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Obama American Dream = New New Deal

Any cursory reading of Mr. Obama’s writings will show that Obama’s big idea has always been to bring back Franklin Delano Roosevelt’s socialism of the 1930s.

Even before our recent economic crisis Mr. Obama was hoping that the competition of the global economy would bring about enough of a “crisis” to make us long for those good old days of the Great Depression.

From Obama’s second 2006 autobiography, The Audacity Of Hope – Thoughts On Reclaiming The American Dream, pp 86-95:

Opportunity

YOU’LL GET LITTLE argument these days, from either the left or the right, with the notion that we’re going through a fundamental economic transformation… But there’s also no denying that globalization has greatly increased economic instability for millions of ordinary Americans. To stay competitive and keep investors happy in the global marketplace, U.S.-based companies have automated, downsized, outsourced, and off-shored. They’ve held the line on wage increases, and replaced defined-benefit health and retirement plans with 401(k)s and Health Savings Accounts that shift more cost and risk onto workers.

The result has been the emergence of what some call a “winner-take-all” economy, in which a rising tide doesn’t necessarily lift all boats. Over the past decade, we’ve seen strong economic growth but anemic job growth; big leaps in productivity but flatlining wages; hefty corporate profits, but a shrinking share of those profits going to workers…

For the most part, though, the Republican economic agenda under President Bush has been devoted to tax cuts, reduced regulation, the privatization of government services— and more tax cuts. Administration officials call this the Ownership Society, but most of its central tenets have been staples of laissez-faire economics since at least the 1930s: a belief that a sharp reduction—or in some cases, elimination—of taxes on incomes, large estates, capital gains, and dividends will encourage capital formation, higher savings rates, more business investment, and greater economic growth; a belief that government regulation inhibits and distorts the efficient working of the market; and a belief that government entitlement programs are inherently inefficient, breed dependency, and reduce individual responsibility, initiative, and choice.

Or, as Ronald Reagan succinctly put it: “Government is not the solution to our problem; government is the problem.”

So far, the Bush Administration has only achieved one-half of its equation; the Republican-controlled Congress has pushed through successive rounds of tax cuts, but has refused to make tough choices to control spending—special interest appropriations, also known as earmarks, are up 64 percent since Bush took office…

But over the long term, doing nothing probably means an America very different from the one most of us grew up in. It will mean a nation even more stratified economically and socially than it currently is: one in which an increasingly prosperous knowledge class, living in exclusive enclaves, will be able to purchase whatever they want on the marketplace—private schools, private health care, private security, and private jets— while a growing number of their fellow citizens are consigned to low-paying service jobs, vulnerable to dislocation, pressed to work longer hours, dependent on an underfunded, overburdened, and underperforming public sector for their health care, their retirement, and their children’s educations.

It will mean an America in which we continue to mortgage our assets to foreign lenders and expose ourselves to the whims of oil producers; an America in which we underinvest in the basic scientific research and workforce training that will determine our long-term economic prospects and neglect potential environmental crises. It will mean an America that’s more politically polarized and more politically unstable, as economic frustration boils over and leads people to turn on each other.

Worst of all, it will mean fewer opportunities for younger Americans, a decline in the upward mobility that’s been at the heart of this country’s promise since its founding.

That’s not the America we want for ourselves or our children. And I’m confident that we have the talent and the resources to create a better future, a future in which the economy grows and prosperity is shared. What’s preventing us from shaping that future isn’t the absence of good ideas. It’s the absence of a national commitment to take the tough steps necessary to make America more competitive—and the absence of a new consensus around the appropriate role of government in the marketplace…

But it was during the stock market crash of 1929 and the subsequent Depression that the government’s vital role in regulating the marketplace became fully apparent. With investor confidence shattered, bank runs threatening the collapse of the financial system, and a downward spiral in consumer demand and business investment, FDR engineered a series of government interventions that arrested further economic contraction. For the next eight years, the New Deal administration experimented with policies to restart the economy, and although not all of these interventions produced their intended results, they did leave behind a regulatory structure that helps limit the risk of economic crisis

Again, it took the shock of the Great Depression, with a third of all people finding themselves out of work, ill housed, ill clothed, and ill fed, for government to correct this imbalance. Two years into office, FDR was able to push through Congress the Social Security Act of 1935, the centerpiece of the new welfare state, a safety net that would lift almost half of all senior citizens out of poverty, provide unemployment insurance for those who had lost their jobs, and provide modest welfare payments to the disabled and the elderly poor. FDR also initiated laws that fundamentally changed the relationship between capital and labor: the forty-hour workweek, child labor laws, and minimum wage laws; and the National Labor Relations Act, which made it possible to organize broad-based industrial unions and forced employers to bargain in good faith.

Part of FDR’s rationale in passing these laws came straight out of Keynesian economics: One cure for economic depression was putting more disposable income in the pockets of American workers. But FDR also understood that capitalism in a democracy required the consent of the people, and that by giving workers a larger share of the economic pie, his reforms would undercut the potential appeal of government-managed, command-and-control systems—whether fascist, socialist, or communist— that were gaining support all across Europe. As he would explain in 1944, “People who are hungry, people who are out of a job are the stuff of which dictatorships are made.”

For a while this seemed to be where the story would end—with FDR saving capitalism from itself through an activist federal government that invests in its people and infrastructure, regulates the marketplace, and protects labor from chronic deprivation. And in fact, for the next twenty-five years, through Republican and Democratic administrations, this model of the American welfare state enjoyed a broad consensus. There were those on the right who complained of creeping socialism, and those on the left who believed FDR had not gone far enough. But the enormous growth of America’s mass production economy, and the enormous gap in productive capacity between the United States and the war-torn economies of Europe and Asia, muted most ideological battles.

Without any serious rivals, U.S. companies could routinely pass on higher labor and regulatory costs to their customers. Full employment allowed unionized factory workers to move into the middle class, support a family on a single income, and enjoy the stability of health and retirement security. And in such an environment of steady corporate profits and rising wages, policy makers found only modest political resistance to higher taxes and more regulation to tackle pressing social problems—hence the creation of the Great Society programs, including Medicare, Medicaid, and welfare, under Johnson; and the creation of the Environmental Protection Agency and Occupational Health and Safety Administration under Nixon.

There was only one problem with this liberal triumph—capitalism would not stand still. By the seventies, U.S. productivity growth, the engine of the postwar economy, began to lag

In this more competitive global environment, the old corporate formula of steady profits and stodgy management no longer worked. With less ability to pass on higher costs or shoddy products to consumers, corporate profits and market share shrank, and corporate shareholders began demanding more value. Some corporations found ways to improve productivity through innovation and automation. Others relied primarily on brutal layoffs, resistance to unionization, and a further shift of production overseas. Those corporate managers who didn’t adapt were vulnerable to corporate raiders and leveraged buyout artists, who would make the changes for them, without any regard for the employees whose lives might be upended or the communities that might be torn apart. One way or another, American companies became leaner and meaner—with old-line manufacturing workers and towns like Galesburg bearing the brunt of this transformation…

Without any clear governing philosophy, the Bush Administration and its congressional allies have responded by pushing the conservative revolution to its logical conclusion— even lower taxes, even fewer regulations, and an even smaller safety net

But our history should give us confidence that we don’t have to choose between an oppressive, government-run economy and a chaotic and unforgiving capitalism. It tells us that we can emerge from great economic upheavals stronger, not weaker. Like those who came before us, we should be asking ourselves what mix of policies will lead to a dynamic free market and widespread economic security, entrepreneurial innovation and upward mobility. And we can be guided throughout by Lincoln’s simple maxim: that we will do collectively, through our government, only those things that we cannot do as well or at all individually and privately.

In other words, we should be guided by what works.

WHAT MIGHT SUCH a new economic consensus look like? I won’t pretend to have all the answers, and a detailed discussion of U.S. economic policy would fill up several volumes. But I can offer a few examples of where we can break free of our current political stalemate; places where, in the tradition of Hamilton and Lincoln, we can invest in our infrastructure and our people; ways that we can begin to modernize and rebuild the social contract that FDR first stitched together in the middle of the last century

Readers will recognize this quote:

FDR also understood that capitalism in a democracy required the consent of the people, and that by giving workers a larger share of the economic pie, his reforms would undercut the potential appeal of government-managed, command-and-control systems—whether fascist, socialist, or communist— that were gaining support all across Europe. As he would explain in 1944, “People who are hungry, people who are out of a job are the stuff of which dictatorships are made.”

This is from Roosevelt’s 1944 State Of The Union Address, where he talked about the need for a “Second Bill Of Rights“:


“The Economic Bill of Rights”

Excerpt from President Roosevelt’s January 11, 1944 message to the Congress of the United States on the State of the Union:

It is our duty now to begin to lay the plans and determine the strategy for the winning of a lasting peace and the establishment of an American standard of living higher than ever before known. We cannot be content, no matter how high that general standard of living may be, if some fraction of our people—whether it be one-third or one-fifth or one-tenth—is ill-fed, ill-clothed, ill-housed, and insecure.

This Republic had its beginning, and grew to its present strength, under the protection of certain inalienable political rights—among them the right of free speech, free press, free worship, trial by jury, freedom from unreasonable searches and seizures. They were our rights to life and liberty.

As our nation has grown in size and stature, however—as our industrial economy expanded—these political rights proved inadequate to assure us equality in the pursuit of happiness.

We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence. “Necessitous men are not free men.” People who are hungry and out of a job are the stuff of which dictatorships are made.

In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a second Bill of Rights under which a new basis of security and prosperity can be established for all—regardless of station, race, or creed.

Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;

The right of every family to a decent home;

The right to adequate medical care and the opportunity to achieve and enjoy good health;

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;

The right to a good education.

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

America’s own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens.

This is how Mr. Obama intends to “reclaim the American Dream.”

This article was posted by Steve on Friday, October 31st, 2008. Comments are currently closed.

13 Responses to “Obama American Dream = New New Deal”

  1. platypus says:

    I’ve seen this movie before. It’s Back to the Future, but Obambi is not nearly as adorable as Christopher Lloyd.

  2. Consilience says:

    SG, Do you know anything about Garet Garrett? Pat Buchanan referenced him today in his column and I found his essay on the New Deal at a Ron Paul website. What’s the deal with this guy? The essay seems spot on, but is there something to know? You can provide your assessment via email if you like.
    Many thanks,

  3. Steve says:

    “Do you know anything about Garet Garrett?”

    No, I don’t.

    I just visited Wikipedia…

    Garet Garrett – Wikipedia, the free encyclopedia
    http://en.wikipedia.org/wiki/Garet_Garrett

    But he still doesn’t ring a bell.

  4. Consilience says:

    Apparently he was a fierce, pre-Cold War conservative. I read one of his essays today, and it made a lot of sense. We’re going to need to separate the wheat from the chaff after next Tuesday if the messiah wins. I’m not optimistic about the days immediately following the election if he loses. I’ll see if I can find the link to the essay if you’re interested.
    Many thanks,

  5. Consilience says:

    A real-time opponent to the New Deal. I’m a student of history, but this truly opened my eyes.

    SG, this is the link:

    http://www.lewrockwell.com/orig5/garrett1.html

  6. Steve says:

    There were a lot of people who opposed the New Deal.

    And it should be noted that even the New York Times thought Mr. Roosevelt had gone around the bend by 1944 — and they endorsed the Republican Wendell Wilke that year for the Presidency.

    Imagine.

  7. Consilience says:

    Indeed, but the essay above describes the dismantlment of America and the beginning of entitlement America.

  8. 1sttofight says:

    IMO LBJ’s Great Society was the beginning of the end for America because it destroyed the family, especially the black family. Black women no longer needed a man to support them and their children. The fed gov became the father .

  9. Consilience says:

    1sttofight—You’re on the right track, but the Aid to Women with Dependent Children during the Eisenhower administration started the trend. Check out Charles Murray’s book Losing Ground from the early 1980s.

  10. Steve says:

    “You’re on the right track, but the Aid to Women with Dependent Children during the Eisenhower administration started the trend.”

    For the record, Aid to Families with Dependent Children also started in 1935 as part of FDR’s New Deal:

    Aid to Families with Dependent Children – Wikipedia, the free encyclopedia
    http://en.wikipedia.org/wiki/Aid_to_Families_with_Dependent_Children

  11. Professor_Repulso says:

    “Today on my way to lunch I passed a homeless guy with a sign that read ‘Vote Obama, I need the money.’ I laughed.
    “Once in the restaurant my server wore an ‘Obama 08’ tie, again I laughed as he had given away his political preference – just imagine the coincidence.
    “When the bill came I decided not to tip the server and explained to him that I was exploring the Obama redistribution of wealth concept. He stood there in disbelief while I told him that I was going to redistribute his tip to someone who I deemed more in need – the homeless guy outside. The server angrily stormed from my sight.
    “I went outside, gave the homeless guy $5 and told him to thank the server inside as I’ve decided he could use the money more. The homeless guy was grateful.
    “At the end of my rather unscientific redistribution experiment I realized the homeless guy was grateful for the money he did not earn, but the waiter was pretty angry that I gave away the money he did earn even though the actual recipient needed the money more.
    “I guess redistribution of wealth is an easier thing to swallow in concept than in practical application.”

    Source unknown

    “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy; its inherent virtue is the equal sharing of misery.” Winston Churchill

  12. Retired Geek says:

    What is the difference between socialism and communism?

    Socialism can only grow directly from Capitalism.

    Communism can only be achieved from Socialism or by violent revolution.

    Socialisms slogan is: “From each according to his ability, to each according to his DEEDS.”

    Communisms slogan is: “From each according to his ability, to each according to his NEEDS.”

    Socialism and communism are alike in that both are systems of production for use based on public ownership of the means of production and centralized planning.

    Socialism is the first step in the process of developing the productive forces to achieve abundance and changing the mental and spiritual outlook of the people.

    Socialism is the necessary transition stage from capitalism to communism unless there is a violent revolution.

    There are two kinds of property to a Socialist:
    1) Property used for private enjoyment, i.e. Automobile.
    2) Property used to produce the Automobile.

    Socialists will allow you personal property i.e. Automobile, but will take away and own the property used to manufacture the Automobile.

    There is one kind of property to a Communist:
    That which is owned by the state, including the citizens of that state.

    The communist principle of distribution according to needs is not immediately possible and practical until the Socialist framework is in place.

    The conjecture that Socialism is NOT Marxist thinking is both foolish and plain silly.

    http://hisfacts.blogtownhall.com/2008/10/21/obamas_radical_and_communist_alliances.thtml

  13. Consilience says:

    SG—My bad!!! “You’re on the right track, but the Aid to Women with Dependent Children during the Eisenhower administration started the trend.”

    I turned off my computer to read last night and went “oops”. My apologies to you and your readers: I was wrong.


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