Ralph Waldo Emerson once made the observation that "the two parties which divide the state, the party of conservatism and that of innovation are very old, and have disputed the world ever since it was made. Now one, now the other gets the day, and still the fight renews itself as if for the first time..."
That has certainly been the story of American history, as progressive and conservative politicians, activists, and writers have battled many of the same battles over and over again. And not just in those debates, but in the patterns of our American story, we see history repeating itself. The great economic crisis of our present day is the latest example, as the parallels between now and our biggest economic crisis of the past, the Great Depression, are remarkable.
In both cases, conservatives had been in power for a while and had radically de-regulated the financial sector, lowered taxes dramatically for the wealthy, pushed down wages and incomes for working class and poor people, and done little investment in infrastructure, education or technology. As a result, the economic health of the country was based more and more on speculative bubbles rather than the solid foundation of a prosperous and expanding middle class, and those speculative bubbles crashed, sending America into a massive financial crisis.
Common sense would suggest that conservatives, seeing that their grand free market theories had led to this disaster would admit that what they had been doing hadn't worked. But common sense has never been a strong feature of conservative thinking; it wasn't back in the 1930s and it isn't today.
Our political debate echoes that earlier era remarkably closely. In fact, today's conservatives such as Amity Shlaes (rapidly becoming the most quoted writer on Fox News) argue that FDR, rather than saving us from the Great Depression actually made things worse. Shlaes, in her book about the Great Depression and in newspaper op-eds, argues that FDR actually made the depression worse with his New Deal economic programs. Her argument is remarkably similar to what conservatives of the 1930s were saying. Republicans in congress denounced New Deal programs, saying about Social Security, for example, that "business and industry are already operating under very heavy burdens" and that "never in the history of the world has any measure brought here so insidiously designed as to prevent business recovery, to enslave workers, and to prevent any possibility of the employers providing work for the people." Conservatives, then and now, argued that public works programs, the minimum wage, social Security and any kind of assistance for people living in poverty would cause more unemployment and that they would hurt private investment.
Shlaes argues that unemployment stayed high through the 1930s even going up in 1937. She even starts her latest op-ed in the Washington Post with a very sad story about a 13-year-old who hung himself in 1937 because times were so hard. What she doesn't tell you is that the recession 1937 happened because FDR was convinced by conservatives to cut back on federal spending because the deficit was getting relatively high.
More fundamentally, what conservatives then and now won't tell you is how American capitalism had been shaken to the core by the Great Depression. Banks' doors were locked because of the banking panic. Industry and agriculture had ground utterly to a halt. Tens of millions of people were not just unemployed but starving in the streets because there was no safety net. When FDR took office in 1933, many serious people were advising him to declare martial law and rule as Mussolini did in Italy. The crisis FDR faced was as profound and fundamental as the crisis Lincoln faced when he took office in 1861, with the American system literally broken and utterly dysfunctional. And like Lincoln, FDR appealed to the better angels of our nature, and rebuilt the American system brick by brick until it worked again. He stopped the banking panic, and created a regulatory system that kept us out of deep depression for 75 years until George W. Bush's deregulatory zeal got us into deep trouble again. FDR made sure workers had decent wages, and old people had a source of income. He allowed millions of family farmers to stay on their farms. Except for that one year when he listened to more conservative voices, unemployment went down every year of the 1930s after he took office; the unemployment rate was over 60% lower in 1940 than it was in 1933. He took us from the brink of collapse and destruction and steadily rebuilt our economic foundation so that for 40 years after, we had a steadily rising middle class and a steadily more prosperous country.
Now conservatives are saying to President Obama: don't repeat the New Deal. Yet we are in another massive crisis caused by the same things that caused the Great Depression: lack of regulation, lack of public investment, tax cuts for the rich and downward pressure on wages for the working class. President Obama and the American public need to ignore the conservative whiners, who even though they screwed things up so dramatically, still counsel that we should avoid making any big changes.
To rebuild the economy, President Obama will have to do what FDR did, and what President Lincoln did before that: take advantage of this Big Chance Moment and be bold and courageous in charting a new and progressive revolution.
On January 14, 2009, Lux released his first book, The Progressive Revolution: How the Best in America Came to Be. Lux's book was published by Wiley Publishing. You can purchase The Progressive Revolution by clicking here.
Crossposted at OpenLeft.