When Government Was the Solution....I post this without comment

[JR]

By Jean Edward Smith
New York Times

For more than a generation, Americans have been told that government is the problem, not the solution.

The mantra can be traced back to Barry Goldwater’s presidential bid in 1964. It provided the mind-set for the Reagan administration, and it has come to ultimate fruition during the presidency of George W. Bush.

On college campuses and at think tanks across the country, libertarian scholars stoke the urge to eliminate government from our lives. This thinking has led to the privatization of vital government functions such as the care of disabled veterans, the appointment to regulatory commissions of members at odds with the regulations they are sworn to enforce, the refusal of the Environmental Protection Agency to protect the environment, and the surrender of the government’s management of military operations to profit-seeking contractors.

A look back at Franklin D. Roosevelt’s presidency shows how differently Americans once viewed the government’s role, how much more optimistic they were and how much more they trusted the president.
F.D.R., like his cousin Theodore, saw government in positive terms. In 1912, speaking in Troy, N.Y., F.D.R. warned of the dangers of excessive individualism. The liberty of the individual must be harnessed for the benefit of the community, said Roosevelt. “Don’t call it regulation. People will hold up their hands in horror and say ‘un-American.’ Call it ‘cooperation.’ ”

When F.D.R. took office in 1933, one third of the nation was unemployed. Agriculture was destitute, factories were idle, businesses were closing their doors, and the banking system teetered on the brink of collapse. Violence lay just beneath the surface.

Roosevelt seized the opportunity. He galvanized the nation with an inaugural address that few will ever forget (”The only thing we have to fear is fear itself.”), closed the nation’s banks to restore depositor confidence and initiated a flurry of legislative proposals to put the country back on its feet. Sound banks were quickly reopened, weak ones were consolidated and, despite cries on the left for nationalization, the banking system was preserved.

Roosevelt had no master plan for recovery but responded pragmatically. Some initiatives, such as the Civilian Conservation Corps, which employed young men to reclaim the nation’s natural resources, were pure F.D.R. Others, such as the National Industrial Recovery Act, were Congressionally inspired. But for the first time in American history, government became an active participant in the country’s economic life.
After saving the banks, Roosevelt turned to agriculture. In Iowa, a bushel of corn was selling for less than a package of chewing gum. Crops rotted unharvested in the fields, and 46 percent of the nation’s farms faced foreclosure.

The New Deal responded with acreage allotments, price supports and the Farm Credit Administration. Farm mortgages were refinanced and production credit provided at low interest rates. A network of county agents, established under the Agricultural Adjustment Act, brought soil testing and the latest scientific advances to every county in the country.

The urban housing market was in equal disarray. Almost half of the nation’s homeowners could not make their mortgage payments, and new home construction was at a standstill. Roosevelt responded with the Home Owners’ Loan Corporation. Mortgages were refinanced. Distressed home owners were provided money for taxes and repairs. And new loan criteria, longer amortization periods and low interest rates made home ownership more widely affordable, also for the first time in American history.

cont'd

 

[JR]

The Glass-Steagall Banking Act, passed in 1933, authorized the Federal Reserve to set interest rates and established the Federal Deposit Insurance Corporation to insure individual bank deposits. No measure has had a greater impact on American lives or provided greater security for the average citizen.

The Tennessee Valley Authority, also established in 1933, brought cheap electric power and economic development to one of the most poverty-stricken regions of the country. Rural electrification, which we take for granted today, was virtually unknown when Roosevelt took office. Only about one in 10 American farms had electricity. In Mississippi, fewer than 1 in 100 did. The Rural Electrification Administration, which F.D.R. established by executive order in 1935, brought electric power to the countryside, aided by the construction of massive hydroelectric dams, not only on the Tennessee River system, but on the Columbia, Colorado and Missouri rivers as well.

To combat fraud in the securities industry, Roosevelt oversaw passage of the Truth in Securities Act, and then in 1934 established the Securities and Exchange Commission. As its first head he chose Joseph P. Kennedy. “Set a thief to catch a thief,” he joked afterward.

By overwhelming majorities, Congress passed laws establishing labor’s right to bargain collectively and the authority of the federal government to regulate hours and working conditions and to set minimum wages.

An alphabet soup of public works agencies — the C.W.A. (Civil Works Administration), the W.P.A. (Works Progress Administration) and the P.W.A. (Public Works Administration) — not only provided jobs, but restored the nation’s neglected infrastructure. Between 1933 and 1937, the federal government constructed more than half a million miles of highways and secondary roads, 5,900 schools, 2,500 hospitals, 8,000 parks, 13,000 playgrounds and 1,000 regional airports. Cultural projects employed and stimulated a generation of artists and writers, including such luminaries as Willem de Kooning, Jackson Pollock, John Cheever and Richard Wright.

Roosevelt saw Social Security, enacted in 1935, as the centerpiece of the New Deal. “If our Federal Government was established … ‘to promote the general welfare,’ ” said F.D.R., “it is our plain duty to provide for that security upon which welfare depends.”

For the first time, the government assumed responsibility for unemployment compensation, old-age and survivor benefits, as well as aid to dependent children and the handicapped. At F.D.R.’s insistence, Social Security was self-funding – supported by contributions paid jointly by employers and employees. (In most industrialized countries, the government provides the major funding for pension plans.) “Those taxes are in there,” Roosevelt said later, “so that no damn politician can ever scrap my Social Security program.”

The government’s positive role did not end when the New Deal lost effective control of Congress in 1938. Neither Wendell Willkie, the G.O.P. standard-bearer in 1940, nor Thomas E. Dewey, in 1944 and ’48, advocated turning back the clock.

The G.I. Bill of Rights, adopted unanimously by both houses of Congress in 1944, provided massive government funding to provide university and vocational training for returning veterans. The G.I. Bill changed the face of higher education by making universities accessible to virtually every American.

The Eisenhower administration continued to see government in positive terms. President Eisenhower added 15 million low-income wage earners to Social Security, and he launched the interstate highway system – which also was self-funding, through additional gasoline taxes. Only the federal government could have organized so vast an undertaking, the benefits of which continue to accrue.

The ideological obsession of the Bush administration to diminish the role of government has served the country badly. But perhaps this government’s demonstrated inability to improve the lives of ordinary Americans will ensure that future efforts to “repeal the New Deal” are not successful.

 

[The Big Ragu]

http://www.amazon.com/FDRs-Folly-Roosevelt-Prolonged-Depression/dp/0761501657

Book Description
“Admirers of FDR credit his New Deal with restoring the American economy after the disastrous contraction of 1929—33. Truth to tell–as Powell demonstrates without a shadow of a doubt–the New Deal hampered recovery from the contraction, prolonged and added to unemployment, and set the stage for ever more intrusive and costly government. Powell’s analysis is thoroughly documented, relying on an impressive variety of popular and academic literature both contemporary and historical.”
–Milton Friedman, Nobel Laureate, Hoover Institution

“There is a critical and often forgotten difference between disaster and tragedy. Disasters happen to us all, no matter what we do. Tragedies are brought upon ourselves by hubris. The Depression of the 1930s would have been a brief disaster if it hadn’t been for the national tragedy of the New Deal. Jim Powell has proven this.”
–P.J. O’Rourke, author of Parliament of Whores and Eat the Rich

“The material laid out in this book desperately needs to be available to a much wider audience than the ranks of professional economists and economic historians, if policy confusion similar to the New Deal is to be avoided in the future.”
–James M. Buchanan, Nobel Laureate, George Mason University

“I found Jim Powell’s book fascinating. I think he has written an important story, one that definitely needs telling.”
–Thomas Fleming, author of The New Dealers’ War

“Jim Powell is one tough-minded historian, willing to let the chips fall where they may. That’s a rare quality these days, hence more valuable than ever. He lets the history do the talking.”
–David Landes, Professor of History Emeritus, Harvard University

“Jim Powell draws together voluminous economic research on the effects of all of Roosevelt’s major policies. Along the way, Powell gives fascinating thumbnail sketches of the major players. The result is a devastating indictment, compellingly told. Those who think that government intervention helped get the U.S. economy out of the depression should read this book.”
–David R. Henderson, editor of The Fortune Encyclopedia of Economics and author of The Joy of Freedom

 

[Double J]

I can't speak for conditions in the USA but I often wonder why we even have government when we get so very little for what we're paying.

We're saddled with "user fees" on top of our tax dollars for essential services like water or garbage collection.

We have a "debt retirement charge" added to our hydro bills, in order to pay for the province's mismanagement of our utilities.

We pay for the "privilege" of parking in hospital lots that are sporadically maintained.

We now pay a "health premium" which is deducted from our paycheques - so much for the myth that we get health care for free - and still collect cobwebs in hospital waiting rooms, or we wait months for treatments that are immediately available to, say, the Toronto Maple Leafs. (what, you thought they have to wait nine months for an MRI like you do?)

We drive on provincial highways that have gone to hell even though Ontario no longer has to pay for upkeep to the roads it transferred to local municipalities and no longer directly maintains the roads it kept in the system - supposedly a money-saving measure.

We spend innumerable hours on the phone trying to reach someone in a federal or provincial government ministry and are told to "press 1 for English, press 2 for French," then get stuck with someone who appears to speak neither language.

We are spending billions of dollars on a war in which we have no business being involved.

We put way too much effort into trade initiatives that do everything for our trading "partners" and punish our own entrepreneurs, who are trying to provide jobs for Canadians AND boost our economy.

We have few incentives to go into business, and it is way too easy for foreign interests to take control of our companies.

We have no protection from oil companies and banks that seek to gouge us at every turn.

We pay enormous salaries to our elected representatives who, whether it's at Queen's Park or on Parliament Hill, cannot properly represent us because they are told by their party leaders how they are to vote.

Every successive administration, federal and provincial, seems even more corrupt than the one that came before. More and more of our hard-earned money goes down the tubes every day. I'm thinking anarchy may not necessarily be the answer, but it sure as hell couldn't be a whole lot worse than what we have now.

 

[Ben_Hecht]

Folks responded to FDR's verbiage . . . but his Supreme Court-packing plan after his first re-election lost him many loyal adherents . . . and economically, it took WWII to bail the US out of its economic fix.

 

[Fenian_Bastard]

Which doesn't explain the success of the GI Bill, the Glass-Steagall Act, the TVA, the Federal Interstate Highway system, Social Security, Medicare. To say nothing of the fact that all those Goldwater yahoos wouldn't HAVE a west if it wasn't for the federal government's involvement in railroads, water management, land management, homestead acts, and the US Cavalry.

 

[alleyallen]

You could easily make a case for or against Roosevelt ... not an entirely difficult task since we're taking a bird's-eye view of history. Roosevelt had no such luxury. When these plans were being set up, it was in response to an immediate crisis.

And while the same could be said for the Bush administration, particularly in its initial responses following the 9/11 attacks, I think the fault is found because we're seeing so much more failure with no attempt to stem the flow, while other areas of pressing concern go untouched.

Read The Government Racket: Government Waste from A to Z and the followup, both by Martin Gross, to get an idea of numerous ways we could drastically improve the way our government spends and operates.