• Lesson From the Old New Deal: What Economic Recovery Might Look Like in the 21st Century

    Kate Aronoff Draws a Direct Line From 1934 to the Green New Deal of Today

    When the Green New Deal reemerged into headlines in November 2018, unemployment in the US sat at 3.7 percent. Even supporters of the program voiced warranted skepticism about its viability. Sure, the climate crisis is important, but the government hardly ever spends huge sums on big social programs anymore—least of all when the economy appears to be doing relatively well, by conventional accounting. The window for a massive stimulus opens when there’s a recession, and we weren’t in one. Times have obviously changed since then, although the path to an ambitious climate response remains far from certain.

    Joe Biden will be the president by the time this book is released, having won decisively in an election that should have been by all accounts—given the blood on Trump’s hands—a blowout. Instead, Trump collected ten million more votes than in 2016, Democrats lost seats where they were expected to gain them. After run-off elections in Georgia, the party managed to win back control of the Senate, held by the narrowest of margins. Biden was pushed by movements during his campaign to adopt a climate platform more ambitious than the one he ran on in the primary. But his administration will be hard-pressed to get any of that through Congress, left mainly to find creative uses for the executive branch—that is, if he decides to treat his $2 trillion commitment to a green-tinted stimulus as anything more than lip service to progressives and isn’t completely shut down by the 6-3 right-wing majority on the Supreme Court. Democrats’ underwhelming performance in 2020, moreover, doesn’t bode well for winning back more power in upcoming elections. If anything, there’s much more to be lost.

    Understanding what the road toward anything like a Green New Deal looks like now, when all manner of crises are boiling over, means taking its namesake seriously. The New Deal—in all its deep flaws and contradictions—was more than just a big spending package that helped to drag the US out of the Great Depression. It reimagined what the US government could do, what it was for, and who it served. To effect such a drastic sea change in this country’s politics, it did something climate policy in the US has historically struggled with: it made millions of people’s lives demonstrably better than they would have been otherwise. That, in turn, helped solved the other big dilemma facing a Green New Deal and just about any major progressive legislative priority: the tangible mark New Deal programs left in nearly every county in the US helped to build a sturdy Democratic electoral coalition that could bat off challenges from the right and endure for decades. Even as many of its gains have been clawed back by a revanchist right, hallmarks like Social Security remain so broadly popular that even the GOP has stopped trying to go after them. A Green New Deal should aim even higher.

    Like today, the bar for successful leadership some 90 years ago was pretty low. A very rich man with even richer friends, Herbert Hoover was mostly blind to the effects of the Great Depression on working people and for a while denied there was any unemployment problem at all. Before becoming president, Hoover had made his fortune in mining, transforming himself from poor Quaker boy to lowly engineer to magnate. He gave away large chunks of his fortune to charity and fancied himself both a man of the people and a magnanimous captain of industry. Hoover assumed his fellow businessmen were philanthropic types, too. As he would find out in the waning days of his administration, America’s businessmen might fund libraries and museums, but they had neither the will nor the ability to fix the problem they had helped create. The Depression defined and destroyed his administration and nearly took down the whole concept of liberal democracy with it.

    In May 1930—with an unemployment rate screeching past 20 percent—Hoover assured the US Chamber of Commerce that “I am convinced we have now passed the worst. The depression is over.” That December, his State of the Union address promised that “the fundamental strength of the Nation’s economic life is unimpaired,” blaming the Depression on “outside forces” and urging against government action.

    “Economic depression,” he said then, “can not be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body—the producers and consumers themselves.” Ideologically opposed to the idea of state intervention in business, Hoover that year had convened a compromise: the Emergency Committee for Employment, to gently nudge the private sector into putting 2.5 million people back to work through local citizens’ relief committees, comprised mostly of local officials and business executives. After several months it hadn’t worked; members of the committee could point to no evidence that it had created any jobs at all. Committee head Arthur Woods petitioned the White House to create a public works program with federal funding instead. Hoover refused, and the committee withered away shortly afterward as unemployment continued to skyrocket. Its replacement was an advertising campaign coaxing individuals to give to charity. Announcing the plan via radio address, Hoover bellowed that “no governmental action, no economic doctrine, no economic plan or project can replace that God-imposed responsibility of the individual man and woman to their neighbors.” Just before the 1932 election, Hoover warned that a New Deal—what Franklin Roosevelt was campaigning on—would “destroy the very foundations of our American system” through the “tyranny of government expanded into business activities.”

    The New Deal reimagined what the US government could do, what it was for, and who it served.

    Hoover had a relatively successful career up until the crash, with a well-regarded run as secretary of commerce that included his successful management of the Great Mississippi Flood of 1927 by marshaling public and private resources toward recovery. That Hoover is widely remembered as a loser is thanks mostly to who and what he lost to. Roosevelt’s blowout victory in the 1932 election—where he won 42 of 48 states—ushered in a profound change in American life. With it came 14 years of uninterrupted, one-party control over the White House and both chambers of Congress, secured not by the kinds of authoritarianism that were common through that era, and which well-heeled American elites mused might be needed, but by democratically elected Democratic majorities. Accounting for two brief interruptions just after the end of World War II, Democratic control would extend on for a total of 44 years in the Senate and 58 years in the House.

    Until he left office, Hoover refused to budge on his overall approach, as he would through the rest of his life. He pleaded with Roosevelt to denounce the agenda he had just run on, which included such things as widespread unemployment insurance, a job guarantee for the unemployed, tackling soil erosion, and putting private electric utilities into public hands. As the financial system collapsed, the unemployment rate floated around 25 percent, and fascism was on the march in Europe, Hoover did nothing. Federal Reserve chairman Eugene Meyer begged him to reconsider and declare the bank holiday he knew that Roosevelt was already planning as president-elect. “You are the only one with the power to act. We are fiddling while Rome burns,” he told Hoover. The president was unmoored: “I have been fiddled at enough and I can do some fiddling myself.”

    Hours after taking the oath of office, Roosevelt and his top advisers embarked on a marathon session to save and restore faith in a banking system on the verge of collapse. Within 36 hours, the administration declared a nationwide bank holiday. Before it ended, on the afternoon of March 9, Roosevelt spent two hours presenting one of the earliest New Deal programs to his closest advisers. It would be a jobs program, he explained, that would “take a vast army of these unemployed out to healthful surroundings,” doing the “simple work” of forestry, soil conservation, and food control. By that evening, the program’s final report explains, the proposal was drafted “into legal form” and placed on the president’s desk. At ten, he convened with congressional leaders who brought it to Congress on March 21. It was signed into law on March 31, and the first recruits of the Civilian Conservation Corps (CCC) were taking physicals by April 7 before being bused from their homes in New York City to Westchester County, freshly issued clothes in hand.

    By July, the program had established 1,300 camps for its 275,000 enrollees. Between 1933 and its end in 1942, the CCC’s workers—average age 18.5, serving between 6 months and 2 years—built 125,000 miles of road, 46,854 bridges, and more than 300,000 dams; they strung 89,000 miles of telephone wire and planted 3 billion trees. Among the most expansive and maligned of New Deal programs, the Works Progress Administration—derided as full of boondoggles and government waste—built 650,000 miles of roads, 78,000 bridges, and 125,000 civilian and military buildings; WPA workers served 900 million hot lunches to schoolchildren, ran 1,500 nursery schools, and put on 225,000 concerts. They produced 475,000 works of art and wrote at least 276 full-length books. From 1932 to 1939, the size of the federal civil service grew from 572,000 to 920,000.

    The WPA’s predecessor, the Civil Works Administration, created 4.2 million federal jobs over the course of a single winter. Much of that work was in construction, but the program also employed 50,000 teachers so that rural schools could remain open, rewilded the Kodiak Islands with snowshoe rabbits, and excavated prehistoric mounds, the results of which ended up in the Smithsonian. In the first year of its operation, 1939, the Civil Aeronautics Board built 300 airports. They did it all without so much as a cell phone or computer.

    Like the original, a Green New Deal won’t—if it’s successful—be a discrete set of policies so much as an era and style of governance.

    Like the original, a Green New Deal won’t—if it’s successful—be a discrete set of policies so much as an era and style of governance. It will be the basis of a new social contract that sets novel terms for the relationship between the public and private sector and what it is that a government owes its people. Likewise, the New Deal was designed—learning as it went—to solve a problem the United States had no blueprint for: creating a welfare state capable of supporting millions of people essentially from scratch and with a wary eye toward those countries abroad that were handling a catastrophic economic meltdown in very different, far crueler ways. The New Deal might be best described by a spirit of what Roosevelt referred to as “bold, persistent experimentation”: flawed, contradictory, ever-evolving, and very, almost impossibly big. “It is common sense,” he said in the same speech, “to take a method and try it: if it fails, admit it frankly and try another. But above all, try something.” More than giving bureaucrats carte blanche to move fast and break things, the New Deal crafted a container in which innovation and experimentation could take place, providing a combination of ample public funds and rigorous standards, all to be overseen by a set of dogged administrators. As Paul Krugman would write some 75 years later, the “New Deal made almost a fetish out of policing its own programs against potential corruption,” well aware of the hostility its new order would face from those invested in continuing on with business as usual.

    The New Deal’s spending programs depended on its public relations efforts, both making a show of its distaste for graft and corruption and showcasing the benefits of the New Deal in every county in the country. It also paid plenty of attention to optics. Posters created through the Federal Arts Program advertised the successes of New Deal programs in striking detail, and public works programs were designed with presentation in mind. “At Hoover Dam,” architecture critic Frederick Gutheim would write of the Tennessee Valley Authority’s flagship project, “one was impressed by the sheer size. But at a TVA dam one was reminded of humanistic values, of power serving man . . . of the virtues of public ownership of hydroelectric power.” In constructing observation decks and breathtaking approach roads to New Deal dams, Roland Wank—the TVA’s socialist, Hungarian émigré lead architect—is remembered as having seen to it that his projects “were approached as one would the Acropolis.”

    Compare that boldness to the Obama administration’s response to the Great Recession 80 years later, seemingly designed to be as uncharismatic as possible. Obama had wanted to use the recovery, in part, to transform and decarbonize the electric sector by building out an array of transmission lines that would bring the country’s grid fully into the 21st century. But like health care, electricity—his top economic adviser Larry Summers counseled—was primarily the domain of the private sector. When it came to transmission lines, he said, “the government’s job is to remove regulatory obstacles.” Any reforms would have to wait for a legislative push in the form of a cap-and-trade bill. The goal now, according to Summers, was to get people spending, preserve the financial system, and not rattle the markets by placing too many limits on corporations or by causing too big an increase in the federal deficit.

    Most of Obama’s top economic advisers harbored a basic weariness about government spending too much or mucking around in the private sector, even if they conceded the basic Keynesian point that governments should spend their way out of recession. Summers famously advocated that spending to be “timely, targeted, and temporary,” so as to not overextend the welcome or footprint of big government to Americans who allegedly hated it. And transformative as it might have been, the 10 percent of the ARRA devoted to clean energy investments took the form of loan guarantees for companies and public sector research. The upsides were nearly incomprehensible to the general public. By 2010, just 6 percent of Americans believed the stimulus had created any jobs.

    And yet for all of the Democrats’ attempts to hide their spending footprint, the GOP attacked the ARRA as full of boondoggles anyway. Obama responded by pivoting back to belt-tightening austerity in 2010 with a stark State of the Union address. “Like any cash-strapped family,” he pledged, “we will work within a budget to invest in what we need and sacrifice what we don’t. And if I have to enforce this discipline by veto, I will.” A New New Deal the Obama stimulus was not.

    Campaigning for reelection in 1936, FDR was, by contrast, unapologetic. He told a crowd at Madison Square Garden that year about his administration’s struggles against “the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.” These forces, he said, “had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.”

    “Never before in all our history,” he bragged, “have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred.” In stacking top cabinet posts with Wall Street allies like Summers and Timothy Geithner, the Obama administration chose instead to welcome the “enemies of peace” into its ranks. While they controlled Congress and the White House, Democrats squandered not just their opportunity to pass climate policy in Obama’s first term, but also to maintain and build on the enthusiasm that had elected him into a durable coalition. Obama’s too-small stimulus and subsequent turn toward austerity helped cost the party not just the House, Senate, and White House over the next eight years, but also statehouses around the country, where GOP majorities have proceeded to gerrymander away democracy and ossify minority rule.

    Much as voters have longed for some return to normalcy through the Trump years, resurrecting the politics of the Obama era threatens to conjure worse monsters down the line. During his campaign, Joe Biden obliquely promised a “Rooseveltian” presidency. If he intends to follow through on that, or even just secure a future for the party in Congress, 2021 will need to look more like 1933 than 2009. By extension, Democrats should be pushing for the midterm elections in 2022 to resemble those of 1934—not 2010.


    Overheated, Kate Aronoff

    Excerpted from Overheated: How Capitalism Broke the Planet—And How We Fight Back by Kate Aronoff. Copyright © 2021.
    Available from Bold Type Books, an imprint of Hachette Book Group, Inc.

    Kate Aronoff
    Kate Aronoff
    Kate Aronoff is a staff writer for The New Republic and the author of Overheated: How Capitalism Broke the Planet—And How We Fight Back (2021).

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