The New Deal Still a Good Deal

(SILVERTON, Ore.) - The bronze statue atop the Oregon Capitol celebrates the pioneer era, but the building itself is a testament to the New Deal's Public Works Administration, born 75 years ago this month in the midst of the Great Depression. The New Deal also bequeathed to Oregon many other superb structures, including Mt. Hood's Timberline Lodge and the Yaquina Bay Bridge. But all of them pale in comparison to the New Deal's greatest creation: a broad middle-class society.

No blueprint existed when President Franklin Delano Roosevelt set out to rebuild the nation after its economic collapse. Yet legislation enacted over the course of several years laid the foundation for an economy in which the fruits of prosperity were widely shared.

It did so, first, by fostering the creation of good-paying jobs. Besides instituting work programs to address the massive unemployment of the time, the New Deal established a national minimum wage and a standard for overtime pay. And crucially, it protected workers' right to organize. As union jobs multiplied, so did the wages of millions of Americans.

Second, the New Deal invested heavily in the public sector, generating big returns. New roads, bridges and schoolhouses sprung up. The newly created Federal Housing Administration (FHA) insured mortgages, making homeownership affordable for a majority of Americans, while the GI Bill opened college doors to returning war veterans.

Public investments were financed through a strongly progressive tax system, a third way in which the New Deal fostered the creation of a broad middle class. "Taxes shall be levied according to ability to pay," Roosevelt declared. "That is the only American principle." Progressive taxation nurtured a broad middle class by inhibiting extreme concentration and entrenchment of wealth and power.

Finally, with pain from the 1929 market crash still lingering, the New Deal strengthened the government's role in the economy. In doing so, it protected the economy and the public from the excesses of unfettered markets and corporate power. The unemployment insurance system created by the New Deal, for instance, is a model program that benefits workers and employers alike.

For sure, the New Deal had its flaws. One of the most glaring was that its benefits did not flow equally to minorities. The FHA's promotion of homeownership, for example, largely excluded African Americans.

Critics often deride the New Deal by contending that it took World War II to pull the country out of the Great Depression. But that argument ignores that the New Deal set the stage for shared prosperity. It pulled a vast swath of the population aboard the ship, so that when the rising economic tide arrived, they all floated up together.

Sadly, that is no longer the case. Nearly 30 years of misguided economic policy have hammered away at the foundations of the New Deal, enabling inequality to return to levels last seen just prior to the start of the Great Depression.

Last year, for example, the highest paid hedge fund manager in the U.S., John Paulson, made $3.7 billion. An Oregonian working full-time at the state's median hourly wage would need to work for about 119,000 years to equal Paulson's take last year. That time span is about as long as modern humans have roamed the Earth.

To make matters worse, middle-class workers can pay higher total tax rates than hedge fund managers and others who speculate for a living, given that income from capital gains gets preferential federal tax treatment compared to income from work and that payroll taxes proportionally take a bigger bite out of the income of middle-income families than that of the well-off. Billionaire Warren Buffet, for one, disclosed last year that he paid a lower tax rate than his secretary.

In today's topsy-turvy America, the National Labor Relations Board undermines worker efforts to organize, the Securities and Exchange Commission looks the other way while Wall Street peddles dangerous derivatives, and domestic programs that invest in America's infrastructure and opportunities for people get the budget ax.

Americans yearning for a better future should heed the lessons of the New Deal. They offer not just concrete principles for building a society of shared prosperity, but also confidence that it can be achieved.

Juan Carlos Ordóñez is the communications director of the Oregon Center for Public Policy. You may reach him at jcordonez@ocpp.org.

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Godsofchaos July 1, 2008 4:44 pm (Pacific time)

I Dislike how you downplayed WWII massive role in getting us out of the great deperssion Juan. WWII provided a massive amount of work. Somebody had to build the planes,ships,etc. This build up didn't end with WWII and in fact it increased during the cold war somebody had build the planes, nukes, and other matrials needed for the imaged WWIII(its called the miltary industral complex or ,in metal gear 4, the war econemy). It was war or the threat of war that rebuilt our wealth not FDR's new deal.

Capitalist June 30, 2008 2:19 pm (Pacific time)

I believe that it's really important that every once in a while you remind people that it is them, the hard working individuals of America that makes our country so wonderful. A place that people from around the world want to come to, even with all our problems, real and imagined and even those that are created for political purposes. It is a fact that the people create the wealth through their hard work, and we empower the government to work for us, not vice versa as some may imply. When that government is not being effective then we need to fix it. They have failed to use the tax revenue that we provide in a responsible manner. One does not need to provide reams of documents to prove that, you just simply observe the environment and see for yourself. Americans should never sell themselves short, we are the makers of wealth, and without our output and input, we have what? I don't even want to think about it. Government has worked quite well in a number of area's and is woefully inadequate in others, and it is the latter that now needs our attention, and the ballot box is one place to start, and maybe even the court system. I advocate that a no-nonsense civilian oversight group of committees begin an intense audit, and a Grand Jury is made available to follow-up if needed, and I belive it is needed. Our infrastructure is a mess not because of just the federal government, but state and local officals have failed to use the tax revenue for which it was earmarked. There needs to be some stern accountibility. We simply cannot afford to have another round of new taxes and user fees to go to heavens knows where. I have been around long enough to see quite a number of tax and fee increases implemented for infrastructure to end up going to one boondoggle after another, and it is the local politicans (in addition to the national ones) that are "squandering our wealth."

Henry Ruark June 30, 2008 12:47 pm (Pacific time)

To all: Axiom: "axiom (as in "proposition") n.:(logic) a proposition that is not susceptible of proof or disproof; its truth is assumed to be self-evident." In this case, "self-evident" to whom is the kicker...for your own "axiom", simply look around your own life and that of your neighbors and ask "Are we better off as Americans in the past three decades ?" Re "don't let details fuzz up the big picture", that will give you both...your own experience and what you've learned over all those years, painfully... !! Which is why Cap. avoids any pretense of documentation via historic and current record, relying again on "trust ME, as I see it" vs proof of reality from widely available reliable sources with proven authority via special preparation and ongoing checkable process. But what ELSE can he DO ??

Henry Ruark June 30, 2008 12:02 pm (Pacific time)

Cap et al: Have heard allathat long ago from favorite neocon nonentitites...and miss any kind of documentation NOT coming from YOU --unknown to us for bckgrnd, motives, any possible authoritative "right to speak" other than feelings as to what is "right" -- SO repeat: Put up or shut up, sir. Your plaint is open and shut from self; where's your foundation from studies, reports, historical references, whatever. Until so-supplied, you still tooting same old horn we've hard ever since the OTHER Depression, caused in large part by same mythical meanderings produced by very similar b-button/rubs. Even Bush I termed this stuff, starting basically with Reagan, as "voodoo economics" and was stuck with that famed saying while selling out to win V.P, start family dynasty from which we continue to suffer... ID-self to Tim for more direct, in deference to all others here now sickened by steady flow of....

Capitalist June 30, 2008 6:44 am (Pacific time)

The advice I give to my associates, along with friends and family, is the best way to catch the larger picture is not to focus too intently on the details. Now did the Earth come off it's axis? If not, then I want to thank the astute poster for acknowledging that "government" does not create wealth (an axiom by the way), they just spend it. We most certainly need government for various types of regulation, but when left unchecked they cause considerable harm to the economy and ultimately all Americans, not just the occasional boondoggle. One would be hard pressed to show any country that has massive government influence that is successful, they do not exist. If government is left unchecked you will have a scenario that could out do Stalin's or Mao's totalitarian mess. "...For the past few years it has been hard to ignore America’s crumbling infrastructure, from the devastating breach of New Orleans’s levees after Hurricane Katrina (building below sea level is not very smart!) to the collapse of a big bridge in Minneapolis last summer..." The bridge is a grossly poor example (that's why research is so important), because the bridge in Minneapolis collapsed due to a construction error. The linking plates at girder interconnects were made of thinner steel than the original design called for---IIRC, installed was 1/2" thick, and blueprints called for 1" thick. If government used the taxes they collect for highway maintenance "on" highway maintenance, our roads/bridges would be the envy of the world, and they use to be just that before the wrong people took over our tax revenues. For example, take what they collect from truckers alone; they pay up the wahzoo in a multi-layered scheme of taxes and fees for every mile they run. Then there's the taxes you and I pay on gas (don't forget home heating oil and natural gas!) and also excise fees. As I wrote earlier below, there needs to be a wide-scale accounting of where all "our" tax money ultimately ends up. Fiduciary responsibility, if violated by private individuals/organizations have criminal sanctions, this should also apply to individuals in government. Or just turn over the budget matters to a bonded private enterprise.

Henry Ruark June 29, 2008 5:36 pm (Pacific time)

Cap et al: "You lie in your teeth, you cur, sir !" That's title of past Op Ed answering capital-city daily telling large fibs about their own copy. If it fits here, lay it on ! Meanwhile miss any level of response with links for "see with own eyes" to any part of this statement you made publicly, thus are both responsible and accountable to support or withdraw: "I suggest that when we have minimal government interference, the markets just perform better. Unfortunately there are forces, powerful force, that feel that increasing taxes is the way to go about it, but where else on the planet does that work? No where. When it comes to current tax rates, just who pays the majority of taxes? What we need from our government, is more oversight on them to see that they remain not only faithful to their budget, but that our tax funds are used appropriately, and not for some outlandish projects that we do not need. If private businesses spent like our different government agencies, they would be bankrupt. Remember, the government does not create wealth, they just spend it." Here we don't just "suggest" we provide responsible statement from other sources with some authority to speak, better than our own, even when ID for writer is known well. Here you are naught by hide-name to all of us, so not worth time, space, effort here any further if you cannot now hang up links supporting what you wrote... OR doth title of Op Ed, cited above, apply for YOU, too ??

Henry Ruark June 29, 2008 12:28 pm (Pacific time)

Cap et al: "Next-step" in your Econ 101 is discussion of tax principle, way in which shares of essential governmental actions are proportioned. Will keep simple for you, and supply full documentation from world-famed economists on request. This to allow you same privilege in advance of Op Eds upcoming... !! IF you can do so and dare to try...

Henry Ruark June 29, 2008 9:51 am (Pacific time)

To all: Here's link for Economist: www.economist.com/world/na/PrinterFriendly.cfm?story Note ref. to Jefferson's plans for roads, canals, 1808, led to transcontinental railroads; Eisenhower's Highway-Aid-Act, '56, creating interstate sysem essential for ALL business; and never forget FDR's New Deal with huge reliance on infrastructure work for millions as jobs. Enough, Cap ? Can you offer documented denial of absolute essential role govt. plays in creating wealth ? OR of same role for workers now denied American right for effective representation vs unfairly heavily-funded royalist-principle opponents ? That's why business spent 30 years and millions to seduce Supremes into "precedent" setting up "corporate campaign contributions" as "person-hood political free speech" !!

Henry Ruark June 28, 2008 4:52 pm (Pacific time)

Cap et al: You want right up-to-date ? Here it is from The Economist, famed British journal, re the role of government for care of infrastructure...you know, roads, bridges, water supply, security - what government can nd must do: "America’s tradition of bold national projects has dwindled. With the country’s infrastructure crumbling, it is time to revive it THE Mississippi River pushed relentlessly past dozens of levees this month. Towns were submerged, their buildings tiny islands in murky water. Ducks paddled on ponds that had once been farmland. Some flooding was inevitable, given the force of the swollen Mississippi. But a poorly managed flood-defence system did not help. For the past few years it has been hard to ignore America’s crumbling infrastructure, from the devastating breach of New Orleans’s levees after Hurricane Katrina to the collapse of a big bridge in Minneapolis last summer. In 2005 the American Society of Civil Engineers estimated that $1.6 trillion was needed over five years to bring just the existing infrastructure into good repair. This does not account for future needs. By 2020 freight volumes are projected to be 70% greater than in 1998. By 2050 America’s population is expected to reach 420m, 50% more than in 2000. Much of this growth will take place in metropolitan areas, where the infrastructure is already run down. If America does not act, says Robert Yaro of the Regional Plan Association (RPA), a body that plans for the New York-New Jersey-Connecticut region, it will have the infrastructure of a third-world country within a few decades. Economic growth will be constricted, and the quality of life will be diminished." Article goes on to show place of investment in then working with government to generate jobs, and wealth, too as that follows. Awaiting your similar "see with own eyes" documentation, when you get tired of stroking b-button...

Henry Ruark June 28, 2008 3:51 pm (Pacific time)

Cap-D. et al: Ask me what the D stands for, please ! Your key misleading, distorted, perverted concept is: "...the government does not create wealth, they just spend it." That denies the fundamental principle on which all-else doth rest: "Private property". Without government, to provide law and control, where doth property go ? Ask any lawless nation. With that guarantee, then --and only then !-- people can join together in multitudinous ways which build excess beyond essential needs, as in early civilization. From that then flows "the investor", providing tools, equipment, management; and using cooperatively-produced transport, security vs raiders and on and on and on... BUT first cometh the most essential organization via civilized cooperation backed by governance of whatever kind, perverted by royalist principle or provided by some form of democracy. Canny old Ben Franklin so declared to the Founders: "Private property is a creature of society and is subject to the calls of that society, whenever its needs may require it. --Ben Franklin - 1789 You wanna try it without government ? Seek out some place other than a democracy, even one so damaged and driven as this one. But never believe any of what America has achieved can come without governance to balance, protect, and provide what only government can do.

Henry Ruark June 28, 2008 1:12 pm (Pacific time)

Cap et al: What you peddle here is still more neocon bushwaw. History denies each and every point, as anyone with economic background other than biased-"capitalist" b/button feelings will confirm. IF you so sure of "facts", why not offer "see with own eyes" rebuttal with factual links for exam by all here ? OR you could do own Op Ed, with much more detailed and thus checkable statements. If you so intense re your own experience, why not state specifics qualifying you to make such stupidifyingly broad and untrue statements ? (Yes - I just called you what you think I did...so now you can put up or shut up !) Without allathat, again you forget basic truth from leader of neocons (at one time): "Everyone is entitled to his own opinion; but not his own facts." --Daniel Patrick Moynihan Factual analysis denies every point you make, and if you ID-self to Editor Tim, I will deliver set of PDFs for your detailed response, as public service re distortion and perversion peddled here.

Capitalist June 28, 2008 9:21 am (Pacific time)

We certainly have had far too many jobs leave our country. I remember quite clearly when we led the world in auto production, then as the inventors of the television and so many other fine products, we also led the world in manufacturing. Then what happened? It's really quite simple, just go back and look at what happened when the tax rates started going up, and all other expenses that were increasing to get that product out at a competitive price. Big manufacturing jobs were leaving, though paradoxically our lifestyles, on average, have been improving. It's the pits anytime someone loses their job no matter what it is, so we do need to make sure we keep those jobs here, and what's the best way to do that? Increase taxes and fees? Of course not, for that's how we lost that huge manufacturing base. I suggest that when we have minimal government interference, the markets just perform better. Unfortunately there are forces, powerful force, that feel that increasing taxes is the way to go about it, but where else on the planet does that work? No where. When it comes to current tax rates, just who pays the majority of taxes? What we need from our government, is more oversight on them to see that they remain not only faithful to their budget, but that our tax funds are used appropriately, and not for some outlandish projects that we do not need. If private businesses spent like our different government agencies, they would be bankrupt. Remember, the government does not create wealth, they just spend it.

Henry Ruark June 26, 2008 6:33 pm (Pacific time)

Cap et al: Yours re survey is meaningless since damage done is to private rights; and survey difficult since most so damaged, under secret actions, have no way yet to know they have been injured --so survey impossible and irrelevant. If this is your response to Constitutional pilfering and pillage by Bush et al, then we know all we need ever to learn. Re "free trade", you are seriously outmoded, since this line became impossible to give away, much less document, during past decade. OR you are misinformed, despite easy access to reliable sources. OR you deliberately distort picture now wellknown around world, seen as badly damaging emerging nations especially, and creating economic vacuum now sucking millions of U.S. jobs abroad, while other impacts multiply effects of deregulation and privatization, adding still more desperate damage to globalization. Ask several hundrd-thousand former call-center workers here why their jobs suddenly went to India, if you dare.. now THERE's a good survey ! That's the reality; what's your excuse for what you peddle here? Please note that I rapidly followed my last-to-you with documented actual reality numbers, from already-named reliable reference, proving what I contended. Can you now do the same ? Might add ID so we know from whence cometh this dead-fish stuff...and if you wish to ID to Editor Tim will be glad to continue direct, in deference to better use of space than waste it thus... "See with own eyes" works, but one must use it honestly. Here we have no source known for responsibility and accountabilty --only the very suggestive cover-name Capitalist.

Capitalist June 26, 2008 8:01 am (Pacific time)

Regarding warrantless recordings of private conversations, I have researched the subject and do not see any large group (or small) of individuals suing the government for this behavior. Generally when damages are not being pursued you really have nothing but smoke, aka, sometimes referred to as smoke and mirrors. I am also concerned about the government getting involved in my personal behavior, as long as it is not hurting others. I also would like to point out that as a society we are in pretty darn good shape because of our free market system, and feel the less government is involved in this free market, the better off we will be. When you look at other countries that have significant government control over the daily lives of their people, you see an oppressive environment. Here in America, when you look at our large cities, and states like New Jersey, you see an ongoing deterioration of individual freedoms, that is, more and more of their wealth is being taken away via taxes and fees and being redistributed to heaven knows where? The word "boondoggle" comes to mind.

Henry Ruark June 25, 2008 4:49 pm (Pacific time)

Cap et al: Re mine stating worker income about stagnated in recent years, here's rapid documentation: In 1980, the last pre-Reagan year, families in the bottom 90 percent averaged $30,466. That's $72 more than the comparable $30,374 comparable families averaged in 2006 --and yes, adjusted for inflation. Top 0.01 percent too home in 1980 an average $5.4 million. That's less than 1/5th the $29.6 million superrich average in 2006 It is economic fact that the greater the gap between the rich and everyone else, the more dangerously unstable the economy becomes; that gap is far worse NOW than in the Great Depression period. For your own protection and that of your family, suggest you see NATION issue cited, as "see with own eyes" check on what I've cited here. NATION is famous as started to oppose slavery continuance, and has been fighting for all of us ever since. importan where now so many are slaves to corporate/business structure, and we fight heavy impact of corporate campaign contributions shaping major legislation at all levels --that is simply fact-of-life these days, only remediable by organized defensive actions and heavy participation by knowledgeable citizens.

Henry Ruark June 25, 2008 2:09 pm (Pacific time)

Cap. et al: You may find my list of "betters" helpful to run through as practical test of where YOU are now... Re "American dream" you outline via contrast of NBA-vs-janitor, and references to Gates et al, that's dreamy stuff of an entirely different and mythical nature --as your use of my "betters" may well show for your own life. Will admit that kind of snuffer-stuff is addictive --which is one reason we are now where we find ourselves, every day, trying desperately to make this one "better" than the last-30-or so... IF any of this actually does penetrate, "better" set self up with sensible cushions for the inevitable-fall that may occur...writer denies all responsibilities for any damage, contends you bringing it on yourself...

Henry Ruark June 25, 2008 2:03 pm (Pacific time)

Bad-D. et al: Your concluding, thus key, phrase is: "I’m sorry, excuse me? I’d be happy to see him or one of his cronies point out to me where in the constitution an Obama administration has the right to tell me how much food I can feed my family, or how many miles my car must get per gallon to be legal or whether or not I can turn the air conditioner on." By all edit-exam rules and inbuilt prosody, that can only be seen as purposive distortion of meaningful common sense from its target. IF you feel so intensely re dictatorial control, what was your response to warrantless recording of private conversations by Bush regime ? Obviously, we could work right on through all 35 of the Kucinich indictments, with your response to each, if needed. Meanwhile perhaps you can profit from further personal examination of motivations for such bent-out-of-shape sayings as in this comment. If you wish further editorial analysis, ID-self to Tim for direct contact; it will be my pleasure to donate the effort to offset the obvious bent mental mechanisms exhibited in this one, such as plainly shown in your very first sentence. Did you live through that period, as I did ? The powers then granted to FDR did not come all that easily, and the struggle-then is all too much parallel in reverse for the one we face now. But you had to have been there to understand that...

Henry Ruark June 25, 2008 1:54 pm (Pacific time)

To all: Simple fact of life, now emphasized as we enter 21st Century, is that there are some things only government can do for its people, and there are some things no market mechanism can ever do, either. It is abuse of relatively simple understandings and the choices offered as we learn that has forced us to the most damaging consequences this nation has ever faced. That may be single slashing simple lesson to be learned ever since false choices were mercilessly marketed to far too many from Reagan-era onwards --as now well-proven by tons of totally testable information, for those still mentally free enough to learn from it rather than unwisely and unthinkingly regurgitate 30-years of neocon noise machine propagandized, distorted and perverted data, now being disclaimed and destroyed on every issue, point, problem and promise mentioned here. Simple test: Are you now better off, better served, better protected, better fed, better housed and clothed, and better educated, better employed, better represented and organized at-work, and better able to provide for your own future ? After prolonged, profound, protected take-over and malign manipulation of our governance system --and thus accepting both responsibility and accountability, too --these neocons non-compoopers still have not absorbed the massive consequences on millions of US in America, and prefer instead to seek still further empire conquests abroad, abrading not only world influence but creating completely, painfully "unsustainable" economic, social and cultural damages not only overseas but also in each and every American home.

Bad Deal June 25, 2008 11:54 am (Pacific time)

If the government gets into the business of regulating and controlling carbon emissions it will be an unparalleled concentration of power far exceeding the New Deal under Roosevelt. The government will be in complete control over what businesses and average citizens consume and produce. It is the gateway excuse to rule, regulate and control your daily life in a fashion that we have never tolerated before but are now expected to meekly accept as we attempt to bailout the bathtub with a teaspoon. Never have Americans been so willing to hand over the most fundamental financial, transportation and quality of life decisions to a central authority on such questionable grounds. We have been brainwashed that climate change is mainly caused by human activity and that somehow carbon taxes, economic socialism, monitoring lawn mower emissions, criticizing cow flatulence and flailing away at the faceless evil that is “oil” will somehow make a difference on climate changes we are only barely beginning to understand, let alone significantly influence one way or another. Rather disturbingly, presidential hopeful Senator Barack Obama made the following statement while campaigning in Oregon. P> “We can’t drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times … and then just expect that other countries are going to say OK.” “That’s not leadership,” Obama declared. “That’s not going to happen.” I’m sorry, excuse me? I’d be happy to see him or one of his cronies point out to me where in the constitution an Obama administration has the right to tell me how much food I can feed my family, or how many miles my car must get per gallon to be legal or whether or not I can turn the air conditioner on.

Capitalist June 25, 2008 8:59 am (Pacific time)

Kind of sounds like a backdoor approach to income redistribution. I agree that some of these benefits that are paid to people can be obscene, but there are potentially other behaviors that could be far worse. For example take an NBA superstar and say he is paid a quarter million dollars for one game (an hour long game that he may play 30 to 40 minutes in) and let's take a member of the game's janitorial clean-up crew who may make $30,000 a year, if they can actually work fulltime. Is that fair? How about people like Bill Gates and all these other billionaires, is that unfair for them to be so wealthy? What should we do, in a capitalist society, to make that more equitable? I suggest: nothing. Compare our poorest people in America with the rest of the world. Who is better off? Who has the best opprotunity to climb out of poverty? I could go on, but you get the idea. As far as taxes and fees, well go look at each state and notice the wide range of taxes and fees each state has, notice the differences.

Henry Ruark June 23, 2008 4:38 pm (Pacific time)

To all: "Anon" above inadvertent: Proud come out from behind tree and acclaim OCPP as deserved and well-earned, too. It is my pleasure not only to consult and cite, but also to file without fail for still more when needed...as in tax factual/file.

Anonymous June 23, 2008 3:13 pm (Pacific time)

To all: We are indeed fortunate to count among Oregon assets the work of the OCPP and its trained and experienced analysts. This re New Deal-approach and historically-embedded real accomplishments, contrasting so definitely devastatingly vs neocon failings ever since, is a classic example of history and what it can teach, if we will but listen. With the upcoming unique opportunity of '08 Election now looming closer to decision for change every day, it is a sharp jolt to remind us of the truth-in-action we can find in our past to guide our future.

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