Government has a final responsibility for the well-being of its citizenship. If private cooperative endeavor fails to provide work for willing hands and relief for the unfortunate, those suffering hardship from no fault of their own have a right to call upon the Government for aid; and a government worthy of its name must make fitting response. - Franklin D. Roosevelt
January 30 marked the 130th birthday of Franklin D. Roosevelt. For most of today's generation, FDR has become a somewhat distant figure, far removed from the day-to-day struggle to make ends meet at a time of slow growth and high unemployment. They know from their history books that FDR launched the New Deal in the midst of the Great Depression, and that he led the nation to victory in the Second World War. But aside from these basic facts, the average American knows very little about the extent to which the government -- and America's role in the world -- was transformed in the critical years between 1933 and 1945.
Yet, if these same individuals were to pause for a moment to consider just how much Franklin Roosevelt's leadership continues to influence their lives, they might soon conclude, as the late Arthur Schlesinger, Jr. once observed, "that the world we live in today is Franklin Roosevelt's world."
Consider, for example, just a few of the major initiatives that were introduced under FDR's leadership: the banking and financial reforms that brought us the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and, until the passage of the Graham-Leach Act in 1999, the separation of commercial and investment banking. These monumental pieces of legislation brought much needed stability and transparency to our financial system and helped restore the American people's faith in the banking and securities industries. What is more, they were not inspired by any deep-seated enmity for capitalism on FDR's part. Rather, they were based on common sense principles derived from the hard-won lessons of the 1920s, which, above all else, taught the American people that "heedless self-interest" represents not just "bad morals," as FDR put it, but also "bad economics."
FDR also acted swiftly and effectively to help troubled American homeowners through such programs as the Home Owners Loan Corporation, which refinanced approximately 20 percent of all urban mortgages in the country in less than three years; revolutionized the mortgage industry through the widespread use of the 30-year amortized mortgage; and led to the establishment of the Federal Housing Authority (FHA). His administration also pushed through the Social Security Act, which not only provided pensions for the aged, but also our nation's first national system of unemployment insurance, two programs that remain critical to our social and economic wellbeing. Then there was the passage of the National Labor Relations Act that established the National Labor Relations Board and guaranteed the rights of workers to form unions and engage in collective bargaining, and the Fair Labor Standards Act, which established maximum hours and minimum wages for all workers, unionized or not.
But that was not all. To put people back to work, FDR launched a series of efforts to improve America's woefully inadequate economic infrastructure. Between 1935 and 1943, the most famous of these programs, the Works Progress Administration (WPA), literally built much of modern America, including 572,000 miles of rural roads, 67,000 miles of urban streets, 122,000 bridges, 1,000 tunnels, and 1,050 airfields. The WPA also constructed thousands of schools, hospitals, water treatment facilities, firehouses, and nearly 20,000 other state and local government buildings, many of them adorned by murals painted by out of work artists. This infrastructure helped lay the basis for the massive economic expansion that took place during World War II and the post-war years. In the meantime, the Rural Electrification Administration "wired" the 90 percent of American farms that still had no electricity while the Civilian Conservation Corps (CCC) and Soil Conservation Service restored America's forests and farmland. As a result, there is hardly a community in this nation that still does not enjoy the benefits of the public works ushered in under the New Deal.
Finally, we should remember that prior to World War II the United States had turned inward and refused to play a leading role in world affairs. Convinced that the Second World War had come about in part from the global economic depravity that helped give rise to fascism in Europe and Asia, FDR used the war as a catalyst for the construction of a new political, strategic, and economic order. It was based in large part on the extension of American moral and military power through the United Nations and the extension of American economic power through the creation of the International Monetary Fund, World Bank, and a new multilateral economic system that would open up the world's markets and natural resources to freer trade. Taken together, these measures resulted in a permanent restructuring of the world's social, economic, and strategic makeup. They formed the basis of the new world order that has given rise to the globalization of the world's economy and the American-led multilateral security system that the United States has played a leading role in since 1945.
In much the same way that FDR's wartime leadership expanded America's role in the world, the New Deal dramatically expanded the scope of the federal government's responsibilities in American life. Where Washington had previously been only a distant factor in the social and economic standing of the nation, it now became the federal government's responsibility to maintain economic prosperity, to mitigate the worst effects of unfettered capitalism, to spread industrial and agricultural development to impoverished regions of the nation, to guarantee workers' right to choose their unions, to protect the bargaining rights of those unions, and to conserve and develop the nation's vast natural and artistic resources. In less than a decade, the United States government had become the primary guarantor of social and economic justice for all Americans, rich and poor alike.
Today's right-wing extremists, much like the conservative critics in FDR's own day, call this "socialism." But the New Deal did not set out to radically change the foundations of American capitalism. On the contrary, it revised that system in order to save it. While Roosevelt did foresee and support the increased socialization of the American economy and society -- insofar as that meant greater government responsibility for the people's welfare -- he took for granted that the system would remain rooted in free market principles, and he was no socialist.
The overall result was to create a domestic social and economic structure that allowed capitalism to flourish even as the government put in place the means by which it might be regulated. This new "philosophy," which included the embrace of Keynesian economic policy, stood at the root of what President Obama has correctly called the post-1945 creation of the "strongest economy and middle class the world has ever known."
President Obama is right to call for more action on the part of the federal government to stimulate the struggling U.S. economy. He is also right to demand a return to an America where "everyone gets a fair shot, ...everyone does their fair share, and everyone plays by the same set of rules." But thanks to the mythology perpetuated by the same right wing that attacked FDR, the New Deal and the philosophy behind it has been largely forgotten. Instead, we are told time and time again that the free market will provide all we need -- excessive wealth for some and well paying jobs for everyone else -- so long as government, with its nasty habit of deficit spending, gets out of the way. This free market myth ignores the overwhelming evidence from the 1920s, '30s, and '40s that the free enterprise system can fail and that there are times when the government must step in to restore the economic health of the nation. Yet it has become so pervasive that even in the wake of the greatest economic crisis since the Great Depression, our political discourse remains fixed not on how much the government should spend to restore the economy, but on how to reduce the deficit; not on how we might use government to restore basic fairness to our economic system, but on how we might reduce government involvement in the economy at a time when we can least afford it. In such a political environment, is it any wonder that even President Obama's effort to pass his modest jobs bill faces an uphill battle?
Franklin Roosevelt once said that there was nothing he loved so much "as a good fight." Perhaps, in this critical election year, it is time for the president and the leaders of the Democratic Party to take on the right-wing soothsayers of doom and make the case clearly and unequivocally for the one instrument strong enough to take on the forces of greed and avarice that have hijacked our democracy. Perhaps they should remind the American public, as Franklin Roosevelt did, that there comes a time in the life of every people when the only way to take on the forces of "economic tyranny" -- whose callous behavior has twice in the past century nearly brought our country to ruin -- is to turn to "the organized power of government."
Cross-posted from New Deal 2.0.