A Far Cry From FDR…

In Boris Johnson’s latest speech he made references to Franklin D. Roosevelt’s (FDR) New Deal, the plan formulated by the 32nd U.S. president to accelerate the American economy out of the Great Depression in the 1930s.

Johnson said of his plan:

“It sounds positively Rooseveltian. It sounds like a New Deal. All I can say is that if so, then that is how it is meant to sound and to be, because that is what the times demand. A government that is powerful and determined and that puts its arms around people at a time of crisis.”

But we’ve all heard Johnson’s rhetoric, for years now, and time after time he fails to deliver…

A couple of days earlier Michael Gove gave the Ditchley Annual Lecture on “The privilege of public service”, again invoking FDR and going even further…

“When he assumed office in 1933, faith in free markets and the capitalist economy was ebbing dramatically. Indeed confidence in democracy itself was fragile – with, even in America, the idea of dictatorial executive authority winning surprising support.

FDR managed to save capitalism, restore faith in democracy, indeed extend its dominion, renovate the reputation of Government, he set his country on a course of increasing prosperity and equality of opportunity for decades – and enabled America to emerge from a decade of peril with the system, and society, that the free citizens of the rest of the world most envied.

He succeeded on such a scale, of course, because he was a remarkable leader.

But there were principles underlining his approach which I think we should learn from now, as we seek to overcome our own crises of authority; as we seek to reform capitalism, re-invigorate support for democracy, and get Government working better for all while building more inclusive societies.

First, Roosevelt took it as a given that no society could succeed unless every citizen within it had the chance to succeed. Throughout his political career he had been concerned by the plight of the poor and the vulnerable, and he knew they needed Government on their side if they were to achieve the dignity, status and independence they aspired to. Reform was needed, he argued, ‘that builds from the bottom up and not from the top down, that puts faith once more in the forgotten man at the bottom of the economic pyramid’.

There are too many in our time and our society whose economic interests, and whose values, have been forgotten. In our unequal times we must attend increasingly to those who have suffered from neglect and condescension and also to those whose lives have been scarred by racism and prejudice. Our contemporary work of reform must put them first.

Second, Roosevelt recognised that faced with a crisis that had shaken faith in Government, it was not simply a change of personnel and rhetoric that was required but a change in structure, ambition and organisation. The establishment of new bodies such as the Federal Emergency Relief Administration, the Public Works Association, the Civilian Conservation Corps and the Agricultural Adjustment Administration demonstrated a willingness to break the mould of the past. Of course, not every initiative upon which Roosevelt embarked was successful – but he recognised even before he became President that no one can predict at the start of a policy what its end will be. What is needed is both ambition in scope and honesty in assessment.

Faced with tumultuous and difficult times, Roosevelt knew government had to be flexible, adaptive and empirical. That meant taking risks, but it also meant the humility to know when to change course – as he argued in 1932, ‘The country needs, and unless I mistake its temper, the country demands bold persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another’.

And third, Roosevelt empowered reformers. Harold Ickes, Henry Wallace, Harry Hopkins, Frances Perkins, Louis Brandeis, Hugh Johnson and others were drawn from different traditions, backgrounds and disciplines – and they were set missions. Their role was not to administer the existing machine, or proclaim abstract virtues, but to act – to achieve real and concrete change in the lives of others.

And as we contemplate the scale of the challenges ahead, for this country, and the wider democratic world, the lessons of FDR’s success have much to teach us.”

Now here is what both Johnson and Gove conveniently skipped over and the media have failed to mention… Roosevelt signed legislation hiking the top marginal tax rate to 77% in 1936, and successive increases raised it to an astounding 91% by 1944. At one point he even suggested a top tax rate of 99.5% on anyone earning more than $100,000.

FDR signed the Tennessee Valley Authority Act into law, creating the TVA and enabling the federal government to build dams along the Tennessee River that controlled flooding and generated inexpensive hydroelectric power for the people in the region. FDR’s National Industrial Recovery Act guaranteed that workers would have the right to unionise and bargain collectively for higher wages and better working conditions. He created the Works Progress Administration (WPA) to provide jobs for unemployed people. WPA projects weren’t allowed to compete with private industry, so they focused on building things like post offices, bridges, schools, highways and parks. The WPA also gave work to artists, writers, theater directors and musicians.

In July 1935, the National Labor Relations Act, also known as the Wagner Act, created the National Labor Relations Board to supervise union elections and prevent businesses from treating their workers unfairly. In August, FDR signed the Social Security Act of 1935, which guaranteed pensions to millions of Americans, set up a system of unemployment insurance and stipulated that the federal government would help care for dependent children and the disabled.

FDR slapped regulations on the banks. The Glass-Steagall Act prohibited bankers from using depositors’ money to pursue high-risk investments, but the act has effectively disappeared in the deregulatory neoliberal environment of the 1980s and 1990s.

In 1936, while campaigning for a second term, FDR told a roaring crowd at Madison Square Garden that;

“The forces of ‘organized money’ are unanimous in their hate for me – and I welcome their hatred … I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match, [and] I should like to have it said of my second Administration that in it these forces have met their master.”

Strange how Johnson and Gove left these bits out.

Yesterday the government released the first outline of their “plan”.

“The government is committed to building a Britain with world class infrastructure. Spring Budget 2020 set out that the public sector will invest £640bn over five years in our future prosperity.”

So the Tories have definitely got hold of that magic money tree, though strangely no mention anywhere of how all this is to be paid for. One thing you can be sure of is that it will be the least well off who shoulder most of the burden. Most of the proposals are just a rehash of manifesto commitments already made as Johnson sets out to fix a list of problems largely caused by his own government.

I can guarantee there will be no “Rooseveltian” type New Deal. If history is anything to go by, what we will get is a load of over budget, behind schedule projects with spiralling costs that are used to syphon millions from the taxpayer purse and into the pocket of big business through cronyism and favourable contracts.

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