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CHANGE AND ITS RESULTS

August 29, 2016

CHANGE AND ITS RESULTS

We are told by New Democrats and, of course, Republicans, that New Deal idealism is an artifact of the industrial age and that we are now in an information age which requires new thinking and new economic philosophies to fit the times. At the risk of being resistant to change and an artifact myself, I disagree. I think these people are using such a pretext to destroy what is left of the New Deal and to facilitate the final and complete corporate takeover of America and its institutions (my greatest fear).

The New Deal was and is a lot more than production of goods and services for sale or trade or the means of making such production (robot or assembly line staffed by humans); it was and is about (finally!) government taking concrete steps to do something for its people as well as corporate America. It provided desperately needed regulation of stock market excesses (SEC); it provided rights of labor to organize and collectively bargain for wages and working conditions (Wagner Act), farm support prices and a myriad of other needed initiatives such as electricity to rural America, dams for flood control and generation of electricity, infrastructure repair and renewal, employment etc.

Those who want to destroy what is left of New Deal activist philosophy either have a very short-sighted view of what it was about or, as I suspect, are wolves in sheep’s clothing who are with their pretense of changing economic times trying to rid their corporate sponsors of regulation and other controls of corporate malfeasance by that big, bad government. On the contrary, it has to be clear to any thinking American that Bush’s Great Recession (caused by banking and corporate recklessness and crime) is a direct result of a lessening of government management of corporate governance.

Thus New Deal laws (see the Glass-Steagall Act of 1933, repealed under the administration of Bill Clinton, a New Democrat) would never have permitted what happened to have happened, i.e., the 800 billion dollar bailout of the big Wall Street banks occasioned by their reckless to criminal banking investments in the derivatives market, mortgage fraud on a massive scale etc., so are New Democrats and Republicans trying to tell me that we need less banking and corporate regulation when less banking and corporate regulation is the very cause of our recent brush with international depression?

I am not buying it; I want America and its people to prosper, and that requires a strengthening of New Deal philosophy, not its total destruction under the phony pretense that it is outdated by new means of production. The basic underpinning of New Deal philosophy works whatever the means of production, but it is a “government cares for the people” idea and not the usual “let’s make the rich richer and the poor poorer” idea and thus draws fire from the rich and corporate class and their New Democrat and Republican confederates in Congress.

Let’s assume for the sake of argument that technological change does in fact have something to do with government’s responsibility to protect and advance the interests of both individuals and corporations in America (which I reject as an apples and oranges argument). Robert Reich points out in his book, Saving Capitalism, that this is nothing new, and proceeds to list some of such past occasions and how we treated the impact of such changes at the time, writing that “During eras of significant technological change, workers are typically displaced, social systems become destabilized, and the economy goes through rapid cycles of boom and bust. The owners of capital often reap vast rewards, financial elites gain ground, and economic and political power become highly concentrated. Notwithstanding the potential of the new technologies to create broad-based prosperity, the prevailing political and economic systems do not deliver it because those at the top gain increasing control over politics. Large numbers of people understandably feel the game is rigged. These anxieties and frustrations eventually fuel reforms that spread prosperity more broadly.” In other words, this has all happened before and we have dealt with it as we have other bumps in our economy so that, after considerable pain to the players, problem solved.

One such example is what happened under Andrew Jackson in the 1830s. The president believed that the elites had accrued unwarranted privileges (see corporate America today) and that such privileges had to be removed before average citizens could gain ground. Jackson’s attorney general (and later chief justice of the Supreme Court), Roger B. Taney, had this to say in this connection: “It is a fixed principle of our political institutions to guard against the unnecessary accumulation of power over persons and property in any hands. And no hands are less worthy to be trusted with it than those of a moneyed corporation.” Jackson opposed formation of the Second Bank of the United States because he believed that it would be controlled by financial elites. The Jackson administration did not reject capitalism; it rejected aristocracy. Jackson sought a capitalism that would improve the lot of ordinary people and not just the elites which, in my opinion, was a worthy goal both then and now.

Similar questions came to the fore in the second industrial revolution during the Gilded Age when we came up with railroads, electricity, oil and steel. Economic combinations (then called “trusts”) were the beneficiaries of great wealth, and urban squalor and political corruption were rampant. Lackeys for the robber barons of the age openly deposited sacks of money on the desks of friendly legislators. Such outrageous excesses finally gave rise to the Sherman Anti-Trust and Clayton Acts designed to curb such corporate thievery and political corruption.

The great justice Louis Brandeis correctly noted in an oft-quoted statement that the nation had a choice: “We can have a democracy or we can have great wealth in the hands of a few, but we cannot have both.” Franklin Delano Roosevelt, author of the New Deal and my favorite all-time president, also had an oft-quoted observation in 1936 after attacks by big business and Wall Street. He said: “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me – and I welcome their hatred.”

So while I deny the connection offered by New Democrats and Republicans that new means of production have any relation to the government’s responsibility to foster prosperity for all its members (since such a claim treats different issues), it is now clear to me that such a pretense is not an honest observation but rather a form of muted political corruption where sacks of money on congressional desks are outdated in favor of huge campaign contributions and perhaps deposits made to Swiss and Cayman bank accounts as we are re-living the Gilded Age once again.

Justice Brandeis was right – we cannot have great wealth in the hands of the few and democracy simultaneously. Either great wealth has to have public controls or we lose our most precious asset, our democracy, in a wealth vs. freedom clash. Given such a choice, I take democracy (the gift to us paid for by the blood of patriots) over profit to the few every time. How about you?      GERALD      E

 

 

 

 

 

 

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