Thread: This New Deal is a far greater gamble than you might think

This New Deal is a far greater gamble than you might think

Roosevelt's call to arms against recession is resonating today, but his followers would do well to consider all its implications

Tristram Hunt The Observer, Sunday 4 January 2009

Top of the political class's reading list on both sides of the Atlantic at Christmas was Cambridge historian Anthony Badger's slim, brilliant volume, FDR: The First Hundred Days. In Chicago, the impatient Barack Obama administration has made no secret of its determination to emulate Franklin D Roosevelt's 1933 blitzkrieg on Washington. Similarly, Gordon Brown has anointed Badger's history his book of the year. "A classic example of how a work of history can illuminate the issues we're dealing with today," he declared. "The imagination and humanity at the heart of some of the great New Deal innovations changed American politics for ever and shaped the future of progressive politics across the world."

And as the prime minister reveals in his interview, the inspiration of the New Deal is already shaping British policy in the struggle against the recession. But Badger's account ends on 16 June 1933 and historians today are still debating the long-term merits of Roosevelt's economic strategy. Brown's lesson from the past is a historic gamble.

The situation could hardly have been bleaker in March 1933 when FDR assumed the presidency. At least a quarter, but probably a third, of US workers were unemployed. A thousand families a day were losing their homes. Farmers were desperate. The stock market had failed to recover from the 1929 crash. In 1932 alone 1,500 banks went bust. But, in an early taste of the audacity of hope, the patrician, polio-stricken but politically mesmeric Roosevelt told America it had "nothing to fear but fear itself". He pledged himself "to a new deal for the American people. This is more than a political campaign. It is a call to arms".

With the help of his so-called "Brains Trust", Roosevelt unleashed an avalanche of legislation in his first 100 days. If politicians in Westminster and Washington feel they have recently been bounced into unwise City bail-outs, Congress was given just 43 minutes to read FDR's bank bill. In its wake came further bills on regulating the stock exchange, prescribing a minimum wage, subsidy packages for farmers, underwriting home ownership and, above all, a programme of public works.

This signature employment policy instantly captured the popular imagination. And as Andrew Rawnsley's recent account in these pages of a summer drive along the Blue Ridge Parkway - a public works highway built to provide jobs and attract visitors to Virginia and North Carolina - showed, the programme forms part of our vision of modern America. This is Roosevelt's progressive, aesthetic and pioneering republic of the Civilian Conservation Corps, the "tree army" that planted 3bn trees and built the log cabins and park campsites that so sparsely but elegantly symbolise the outdoor US. More than that, America's infrastructure was transformed during the 1930s, from New York's Lincoln Tunnel to the San Francisco Zoo to a new generation of reservoirs, roads and harbours.

For President-elect Obama, the attractions of this narrative are obvious. George W Bush can be cast as FDR's inept predecessor, Herbert Hoover, whose voluntarist, laissez-faire philosophy did nothing to address the human costs of the Depression. Indeed, Bush has stuck closely to the Republican mantra of government being the problem rather than the solution - of which there remains no more chilling edifice than the ruins of New Orleans. Whereas the Federal Emergency Management Agency once stood as an effective arm of the state assisting the citizen in times of crisis, the Bush administration so denigrated its capacity that when hurricane Katrina called, the Big Easy was left to fend for itself.

So the Obama plan is simple: a reaffirmation of the moral and pragmatic worth of strong government. An end to tax giveaways for the super-rich and, instead, a 21st-century New Deal promising 2.5m jobs focusing on renewable energy, broadband access and home insulation. In addition, a huge public works programme to rebuild America. This is the Democratic party as it used to be, before the investment bankers captured the Clintons.

But what is Gordon Brown's position on this? According to his new year message, 2008 was the moment when the "old era of unbridled free market dogma was finally ushered out". In the Brown template, it is Tony Blair, not George W Bush, who is set to play the part of Herbert Hoover as an era of 1990s light-touch, neoliberal corporate excess is roundly denounced by Downing Street. With Brown as FDR (rather than the former chancellor of the exchequer), the Labour party is able to rediscover its belief in an energetic state confronting profiteering.

Brown, like Roosevelt, has also opted for military analogies. Roosevelt asked Congress for "broad executive power to wage war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe". The prime minister has urged the British public to show their "Blitz spirit" in the face of the recession.

And it's more than just words. Brown's bank recapitalisation plan was pulled together and implemented with FDR-like bravado and mettle. It, too, brought the economy back from the precipice. There is also more than a whiff of Roosevelt-era politics when it comes to ministers' denunciation of City spivs, as well as plans for fast-tracking infrastructure projects and this weekend's announcements on new jobs in green energy and public sector construction.

Until today's interview, however, we have seen none of the New Deal's more inspiring environmental and civic components. The Marine Bill is a pale shadow of what it might be in the hands of a modern FDR: the chance for coastal paths around the country and conservation areas at every shore. And while Roosevelt established the Historic American Buildings Survey to celebrate the physical and natural heritage of the US, the government has short-sightedly dropped its Heritage Bill from the Queen's Speech. Politicians would do well to remember that the New Deal legacy we so appreciate today was as much the product of conservationists, architects, photographers and naturalists as Treasury policy wonks.

However, FDR's presidency was ultimately a question of economic survival. Seventy years on, historians remain generous when it comes to his alleviation of the US banking system. But in terms of sustained economic growth, the score card is mixed. Rather than curtailing the Depression, critics argue, the New Deal piled on costs for business, crowded out capital, failed to grow private sector employment and deepened the 1937 recession. The creative powers of capitalism were neutered by Washington bureaucrats and it was only thanks to the demands of Second World War rearmament that the US economy revived.

But for Anglo-American progressives, FDR's achievements have always been as much political as economic. What the 32nd president did was to shift the 20th-century paradigm from neoliberal let-alone to state intervention. He convinced the American people that society as a whole, operating through the federal government, must and could protect itself against the impersonal and amoral vagaries of the market.

This was the "progressive consensus" lost under Reagan and Thatcher, which Obama and Brown hope to revive. And while it is questionable whether the British economy really needs more state intervention, in the face of City greed and Tory laissez-faire, Roosevelt's inspiring advocacy of effective government deserves to be heard again.

For Gordon Brown, there may also be one other attraction to FDR: he went on to win a fourth term.

• Tristram Hunt is a lecturer in history at Queen Mary, University of London. His biography of Friedrich Engels is published on 1 May

http://www.guardian.co.uk/commentisfree ... velt-brown

Given Obama's politcal report card, Obama's "New Deal" will end up being a "Raw Deal" for the American people................