How effective was the New Deal?

[FaxModem1]

One of the key things I've heard talked about the New Deal is that it helped build up the US's infrastructure, as well as giving people jobs, income, and a sense of pride. But, another thing I've heard about the New Deal is that it was only a temporary boost, and that once the construction and infrastructure jobs were gone, the US would have fallen back into hard times if not for World War II's huge boost to the US economy and building up of everything while also destroying every other competitor economically.

So, how effective was the New Deal for the US? Was it only a way to buy time, or was it a permanent gain? How effective was it?

Discuss.

[Guardsman Bass]

Overall, I'd say that a lot of it was good but inadequate. The best parts of the New Deal* in stimulating the economy were the Civilian Conservation Corps, the Works Progress Administration, and the Public Works Administration, but they were never run at a size large enough to really shrink unemployment enough and produce enough aggregate demand to get the US economy back to pre-Depression unemployment and GDP size levels. FDR also tended to get cautious from time to time and drastically scale back federal spending while hiking taxes (like in 1937/38).

The other stuff was a more mixed bag. Reforming the banks was good, passing the FLSA and NLRA were good in the long term but not necessarily good in terms of economic recovery at the moment, the AAA saved farmers but also created a vast screwed up system of subsidies that has mostly worked to the benefit of agro-business, and NIRA was a disaster that caused US industrial production (which had grown by 58% in relative percentage in the three months prior to its passage) to then decline by about 19% afterwards.

* I'm focusing exclusively on the New Deal here. The FDR administration's most effective policy in helping the US economy to grow until World War 2 might have been devaluing the currency and expanding the money supply by (sort of) going off of the Gold Standard.

[Sea Skimmer]

It certainly took the edge off in terms of preserving the balance of society, as an economic recovery the effect was limited, and many projects like the whole TVA simply had no realistic basis for producing quick results. But then all that surge of production in WW2 would have been significantly harder had that power not existed; the US was still hard up enough for electrical power in the war that several major dams were built during the war. One of them in something silly like 13 months for a 250 MW installation.

[Simon_Jester]

The "preserving the balance of society" part is arguably very important. A society where the economy is stagnant but people are basically content to just keep working until somehow everyone muddles through and things start growing again... That is a much better place to be than in a society where the economy is stagnant and the general public is starting to turn to feuding revolutionary groups and violent political movements in hopes of resolving the problem.

The New Deal was American mainstream government signaling that they had an answer to the Great Depression, that radical changes like a communist revolution or the Business Plot were not required. This did a lot for American political stability.

[cadbrowser]

I wonder then, if World War II hadn't happened; would The New Deal been enough to continue to grow and stimulate the economy and keep the US as a World Power?

[Broomstick]

I thought the US wasn't a world power until after WWII...?

[Elheru Aran]

I thought the US wasn't a world power until after WWII...?

Remember that the US was big enough in WWI to basically turn around the entire tide of the war once they entered. I'd say that qualifies as 'world power' on its own.

They also kicked the ass of Spain-- admittedly it wasn't much of a fight, but nonetheless it was still a young nation vanquishing quite thoroughly a powerful colonial empire-- during the Spanish-American War and formed their own colonial empire in the process.

Plus, they were definitely influential on their side of the planet, even somewhat before the SAW. Madison Doctrine and all that.

So... at least a 'hemisphere power'?

[houser2112]

Plus, they were definitely influential on their side of the planet, even somewhat before the SAW. Madison Doctrine and all that.

So... at least a 'hemisphere power'?

I think you mean Monroe Doctrine?

[Elheru Aran]

Plus, they were definitely influential on their side of the planet, even somewhat before the SAW. Madison Doctrine and all that.

So... at least a 'hemisphere power'?

I think you mean Monroe Doctrine?

Quite right. I knew it was a name starting with M, and wasn't McKinley, so...

[Gandalf]

I thought the US wasn't a world power until after WWII...?

It actually became a great power towards the end of the nineteenth century, as they had the world's most productive economy, and then defeated Spain in the Spanish-American War. It's a fascinating and terrible period of history.

[Guardsman Bass]

I wonder then, if World War II hadn't happened; would The New Deal been enough to continue to grow and stimulate the economy and keep the US as a World Power?

Probably not, but the US would have eventually recovered albeit at a slower pace. That's what happened in the wake of the "Long Depression" in the 1870s after the Panic of 1873, and after the Panic of 1893.

[PainRack]

Interestingly, what would you characterise as the New Deal?I seen partial remilitarisation such as the construction of the Enterprise called as New Deal because it called from public funds meant for unemployment.

Similarly, going off the Gold Standard isnt viewed as New Deal,but yet historians argue that it was critical in allowing for recovery and hence in my opinion, was part of the New Deal.

[Simon_Jester]

Well, Roosevelt used the term 'new deal' in his acceptance speech for the 1932 Democratic nomination:

"Throughout the nation men and women, forgotten in the political philosophy of the Government, look to us here for guidance and for more equitable opportunity to share in the distribution of national wealth... I pledge myself to a new deal for the American people."

That's sort of a key right there. I'd argue that "New Deal" refers mainly to programs whose primary intent was to rebalance the economy, reduce the advantages that accrued to wealthy individuals and groups, increase the opportunities available to the poor, and prevent things like the wild financial speculation of the Roaring Twenties from blowing up the economy for everyone else.

Going off the gold standard really should qualify.

[GrosseAdmiralFox]

The thing with the New Deal was that FDR had to ease the pains of the Great Depression, but also prevent a new one from happening again. Also, the 'Business Plot' was a REACTION to the New Deal. The US at the time was pretty much the second closest it had to a literal communist revolution, Russian October style. First time? The Gilded Age... yeah it was that bad.

Then there is Huey Long who essentially prototyped many of the New Deal's programs BEFORE the Great Depression. Huey Long is a controversial character to say the least, but he was the sort of patriot and Christian that would baffle most people today...

Huey Long was a very interesting character to say the least, and is one of those 'American Success Stories' of sorts. He grew up in rural Louisiana (and to put things into perspective, rural Louisiana was fuck poor at the best of times, much of the rural Louisiana populous didn't have electricity and running clean water) to a poor family, worked his way to change things so no one will have to go through the shit he had to and became basically a Caesar doing it. Down to his opponents assassinating him in the Senate-like body (this time a state legislature)... and in this case attempting to pull 'a Bismark' and literally take the rug out from under the Socialists and Communists with his 'Share our Wealth' Program (which is basically, for all intents and purposes, a Basic Life Guarantee before the concept had been conceived in it's modern context)...

Hell it wasn't uncommon for jokes about FDR stealing Long's thunder to happen during the Great Depression.

[Proletarian]

A Marxist analysis of the New Deal conducted in median res (and one hostile to Stalinist distortions about "united fronts").

To begin with, Roosevelt's economic interests were parsimonious with those of the class he was ostensibly to 'betray'.

... Why was Roosevelt selected to “lead” the country out of economic chaos? Not only because he had caught the nation’s attention as a much advertised “liberal” politician, but even more so because his own economic interests were identical with those of the group pushing his candidacy.

James Roosevelt, father of Franklin D., one-time vice-president of the Delaware & Hudson R.R., accumulated such a tremendous fortune in railroad organization, both down South following the Civil War, and in the East, that he was considered one of the five richest men in New York City. Although young Franklin D. had expressed a desire to enter the Navy, the elder Roosevelt persuaded him to study law instead and thus better equip himself for the ultimate management of the extensive Roosevelt holdings.

Following graduation from Harvard and Columbia Law School, Roosevelt entered the offices of the best established firm of management lawyers in New York City. While in their employ, he directed the affairs of the huge Astor estate, and thereby established a very close friendship with William Vincent Astor, one of the country's most influential industrialists and bankers. In a spirit of fun, Roosevelt then entered politics. Running for the state Senate on the Democratic ticket, he surprised everyone by capturing the office. No sooner was he seated, than Roosevelt, the comparatively unknown, drew national attention to himself by leading an opposition to the Tammany nomination for U.S. senator (in those days, 1911, they were elected by the state legislature). Thus he gained through this one act that unfounded reputation for unselfish devotion to the people's interests that has endured to this day.

Next Roosevelt boosted Woodrow Wilson for the Democratic presidential nomination in 1912, stumping for him afterwards during the successful election campaign. As a reward, Wilson appointed him Assistant Secretary of the Navy. Roosevelt spent seven years in this position. Several months ago, the Administration publicity agencies made much of the State department's order removing the U.S. Marines who had been stationed in San Domingo (Haiti). They discreetly neglected to mention that it was this same Franklin D. Roosevelt who sent them there in 1913 in his first official act as Assistant Secretary ostensibly to protect American lives, actually to protect American investments, Astor interests among others! During the summer and fall of 1915, our peace-loving Asst. Secretary of the Navy began preparing the Navy for eventual participation in the World War, two years before our actual entry! In addition, he developed a gift for oratory and began to advocate publicly for a much larger Navy. This missionary work was largely instrumental in causing President Wilson to sponsor the largest Navy appropriation bill up to that time. Passed in 1916, it provided an appropriation of $320,000,000 for naval expansion.

...

Roosevelt is not the only member of his family with extensive railroad holdings. His first cousin on his mother's side, Lyman Delano, is today Chairman of the board of directors of the Atlantic Coast Line R.R. Co., the Louisville & Nashville, and has an interest in many others. Other relatives are J.J. Pelley, recently resigned president of the New York, New Haven & Hartford R.R., and a shareholder in others; and Mr. Curry of the Union Pacific. Roosevelt's three most intimate friends are likewise industrialists with huge railroad holdings. The aforementioned Vincent Astor, besides extensive interests in industry and ocean transportation, is a director of the Great Northern Ry. Co., and the Illinois Central. Wm. A. Harriman, heir of the old railroad king, is a director of both the Illinois Central and the Union Pacific. Wm. K. Vanderbilt holds directorates in the New York Central, the Michigan Central, and other railroads. Besides these relatives and close friends, all who supported Roosevelt's presidential campaign with substantial financial contributions, almost every other railroad mogul in the country likewise backed him: Robert Goelet, Arthur C. James, Edward S. Harkness, C.S. McCain, David Bruce, Howard Bruce, Wm. T. Kemper, and F.H. Rawson. The railroad group behind Roosevelt numbered almost everyone but, significantly enough, the representatives of the roads controlled by the J.P. Morgan financial interests.

It was only natural that the railroads and related economic sectors would turn to one of their own in the midst of the downturn.

The railroads had indeed taken the worst beating of any capitalist group during the period of the crisis, and certainly needed help. For example, in 1932, 150 selected railroads showed a deficit of $150,634,000 compared to earnings of $896,807,000 in 1929. The railroad equipment industry led by Wm. Woodin also marshalled behind Roosevelt.

So too did other leading lights of industry. Western mining interests, which had a stake in the 'progressive' wing of the Democratic Party since the days of William Jennings Bryan's inflationary free silver schemes, stood fast for the New Deal.

Another section of industry that rallied behind Franklin D. was the mining, particularly the precious metals - gold and silver - group. Most prominent here were the Guggenheim and Bernard M. Baruch interests, exerting a virtual monopoly on silver through control of the American Smelting & Refining Co., which either extracts or refines for others almost one-half of the world’s silver produced yearly. Included with these is also Wm. R. Hearst, newspaper publisher, large Mexican silver mine owner and shareholder in the Homestake Gold Mining Co. This group in advocating gold devaluation and greater use of silver for monetary purposes enlisted the large farmers' vote who demanded that farm product prices be raised through monetary legislation.

So too did farming equipment consortiums.

A political party that promised to raise farmer purchasing power (fallen in 1932 to almost one-half that of 1929) was bound to gain the support of industrial interests dependent on the farmers and so we find the McCormicks, owning the monopolistic International Harvester Co., and other farm implement and fertilizer manufacturers joining the Roosevelt band-wagon.

And above and beyond all this were the internecine struggles of two factions of finance Capital, the 'liberal' Rockefellers and the 'conservative' Morgans, vying for control of Chase Bank. Roosevelt directly enabled a coup at the head of Chase by way of Congressional hearing, allowing the Rockefellers to replace a Morgan-appointed chief executive with one of their own.

Behind both political parties was also a grim struggle between two factions for control of the giant Chase National Bank. Backing the Republican Hoover were his 1928 mentors, the House of Morgan. Opposing J.P. Morgan was this other group of stockholders headed by John Rockefeller, Jr., and including Vincent Astor, the Vanderbilts and Guggenheims. The fight centered about the policy of J.P. Morgan, who controlled the bank, in forcing the Chase National to engage in practices outside its own legitimate field, such as lending money for speculative purposes, the floating of new stock and bond issues, and buying and selling on the stock market. Rockefeller, Jr., and his allies who are primarily industrialists, violently disapproved of this policy blaming it in great part for the stock market crash of '29. They not only wanted to gain control of the bank and return it to its normal commercial banking practice, which is to provide funds to industry and business for meeting current expenses, on good security, but they wanted control of the federal government in order to enact federal legislation against the Morgan policy which had become widespread under the influence and example of the Chase National. The Lehman Bros. (among which is Gov. H.H. Lehman of N.Y.) the country’s second largest firm of investment bankers, and other investment houses such as Halsey Stuart, supported this attempt to legalize against their competitors.

Roosevelt was no sooner inaugurated than he commenced to remember the “forgotten men”. First on the list, of course, were the Rockefellers. So on March 15, 1933, J.P. Morgan was summoned before the Senate Banking Investigation. His revelations and those of Albert H. Wiggin, the nominal head of the Chase National appointed by Morgan, were so damaging that Wiggin was forced to resign and the Rockefellers gained the balance of voting power, enabling them to elect their own man Winthrop W. Aldrich to the Chairmanship of the Board of the Chase National Bank. When Aldrich appeared before the Banking Investigation, he announced that the Chase National would divorce its Chase Securities Corp. He argued for a complete divorce of the securities business and commercial deposit banking. This suggestion was embodied in the Glass-Steagall Banking Act (June 16, 1933) ordering all commercial banks to be separated from their securities business within twelve months. Restrictions were also placed against loans for speculative purposes.

And as for the mining magnates?

The devaluation of the gold dollar, followed later by the nationalization of silver, enriched immediately the gold and silver producers. This monetary policy plus crop curtailment as practiced by the A.A.A. has increased farm prices to some degree. The Administration, however, overlooked the obvious fact that higher food prices raise the cost of living for the worker, which is directly opposed to the interests of the industrialist who desires low production costs.

I would suggest the New Deal was hugely effective... for those whose interests it served.

[FaxModem1]

When you say interests served, do you include the hungry and unemployed?

Such as the starving people it fed, or the logistics for transport of such food and supplies? It may have profited railroad and agricultural companies, but simply having the ability to manufacture food and transport it is rather important in a society that people are able to survive. Especially considering the levels of starvation and poverty that the Great Depression and Dust Bowl were inflicting on people?

Do we have solid numbers on infrastructure built up, services provided, to what extent it helped people, etc?

I'm sure preventing a socialist/communist revolution is great(or horrifying depending on your ideology), but I guess I'm also concerned about numbers of lives saved, and the best way to calculate that, as opposed to the abstract of scoring ideological progress.

[Broomstick]

Yes, how horrifying that the farmers who want to be paid for the food they produce, the industry that transports that food to where it is needed, and the hungry in the cities all have a common interest in making the system work - far better that millions starve and ideological purity remain unsullied!

And that cuts both ways - both the communists who'd rather the hungry starve than someone make even a penny's worth of profit in the system, and the capitalists who'd let the crops rot in the fields and the hungry starve in the cities.

The New Deal was far from perfect, and you can argue about what exactly was and wasn't the New Deal, but putting people to work, getting "relief" to the poor (back then it was actual food commodities), and so forth was good for all who benefited, and many were the poor and disadvantaged, not just the plutocrats.

[Patroklos]

And that cuts both ways - both the communists who'd rather the hungry starve than someone make even a penny's worth of profit in the system, and the capitalists who'd let the crops rot in the fields and the hungry starve in the cities.

You might want to watch the starvation talk, given the AAA caused exactly what you allude to above. That was not the capitalist's doing.

[Proletarian]

When you say interests served, do you include the hungry and unemployed?

The goal of those who are employed ought to be to achieve a state in which employment as a concept is incoherent. Chains wrapped in velvet are still chains.

Such as the starving people it fed, or the logistics for transport of such food and supplies? It may have profited railroad and agricultural companies, but simply having the ability to manufacture food and transport it is rather important in a society that people are able to survive. Especially considering the levels of starvation and poverty that the Great Depression and Dust Bowl were inflicting on people?

To be sure, the New Deal in some form or fashion was probably historically necessary at the time. That does not mean it was anything less than a sop to the working-class which enabled the centralization of Capital, under the aegis of the State (the Works Progress Administration in particular was modeled almost directly on corporatist structures in fascist Italy), and served the long-term interests of capitalism.

I guess I'm also concerned about numbers of lives saved, and the best way to calculate that, as opposed to the abstract of scoring ideological progress.

If the New Deal saved thirty million lives in 1934, at the expense of three billion in 2134 by preserving the profit-driven capitalist order and its attendant climatological catastrophism, then how 'moral' was it in hindsight?

You might want to watch the starvation talk, given the AAA caused exactly what you allude to above. That was not the capitalist's doing.

The AAA was absolutely a capitalist program, so far as it was directed towards boosting agricultural profitability. A program is not 'not capitalist' simply because the gub'mint does it. Capitalism is a totality; there are no non-capitalist spheres within capitalist society. An absolute command economy (which the New Deal never was), which retains commodity production, retains capitalism.

The fact of the intrinsically capitalist nature of the New Deal is why capitalists like Winthrop Aldritch, like Bernard Baruch, could support it with such gusto.

[Broomstick]

And that cuts both ways - both the communists who'd rather the hungry starve than someone make even a penny's worth of profit in the system, and the capitalists who'd let the crops rot in the fields and the hungry starve in the cities.

You might want to watch the starvation talk, given the AAA caused exactly what you allude to above. That was not the capitalist's doing.

I was speaking more in generalities in that paragraph.

When you say interests served, do you include the hungry and unemployed?

The goal of those who are employed ought to be to achieve a state in which employment as a concept is incoherent. Chains wrapped in velvet are still chains.

Uh, yeah - while you're working on achieving an earthly paradise the rest of us need to eat and put a roof over our heads and in a capitalist nation (which are the majority these days) that's generally done by getting a job of some sort. Communists tend to be at generating theory, at putting real food on real tables not so much.

If the New Deal saved thirty million lives in 1934, at the expense of three billion in 2134 by preserving the profit-driven capitalist order and its attendant climatological catastrophism, then how 'moral' was it in hindsight?

Oh, because the communists were so ecologically enlightened? Let's look at Chernobyl, Ukraine. How about Dzerzhinsk, Russia, which landed in the Guinness record book for most chemically polluted city? How about Linfen, China? Worst air quality in China, which is fucking saying something. Mailuu-Suu, Kyrgyzstan - radioactive waste. Norilsk, Russia - heavy metal contamination. Sumgayit, Azerbaijan - chemicals again. Tianying, China - lead contamination.

Let's put an end right here to the notion that it's somehow "capitalism" that's destroying the world. It's people doing that - humans piss and shit in their drinking water regardless of ideology.

[FaxModem1]

When you say interests served, do you include the hungry and unemployed?

The goal of those who are employed ought to be to achieve a state in which employment as a concept is incoherent. Chains wrapped in velvet are still chains.

That's nice and all, but automation wasn't really as big a factor back then as it is now. Someone has to make the sausage, as they say. And getting people to actually make sausage, as well as grain, barley, wheat, fruit, beef, roads, bridges, irrigation, electrical lines, telephone lines, etc., is rather important. Especially in a nation in which entire states are unusable as farmland due to bad agricultural practices. Making ideological progress is a little hard in the face of needing real technological progress and an infrastructural presence for practical realities in order to accomplish such potential political realities.

As well as a sense of personal sense of accomplishment and pride in having built something. Which is ingrained in human nature. Handouts happened in the New Deal, but jobs programs also kept people from losing hope.

I guess I'm also concerned about numbers of lives saved, and the best way to calculate that, as opposed to the abstract of scoring ideological progress.

If the New Deal saved thirty million lives in 1934, at the expense of three billion in 2134 by preserving the profit-driven capitalist order and its attendant climatological catastrophism, then how 'moral' was it in hindsight?

See, this is where I have to disagree. Even as left and forward thinking as I am(I'm more a Bernie Sanders man than any sort of communist), if I'm facing the prospect of my house being on fire, and trying to put it out, and the prospect of building an entirely new, better house after it burns down, I'll probably pick option 1 because my family and I need somewhere to sleep, eat, and live, and my family are in the house at the time of the fire. Even if FDR(or someone else who was elected in his place) was potentially open to making the US a Socialist paradise, wasting time trying to iron out the best possible nation while people are literally starving leaves the nation open to revolution. And keep in mind that fascism was just as valid an option for people of the time as communism or socialism.

How would history be affected ideologically for those potential three billion lives if the United States decides to go "It Can't Happen Here" and has the equivalent of Buzz Windrip in office? Remember, Hoover made the Great Depression worse by (real or perceived) inaction, thereby getting every slum nicknamed after him into Hoovervilles. What happens if a great progressive like Roosevelt is labeled with the same brush for similar actions?

To quote FDR....

It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.

I think that was FDR's method. Keep on experimenting, trying to keep everyone alive, and continue work on doing so to improve the nation and economy, as opposed to a 'Let's iron out all the kinks first, then implement said grand ideological design after, no matter how many die from our navel gazing' plan.

[Gandalf]

Let's put an end right here to the notion that it's somehow "capitalism" that's destroying the world. It's people doing that - humans piss and shit in their drinking water regardless of ideology.

Does this also apply to other "isms" (good and bad) and their associated historical actions?

[Broomstick]

Without spending an hour pondering in thought... yeah, probably.

People are their own worst enemy at this point, and part of the problem is that there are just Too Damn Many People for the planet. If the world population was an even 1 billion a lot of our current problems would be smaller and less catastrophic. But there's no morally acceptable way to cut down the world population by that amount in a short time span.

[Gandalf]

So you would be comfortable saying that Naziism didn't kill people, people killed people?

[Jub]

So you would be comfortable saying that Naziism didn't kill people, people killed people?

In the same span of time, you had Stalin and the Imperial Japanese getting in on the mass murder game as well and the common denominator between all three groups is that they're all human and thought that a lot of death would get them closer to their current goals.