressive Revolution”: It Did Happen And It Will Happen Again
Exactly a century ago, on February 3, 1913, the Sixteenth Amendment to the Constitution was ratified, authorizing a federal income tax. Congress turned it into a graduated tax, based on “capacity to pay.”
It was among the signal victories of the progressive movement—the first constitutional amendment in 40 years (the first 10 had been included in the Bill of Rights, the 11th and 12th in 1789 and 1804, and three others in consequence of the Civil War), reflecting a great political transformation in America.
The 1880s and 1890s had been the Gilded Age, the time of robber barons, when a small number controlled almost all the nation’s wealth as well as our democracy, when poverty had risen to record levels, and when it looked as though the country was destined to become a moneyed aristocracy.
But almost without warning, progressives reversed the tide. Teddy Roosevelt became president in 1901, pledging to break up the giant trusts and end the reign of the “malefactors of great wealth.” Laws were enacted protecting the public from impure foods and drugs, and from corrupt legislators.
By 1909 Democrats and progressive Republicans had swept many state elections, subsequently establishing the 40-hour work week and other reforms that would later be the foundation stones for the New Deal. Woodrow Wilson won the 1912 presidential election.
A progressive backlash against concentrated wealth and power occurred a century ago in America. In the 1880s and 1890s such a movement seemed improbable, if not impossible. Only idealists and dreamers thought the nation had the political will to reform itself, let alone enact a constitutional amendment of such importance—analogous, today, to an amendment reversing Citizens United v. FEC and limiting the flow of big money into politics.
But it did happen. And it will happen again.
By: Robert Reich, The American Prospect, February 3, 2013
“Its Time To Reboot”: Ronald Reagan Is The GOP’s Problem, Not Its Solution
So the Republican Party’s going through some soul searching. And after the results of the 2012 elections that seems like a sensible thing to do.
But so far most of the changes contemplated tend toward the cosmetic—we have to change our “tone,” they say, or the “face” of the party. And that’s all well and good. But one is left to wonder: Is there something going on here that requires plumbing a little deeper into the Republican depths?
I think the answer is yes.
Come back with me to 1981. It’s Ronald Reagan’s inaugural, a shining moment for conservatives and the GOP, punctuated by his famous quotation: “In this present crisis, government is not the solution to our problem; government is the problem.”
Those words were the apotheosis of a conservative line of argument championed by the likes of William F. Buckley and Russell Kirk for over 30 years. And here was a president not attacking this government program or that one, but instead indicting government as a whole. How satisfying that must have been for those who had long railed against programs like the New Deal and the Great Society.
Not surprisingly, Reagan’s creed became a rallying cry for conservatives and over the past three decades it has remained ever thus. It’s a great slogan that immediately communicates a distinctive set of values, and in that respect, in many cases, it has served the GOP well. But as an organizing principle for electoral success? Well, that’s a little more complicated.
For the GOP’s traditional base—the wealthy—it’s a terrific message. If you have sufficient wealth, you don’t have much need for the domestic programs you see your taxes going to fund, and maybe it offends you to see your money being redistributed by the government to folks less well off than you. If that’s the case, you might prefer a federal government that does less and, as a result, costs less, leaving more of the money you earn in your pocket. In other words, for you, government really is the problem: it diminishes the amount of money you can spend on the things you want, and it does so without offering you something that you regard as an offsetting benefit.
If the number of people who don’t need domestic programs were large enough the GOP would need go no further than Reagan’s creed to win elections. But it isn’t.
Recognizing this, clever Republicans take a step back from the broad sweep of Reaganism and instead try taking it to a more tactical scale, identifying a particular demographic group whose taxes can be said to be paying for a program that benefits someone else. By saying to Group A you are paying for the benefits of Group B some try to mine a latent vein of resentment without threatening government programs that benefit a broader swath of the electorate. See: Reagan appealing to blue color whites by talking about welfare.
Finding the sweet spot between Reagan maximized and Reagan targeted is often the key to Republican electoral prospects, as no less than Reagan himself found out. Early in his first term he managed to push through broad spending cuts. But as people learned the impact those cuts were actually having (remember ketchup as vegetable?) momentum waned. And that’s the thing: take Reagan too far, and your spending cuts start hacking away at programs that people have come to rely on. Think school lunches. Student loans. Social Security. You see, sometimes government is the solution, no matter how much conservatives don’t want to believe it.
Today, the Republican caucus seems fractured between true believers looking to cut anything that moves, and more traditional Republicans who speak Reagan boldly, but apply him more cautiously. And while the radicals have had some well-publicized victories, the long-term health of the party seems dependent upon the veterans’ ability to retake the agenda. One suspects that that is how this play will eventually unfold.
But I’d like to suggest something a little different. There’s an honorable role to be played by a party that holds government expenditure to a rigorous standard. To be sure, for every government program that works there are any number that don’t. Fashioning a government that is narrowly tailored to the problems its constituents face, and that moves efficiently to address them (whether through a program or the absence of one) ought to be everyone’s goal.
Just imagine how constructive a Republican party able to have a rational discussion about the role of government in our lives could be, a party able to contemplate not only the costs but also the benefits of government, and one that offered a principled view about how to distinguish between the two. That would be quite something. And it would offer an extraordinary service to this country.
But for that to happen, something pretty fundamental has to change. There must be a recognition that for all he did for the Republican cause, in this present crisis Ronald Reagan isn’t the solution to your problem; Ronald Reagan is the problem. And its time to reboot.
By: Anson Kaye, U. S. News and World Report, February 1, 2013
“Bush v Gore”: The Only Precedent That Seems To Matter To “Judicial Counter Revolutionaries”
Nobody would much describe Monthly alumnus and long-time Atlantic writer James Fallows as a firebrand. But he does have a sense of historical perspective. Over the weekend, mulling a probable Supreme Court action to invalidate some or all of the Affordable Care Act, Fallows put together a stunningly brief summary of how we came to this point:
Pick a country and describe a sequence in which:
* First, the presidential election is decided by five people, who don’t even try to explain their choice in normal legal terms.
* Then the beneficiary of that decision appoints the next two members of the court, who present themselves for consideration as restrained, humble figures who care only about law rather than ideology.
* Once on the bench, for life, those two actively second-guess and re-do existing law, to advance the interests of the party that appointed them.
* Meanwhile their party’s representatives in the Senate abuse procedural rules to an extent never previously seen to block legislation — and appointments, especially to the courts.
* And, when a major piece of legislation gets through, the party’s majority on the Supreme Court prepares to negate it — even though the details of the plan were originally Republican proposals and even though the party’s presidential nominee endorsed these concepts only a few years ago.
How would you describe a democracy where power was being shifted that way?
Fallows answers his own question by using a term—“long-term coup”—that he later downgrades to “radical change.” That’s appropriate, since “coup” implies tanks in the street rather than black-robed ideological cheerleaders. But it’s becoming more obvious each day that the judicial counter-revolutionaries of the Supreme Court don’t need the crisis atmosphere that they used to justify Bush v. Gore to continue its legacy. Indeed, it seems to have become the only precedent the majority reliably respects. Maybe they will surprise us all on Thursday and step back from the brink. But without question, if another seat on the Court falls their way, the constitutional substructure of every 20th century social accomplishment from the New Deal to the Civil Rights Act to the Clean Air Act to the right to an abortion is in immediate danger. And anyone who remembers that strange night in 2000 when the Court’s Republican appointees decided to seize the opportunity to choose a president should not be surprised.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, June 25, 2012
The Deeply Crazy In Virginia’s Obamacare Lawsuit
As my Philadelphia Phillies idled through a two-hour rain delay Thursday night, I curled up with some light reading: a Texas Review of Law & Politics article by the legal team, led by Virginia Attorney General Ken Cuccinelli, that’s challenging the new healthcare individual mandate in the U.S. Court of Appeals for the Fourth Circuit.
It’s fascinating stuff.
Cuccinelli and co. follow a long trail from the 18th century British jurist William Blackstone to the Dred Scott case to the New Deal to the present day. The conservative team, at first, makes a tight, prudential case against the Obamacare mandate that I, in my nonprofessional capacity, happen to favor.
In their words:
No existing case needs to be overruled and no existing doctrine needs to be curtailed or expanded for Virginia to prevail on the merits. Nor does Virginia remotely suggest that the United States lacks the power to erect a system of national healthcare. Virginia expressly pled that Congress has the authority to act under the taxing and spending powers as it did with respect to Social Security and Medicare, but that Congress in this instance lacked the political capital and will to do so. No challenge has been mounted by Virginia to the vast sweep and scope of the Patient Protection and Affordable Care Act (PPACA). Instead, only the mandate and penalty were challenged because the claimed power is tantamount to a national police power inasmuch as it lacks principled limits.
In plainer, get-to-the-point English: We grant you the social safety net established under the “Roosevelt Settlement.” We recognize Congress’s power to regulate interstate commerce. We even grant that this power could conceivably deliver universal healthcare. But for Pete’s sake, don’t try to include “inactivity”—that is, not buying a health insurance plan on the private market—under its purview.
Because, once you regulate the act of doing nothing, what’s left to regulate?
Er, nothing.
Thus, does the state’s power to tax and police become theoretically unlimited?
But, later in the body of the piece, Team Cuccinelli begins to play other, more presently familiar cards. Glenn Beck fans will recognize the faces in the rogue’s gallery: Justice Oliver Wendell Holmes, progressive philosopher John Dewey, and others who, this argument goes, created the post-New Deal legal and philosophical edifice.
Wouldn’t you know it, this welfare-state stuff constitutes a violation of natural law—which, ipso facto, means economic laissez-faire—and a lurch into moral chaos. Echoing the newly popular Hayek, Cuccinelli’s article asserts the primacy of economic rights while characterizing as relativistic the not-exclusively-liberal jurisprudential argument that personhood and dignity precede the marketplace. (Last I checked, I’ve never seen an unborn baby sign a contract.)
Come conclusion time, the piece sounds eerily like it’s not merely advocating the curtailment of an otherwise defensible attempt to advance the national interest, but rather like a full-throated libertarian manifesto:
The Progressive Meliorists had argued that they should be accorded constitutional space in which to make a social experiment, agreeing in turn to be judged by the results. The New Dealers carried the experiment forward. Seventy years later, results are in suggesting that the experiment is living beyond its means. The statist heirs to the experiment say that it cannot and must not be curtailed, so now they claim this new power.
Social Security and Medicare—an experiment! Just a temporary, 70-year blip on the radar!
So, in 46 pages, we proceed from modest and reasonable to deeply crazy.
It behooves us to ask, what’s Cuccinelli’s endgame?
I think we’ve seen this movie before.
By: Scott Galupo, U. S. News and World Report, August 18, 2011
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