5-01-09, 10:00 am
Rome, as the old truism goes, wasn’t built in a day. Or in 100 days. Neither was the New Deal government led by Franklin Roosevelt of the 1930s, which eventually accepted and implemented major reforms in the interest of labor and the whole American people. Neither will or can the government led by Barack Obama, whose campaign was centered around the theme of “change we can believe in” and who, unlike so many of his predecessors, has begun to keep many of his campaign promises by initiating reforms in a wide variety of areas.
Analysts at all levels are seeking to interpret the first 100 days of the Obama administration. Some are attempting to compare it with the first 100 days of the Roosevelt administration. While there are huge differences between the America and world of 1933 and 2009, such comparisons are useful.
First, Roosevelt and Obama took office in the midst of a national and global economic crisis. The crisis that the New Deal government faced was quantitatively and at this stage qualitatively greater. The term “depression” had in effect been coined to explain it. It was already nearly four years old. Official unemployment statistics had grown from under one million to over 12 million – one-fourth of the work force by the last Hoover administration statistics, as much as 38 percent of the work force by trade union movement statistics. Real wages for the great majority of the employed had dropped sharply. Evictions and foreclosures had escalated homelessness to previously unimagined levels. Industrial production and agricultural prices were in free fall. And the banking system was in general collapse (about one-fourth of all depositors who already lost their deposits in uninsured failed banks).
Today, the Obama administration took office at the beginning of a crisis, one that began in the autumn of 2008. Protections like the FDIC, Social Security and unemployment insurance, along with New Deal anti-poverty policies like the food stamps, are still in place, as much as right-wing Republican administrations beginning with Ronald Reagan have undermined them. The Securities and Exchange Commission is still in existence; however the “deregulation” of the last 30 years, combined with right-wing Republican administrations has made it more of an accomplice to Wall Street speculators and new Robber Barons than a protector of the public interest.
Still, important characteristics of capitalism now hint that today's crisis might be worse. Capital is far more fluid and transnational today than in 1933. The power and significance of big bank and brokerage house capital is far greater today than in 1933. Lenin’s interpretation of finance or monopoly capital, the merger of large corporations and banks into great financial oligarchies, with bank capital being the major controlling power, was far less developed in 1933 than today.
Although the collapse of the marginally regulated and uninsured banking system caused enormous misery for a large section of the population in the early 1930s, especially senior citizens for whom savings accounts and stock market-based annuities was all they had in retirement, the New Deal government defined the crisis as centered in the industrial and agricultural sectors of the economy and its major policies in its first 100 days. After an immediate “bank holiday,' Roosevelt’s plan for closing banks for a short period of time until they could with varying kinds of government assistance reopen safely, the bulk of the administration's New Deal policies was aimed at these sectors.
The National Industrial Recovery Act, creating the National Recovery Administration, and the Agricultural Adjustment Act, creating an agricultural adjustment administration, and the Federal Emergency Relief Act, creating a Federal Emergency Relief Administration, were among the most significant acts of Roosevelt’s first 100 days. While these policies had major progressive components, particularly the right of workers to bargain collectively under National Recovery Administration, industrial codes of conduct, land use planning, conservation and some formal protections for tenants and sharecroppers, non-conservative historians have generally seen them as an attempt to save corporations, banks and commercial agriculture by reducing production in order to maintain prices and profits.
In effect, this was a non “free market” policy of “planned scarcity” which corporations and banks initially welcomed to save them, while they set up company unions, defrauded tenants and croppers of AAA benefit payments and threw them off the land to increase their own payments. In addition, many and banks defied President Roosevelt’s calls by hoarding capital.
The left was weak in 1933. While it was not nearly as weak as it is today, it was not strong enough that early in the young presidency to spur passage of some of the administration's later progressive reforms, such unemployment insurance, Social Security or the massive 'work relief' and welfare programs, which labor, leftists, radicals, communists and socialists had been demanding since the beginning of the Depression four years earlier.
In this period, the left focused mass anger and frustration in an upsurge of strikes for union recognition and grassroots protests on a wide variety of issues affecting the lives of the people. This action confronted capital’s attempt to use New Deal policies to “bail itself out” and maintain business as usual, forcing a crisis in administration policy.
This crisis was addressed in 1935 by the administration in a sharp turn to the left. That year Roosevelt endorsed and implemented Social Security and unemployment insurance, the National Labor Relations Act (which enforced collective bargaining provisions), the massive jobs program Works Progress Administration (WPA), an unsuccessful attempt to establish a new national taxation program aimed at the wealthy, and a new National Banking Act reforming the Federal Reserve system, increasing public regulatory power, and most importantly, “divorcing” commercial from investment banking.
This latter New Deal policy on banking regulation was repealed in 1999 with the Republican sponsored Gramm-Leach Act signed by Bill Clinton. Notably, this deregulatory measure is a direct cause of the predatory lender mortgage swindles which triggered the 2008 bank crisis and lives on in the “toxic assets” that the government is trying to deal with today.
The Obama administration has no history for us to look at except these first 100 days. It has launched the most sweeping compensatory fiscal policy in history. It has, in spite of its enormous public investment in finance capital, failed to develop policies to have the banks channel hundreds of billions into recovery instead of hoarding capital to save themselves. The administration has yet to act to ensure that the hundreds of billions going to the states and localities will be used to protect jobs and purchasing power, not to balance books and/or expand pre-crisis wasteful projects. The administration has yet to begin to draft new SEC and Federal Reserve legislation, not only to repeal the Reagan Bush policies of the last three decades but to establish public control over a system of finance capital far more advanced, powerful, and complicated than it was in the 1930s.
But it took the Roosevelt administration a number of years to advance such policies, and the break that Obama has made with his predecessor is very significant and positive. And Obama, in spite of a deforming history of racism which goes back to colonial and post-colonial slavery, is hugely popular in the US because he is acting, advancing policies that the great majority of the people see as positive, just as Roosevelt was hugely popular as he faced the depression crisis
The New Deal government proclaimed a “Good Neighbor” policy toward Latin America and withdrew US troops from a number of countries. Because the US continued to work behind the scenes on behalf of corporate interests to defeat popular democratic movements in Cuba and other nations, this point should not be exaggerated. Still, relations with many Latin American countries, especially Mexico, improved significantly as the administration rejected gun boat diplomacy and pushed policies of Pan American cooperation and encouraged New Deal style reforms in many Latin American countries.
These policies were substantially reversed in the Cold War and the old gunboat diplomacy policies in Latin America (to protect the “freedom” of Latin American people) were not only revived but became a very destructive model for global US cold war policies.
In lifting brutal Bush restrictions on Cuban American relations with Cubans, his gestures to Venezuela and other Latin American countries, his general willingness to open up discussions, seek conflict resolution and pursue “peaceful co-existence” with many governments, President Obama has returned to the Roosevelt Good Neighbor policy in the Western Hemisphere. Today, President Obama’s policies look good not only in comparison with George W. Bush (that is very simple) but also with all post World War II US presidents.
What is needed though is something like a good neighbor policy for the world, one that works multilaterally through the United Nations and its allied social agencies to address world poverty, hunger, environmental crisis and seeks regional cooperation to avoid military conflicts and keep the peace.
Here, President Obama, on questions such as nuclear disarmament, withdrawal from Iraq, international solutions to environmental problems and improved relations with Iran, has moved in positive directions. The administration’s increase of the US military involvement in Afghanistan, however, even with its emphasis on multilateral and diplomatic approaches is a great danger to its overall goals and policies.
The New Deal did not really enter its labor, social welfare, anti-big business phase until 1935, when organizing strikes and other forms of mass protest led to the realization that such policies were necessary to save and reform capitalism and of course to maintain its own political power in the country.
Millions of working people took the hopes inspired by the New Deal and ran with them, making the New Deal a symbol for what they wanted. Those who complain abstractly about the Obama’s administration’s failings and dismiss its accomplishments will contribute nothing to peoples' social struggles. Those who organize, educate and mobilize in action working people who support the administration to take its slogans and promises in the direction of achieving full employment, national health care, a complete and unconditional end to homelessness, malnutrition, urban and infrastructure decay, and international peace, will achieve a great deal.
In the aftermath of the first 100 days, the Obama administration’s challenge is also ours, those who realize that the crisis of capitalism can never be resolved except through the establishment of socialism but that the struggle for socialism is rooted in deeds, policies that empower working people and expand their economic and social security, not words. It is a challenge that we should not only accept but look forward to with optimism and confidence.
--Norman Markowitz teaches US history at Rutgers University.
