[PEN-L] New Deal?

[Louis Proyect]

http://www.laborstandard.org/New_Postings/New_New_Deal.htm
Myth of Benevolent Roosevelt Democrats:
The Real Deal on the “New Deal”
by Andrew Pollack
In the aftermath of Hurricane Katrina some Democratic Party politicians and 
even conservative newspapers like the New York Daily News were calling for 
a “new ‘New Deal’” to deal with the destruction wrought, and with the 
broader social problems exposed in its wake.

Some pundits even claimed the reaction against Bush’s apathy toward Gulf 
residents’ needs would help shift the country’s politics back to the left. 
For instance the Nation’s William Greider predicted that “[t]he 
catastrophe…is one of those big moments that jolt public consciousness and 
alter the course of national history”. He predicted “a dramatic breakdown 
for the reigning right-wing orthodoxy, the beginning of its retreat and 
eventual demise.” Greider took as good coin the rhetoric of Democrats who 
“are doing what they haven’t dared to do for many years, even decades: They 
are invoking their New Deal legacy and applying its liberal operating 
assumptions to the present crisis…only the federal government has the 
resources and authority to lead such a complex undertaking.”

For most working people the phrase “New Deal,” based on the commonly 
accepted mythology of what happened in the early years of Franklin Delano 
Roosevelt’s administration, conjures up welcome pictures of public works 
jobs for all who needed them, of gigantic public works projects rebuilding 
old institutions and building brand new ones, of government concern for the 
down and out. Those Democratic Party politicians who were throwing around 
Rooseveltian rhetoric may even believe this mythology. But the rebuilding 
packages they put forward fall far short of what FDR was alleged to have 
achieved, and are instead more in synch with today’s bipartisan consensus 
that the market is a cure-all for whatever ails you.

The more astute Democratic politicians, however, know precisely the limits 
of the New Deal and in some ways their miserly proposals more accurately 
match the overall picture of Roosevelt administration policy.

Barely a month after Katrina even the few Democrats who had early on 
engaged in New Deal-style rhetoric had largely fallen mute, and by 
mid-October the New York Times could report that Republicans were once 
again pressing their plans to save the Gulf and the economy as a whole with 
even more tax cuts for the corporations and the rich. “We’ve had a stunning 
reversal in just a few weeks,” said Robert Greenstein of the liberal Center 
on Budget and Policy Priorities. “We’ve gone from a situation in which we 
might have a long-overdue debate on deep poverty to the possibility, 
perhaps even the likelihood, that low-income people will be asked to bear 
the costs. I would find it unimaginable if it wasn’t actually happening.’”

But the inability, in fact the unwillingness, of the Democratic Party to 
take its own rhetoric seriously made this turn of events predictable. In a 
future article we’ll go into the nature of today’s Democratic Party. But 
for historical context let’s take a look at the reality behind the New Deal 
mythology.

What Really Happened

FDR used the phrase “New Deal” in his 1932 campaign, but the main theme of 
his thoroughly mainstream platform was cutting the deficit. His secretary 
of labor, Frances Perkins, later said it was only a “happy phrase” to make 
people feel better.

The very first task undertaken by Roosevelt upon taking office was saving 
the country’s banks, which had shut down the day of his inauguration. The 
motivations and machinations of FDR’s banking experts are well-described by 
one of his most ardent supporters, historian Arthur M. Schlesinger, Jr., in 
the second volume of his three-volume tribute, “The Age of Roosevelt.” 
Schlesinger quotes FDR aide Raymond Moley to the effect that those working 
on the emergency banking legislation had “forgotten to be Republicans or 
Democrats. We were just a bunch of men trying to save the banking system.” 
And by saving the system they meant consolidating the hold of the biggest 
banks.

At a time when even some liberal members of Congress pleaded with Roosevelt 
to establish a national banking system, Roosevelt’s reply was: “That isn’t 
necessary at all.  I’ve just had every assurance of cooperation from the 
bankers.” Concludes Schlesinger, “the very moneychangers, whose flight from 
their high seats in the temple the President had so grandiloquently 
proclaimed in his inaugural address, were now swarming through the 
corridors of the Treasury.” And they were there to help Roosevelt’s 
advisers craft the new bills, which would tighten their grip on the 
nation’s banks (much as the big energy companies worked in the White House 
to help Dick Cheney craft Bush’s energy bill.) The result, says Moley, of 
FDR’s conservative policies, was that “capitalism was saved in eight days.”

Yet Schlesinger also cites Senator Bronson Cutting of New Mexico, who wrote 
years later: “The nationalization of banks by President Roosevelt could 
have been accomplished without a word of protest. It [not doing so] was 
President Roosevelt’s great mistake.”

FDR himself testified to his motivations in this and subsequent policy 
decisions: “No one in the United States believes more firmly than I in the 
system of private business, private property and private profit. No 
Administration in the history of our country has done more for it. It was 
this Administration which dragged it back out of the pit into which it had 
fallen in 1933.” He even put his finger on the real value of liberals to 
the system: “the most serious threat to our institutions comes from those 
who refuse to face the need for change. Liberalism becomes the protection 
for the far-sighted conservative.”

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