The conservatism of the New Deal.
Susan Feiner thinks "Eric misunderestimates the clarity of the New Dealer's vision.... Suggesting that the commitments holding the New Deal together were 'little' makes no sense."
Clearly we read the record differently. I see a New Deal that included, as one of its first priorities, the Economy Act, which balanced the budget; which provided 4m jobs through the Civil Works Administration and then took them away a scant few months later; which went back into the relief business with the Works Progress Administration in 1935, only to shrink WPA in 1937, in Keynes's view causing the 1937-38 recession.
In short, I see a New Deal that looks as wobbly as an immediate post-Prohibitionist who's had a night on the tiles.
As for Keynes: yes, he was the architect of Bretton Woods; in fact my book concludes by remarking it. To say that the Keynes who appreciated the benefits of global trade in 1919 is somehow inconsistent with the Keynes who helped create Bretton Woods seems to me something akin to missing the whole lesson of the New Deal: if you want the benefits of capitalism, you have to accept some regulation of its workings.
The beauty of the New Deal was not that it began with a clear core vision, it was that by "bold and persistent experimentation" -- by trying and failing, by butting up against the Supreme Court and political opposition, by changing tactics -- the Roosevelt administration arrived at such a vision, balancing, as Isaiah Berlin said, "individual liberty ... with the indispensable minimum of organising and authority".
None of which is to say that individual New Dealers -- Frances Perkins, say, whom Susan quotes -- did not have consistent views throughout the period. But Roosevelt certainly wasn't one of them, and the New Deal reflected his propensity to try some of column A and some of column B; it wasn't all the Economic Bill of Rights from day one.
Indeed, if you want to make a case for a continuous thread through the New Deal, you could argue it's the desire -- partly Roosevelt's, but certainly more widespread than that -- to be as conservative as possible in the face of a dire emergency. More, you could say this impulse toward timidity kept the New Deal from achieving the successes it might have done.
I think it was Morganthau who said of FDR: "A second-rate intellect but a first class temperment."
FDR was economically ignorant and a pragmatist - he experimented until something worked.
The best thing about him was his desire to do the right thing for the common man.
February 11, 2009 12:06 AM | Reply | Permalink
That's is what gives me some hope about Obama, his possible desire to do the right thing for the common man.
February 11, 2009 12:31 AM | Reply | Permalink
"I see a New Deal that included, as one of its first priorities, the Economy Act, which balanced the budget..."
That is the one thing which isn't even being considered in tackling this economic meltdown.
The USA government has had a debt fueled economy to the point that it has become one vast multi-trillion dollar ponzi scheme. Increasing borrowing to pay off the interest and principle from previous borrowing while continuing to spend more than its income.
It seems that the Wall Street bankers have convinced Congress that the US can borrow and spend its way to solvency. That is pure BS.
Until Congress repeals the laws of basic accounting, this is not possible.
Following WW2 the USA was paying off its war debts and reducing the national debt. While this was occurring, the USA had some of the best economic times in the last 100 years.
There has yet been absolutely no comments from any government official concerning how all these bailouts will be paid for, or when they will be paid for.
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February 11, 2009 11:35 PM | Reply | Permalink