Sometimes its worth taking a moment to remember what America was like the day before FDR’s inauguration in 1933. All those Tea Party people who want austerity, to eliminate Social Security, medicare, unemployment benefits, etc., and who think that all sort of jobs are out there and that unemployed Americans laid off in near record numbers are lazy and undeserving leeches, need a history lesson.
And guess what? David Glenn Cox is here to give it to them:
Let’s look at Roosevelt’s predecessor, Herbert Hoover. Hoover was strongly against any direct aid to the poor, fearing that the poor would become demoralized. The Republican Congress, likewise, was against any national scheme to aid the poor. The United States was the only industrial power with no system of social security. No system of national unemployment. No minimum wage law, no national labor laws of any kind. No aid for the elderly or the disabled. Looking back at that America it is like looking into almost medieval proportions. […]
Before the New Deal, the elderly were the poorest demographic in the country. When you got too old to work, you lived on your savings, and if you didn’t have savings you starved or lived on charity or with your children. America was mainly rural then with most people living on farms, so those elderly worked until the day they died. Healthcare existed only for the rich and hospitals were a cash affair except for the “charity ward”. If you were sick or injured you went home and you either got better or you died. There was no public health service. Hypothermia was the second leading cause of death for the elderly and pneumonia was the first. In Detroit in 1932 two people an hour died of starvation; in Toledo unemployment was at 70%.
People forget what that world was like. I honestly believe that some of them think we’d all be rich and jobs would be sprouting like mushrooms in a rain forest if only that Bad Old Government would just die a well deserved death. The truth is, we have the lowest taxes in a generation, the highest unemployment in a generation and (this will really surprise you I’m sure) the highest corporate cash on hand since 1952.
You see, corporations being awash in money does not mean they will go out and suddenly start massive hiring and solve all our economic woes. Why? Demand, that other part of the phrase “supply and demand.” A generation or more of Americans have been told that supply side economics will bring us all prosperity, but it isn’t true. Over the last three decades we have seen little if any real growth in wages among anyone who is not in the top 5% of earnings.
The rich got obscenely rich until the discrepancy between the wealth held by the upper 1% of Americans and everyone else has grown to its greatest level since — well since Hoover was alive. That’s what “supply side” economics (tax cuts, deregulation, relaxation or eradication of labor and worker safety laws) has brought us.
Why? Because feeding the supply side of the economic engine is not sustainable unless you also feed the demand side of the equation. Under republican policies we rejected any efforts to increase demand and promote jobs. We relied solely on the “free market: just like our ancestors back in the Gilded Age of Financial panics and depressions. What do you know. The free market doesn’t always magically create demand.
To create demand you need good, well paying jobs. And corporations view labor not as an asset, not as an essential part of their collective effort to produce and innovate (as they do, by law, in Germany), but as a liability. In Germany, labor plays a significant role in the corporation’s success:
American labor unions, the high wages and benefits they negotiate for their workers and burdensome federal labor regulations, often get the blame for the country’s lack of industrial competitiveness.
But even higher rates of union membership, wages, more lucrative benefit packages and more onerous government labor requirements have not hurt Germany, according to Markus Franz, counselor for labor and social affairs with the German Embassy in Washington, D.C.
… When former U.S. Secretary of Labor Elaine Choa was turning over the reins of her agency to the next administration late last year she gave a speech calling on the future president to continue George W. Bush’s labor policies and not follow “the poor example of Europe,” Franz told a recent meeting of the National Policy Forum of the Labor and Employment Relations Association in Washington. Chao, according to Franz, said that the United States had a productive, well-trained workforce that was due to deregulation, low taxes and free trade, and she implied that the weakened state of labor unions has made the United States economically superior over European rivals. […]
Rigid European labor laws and governments “that dictate to business how they [should] handle even the most basic entrepreneurial decisions” were leading to double-digit unemployment rates, long-term unemployment, less innovation and less growth in Europe, Chao said.
Of course, Ms Chao was lying, as Franz pointed out:
Double-digit unemployment in Germany? “Not true,” says Franz. The combined unemployment rate 27 European countries in the summer of 2008 was 6.9 percent compared to the U.S. unemployment rate at the time of 6.1 percent. Today, the unemployment rate in Germany (9 percent) is lower than in the United States (9.4 percent). And “little Germany” (with a population of 82 million) is the world’s largest exporting nation, with more exports than China (with a population of 1.33 billion) and the United States (population 304 million), Franz notes.
Germany, whose economy grew during the past quarter, has remained the world’s largest exporting nation despite strong labor unions and a regulated labor market. “But hey, why despite?” Franz asks. “Now comes the shocking part: Could it be that Germany is successful for that very reason?”
In Germany, unions are in constant contact with politicians, including the German chancellor. Policymakers listen to the concerns of workers and their suggestions,” says Franz. […]
… Sixty percent of all German workers are impacted by labor initiatives and collective bargaining agreements upon which the wages for most Germans are based, notes Franz. German companies with at least five employees must have work councils to represent workers’ rights on issues such as dismissals, on-the-job safety and overtime. “Then there is the principle of co-determination, according to which half of the members of the supervisory boards at large companies are labor representatives,” Franz observes.
There are regulations that provide unlimited sick leave; 12 weeks of paid maternity leave; at least four weeks of legally mandated vacation and strict regulations against dismissing workers. All of Germany’s workers benefit from these regulations, which are the result of union initiatives.
Because companies do not have to “engage in a race to the bottom with respect to wages due to industry-wide wage agreements in many sectors, they instead compete to produce the best product,” notes Franz. Given strict laws that protect workers from dismissals, employers tend to be cautious when hiring workers. “But that is only one side of the coin,” according to Franz. “The other side is that because workers cannot be fired so easily without cause and thus remain at the company longer, they are consequently more loyal to their company, identify with it more, are more skilled and experienced and are more productive and creative.”
In short, regulations and labor protections and a social safety net has benefited German corporations at a time when the rest of the world is in the dumpster. They now are the leading export nation in the world. That’s a title America once held, back when “union” wasn’t considered a dirty word, even among many so-called Democrats.
FDR never required corporations to give labor unions and workers representation on their boards of directors, but he and the New Deal legislation that was passed did strengthen labor laws and the rights of unions to organize. And that led to an America where living standards rose dramatically over the next four decades until the effect of the Vietnam War and the Arab Oil Boycott and then the “Reagan Revolution” began to chip away at that foundation of middle class prosperity.
What FDR also did was put people to work — immediately. From David Glenn Cox again:
[W]hen I was a child, long before seat belt use became common, I would lean forward on the back of the car seat and talk to my father as he drove. We had a game we regularly played, “See it!” He’d say, “That’s a WPA Bridge.” I bet we counted a thousand of them; most are gone today but a few survive in rural areas. They were concrete bridges for the most part. Built to high standards and in many cases over-engineered for their time. As my dad would tell it, before those, the bridges across America were rickety wooden bridges built with local expertise for horse traffic, or in many cases they just didn’t exist at all.
Now, as our own current day economy continues to slide towards the brink, I have heard academic free market economists make the claim that FDR and the New Deal actually made the Great Depression worse. This is picked up and parroted by right wing partisans who, using 20/20 hindsight, pick apart the failings of the New Deal without counting up all those things that the New Deal gave us.
… Roosevelt reversed the federal government’s position completely with what was called the alphabet soup of government programs. Of course the most obvious is Social Security for the elderly, but there were many other programs that have faded into history and been forgotten.
In New Orleans, just to use one city as an example, the programs included paving streets, building the airport, and archeology projects for the region as white-collar workers established federal archives for Orleans Parish. Workers were trained in book binding, recovering 25,000 school and library books. The WPA built libraries and refurbished other public buildings. They made mattresses that were distributed to the poor and to hospitals. The canals were dredged and cleared; levees were built. People were trained as cooks, heavy equipment operators, surveyors, and even musicians. You see, the Bourbon Street that you know today might have disappeared except that the WPA put musicians to work as teachers, teaching music to others.
Roosevelt created demand by creating jobs. He strengthened unions and labor. He gave us the first programs to provide a social safety net in this country so the elderly, the unemployed and the disabled didn’t die because they were too poor to afford food and shelter. Did everything he did turn out perfect? Of course not. But in the long run, the New Deal radically changed America for the better.
You can’t say that about the policies promoted by Republicans and conservative Democrats over the last 30 years. Those polices led to government and corporate corruption, fraud, and an economic implosion on a massive scale unknown since the Great Depression. They have also set Americans against fellow Americans and put a heavy anchor on our ability as a nation to compete and succeed in the world. Take it from Mr. Franz:
“Let me say a word about an issue which seems to be a fight-to-the-death issue here in the United States: the Employee Free Choice Act. I cringe just mentioning the name,” Franz says. “The bitter dispute over this legislation is to me symbolic of the often complicated, confrontational relationship between labor and management that we do not have in Germany. It seems to me to be a fundamental problem because this animosity is simply unproductive.”
“Simply unproductive” is an understatement of monumental proportions. We are a nation at war with itself, divided and conquered by large financial interests which fight with their millions in corporate welfare benefits to prevent our government from bettering the lives of the vast majority of our citizens.
Large Insurance corporations and their wealthy executives fought to weaken health care reform. The Wall Street firms who are making billions in the markets (like Goldman Sachs), while millions of Americans suffer, are fighting to weaken needed financial reforms.
And Big Oil companies even pulled the strings of major Republican politicians, getting them to apologize to BP for destroying the Gulf of Mexico and the livelihoods of the people who live there. Joe Barton, after all was just reading from an approved GOP script.
All this after Republicans falsely condemned health care reform by lying that it would require government death panels the right to decide which old people live or die, and the GOP’s current support of Wall Street to kill financial reforms that even in their weakened form would provide some protection from a future financial catastrophe (i.e., the GOP Senators’ filibuster of the financial reform bill).
FDR was vilified in his day as a Socialist, a Communist and a traitor. He didn’t back down from that fight, calling the large moneyed interests who fought against him what they were: economic royalists who sought greed over simple human decency. They hated the New Deal with a passion because there wasn’t enough in it for them, and too much for the “little people.”
It’s time more of our current Democrats learned the lesson he did: that when you help the vast majority of Americans get good jobs to pay their rent and mortgages, buy groceries for their kids and get health care when they need it at an affordable price, while reining in the worst excesses of the obscenely wealthy “corporate royalists” (or as an earlier era labeled them “robber barons”) you strengthen not only your country but you grow your party as well.
