THE BLOG
09/07/2010 03:11 pm ET | Updated May 25, 2011

Where is the "New Deal"?

When Franklin Roosevelt accepted the Democratic nomination in 1932, he called for a "new deal" for the American people. He said that "throughout the nation, men and women" had been "forgotten" by their government. He added that this "new deal" would be more than a political campaign, it would be "a call to arms."

Most Americans now think of the New Deal as a set of government programs, from Social Security to the Works Progress Administration. But, at its heart, the New Deal was renewal of the government's social contract with its citizens. FDR's convention speech was an acknowledgment that the government had failed the American people through mismanagement of the economy, lax oversight of the banks and its failure to look out for the welfare of a large majority of its citizens.

While Roosevelt's New Deal programs were violently attacked by both Republicans and Democrats as unconstitutional, socialist and un-American, and many were either scrapped or repealed, his pledge to form a new social contract between the government and the American people gained him the trust of a broad swath of working Americans. Although some historians have argued that FDR's programs were often ineffective in combating the scourges of the Great Depression, there is little dispute that Roosevelt forged a bond with the nation - the New Deal Coalition -- that endured for most of the twentieth century.

As economists and elected officials argue over the most effective tools for ending the Great Recession -- whether it be stimulus packages, tax cuts or austerity programs - the larger message of this crisis is being overlooked. Whether on the right or the left, from Tea Party activists to populist Democrats, the clear message from the American public is that the government is out of touch with the people. Or, to put it in grander terms, the social contract between the government and the governed is seriously strained.

The success of the Obama campaign in reaching out to independent voters -- who are the bellwether citizens in this era of political partisanship -- was largely due to his message of change. While the message was criticized for being overly vague, it clearly struck a chord with voters who understood that the government -- and more specifically the political class -- had become isolated and resistant to the kind of change that is essential to a democracy. As the Obama campaign correctly recognized, this was not an issue of left or right, but a more fundamental question of listening to the voice of the people.

There can be little debate that American political culture has become corrupted over the past thirty or so years. Money -- always the mother's milk of politics -- has now become virtually the entire diet of political life. The partisan ideological battles that seem to bitterly divide us are simply convenient tools for the political class to stir up emotions and distract the general public from the deep problems that are staring us in the face.

With the advent of the Great Recession, several facts have become abundantly clear. As a nation, we have been forced to re-examine our expectations for ourselves, our communities and ultimately our government. It is clear that the federal government -- and many state and local governments -- are too large and inefficient to accomplish the more modest goals that we must set for them. At the same time, the fundamental American principle of equality of opportunity has been assaulted by a concerted effort of the federal government and multinational corporations. The clearest evidence of this assault -- in 1970, the wealthiest 1% of Americans took home 9% of the nation's income; by 2007, the top 1% took home nearly 24% of total income.

While the strategies for recovery -- stimulus, austerity or tax cuts -- may be different on the right or on the left, the renewal of the social contract should be paramount, and is not that much different on either end of the political spectrum. Conservatives are correct that the political culture has become corrupt, and that government is often wasteful and ineffective. At the same time, progressives are right that America should not abandon its fundamental principle of equality of opportunity. When 1% of the citizens grab nearly one-quarter of the nation's income, the system is clearly rigged and needs to be reformed.

As in FDR's day, whatever programs President Obama proposes to address the tears in the political fabric will be bitterly attacked, probably from both sides of the aisle. However, the clear message from voters in the last election and ever since -- left, right and center -- was "Fix the political culture!" If the president embraces this more important, overriding message that voters are sending, he will be on the right track. And that means aggressively attacking opponents of change, no matter what party they belong to.

Remember that FDR famously attacked everyone who stood in the way of reform, no matter who they were. He unleashed a rhetorical firestorm against bankers (calling them "unscrupulous money changers" and "rulers of mankind's exchange of goods") and political opponents ("not content with attacking me, or my wife, or my sons, they now include my little dog Fala") While many Americans may have questioned the effectiveness of FDR's New Deal programs, they rarely questioned his dedication to them -- and his hope for a "new deal" between the government and the American people. As we struggle to recover from the depths of the Great Recession, Americans are again looking again for a "new deal" with their government.