Seventy-five years ago this month, Franklin Roosevelt assumed the presidency amid mass unemployment, a collapsing bank system and rapidly escalating poverty. Over the next five years the New Deal came to be associated with major regulatory reforms, labor laws and social welfare legislation.
This is well known. But less attention has been paid to the stagnation of the New Deal in the 1950s and its dismantling after 1980. With the watershed election of Ronald Reagan what can be called the anti-New Deal arrived.
A massive defeat of the anti-New Deal Republicans at both the presidential and congressional levels this November would give the next president the kind of majorities that Franklin Roosevelt depended upon when he won approval of the Securities and Exchange Commission, Social Security, unemployment insurance, a minimum wage, a 40-hour workweek, and the Works Progress Administration that built new roads, bridges, dams, post offices, classrooms and libraries.
This year, with votes from young people as well as those who had largely given up on the system, the Democrats’ victory might be large enough to sustain a new hundred days.
The post-World War II history of the New Deal followed the history of the Cold War. Harry Truman’s New Deal-derived Fair Deal program, including a Social Security-based national health insurance system, became a casualty of both Cold War priorities and a Cold War political mentality.
Lyndon Johnson advanced New Deal priorities, including Medicare, Medicaid, and federal aid to education. But his Great Society became a casualty of the Vietnam War and a political backlash against the radical movements the 1960s.
Neither the New Deal nor its advances through the Great Society were repealed. Most analysts concluded by the 1970s that the Eisenhower and Nixon administrations, with leading groups in business, had quietly made peace with the New Deal, content to thwart its advance but unwilling to risk its repeal. Few Americans thought that they would ever see homeless people on the streets again or the spectacular disparities in wealth that have characterized post-1980s America.
They were wrong. Ronald Reagan championed deregulation. Anti-tax crusades flourished. Reagan and his supporters embraced the recommendations of the economist Milton Friedman that relied on the Federal Reserve to manipulate interest rates to pump money in and out of the economy. What Roosevelt called rights Reagan disparaged as entitlements.
The Democratic administration of President Clinton accepted and sought to moderate the anti-New Deal in the 1990s much as the Republicans had done in the 1950s. Clinton’s policies greatly strengthened the right wing of the Republican Party, leading to the conservative Republican victory in 1994 and twelve years of Republican control of Congress.
Today, it is important to remember that the New Deal ushered in the biggest period of economic expansion in U.S. history. Its institutions worked towards economic equality. It also provided the foundation for greater social justice through the inclusion and integration of women and minorities. The anti-New Deal has only worked for corporations and wealthy Americans.
A national debt that was a trillion dollars in 1981 exceeds ten trillion today. Income inequality has grown substantially during the years of the anti-New Deal after declining during the years of the New Deal ascendancy. Large sectors of the population are saddled with expanding credit-card debt, many having to pay interest that was previously considered usurious. They also suffer from crippling mortgage debt. Nearly 50 million people are without any health insurance. The departing Bush administration has made things worse for them.
But real change may be at hand. The 2008 elections can be a historic turning point in the conflict between the New Deal and the anti-New Deal. But, like FDR’s first hundred days, it will take the political will of voters and officeholders to bring it about.
Norman Markowitz is a member of the history faculty at Rutgers University in New Brunswick, N.J., and a writer for the History News Service.
