Tuesday, November 09, 2010

Undoing the New Deal

The depression was not so Great
And almost nobody ate
Millions had no shoes
Only lawbreakers had the booze
The poverty was grinding
While the nation was finding
A way from the third level of hell
And yet the wealthy did well

In reading the recent biography of FDR A Traitor to his Class by H. W. Brands, lots of interesting facts glared out at me from the pages of the book. Some were related to the personal life of Franklin Roosevelt, but many more were related to the disturbing parallel of the roaring twenties and the depressing thirties to recent times. Foremost among these is that the record corporate profits of today were also the center of the economy of the twenties. In the US, especially, corporations saw record profits as well as reckless speculation in the stock market. Of course, there were differences as well. Only perhaps 15% of the nation was invested in stocks. We now boast of at least 70% participation. Today, we have derivatives that schemers in the 20s did not. Instead of today’s Tea Party extremists and neo-Nazi militia, we had militant Ku Klux Klan and Communist agitators as well as real Nazi sympathizers stirring up hate, discontent and isolationism. Famous people including aviator Charles Lindbergh supported Germany directly and he received a Nazi Medal of Honor presented by Hermann Goering.

Perhaps it is more difficult for folks to peacefully share poverty than it is for them to share the good times. We tend to define differences more sharply in recessions and depressions. During the thirties, blacks were still being lynched, European and Asian immigrants were attacked and humiliated, while today, Hispanic immigrants and Islamic citizens seem to be hated and under attack. Agitation was actually a bit more common then than now with government in the 1920s often supporting ruthless suppression of crowds whether they were unions seeking fair wages or WW I veterans seeking their bonuses promised for service in WW I. In Anacostia, part of the District of Columbia, President Hoover ordered General MacArthur to disperse the 20,000 veterans. He did, brutally using cavalry with swords drawn. The injuries to veterans and the death of an infant in the assault stunned even Hoover who had ordered the action. Child labor in the US was not stopped until 1938 when FDR signed the Fair Labor Standards Act. That was successful largely because adults were competing with children for the same low wages during the depression. A regressive Supreme Court had earlier ruled that children must be given the right to contract for their labor, although they were prohibited from most other contracts. Earlier legislative attempts to force the Supreme Court to respect children in the workplace were fruitless. Our current Supreme Court is not alone in being right wing in makeup. The late 19th and early 20th centuries fostered highly conservative Supreme Courts, similar to today. There was no economic or social safety net except the generosity of neighbors. The American ideal of self-sufficiency was the basis for government policy. The Poor House was the alternative.

Wealth was concentrated in the upper echelons of society to a point not to be seen again until today. Worker productivity until the crash of 1929 was high, however there were problems of sharing productivity gains with workers. That has again occurred with executive salaries and bonuses exceeding a level of 400 times that of the average worker despite record employee productivity. Strangely, the main argument defending harsh treatment of millions of hungry citizens was nearly a verbatim prediction of today’s conservative response to hungry and frightened people of today. “The promise of America is opportunity, not a handout.” Hoover expressed the thought that if citizens were given a handout, it might create a dependence on continued handouts and that people would lose any motivation to work. Today, we have heard almost identical words being echoed by leaders of the conservative elements of the Republican Party as a reason to not extend jobless benefits. Then, as now, politicians resisted unemployment assistance. When a priest in Pittsburgh marched with 12,000 workers to help get unemployment consideration, four were killed in the process. We now know that the conservatives will fight any extension of the unemployment payments to millions of out-of-work men and women. This lack of empathy is cloaked in a “rugged individualism” rhetoric now as it was then and yet they see no connection between their support from government and support of the less fortunate. Coal miners at Matewan, West Virginia were attacked by a detective agency hired by the owners and 12 people were killed. Violence by owners to avoid unions was common and union retaliation became a fact of life. The conservative distrust and even hatred of unions had its beginnings in the New Deal when FDR attempted to level the playing field by encouraging management negotiation with unions. Management did so only under duress and not really until early war production to sell to the British.

The history books are filled with the examples of failed conservative policies that protected the wealthy business owners while government policy was essentially laissez faire with the idea that prosperity was cyclical and that it was all right if some people were hurt or starved in the process of waiting for the cycle to right itself. That was the natural way. The thirties saw the insertion of the Glass-Steagal Act (FDIC, etc.) and Social Security that conservatives even today are trying to eliminate or emasculate by replacing it with defined contributions into privatized stock plans. Can you imagine our individual and family pain and chaos in this current recession if GW Bush had succeeded in replacing Social Security with privatized investment? Maybe you should listen closely to the conservatives, read back to the Great Depression and think hard, because that is our current direction despite the fact that we have the lowest tax rate since 1950 at less than 10% on average. The cry to reduce our deficit caused mainly by two wars of choice may sound appealing, but it is only crying wolf unless the wealthy are willing to give a little to let the real spenders of the middle class help save the republic, its economy and its self respect.

Conservatives are trying to undo the New Deal. To them, regulation is un-American and real freedom is the freedom to hurt everybody except the bankers and large corporations who must be bailed out. The little guy is just that. Little. Big is just that…and too big to fail. What an American concept! Freedom fries the little guy. Freedom gets Big a free lunch.

George Giacoppe
10 November 2010

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