by Heather Gray
January 9, 2017
Yes! Believe it or not there are comparisons to be made regarding circumstances surrounding President Franklin Delano Roosevelt (FDR) and Donald Trump. In terms of economics, the comparison of the two is largely about “collectivism versus greed!” This account about the coup will be a series.
Brief Background Of The Coup
Collectivism and a Mixed Economy
In response to the 1930s depression, President Franklin Delano Roosevelt (FDR) developed programs in what were appropriately referred to as the “New Deal”. It is also often referred to as the three R’s – relief, recovery and reform (see in the appendix a listing of some of the New Deal programs.). While much of the New Deal’s programs were initially thought to be short-term relief in providing government funded jobs for the unemployed after the 1930s depression, there were also long term programs that evolved as well such as Social Security and ultimately unemployment insurance, Medicare, etc.
Major in FDR’s programs was the G.I. Bill passed in 1944 for returning veterans of WWII. It offered low-interest loans for a vast array of programs:
Benefits included low-cost mortgages, low-interest loans to start a business, cash payments of tuition and living expenses to attend high school, college or vocational/technical school, as well as one year of unemployment compensation.
Historians and economists judge the G.I. Bill a major political and economic success-especially in contrast to the treatments of World War I veterans-and a major contribution to America’s stock of human capital that encouraged long-term economic growth. (Wikipedia)
The New Deal was far from perfect, however. Some refer to it as affirmative action for whites as the programs were mostly not equitable in terms of services and opportunities for the Black community in education, agriculture, housing and other job opportunities, etc. Nor, was there protection and services offered for farm workers across the country.
As scholar Ira Katznelson wisely notes in his book “When Affirmative Action Was White: An Untold History of Racial Inequality in Twentieth-Century America:”
“the law was deliberately designed to accommodate Jim Crow”. Because the programs were directed by local, white officials, many veterans did not benefit. Of the first 67,000 mortgages insured by the G.I. Bill, fewer than 100 were taken out by non-whites.” (Wikipedia)
The same discrimination disparities occurred in efforts by Blacks to receive school loans under the GI Bill.
The above are but a few of the disparities in the New Deal programs.
In fact, the white community in America was able to build its so-called “middle class” largely thanks to the New Deal that left many others behind.
But the model of public monies being utilized to benefit the masses is an excellent blueprint, provided it is inclusive of all the people and not selective by race or other categories such as gender, religion, sexual orientation etc.
It is “collectivism” in terms of our tax dollars being used to benefit the masses as in jobs, agriculture, education, housing and healthcare.
I also refer to this as a “mixed economy” that combines public monies along with private enterprises for the benefit of the people and the economy.
Let the capitalists make my cell phone, for example, or my shoes, but they need to keep their greedy hands off important areas such as agriculture, education, healthcare, prison systems, and on.
But there are important labor and worker rights issues here as well. If the capitalists are to make my cell phone, or produce steel, etc. then there need to be more protections in place for workers. As the renowned activist Jack O’Dell has noted, the large corporate enterprise should be owned and controlled by the workers. At the very least there should be a strong labor union infrastructure for the workers along with protected collective bargaining rights. I also think the German model of requiring workers to have representation on corporate boards of directors should be practiced in the United States.
These examples above, of collectivism, can be rather radically compared to, for example, the contemporary neoliberal economic model of our tax dollars being used to enhance the privately owned military industrial complex to build weapons, engage in war and ruthlessly kill others in the world and domestically; and/or our tax dollars being used generally to benefit the 1% through privatized prisons, privatized security military entities such as Blackwater, privatized health care, education, industrial agriculture – on and on. The fraud and non-competitive nature of these enterprises, that generally lead to concentrated wealth along with lack of support of unions and collective bargaining, is tragic, exploitative and we could infer “non-democratic” to say the least.
As Howard Zinn and others have noted, the American bankers and the corporate elite overall did not appreciate FDR’s New Deal. They essentially said he was a traitor to his class. Zinn notes:
“How refreshing it would be if a presidential candidate reminded us of the experience of the New Deal and defied the corporate elite as Roosevelt did, on the eve of his 1936 reelection. Referring to the determination of the wealthy classes to defeat him, he told a huge crowd at Madison Square Garden: “They are unanimous in their hatred for me-and I welcome their hatred.” I believe that a candidate who showed such boldness would win a smashing victory at the polls (Beyond the New Deal)”.
Well, we don’t have such a president as yet – far from it.
Greed and Neoliberal economics
With the election of Trump we have witnessed a neoliberal economic triumph otherwise known as “greed”. Corporate America has wanted this throughout most of its existence. In 2012, I wrote an article entitled “A Draconian Structural Adjustment for the US?” It was when Paul Ryan was running for Vice President with the Republican presidential candidate Mitt Romney.
Ryan is now, unfortunately, the Republican Speaker of the US House of Representatives. Regarding the neoliberal economic philosophy adhered to by Paul Ryan, I, of course, referred to the godfather of it all, Milton Friedman. I wrote: “We are now faced with the threat of the stark economic policies of neoliberalism or its more stark form of the structural adjustment market-driven model being thrust down our throats. This is thanks to the likes of GOP Vice Presidential candidate Paul Ryan’s radical economic ‘go it alone’ Ayn Rand philosophy. They want to dismantle the last vestiges of the New Deal in its current form. It’s also what Milton Friedman, of the University of Chicago’s School of Economics, wanted which is that his market-driven policies be imposed on the American people. The right wing on the whole is likely pleased that the United States might finally be the victim of these failed and tragic economic policies that they’ve forced on developing countries where the wealthy benefit and no one else. It’s a home-coming and not a pleasant one.”
I also, of course, made reference to the devastating impact Friedman’s neoliberal economics has had on the “Global South”. Here is a quote from Filipino economist Walden Bello: “Friedman’s probably smiling from his grave. Contrary to all the hype, neoliberalism is a failed system throughout the world leading to inequities, environmental degradation and starvation….Indeed, there is probably no more appropriate inscription for Friedman’s gravestone than what William Shakespeare wrote in ’Julius Caesar’: ‘The evil that men do lives after them, the good is oft interred with their bones.’”
What are neoliberal or structural adjustment economic policies? These are Global North v Global South distinctions on the whole: “neoliberalism” is referred to a market-driven draconian economic model in the “developed” Global North; “structural adjustment” refers to the same market-driven draconian model but with distinct policies being enforced, if money is loaned, by the world’s banking system in the so-called “developing” or Global South which is generally considered to be outside of the United States and western Europe.
The requirements (of the IMF and World Bank) are austere and restrictive, and what the likes of Paul Ryan and others also want in the U.S. as well. The imposition of structural adjustment on “developing” countries has made them essentially without protections and vulnerable to vulture capitalists.
Market-driven means that the market will solve our problems – place no restraints on the market because as an entity it will determine what’s needed in terms of products and consumption and everyone will benefit as a result, economically and otherwise. Yet, it’s a farce!
Neoliberalism, or its more austere structural adjustment model, was ultimately enshrined as the leading paradigm in the policy guidelines of the World Bank and the International Monetary Fund. In fact, to receive loans, countries were and continue to be required to curtail government “collective” programs (i.e. health, education) that offer New Deal type services in mass to the people that are then privatized or ended altogether; tariffs that had wisely been in place to protect local business ventures were required to be lifted; and the country was generally required to provide the opportunity for foreign investment in their country, perhaps of land ownership, resource extraction and control of large scale business ventures by foreign interests.
The policies have never created a level playing field. The West’s corporate leaders have dominated as a consequence and while corporate capitalists have thrived, thanks to the World Bank and IMF, many of the poor have starved and been driven deeper into poverty.
Similarly, Paul Ryan’s neoliberal philosophy overall is that you’re on your own essentially and to shrink the government programs altogether to ensure that you don’t get help from the government and/or to privatize everything. This brings efficiency they say. It would also finally put the nail in the coffin of the New Deal policies. Ryan apparently wants to complete the process except for the military. Who will benefit? Certainly not the 99%.
(Milton) Friedman in the 1970’s knew his neoliberal policies would essentially throw out the popular New Deal programs and that there was no way this would pass the U.S. Congress in the 1970’s. He instead needed another country and most likely a crisis to test his neoliberal policies. Chile was it in 1972.
What happened in Chile after the tragic assassination of Salvador Allende? Allende, a friend of Castro, wanted to nationalize corporate owned companies in Chile to acquire resources to, then, benefit the Chilean masses with programs similar to the New Deal. American corporations were furious and opposed this. Yes, reports are that the CIA became engaged in the process and Allende was assassinated.
It is noted that the day after Allende was killed, Chilean graduates of the University of Chicago’s School of Economics under Milton Friedman had, on their desks, plans for the privatization of the Chilean economy. Years later at a conference in Atlanta in the 2000s I talked with a South American activist who had been arrested and tortured during this period. He told me the guards said to him, “We are going to take that ‘collective’ mindset out of you!”
While “Collectivism versus greed” is primarily the focus in the narrative above, the next part of the series will be additional background and/or information about economics and the need for change in America.
Top 10 New Deal Programs:
By Martin Kelly
Updated August 08, 2016.
The Great Depression (1929-1939) was the largest and most significant economic depression to affect not only America but also the world. The Stock Market Crash on October 29, 1929 is cited as the beginning of the Great Depression. Herbert Hoover was president when the Crash occurred but felt that the government should not become overly involved in helping individuals dealing with economic troubles. However, this changed with the election of Franklin Roosevelt. He worked to create numerous programs through his New Deal to help those affected worst by the Depression. Following are the top ten programs of the New Deal.
1. CCC – Civilian Conservation Corps
The Civilian Conservation Corps was created in 1933 by Franklin D. Roosevelt to combat unemployment. This work relief program had the desired effect and provided jobs for many Americans during the Great Depression. The CCC was responsible for building many public works and created structures and trails in parks across the nation.
2. CWA – Civil Works Administration
The Civil Works Administration was created in 1933 to create jobs for the unemployed. Its focus on high paying jobs in the construction arena resulted in a much greater expense to the federal government than originally anticipated. The CWA ended in 1934 in large part due to opposition to its cost.
3. FHA – Federal Housing Administration
The Federal Housing Administration was a government agency created to combat the housing crisis of the Great Depression. The large number of unemployed workers combined with the banking crisis created a situation in which banks recalled loans. The FHA was designed to regulate mortgages and housing conditions.
4. FSA – Federal Security Agency
The Federal Security Agency established in 1939 had the responsibility for several important government entities. Until it was abolished in 1953, it administered social security, federal education funding, and food and drug safety.
5. HOLC – Home Owner’s Loan Corporation
The Home Owner’s Loan Corporation was created in 1933 to assist in the refinancing of homes. The housing crisis created a great many foreclosures, and Franklin Roosevelt hoped this new agency would stem the tide. In fact, between 1933 and 1935 one million people received long term loans through the agency that saved their homes from foreclosure.
6. NIRA – National Industrial Recovery Act
The National Industrial Recovery Act was designed to bring the interests of working class Americans and business together. Through hearings and government intervention the hope was to balance the needs of all involved in the economy. However, the NRA was declared unconstitutional in the landmark Supreme Court case Schechter Poultry Corp. v. US. The Supreme Court ruled that the NIRA violated the separation of powers.
7. PWA – Public Works Administration
The Public Works Administration was a program created to provide economic stimulus and jobs during the Great Depression. The PWA was designed to create public works and continued until the US ramped up wartime production for World War II. It ended in 1941.
8. SSA – Social Security Act
The Social Security Act was designed to combat the widespread poverty among senior citizens. The government program provided income to retired wage earners. The program has become one of the most popular government programs and is funded by current wage earners and their employers. However, in recent years concerns have arisen about the viability of continuing to fund the program as the Baby Boom generation reaches retirement age.
9. TVA – Tennessee Valley Authority
The Tennessee Valley Authority was established in 1933 to develop the economy in the Tennessee Valley region which had been hit extremely hard by the Great Depression. The TVA was and is a federally owned corporation that works in this region to this day. It is the largest public provider of electricity in the United States.
10. WPA – Works Progress Administration
The Works Progress Administration was created in 1935. As the largest New Deal Agency, the WPA impacted millions of Americans. It provided jobs across the nation. Because of it, numerous roads, buildings, and other projects were completed. It was renamed the Works Projects Administration in 1939.
HEATHER GRAY produces “Just Peace” on WRFG-Atlanta 89.3 FM covering local, regional, national and international news. She is also a writer, researcher and journalist. In 1985-86 she directed the nonviolent program at the Martin Luther King, Jr. Center for Nonviolent Social Change in Atlanta. She subsequently has also been engaged in support for and helping black farmers in the Southern US hold on to their land and this has included work in cooperative economic development. She has lived in Canada, Australia, Singapore, the Philippines and the United States. She now lives in Atlanta, Georgia and can be reached at firstname.lastname@example.org