Gradual Change - Reassessing the Historic Impact of the New Deal - Coursework Example

Gradual Change: Reassessing the Historic Impact of the New Deal Historians and economists can be as susceptible toideology as politicians. It can be difficult to appraise a socio-political phenomenon as massive, and as polarizing, as the New Deal without seeing it through the prism of pure politics. The traditional (and understandable) tendency is to confine the New Deal to the era in which it was initiated, to the post-Depression, pre-war interlude, the smithy in which its multitude of social programs was forged. But to do so is to ignore the conclusion of an epic story. The interpretations of Donald McCoy and Hugh Brogan come closest to understanding the larger picture in which the New Deal must be judged. The tradition of progressive reform the New Deal set in motion was so fundamental and far-reaching that it changed the way American Democracy functions and laid the groundwork for the development of a more responsive, and responsible, government. Brogan makes an incisive comment in explaining that simply setting in motion such a far-reaching and progressive initiative is a massive undertaking when one considers political and special interest opposition and public criticism. “Later critics have blamed the New Deal for not going further, faster: it is always so easy to demand the impossible, and so tempting to play down the importance of starting something. FDR and his team had started a lot…” (Brogan, Name 2 607). Brogan’s viewpoint is that critics take too narrow a view of the New Deal, which has accomplished far more over time than could ever have realistically been done in the few short years between 1932 and 1941. The New Deal helped reshape the relationship between the executive and judicial branches, with its repercussions for the management of future crises (i.e. Watergate), and set new expectations for the role of Congress. “(Roosevelt) also accustomed Congress, and the country, to the necessary activism of modern government, so that the stream of statutes, which seemed so astonishing in the Hundred Days, has become the norm of congressional life…” (Brogan, 607). One need only think of President Johnson’s “Great Society” legislation, the legislative activism of the Civil Rights era and, recently, the Obama administration’s overhaul of the nation’s health care insurance franchise to appreciate the magnitude of the evolution set in motion by the New Deal. McCoy is technically correct in saying that “relief, recovery and reform” were the intended outcomes of the New Deal (McCoy, 118). And he is correct in asserting that not everyone benefited from its programs. But McCoy does not make the same error that so many critics have made, relegating their examination to the Depression era and judging the Roosevelt administration’s success according to quite narrow parameters. McCoy addresses what may be one of the most important and enduring accomplishments of the New Deal: greater sharing of responsibility for the maintenance of social programs with state governments. “The Federal government and the states assumed some ongoing responsibility for the needs of the aged, dependent mothers and children, the handicapped and the unemployed” (McCoy, 118). The strengthening of this uniquely American governmental “architecture,” in which power and Name 3 responsibility is shared, has been a remarkable source of strength and flexibility in the post-New Deal America, and a topic of fierce debate over the relationship between federalism and states’ rights. History has accorded Roosevelt credit for the achievements of the New Deal and for establishing the modern-day tradition of progressive government. But as is so often the case, history is a marriage of disparate factors coming together, often unexpectedly, to produce some notable outcome. Much of the “revolution” that FDR championed had its basis in the Hoover administration. Many of the policies of the Roosevelt administration were, in truth, continuations of programs set in motion by Herbert Hoover, a president rarely given credit for what were truly innovative approaches to domestic and foreign economic policy. Hoover approved the Reconstruction Finance Corporation, establishing the framework through which many New Deal initiatives were later financed, both at home and abroad. Hoover, who had been Secretary of Commerce in the Coolidge administration, had an unsavory reputation among many for being too tied to Wall Street interests, a sort of errand boy for the nation’s moneyed elite. Hoover’s approval of the Norris-LaGuardia Act made collective bargaining the law of the land. The Hoover years also saw the beginnings of an unprecedented relief program for farmers and began the process whereby funding was earmarked for an agency that would eventually become the Works Progress Administration. These and other programs represented nothing less than an “about face” for traditionally conservative economic philosophy. Thus, Hoover’s “efforts to halt the Depression provided the rudiments of Name 4 Roosevelt’s program” (Riggenbach, 147). In a comment made at the time, journalist Walter Lippmann pointed out that the programs put in place during the Roosevelt years benefited from Hoover’s “innovatory corporatism,” combining in what Lippmann referred to as the “permanent New Deal” (Johnson, 757). Much of what Hoover set in motion as president began to take shape during his days as Secretary of Commerce. It seems incongruous to claim that the sea change brought about by the New Deal began during the ultra-conservative Coolidge years, but what Hoover had in mind was a far cry from the traditional laissez-faire doctrine so firmly anchored in the Republican ideological canon. What took form during the prosperity of the 1920s “opened the way to a new kind of cooperative ferment, and from this, with some assistance from political agencies, had come a new structure of economic self-government capable of realizing social ideals unattainable through public regulation” (Hawley, 2). Rothbard agrees that, in laying aside laissez-faire, Hoover set the tone for what followed. According to Rothbard, “if we define ‘New Deal’ as an antidepression program marked by extensive governmental economic planning and intervention – including bolstering of wage rates and prices, expansion of credit, propping up of weak firms, and increased government spending…Herbert Clark Hoover must be considered the founder of the New Deal in America” (Rothbard, 186). Incongruity aside, what Hoover and the “new era” Republicans who would follow him to the White House had in mind was a government that used its wealth to create government, which would act progressively in the interest of average American citizens. The New Deal adapted this Name 5 new line of thinking, emerging from the Hoover-Roosevelt political continuum, as a new concept of government, one that acts as a benign protector of the general public. In that sense, the New Deal can hardly be dismissed as overrated. Hoover’s break with Republican dogma helped lay the groundwork for what Roosevelt would expand, through the New Deal, into an important new role for the Federal government. In Limits of Liberty, American History, 1607 -1992, Maldwyn Jones says the government successfully assumed a protective posture that manifested itself through a heightened regulatory presence. Important constraints would be placed on the financial sector. The New Deal “introduced controls on banks and stock exchanges. It established the principle that government had the primary responsibility for regulating the economy” (Jones, 455). Critics of the New Deal often overlook the fact that the concept of greater government regulation of the business sector didn’t arise from the Great Depression. Indeed, Roosevelt was not even the first member of his family to appreciate the potential for good government possible in the wielding of effective regulatory authority. Roosevelt’s uncle, Frederic Delano, railroad tycoon and chairman of Roosevelt’s planning agency, had since before the turn of the century pondered what he considered the inevitable need for government to step in and manage the rapid growth of corporate America. “(Delano) realized the regulation could serve as a way to deal with ‘ruinous competition’ and to unite corporations, workers, and the government in what he termed a ‘community of interest’” (Reagan, 34). No mere theoretician, Delano applied these beliefs in running his railroad. Name 6 The regulatory impact of the New Deal would seem to vindicate Delano’s beliefs. As Jones points out, it laid the foundation for America’s welfare state, and established a legal blueprint for subsequent government-industrial relations. While criticizing the New Deal’s relative ineffectiveness in dealing with unemployment and housing, Jones bases his final verdict on the long-term institutional change it brought to American Democracy. “…for all its failures and limitations, the new deal can claim achievements which have stood the test of time and become part of the national consensus” (Jones, 456). It must be noted, however, that many of the shortcomings of Roosevelt’s New Deal policies - for instance, the sluggishness of the nation’s economic recovery - have been blamed on Roosevelt’s personal hostility to big business. As a politician, he was not above wielding federal power ruthlessly to clear the way for his programs, or even to carry out “vendettas” against those he disliked or considered enemies, Andrew Mellon for one. Mellon was an arch-conservative who espoused the Republican slogan, “More business in government, less government in business” (Johnson, 758). When a grand jury failed to convict Mellon on tax evasion charges, Roosevelt forced the government to proceed with a civil case, which went on until Mellon’s death (Johnson, 758). “Nothing did FDR’s reputation with the business and financial elite more harm than this obvious persecution of an upright man who had rendered the state long and faithful service…” (Johnson, 759). This and other punitive measures drove a wedge between Roosevelt’s government and the nation’s corporate giants at a time when compromise and close cooperation were at a premium. If more politics can be said to have placed the government and Name 7 business in diametrically opposite camps, then the New Deal can be said to have failed to accomplish its primary task, that of bringing about the nation’s economic recovery. But if that is so, and the New Deal had a limited economic effect, then what brought the Great Depression to an end? An unintended effect of the events that began in 1941 with the Japanese raid on Pearl Harbor was the reinvigoration of America’s industrial sinews. War meant production on a massive scale, full employment and an end to the nation’s economic malaise. Up until the outbreak of hostilities, the New Deal had failed to restart the nation’s economic engine. As Jones points out, 17 percent of the working population remained unemployed and investment continued to underperform. “Not until 1941 would full employment and prosperity return, and only then because of the war and rearmament” (Jones, 457). As remarked earlier, the importance of “doing something” should not be dismissed, if for no other reason than its effect on the nation’s morale. Nor should Roosevelt’s personal charisma or the rapport he established with the American public be overlooked. “Roosevelt and New Deal reformers had partially restored the psychological confidence of the American people through their charisma, infectious optimism, and willingness to try new methods” (Reagan, 196). Most policy programs are not conducive to tight time frames. They are organic creations usually requiring years to take hold. The New Deal was conceived as a broad-stroke remedy for the worst economic crisis in American history, and could hardly be expected to “fix” such a massive problem overnight. From a technical standpoint, critics are correct in claiming that the Name 8 New Deal didn’t return the nation to prosperity as planned, though it certainly began a process that gained unexpected momentum in 1941. In any event, to examine the New Deal and the activism of the Roosevelt administration based on the results of the years between 1932 and 1941 is to take a substantially superficial view, according to Jason Smith, author of Building New Deal Liberalism: the Political Economy of Public Works, 1933-1956. Smith says “the consequences of the dramatic, unprecedented expansion of the U.S. government that occurred before 1940 can be better understood by…looking directly at the New Deal’s accomplishments” (Smith, 55). The Roosevelt administration never lost sight of the big picture or retreated from the kind of promises made by Roosevelt in an article that appeared early in his presidency. “The New Deal,” he promised, “would consolidate the nation’s transportation, oversee the power industry, establish a farm rehabilitation program, and bring balance to foreign trade through reciprocal trade agreements” (Lawson, 62). To be able to make this claim in the face of the economic crisis the nation faced is impressive enough. To have actually carried so many policies through (albeit to varying degrees of success) is remarkable, and unparalleled in that the New Deal established a tradition of governmental activism that transformed the very nature of American Democracy. Therefore, to claim that the New Deal was “overrated” is to take too narrow a view. It was a historically significant success that continues to benefit Americans to the present day. Name 9 Work Cited Brogan, Hugh. The Penguin History of the USA. New York: Penguin Books. 2001. Johnson, Paul. A History of the American People. New York: Harper Collins. 1997. Jones, Maldwyn A. Limits of Liberty: American History, 1607-1992. Oxford, UK: Oxford University Press. 1995. Lawson, R. Alan. A Commonwealth of Hope: the New Deal Response to Crisis. Baltimore, MD: Johns Hopkins University Press. 2006. McCoy, Donald. Coming of Age: the United States During the 1920s and 1930s. New York: Penguin Books. 1975. Reagan, Patrick D. Designing a New America: The Origins of New Deal Planning, 1890-1943. Boston: University of Massachusetts Press. 1999. Rothbard, Murray N. America’s Great Depression. Auburn, AL: Ludwig von Mises Institute. 1975. Smith, Jason S. Building New Deal liberalism: the political economy of public works, 1933- 1956. New York: Cambridge University Press. 2006. Read More