America May Never Have Another New Deal

Spilled across the pages of journals of opinion are demands for a new New Deal, a global New Deal, a New and improved Deal, to reNew the Deal, and even New Deal 2.0. The excitement following Barack Obama’s first election, just after the nation slipped into the abyss of a massive financial crisis, generated further New Deal analogies. Otherwise sober commentators began speaking of “Franklin Delano Obama.” Meanwhile, among union watchers, minor twists of the labor movement seem to generate unrestrained proclamations of the second coming of the union movement that swept across the nation during the Great Depression. Even before the coming of the financial crisis of 2007–2008, the New Deal has been metaphor, analogy, political principle, and guiding light for all that must be returned to the progressive side of American politics.

Then, inevitably, comes the shock: the new Gilded Age seems to have a lot more traction in American political culture than did the hope of a new New Deal. The return of nineteenth-century-style plutocracy, crony capitalism, and shocking levels of inequality—disparities that continued even after the excitement of Obama’s presidency—suggest a conscious, confident, and powerful ruling class that has largely separated itself from the concerns of the nation’s working people.

The New Deal and the postwar order it sustained once gave the illusion of permanence—for many, the inevitable domestication of capitalism. Marbled throughout its very creation, however, were a series of social and political fissures that help to explain its ultimate fall in the 1970s and beyond. Beneath the surface of the “fragile juggernaut” of America’s social democratic moment were a series of exceptions to U.S. history that are difficult to imagine being repeated: the massive but temporary transformation of the role of the state; the Faustian exclusion of African American occupations that kept the white South in the Democratic Party; the one-time leap forward in power of organized labor; the single period in American history in which immigration (and thus the politics of division) were closed off; and the temporary eclipse of the politics of culture and religion. Wrapping around all of these issues were the complex ideologies of a Jeffersonian individualism, which were muted but never resolved even as the New Dealers waded cautiously into collective waters.

Today’s politics are a regression to the norm. The fractious polity has chosen deeply rooted quarrels over individual rights, ethnic and racial hostility, immigrant versus native, and crusades over moralism and piety in lieu of a politics of collective economic security.

The Obama administration ultimately offered precious little in terms of the politics of material security. Part of that was President Obama’s unwillingness to make a bold, decisive break from previous decades and make the case to the American people that the state could help build economic security and opportunity for all. The first two years of the Obama administration was a lost opportunity for the American reform tradition—not just on policy grounds but in making the argument that government had a role in helping regular people. Seemingly insecure in his position, the new president appointed economic insiders, many of whom had played a role in creating the crisis, while shying away from larger stimulus packages or initiatives that would halt the decades-long growth in inequality and wage stagnation. Banking, finance, and important industries like auto were saved. Meanwhile, working people continued to inhabit the exact same economy they had in the decades leading up to the crisis.

While Obama might have made more of his moment, I do not believe he could come close to delivering the “next” New Deal. The remarkable differences between the politics of the crisis of 2008 and that of 1929 were too vast. When FDR was inaugurated in March of 1933, the Depression was already three and one-half years old. The mood of the country was a peculiar combination of resignation and depression, anger and calls to action. Focusing his 1932 campaign against incumbent Herbert Hoover’s inept handling of the crisis—ultimately refusing to even meet with Hoover to discuss plans during the four months before he took office—FDR gathered around him a coalition that demanded change. One-quarter of the population was out of work, and there was no unemployment insurance, no social security, no deposit insurance, and what state and private charities existed had either collapsed or were teetering on the brink of bankruptcy. For three winters, the nation suffered untold misery, and major industrial cities had populations on the edge of starvation. Homelessness was rampant.

While horrific, the Great Recession of 2008 fell short of the full devastation of the Great Depression. Both the sense of panic and the unemployment rate were only a fraction of what they were in the 1930s. Although Obama entered office not long after the crash, he inherited a bailout engineered by the previous administration, a trillion-dollar deficit, and a set of unpopular wars that proved to be the economic and political opposite of the stimulus of World War II. Because of Obama’s almost militant commitment to economic centrism and his unwillingness to confront the political power of Wall Street, he immediately elected to continue the policies (and even many of the players) from the previous administration. That clouded the contrast with the Republican he succeeded—a dramatic contrast that FDR had used to superb effect. As compared to the era when government hardly existed in the daily lives of regular people, a safety net, under attack since 1981, still did exist in 2008: Social Security, unemployment insurance, the Federal Deposit Insurance Corporation, Medicare, and Medicaid all helped cushion the blows of the financial crisis. Yet there was also tremendous political activity, built up since the 1970s, to roll back existing government activity that did not simply serve business’s interests. The Solid South that FDR needed for his legislative successes had turned largely Republican—and militantly so. The “modern” Republicanism of the postwar era, which had made its peace with the New Deal, had already become a distant memory.

All of this is not to say that Obama’s presidency, especially his first two years, was a failure. It was not; it just was not a new New Deal. The failure rests more squarely in analysts’ insistence in using the Depression Era analogy where it was not helpful. He did help dig the country out of the worst economic disaster in eighty years, pulled the United States back from a disastrous foreign policy, and renewed federal effectiveness in health and safety, immigration, and the environment.

The fundamental difference between the two eras was the place of the forgotten man and woman. FDR took office explaining that the “money changers had fled the temple” and that “the measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.” The unspoken mantra of the Obama administration, in contrast, was “Save Wall Street first,” a symptom of, not a solution to, what political scientists Hacker and Pierson rightly call “the winner take all society.” In the politics of the recovery after 2008, FDR’s forgotten man remained trapped in the dustbin of history. In the politics of rage, however, he was the folk hero to conservative pundits and talk news shows that constructed a pot-boiling industry exploiting the mythology of the hijacking of the nation by various others—be they cultural elites, secular humanists, immigrants, or blacks. As conservative Fox News commentator Glenn Beck co-opted the discourse of the 1930s, “What happened to the country that loved the underdog and stood up for the little guy? What happened to the for- gotten man? The forgotten man is you.”

Caught up in the whirlwind of our present, we overestimate how radically new the rate of change is in the global-digital age. The sense of standing at the abyss of a new world feels unprecedented. Yet when Henry Adams made his prayer to the electric dynamo in 1900, he said that the pace of technological change was so great that if left “his historical neck broken by the sudden irruption of forces totally new.” In the creation of electric power, he saw the emergence of a religious faith in the rational, sterile, and technological future, which he regarded as “the break of continuity,” an “abysmal fracture” in everything he understood and trusted. Many would say the same about our own time. This is not to say that history has started over or is the same, but that our challenges are not unprecedented. The arguments made here do not mean that politics is the same as it was generations ago, only that the same issues that are deeply ingrained in American history and culture remain challenges for the past and the future.

Too often, political changes are seen as simple vacillating “cycles” of partisan history. While this might have some explanatory power when it comes to changes in what party is in charge, it fails to explain the underlying currents, coalitions, fractures, and agendas that run for longer periods. What replaces this generation of conservative, individualistic, “free-market” ideology, however, will not be some simple cycle back to a New Deal revival but will most likely be a much more chastened or radically different form of change that takes its cues from well outside of the New Deal paradigm.

To reframe the New Deal order as a great exception, I must emphasize, is not to take a jaundiced view of American history, but rather urges a more thorough and realistic understanding of our recent past in the hope that it can provide a more stable intellectual foundation for discussions of present and future politics. I recognize the contested nature of American politics and social life that have informed a wide variety of dissenting movements that reshape our politics and discourse, but I also understand that the most powerful aspects of American political culture have often proved resistant to these protests. My aim is also not to diminish the vision or values of those dissenters, but rather to resituate and rethink the New Deal Era in the broader terrain of U.S. history. Our founding mythos of individualism has structured our collective life, created much of value, and become so intimately intertwined with the very essence of the nation itself that its limitations become most difficult to perceive and discuss. If this argument is correct, then conservative victories are more understand- able and progressive victories all the more precious.

Despite the New Deal’s many flaws and fissures, the programs of the 1930s represent the best of what the United States can be as a nation—caring, sharing, secure, and occasionally visionary. Few issues seem more important today than the need to bring the concerns of working people out of the shadows and into the political and economic light.

But bad history makes for weak political strategy. While it is useful and hopeful to imagine that the United States can take the issue of collective economic rights as seriously as it did in the 1930s and 1940s, our present politics ought not be misled by freewheeling historical analogies based on an extraordinarily unique period in American history.