One of the common labels employed by critics attacking of President Obama's stimulus bill is "socialist." I know that's a fright-laden term since it evokes images of Josef Stalin and the KGB, but the history of socialism is much broader and often more benign than such a connection implies, especially in this country. For one thing, socialistic ideas are not incompatible with democracy; and though it's a less obvious fit, at least theoretically, it's not really all that incompatible with capitalism either (understanding that such a relationship involves a degree of compromise on both sides-- look at Germany for example). Certainly, programs that have socialistic elements have been successful in the past in this country; this morning, Mark Schone at Salon.com collected a whole
slide show of evidence. Part of the genius of Franklin Roosevelt was his ability to set aside labels (and their attached ideologies) to embrace policies that might help, regardless of their theoretical origins or attachment to specific factions (and during the New Deal, that meant fascism as well as socialism). His goal, and ultimately his success, was in crafting a set of programs that collectively worked to preserve the fundamental democratic/capitalistic nature of our system, by demonstrating its inherent flexibility in occasionally embracing seemingly radical ideas. It would be nice if the current critics could be so open-minded, and confident that our system is ultimately strong enough to endure such pragmatic compromise, especially in a time of emergency. Stephen Pearlstine's
article in this morning's
Washington Post addresses this same issue.
4 comments:
Dr John,
I can follow your comment about "socialistic ideas are not incompatible with democracy" There may be even some I could agree on .. but your reference to FDR genius of embracing policies to help.. now there I have an issue. Over the years I have read and heard many arguments that FDR's policies hurt more than helped and that the main reason the unemployment went down and the depression ended was because of WWII. Here is a column by Jim Powell addressing that issue. http://www.cato.org/pub_display.php?pub_id=3327
If Obama follows the example of FDR we could be in alot more misery than he and his supporters suggest.
Lil' Sis
Lil Sis,
Saving the system and ending the Depression were two different problems. FDR saved the system (many forget that there was revolutionary tension in the air in some parts of the country in 1931-32-- the New deal defused most of that), but never committed whole hog to the policies necessary to end the Depression, at least not prior to 1938. This was due to the lingering notion that government debt was bad, and so every time (through 1938), that the New Deal programs registered some advances, they were cut back to avoid going too deeply into debt. This was partly because of political pressures from the opposition, but it's probably safe to say Roosevelt shared some of their concerns. After 1938, he decided to not worry so much about accumulating more debt and kept spending, right through World War II (and remember, the war started in China in 1937, in Europe in 1939, and although the US wasn't directly involved, we counted many of the participants as customers). Certainly the war gave greater cover to this process after Pearl Harbor (there weren't too many opponents to increasing government spending then), but it was still government spending that fueled the recovery (after all, who was the primary customer for all that war material?). Not only that, but the institution of New Deal agencies made for a quicker and more efficient switchover to the war-time economy, which was a critical factor in winning the war. To put it another way, the war effort was an extension, a very successful extension, of the New Deal.
Dr. John
Dr John,
As I stated, the war with the spending towards military weaponry, security and whatever else can be put to use during the war effort, was precisely my point. The draft of men for the military helped with the unemployment situation, and the filling of military (and other) jobs helped with the recovery of the economy. Proir to the war the policies of FDR sometimes offered help but as I read about it they often worked just the opposite. It was after the war when regulations were set up (for banking in one instance) that helped to continue the nations growth after '45 (Truman's administration).
You talk about the fear of debt - Don't we have that now too? Where is this trillion+ dollars stimulus coming from? Loans from foreign countries? There is just too much at stake, and not much besides pork going into the stimulus to just roll over and "let it ride".
Lil' Sis
Lil Sis,
Taking your last point first, the fear of debt (specifically government debt) was what checked the effectiveness of the New Deal through its first years; in other words, in allowing those fears to govern policy (rather than the positive results already realized through spending) FDR handicapped his own efforts. By the way, this was as much for political reasons as anything else-- feeling he needed the support of critics to pass other programs, he compromised on the principle, which in the end proved counterproductive. Unemployment went down every year under the New Deal, except 1938 (during a recession partly created by a cut back in federal spending, as FDR tried to scale back the deficit); the GNP also grew each year under FDR, again except for '38; tax revenues also increased each year, at least partly due to the other two factors. It's true that the wealthy objected to Roosevelt's policies (a couple tried to stage a coup in 1933-- that's what I meant about revolutionary tensions), and he wasn't particularly sympathetic to them during the crisis. But there is no way to analyze the data to suggest the New Deal was a failure, unless you start with the premise that success can only be measured in terms of returning to where things were in twenties-- during which the economy was dramatically over-valued by over-production and inflated stock values (both of which contributed to the eventual collapse). By the way, most of the programs regulating banking originated with the New Deal and were extended under Truman (as were Social Security, minimum wages and unemployment benefits). Does that mean every program worked perfectly? No, but that was my original point-- FDR did not let ideology dictate what he was willing to try, if it had a reasonable chance at success, and in the end, the overall impact was positive. Another sign of these programs general success: when the war was over and Republicans tried to roll back New Deal programs, they were rebuffed by public opinion, and while other countries (who were also victims of the Great Depression) struggled to regain their economic footing after the war, the US economy, operating with many of those same programs intact, surged. Only those with an ideological stake (like the Cato Institute, for example) will even try to make the counter-argument. One last point-- you refer to the stimulus bill being not much more than pork, but the only analyses I've seen suggest the pork constitutes about $6 billion, a big sum, for sure, but much less than 1% of the total package. As for the other components of the bill, let me refer you to the analysis (not of the bill specifically, but of the different forms of stimulus available, several of which are in the bill) by Moody's Economy, an independent source, at
http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20081022/
Dr. John
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