“Not since the Great Depression.” “Not since the 1930s.” You hear these phrases a lot these days, and for good reason. As Congress prepares to pass the Democratic Party’s stimulus package, it may be worth looking back at Franklin Roosevelt’s New Deal and considering how well it worked politically and politically.
There is a fairly broad policy consensus that some of Roosevelt’s actions made positive changes but did not get us out of the crisis. Amity Shlaes, in his groundbreaking The Forgotten Man, argues strongly that some of Roosevelt’s policies blocked economic recovery, and even his admirers admit that his policies led to the severe recession of 1937–38. After eight years of the New Deal, unemployment remained at 15 percent in 1940 – twice the current rate. What really got us out of the crisis was World War II. The total number of military personnel and personnel increased from 44 million in 1938 to 65 million in 1944.
So copying the New Deal as a recipe for economic recovery would be unwise. And the policies that caused the war boom cannot be repeated today. We will not have food rationing, wage and price controls, government spending of almost half of the gross domestic product, tax rates of 91% and a 12-million-strong army (the equivalent of 27 million today).
There was general agreement, however, that Roosevelt’s policies had been a political success. Most of us in political commentary often operate the phrase “New Deal Democratic Majority” and tend to believe that Roosevelt’s policies worked in his party’s favor for generations, dating back to the 1960s.
I think the picture is more complicated. The Democrats actually had great successes in the 1934 and 1936 elections. They made vast gains in vast cities and factory towns, many of which were staunch Republicans in the 1920s. However, these benefits did not last as the effects of some New Deal policies became apparent – high taxes on high earners, the union-promoting Wagner Act, and employment programs such as the WPA.
In early 1937, trade unions engaged in sit-down strikes at car and steel factories; were simply illegal, but Democratic governors in Michigan and Ohio refused to enforce court orders against them. Later that year, the “capital strike” that Shlaes describes led to a pointed recession.
The jobs programs have been widely criticized as a “mistake” and “leaf raking”. Allegations of political favoritism and corruption were common. In the off-1938 elections, Democrats lost 81 House seats, 51 of them in the industrial belt from Pennsylvania and upstate New York west to the Upper Midwest. The Democratic governors of Michigan and Ohio were defeated in their re-election races. The congressional district that includes Flint, Michigan, site of the first sit-in, flipped from Democratic to Republican; as do most congressional districts in Ohio.
As pro-New Deal historians acknowledge, New Deal policies no longer had a majority in Congress, given the opposition of many Southern Democrats. The outlook for Democrats was not rosy either as the 1940 election approached. Polls, then in their early stages, suggested that Republicans would win if the election was decided on domestic issues.
However, in September 1939, World War II broke out in Europe. In June 1940, France fell; Adolf Hitler and Joseph Stalin, then allies, seemed to have most of Europe under their rule. Just days later, Republicans nominated Wendell Willkie, an attractive candidate with no foreign policy experience. The Democrats met in July and Roosevelt sent a letter stating that he did not want to be the candidate. But with the assist of Chicago’s sewer commissioner via loudspeaker, “We Want Roosevelt!” the president was renominated. In November, he won his third term not, as he later put it, as “Dr. New Deal,” but as an experienced leader when the nation faced grave danger.
“The American people, by their righteous might, will achieve absolute victory,” Roosevelt declared in his Pearl Harbor speech, and this remained the case by September 1945. In my opinion, it was a war effort, a mobilization of large government, large business and large work, it raised the prestige of the country much more than the New Deal. This made Americans proud to think of themselves as miniature cogs in very vast machines. This made them susceptible to statist policies that they would never have accepted in the 1920s, and which many of them refrained from doing in the behind schedule 1930s.
No two political times are the same. But as we watch the stimulus package come to an end, we get a whiff of the aid favoritism and crony capitalism that was also present in the New Deal. The forced unionization of the Card Check Act may prove no more popular than the sit-in-forced unionization that occurred in Michigan and Ohio in 1938. Today’s Democratic programs may face as mixed a political response as the New Deal in the years before World War II world war.
