The Start of a New Deal for America

Nicholas Kristof of The New York Times favorably compares Biden’s “American Rescue Plan” to the first days of Franklin Roosevelt’s New Deal. One reason is that it would seriously reduce child poverty:

Coverage of Biden’s $1.9 trillion plan has understandably focused on the $1,400 payments to individuals, the increased unemployment benefits, the assistance to local governments, the support for accelerated vaccine rollout and the investments to get children back in schools. But there is so much more: food assistance, policies to keep families from becoming homeless, child care support, a $15 federal minimum wage and an expansion of the earned-income tax credit to fight poverty.

To me, the single most exciting element of the Biden proposal is one that has garnered little attention: a pathbreaking plan that would drastically cut child poverty.

It is a moral stain on America that almost one-third of people living in poverty are children, a higher share in poverty than any other age group.

So it’s exhilarating that Biden included in his plan a temporary expansion (I hope it will be made permanent) of the child tax credit in a way that would do more than any other single policy to reduce child poverty and make America more truly a land of opportunity. In effect, Biden is turning the child credit into something like the child allowances that are used around the world, from Canada to Australia, to reduce child poverty.

The Biden child poverty plan was previously offered as legislation backed by Senators Michael Bennet of Colorado and Sherrod Brown of Ohio, and a Columbia University analysis found that it would reduce child poverty in the United States by 45 percent. For Black children, it would reduce poverty by 52 percent, and for Native American children, 62 percent.

This is the boldest vision laid out by an American president for fighting poverty, and child poverty in particular, in at least half a century,” said Luke Shaefer, a poverty expert at the University of Michigan.

Americans too often accept poverty or race gaps as hopeless and inevitable. In fact, the evidence suggests they are neither. As Britain’s prime minister, Tony Blair cut child poverty by half with a strategy that included Biden-style child allowances.

[Another] example is the New Deal . . . . Results of Roosevelt’s boldness included Social Security, rural electrification, jobs programs, networks of hiking trails, the G.I. Bill of Rights and a 35-year burst of inclusive growth that arguably made the United States the richest country in the history of the world.

Yet for the last half-century, we mostly retreated. We overinvested in prisons and tax breaks for billionaires while underinvesting in education, public health and those left behind.

So we think of the United States as No. 1, but America ranks No. 28 worldwide in well-being of citizens, according to the Social Progress Index. And the United States is one of only three countries to have gone backward since the index began in 2011.

Americans are less likely to graduate from high school, more likely to die young, less safe from violence and less able to drink clean water than citizens in many other advanced countries. And then along came Covid-19 and magnified the disparities.

As Biden noted in his speech Thursday night, one in seven households in America now report that they don’t have enough food. Some 12 million children live in households that lack enough food. . . . 

Yes, Biden’s proposal would be costly, but a major study from the National Academies of Sciences, Engineering and Medicine found that child poverty is even more expensive, costing America at least $800 billion a year in diminished productivity, higher crime and elevated medical costs.

Helping people is often harder than it looks. But it is difficult to overstate how much difference Biden’s child poverty plan would make for Americans, for economic growth, for the country’s international competitiveness — and, let’s acknowledge it, for the moral framework of the United States. In the long run, this would do more to advance American equality, opportunity and decency than almost anything else.

Unquote.

There will be Republican opposition to Biden’s plan, of course, which will almost certainly mean that it’s effectiveness is reduced. But it’s encouraging that the U.S. Chamber of Commerce, not exactly a hotbed of socialism, has endorsed it (to some extent):

The U.S. Chamber of Commerce welcomes the introduction of President-elect Biden’s American Rescue Plan. Specifically, we applaud the President-elect’s focus on vaccinations and on economic sectors and families that continue to suffer as the pandemic rages on. We must defeat COVID before we can restore our economy and that requires turbocharging our vaccination efforts.  We look forward to working with the new administration and Congress on the details and in ensuring that any additional economic assistance is timely, targeted, and temporary.

The New Deal and the Same Old Deal

For those of us under 80 or so, the New Deal was basically President Franklin Roosevelt using the federal government in creative ways to address the Great Depression, which wasn’t fully tamed until World War II began, government spending rose even further and lots of working-age men joined the armed forces (there were 450,000 Americans in the military in 1940 and 12.5 million in 1945).

A recent book, Fear Itself: The New Deal and the Origins of Our Time, tells the story but leaves Roosevelt in the background. The New York Review of Books has a fairly long but excellent review by Nicholas Lemann, a professor of journalism at Columbia University, here. 

The author of Fear Itself is Ira Katznelson, a professor of political science and history, also at Columbia. According to the review, Katznelson considers the national legislature to be the most central political institution in a democracy. For that reason, he presents an account of the New Deal and its aftermath that pays little attention to Presidents Roosevelt and Truman:

Katznelson has no interest in their personal qualities or their methods of leadership. Instead his focus is on Congress and government agencies, and more broadly on political systems, voting, and interest groups. This gives Fear Itself the feeling of a fresh look at a familiar story.

In addition, Katznelson emphasizes the perilous situation the country faced in the 1930s. Germany and Italy had reacted to the Great Depression by turning to fascism. The diplomat George Kennan believed America’s government should become authoritarian. The respected journalist Walter Lippmann told President Roosevelt that he might have to become a dictator. New Deal policies were enacted in “an atmosphere of unremitting uncertainty about liberal democracy’s capacity and fate”.

Becase Katznelson focuses on Congress, the South has a major role in the story he tells. Since the Civil War, the South had been firmly Democratic. In the 1932 election, Democratic congressional candidates received 86% of the vote in the South. After that election, more than half of the committee chairmen were southern Democrats. As a result, Roosevelt needed southern support in order to get anything through Congress:

The South used its power to create de facto regional exceptions to many New Deal policies, either by exempting domestic and agricultural workers (meaning blacks) from them, or by placing administrative and policy control of them in the hands of state governments. To use the most obvious example, the 1935 law that created the Social Security system had both of these features...

It was specifically the South that blocked … the possibility of the New Deal’s moving further left in its policies. The New Deal wound up largely achieving one set of goals—an American welfare state, including retirement security and an empowered labor movement—but stopped far short of another, which would have involved creating, through democratic procedures, a more centrally planned economy….

It was Congress that blocked national planning, for reasons having to do with the southern bloc’s overriding concern with maintaining the regional racial order. The South, in Katznelson’s view, was willing to move left on economic issues as long as that didn’t threaten segregation. When economic policy and race began to seem intertwined, the South opted out on economic policy, and that defined the leftward boundary of the New Deal.

Reading this should remind us how little has changed since then. Much of our politics is the same old deal it’s always been. Since the compromise that resulted in slaves being counted as 3/5ths of a person in the Constitution, America has been politically divided between the North (now including western states like California) and the South (now including northern states like Idaho and Wyoming). 

Of course, after the passage of the Civil Rights Act in 1964 and the Voting Rights Act in 1965, the South switched to voting Republican. But progressive federal policies are still being watered down in order to accommodate southern sensibilities. For example, the Affordable Care Act allowed individual states, especially in the South, to avoid expanding Medicaid, thereby limiting benefits to poor people and low-paid workers (including, of course, poor and low-paid blacks).

Professor Lehmann, the author of the review, highlights other ways in which southern “conservatives” have affected federal policy since the New Deal: by supporting our entry into World War II (Southern politicians tend to favor the military and military activity); by encouraging the creation of our national security state (internment of the Japanese, loyalty oaths, FBI surveillance, the creation of the CIA and the House Un-American Activities Committee); by voting for a “defense” budget that has continued to grow even in peacetime; and by making life difficult for labor unions and people who want to vote.

For example, given the Republicans’ recent attacks on voting rights, this passage from the review is especially striking:  

Katznelson also reminds us that whites as well as blacks were substantially disenfranchised in the South, because of poll taxes. Voter turnout was shockingly low in the South—below 20 percent of eligible (meaning mainly white) voters, for example, in Georgia, Mississippi, Alabama, and South Carolina in the crucial presidential election of 1940. In the 1938 midterm elections, Mississippi, with a population of more than two million, had only 35,000 voters. 

There are few activities more troubling in a democracy than intentionally limiting the size of the electorate, although that’s now standard Republican policy, especially in the South.

Professor Lehmann thinks that the South described by Professor Katznelson is too homogeneous. Lehmann argues that there have been significant differences between Southern politicians regarding civil rights and economic issues. Nevertheless, if you want to understand where America is today, Lehmann’s review of Katznelson’s book is terrific reading. So, probably, is the book. 

(A personal note: when I was in college, I read something by a black author who claimed that the status of black people has been the central issue in the history of our country. Unfortunately, I haven’t been able to find the quotation or even identify the author. But I remember reading that statement some 40 years ago and being highly skeptical. The more I learn about American history, however, the more I’ve come to agree.)