'We basically have a 21st-century economy wobbling on a 20th-century foundation': Could a 21st-century version of Franklin D. Roosevelt’s New Deal help the U.S. out of the coronavirus slump? TackettDC and joshboak explore this notion.
FILE - In this March 1933, file photo, President Franklin D. Roosevelt delivers his first radio "fireside chat" in Washington. The New Deal was a try-anything moment during the Great Depression that remade the role of the federal government in American life.
These programs were designed to provide get-by wages in exchange for work. But others were crafted to remake society. Social Security was instituted to save the elderly from poverty, federal insurance on banks to renew trust in the financial system, minimum wage and labor rights to redistribute the balance of power between employer and employee.
Yet the coronavirus outbreak has also revealed how ill-equipped the government was to address the rapidly escalating fallout of 26 million job losses, overwhelmed hospitals and millions of shuttered businesses only weeks away from failure. Just this past week, Sen. Kirsten Gillibrand and Sen. Michael Bennet , leaned hard on programs of the New Deal to offer legislation to create a federal “health force” to employ workers “for future public health care needs, and build skills for new workers to enter the public health and health care workforce.” It is unlikely the Republican-controlled Senate would consider such legislation, but it also shows what Democrats might have in mind as voters contemplate upcoming elections.
Any recovery will rely on government programs to catalyze the economy so that hiring and commerce can flow again. The public will also expect reforms that make the nation more resilient against future emergencies, so people feel comfortable enough to take the risks that lead to innovation and prosperity.
Nineteen years later, that phrase has a new context as Washington tries to fashion a response to the coronavirus. It’s a challenge at a scale the nation has not seen since 1932, when Roosevelt, a Democrat, defeated Republican President Herbert Hoover with a promise of better days ahead — a “new deal” for the “forgotten man.”
But the New Deal programs stemmed from bold visions that could be implemented by political leaders, he cautioned. “In our fragmented body politic, it would take an extraordinary politician to do what is necessary.” The case for a major rebuilding may become clear if dire forecasts of a second-quarter decline in annual economic output ranging from 30% to 50% come true.
“The policy that would undo that is to enable people to accumulate wealth in other ways,” he wrote in an email. Those include better pay, capital market investment incentives and, especially, “building lots of houses for the under-housed.”Any attempt at updating a New Deal will reflect ideological differences between Democrats and Republicans.
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