Lessons for Obama from the New Deal

The author of a new book on how FDR changed America connects the dots to our current plight

Topics: U.S. Economy, Barack Obama, Great Recession, How the World Works,

Lessons for Obama from the New DealFranklin D. Roosevelt

As the current crop of Republican presidential candidates tours the United States denouncing Big Government in language virulent enough to make Barry Goldwater quail, it seems almost impossible to recall that once upon a time American voters endorsed the principle of strong government action by propelling Franklin D. Roosevelt to landslide victory after landslide victory. The contrast is heightened further when one considers how difficult it has been for the current president, who, like Roosevelt, came into office during a time of great economic crisis and on the heels of a thoroughly discredited Republican Party, to move his own agenda through Congress.

FDR’s New Deal remains the standard by which all Democratic presidents are judged. The government put millions of Americans directly to work building roads and bridges and schools that still exist today. The creation of Social Security established the underpinnings of a safety net for all Americans. Wall Street’s tendency to excess and destructive speculation was reined in by the Securities Exchange Act and the banking system stabilized for generations by federal deposit insurance.

Meanwhile, Obama struggles merely to get unemployment insurance extended. Should we blame his failings as a politician, or Republicans for their obstruction, or is America simply a different country now than it was 80 years ago? The economy is still in crisis, but the efficacy of government action has been so clamorously called into question by the Tea Party and congressional Republicans — with Texas Gov. Rick Perry even claiming that the New Deal was a failure and Roosevelt made the Great Depression worse — that the notion of a new New Deal seems further away than ever.

Michael Hiltzik, a Los Angeles Times columnist and the author of several works of popular history, gets credit for hitting the timing jackpot. Just as President Obama is once again attempting to make the case for government action, Hiltzik’s latest book, “The New Deal: A Modern History,” is arriving in bookstores. Hiltzik spoke with Salon to explain why we should reexamine FDR’s legislative achievements, and what Obama could learn from them.

The New Deal isn’t exactly what one would call an underappreciated period of history. What made you decide to revisit it?

I think we have a very distorted and incomplete view today of the New Deal. The last spate of books about it were either overly polemical and ideological, like Amity Shlaes’ “The Forgotten Man,” or they were incomplete, like Jonathan Alter’s recent book “The Hundred Days.” So I thought it was time to go back and rediscover it and recapture what really happened, so that we could reset the debate that we were inevitably going to have now about the New Deal, by showing what gave rise to it, what was good about it and what was bad about it.

Were you consciously influenced by the Great Recession and the example of a new Democratic president coming in at a time of crisis?

Well, that aspect of it emerged as I started working on it. The debate about the New Deal is a permanent debate. As we approached the presidential election and then the reelection, I thought it was clear that this whole question of what is the federal government’s role in our lives was going to move front and center. That sort of fed into my conviction that this was the right thing to do.

So what have we gotten wrong? How have we misunderstood the New Deal?

Both sides get the New Deal wrong. The New Deal has become a shibboleth for both liberals and for conservatives. Conservatives look at it as the quintessential radical socialist over-reaching. There’s this idea that Roosevelt was a central radical figure and the New Deal sprung from his head. It was a plan, and it was all about him collecting power — the Imperial Presidency — and foisting this radical expansion of government on the American people. But that is simply not true.

Roosevelt was a much more conservative leader than that narrative gives him credit for. In fact, at least until 1937, inflationary and deflationary government policies were actually very balanced — too well balanced, in fact. There wasn’t enough Keynesian-style stimulus until 1938.

And what liberals and progressives get wrong is the mirror image of that. They view the New Deal as this ideal of progressive liberal government action — the essence of Keynesian deficit spending policy. For that camp Roosevelt becomes the hero, the progressive hero. But that gives too much credit to the idea that this was a program, a single program in which everything was designed to work together like a machine. And that simply was demonstrably untrue. It was much messier than that.

The New Deal was a combination of conservative initiatives and progressive initiatives, and there was a lot that Roosevelt had nothing to do with — or actively disapproved of. Things like deposit insurance, for example. Roosevelt, like Wall Street, was really negative about that and threatened to veto the Emergency Banking Act during the hundred days if it was in there. But he was just finally told, it’s going in — you are going to have to accept it. And of course it ended up protecting the money supply and protecting the banking industry.

He was also really equivocal about Social Security. He was always very wary of anything that looked like the dole, or an excessive redistribution of wealth. Just a month before the Social Security Act was due to be presented to Congress, he said I’m not sure the time is right for a retirement program.

Reading your book, one of the things that struck me most about the difference between what Roosevelt faced and what Obama has faced had to do with how willing Congress was to pass everything Roosevelt sent them — with huge majorities of both parties. The Emergency Banking Act took about seven hours to become law! Why was Congress so eager to give him what he wanted?

The Depression was much, much worse then than what we have lived through over the last few years. It had gone on for much longer. Every effort to deal with it had sort of been tried and had failed. There was a lot more fear among the public and Congress about not achieving what had to be done.

But opposition to what Roosevelt was doing began to emerge fairly quick — certainly by the end of 1933 when the Securities Exchange Act bill came up. Wall Street was out there fighting it tooth and nail, and did get changes in it. In fact progressives thought at the time that Roosevelt had completely sold out to Wall Street on the SEC bill.

But the two parties were also very different then from what they are today. Today, each party, particularly the Republicans, are ideologically homogeneous. Back then they were very heterogeneous — you had progressive and conservative camps in both parties. The core of opposition to the New Deal was actually a really powerful conservative wing among Southern Democratic senators. Roosevelt had to triangulate even within his own party, and he was very canny about doing that but took a lot of criticism from progressives for selling out. As I was researching that and putting those sections of the book together it gave me a different perspective on Obama’s relations with Congress and also with progressives.

How so?

Progressives have to understand that it is not unnatural for a president to compromise to get what he can get. You can debate whether Obama compromises too much or not enough or whether he gives in too easily. But the same debate went on with Roosevelt, the leader who is held up today as this master of manipulative politics — the genius of progressivism.

And yet, even after the business community turned against him, Roosevelt’s personal popularity didn’t take a hit. He expanded his majorities in the midterm election of 1934 and won a landslide in 1936, even while the economy was still in terrible shape. What explains his popularity?

One part of it was his personality. Roosevelt was just an extraordinary politician. When he did his Fireside Chats he had a feel for language that would be comforting and clear and lucid. He had an amazing ability to explain what he was about to do. And in this environment, where people were so afraid, when they had lived through this Depression which had been so severe and had gone on so for long, they were much more willing to give him what he wanted, to give him their assent. And that contributed to his personal popularity. But he just had this manner that people found very appealing. He had a skill that’s unusual if not unique. You can’t really blame Obama for not having that, he’s just a different personality

You write near the end of your book that “the New Deal instilled in Americans an unshakable faith that their government stands ready to succor them in times of need.” Does that really hold true? Rick Perry might be the next president of the United States and he’s calling Social Security a “Ponzi scam.” The current Republican Party is absolutely dedicated to shrinking government. The general public seems to have given up on the notion that government can help.

The persistence of bad conditions has shaken people’s faith. But when you really look at opinion polls, and what people think, even among the Tea Party … they don’t want Social Security cut, they don’t want Medicare cut. To the extent to which Social Security has been expanded by Democratic and Republican administrations alike, there is this core sense that this is the proper work of government: to provide a safety net.

You even have people like Karl Rove saying if Rick Perry continues down this road, he’s going to hurt the Republican Party because the American public doesn’t really feel that way. They don’t agree it is “a monstrous lie.”

We’ll know more next year, obviously. But for now I think these programs are really part of the American fabric and we have the New Deal to thank for that.

If you go back in time and advise Obama, right after his inauguration, on how to govern, based on what you’ve learned researching the New Deal, what would you tell him?

Well, I think the lesson to learn from Roosevelt is that Roosevelt always tried to make sure that the voters at large understood where the dividing line between their interests and the interests of other interests was. He was never shy about saying the government is here to protect you from some of your fellow Americans, who only want to take from you. Roosevelt again and again said the privileged classes are not your friends, they don’t reflect your interests but we do.

He positioned himself as the leader of the government whose job was to make sure people had a roof over their heads and food to eat and he would do his best to get them jobs and work and a paycheck. And Roosevelt always stood up for the principle of government action. The one unifying theme of the New Deal is that government has a role to play in people’s lives beyond national security. In one of his later fireside chats from 1937, he said that he didn’t agree with the notion that legislators should stay home. In a democracy, democratic action can never be an intruder; it’s always part of the process and needs to be defended.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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