
{"id":4950,"date":"2009-02-26T08:58:42","date_gmt":"2009-02-26T16:58:42","guid":{"rendered":"http:\/\/www.carrborocitizen.com\/main\/?p=4950"},"modified":"2009-02-26T08:58:42","modified_gmt":"2009-02-26T16:58:42","slug":"the-new-deal-and-the-new-new-deal","status":"publish","type":"post","link":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/2009\/02\/26\/the-new-deal-and-the-new-new-deal\/","title":{"rendered":"The New Deal and the New New Deal"},"content":{"rendered":"<p><strong>The New Deal and the New New Deal:<br \/>\n<em>Countering conservative claptrap<\/em><\/strong><\/p>\n<p><strong>By Robert Reich<\/strong><\/p>\n<p>The stock market reached a six-year low last week. Why? Some blame loose talk (including that of former Fed Chair Alan Greenspan) about nationalizing the nation\u00e2\u20ac\u2122s banks. Others blame Obama\u00e2\u20ac\u2122s new plan for helping homeowners who may not be able to pay their mortgages. But the real culprit is the accelerating decline in aggregate demand \u00e2\u20ac\u201c consumers, businesses and exports. Companies are losing money because their customers are disappearing. That\u00e2\u20ac\u2122s precisely why the stimulus is so important \u00e2\u20ac\u201c indeed, why many of us fear it\u00e2\u20ac\u2122s too small.<!--more--><\/p>\n<p>One of the oddest of right-wing claims is that FDR\u00e2\u20ac\u2122s New Deal didn\u00e2\u20ac\u2122t pull America out of the Great Depression, so Barack Obama\u00e2\u20ac\u2122s \u00e2\u20ac\u0153New New Deal\u00e2\u20ac\u009d won\u00e2\u20ac\u2122t either. While it\u00e2\u20ac\u2122s true that the New Deal didn\u00e2\u20ac\u2122t end the Great Depression, three points need to be impressed on the hard-pressed conservative mind:<\/p>\n<p>1. The New Deal relieved a great deal of suffering by establishing social safety nets \u00e2\u20ac\u201c Unemployment Insurance, Aid for Dependent Children and Social Security for retirees. Most have remained, a worthy legacy. But because the structure of the economy has changed (a much higher percentage of the working population is now employed part-time in several jobs or as independent contractors, for example), there are gaping holes in the safety net, which a New New Deal should fill in order that the Mini-Depression we\u00e2\u20ac\u2122re experiencing not cause excessive harm.<\/p>\n<p>2. FDR\u00e2\u20ac\u2122s public works spending did help the economy somewhat. By 1936, the U.S. economy was showing some life. Unemployment was declining and consumers were beginning to buy. But FDR cut back on public-works spending and the economy sank back into its former torpor. A warning to Obama: Don\u00e2\u20ac\u2122t worry about so-called \u00e2\u20ac\u0153fiscal responsibility\u00e2\u20ac\u009d when aggregate demand still falls far short of the economy\u00e2\u20ac\u2122s total capacity.<\/p>\n<p>3. The Second World War pulled the nation out of the Great Depression because it required that government spend on such a huge scale as to restart the nation\u00e2\u20ac\u2122s factories, put Americans back to work and push the nation toward its productive capacity. By the end of the war, most Americans were better off than they were before its start. Yes, the national debt ballooned to 120 percent of GDP. But the debt-GDP ratio subsequently declined \u00e2\u20ac\u201c not just because post-war spending dropped but because the economy continued to grow as war production converted to the production of consumer goods. Lesson: The danger isn\u00e2\u20ac\u2122t too much stimulus, it\u00e2\u20ac\u2122s too little stimulus.<br \/>\n<em><br \/>\nRobert Reich was the nation\u00e2\u20ac\u2122s 22nd secretary of labor and is a professor at the University of California at Berkeley. His latest book is <\/em>Supercapitalism.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The New Deal and the New New Deal: Countering conservative claptrap By Robert Reich The stock market reached a six-year low last week. Why? Some blame loose talk (including that of former Fed Chair Alan Greenspan) about nationalizing the nation\u00e2\u20ac\u2122s banks. Others blame Obama\u00e2\u20ac\u2122s new plan for helping homeowners who may not be able to&#8230;<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-4950","post","type-post","status-publish","format-standard","hentry","category-opinion"],"_links":{"self":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4950","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/comments?post=4950"}],"version-history":[{"count":1,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4950\/revisions"}],"predecessor-version":[{"id":4951,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/posts\/4950\/revisions\/4951"}],"wp:attachment":[{"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/media?parent=4950"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/categories?post=4950"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ibiblio.org\/carrborocitizen\/main\/wp-json\/wp\/v2\/tags?post=4950"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}