The silver lining in today’s crisis is that something like another 1930s progressive era could be in the cards for America beginning this fall.
As we hunker down trying to remain safe while the coronavirus takes its toll on our health, psyche, and economic well-being, and as many of us are dismayed by the dysfunction of the federal government, it may be worthwhile to add a note of optimism in this time of crisis. The silver lining may be a repeat of what happened in American in the 1920s and 1930s.
During the 1920s, America experienced an unprecedented economic boom which was reflected in a massive rise in the stock market. The rich became super-rich and a new middle-class began to evolve. Americans elected three conservative Republicans in a row – Calvin Coolidge, Warren Harding, and Herbert Hoover. And then on October 24, 1929, with skittish investors selling off a record 12.9 million shares and sending the stock market reeling, the economy began to unwind. Household consumption and business investment tanked. By 1933, the unemployment rate would reach 25 percent and long bread lines began to form. The crisis called for bold action.
With society in such disarray, Americans went to the polls on November 8, 1932. In a landslide Franklin Roosevelt defeated Hoover who just four years earlier had won 58% of the popular vote. Hoover won only 39.7% against FDR. Subsequent Democratic landslides in the 1934 mid-term elections and the presidential election in 1936 cemented an era of Democratic Party dominance that lasted all the way until 1952 when a moderate Republican, General Dwight David Eisenhower bested his Democratic Party challenger.
With the election of FDR, the era of the “New Deal” was ushered in and what followed was the most extensive array of progressive federal policy in the life of the nation. To combat rising unemployment, massive public investment in bridges, dams, roads, and sidewalks were made through the Works Progress Administration (WPA) and the Tennessee Valley Authority (TVA). Farmers were assisted through the Agricultural Adjustment Act (AAA). To help unemployed youth, the Civilian Conservation Corps (CCC) was established which provided the equivalent of universal service for youth and concern for the environment.
Our modern social safety net was introduced during this brief period with the introduction of Social Security, the Fair Labor Standards Act, national Unemployment Insurance Benefits, the Aid to Dependent Children welfare program, the nation’s first minimum wage, and the Wagner Act which provided the basis for trade unionism to blossom across the country.
And Washington began to regulate the national economy for the benefit of all. To protect depositor accounts from bank failure and restore confidence in the financial sector, the Federal Deposit Insurance Corporation (FDIC) was established in 1933. Soon the Security and Exchange Commission (SEC) would follow to safeguard investors. The Federal Trade Commission (FTC) began its mission to prevent fraudulent, deceptive, and unfair business practices along with the Federal Communications Commission (FCC) and the Civilian Aeronautics Administration (CAA) – the predecessor to today’s FAA – to regulate communications and air travel for the good of the public. All of this government action occurred within the span of just six years, giving people hope, helping to restore large parts of the economy, and creating a new sense of security whenever Americans faced unemployment, callous employers, or old age.
The silver lining in today’s crisis is that something like another 1930s progressive era could be in the cards for America beginning this fall. With the stock market having lost all of its wealth since Donald Trump became president and with unemployment likely to rise to super-recession levels, more and more Americans are looking to turn the Republican Party out of office. With the growing likelihood that Joe Biden will be the Democratic standard bearer in November, perhaps with a popular woman as his running mate, it is possible that the Democrats will not only retake the White House and keep control of the U.S. House of Representatives, but defeat enough GOP senators to take control of Congress completely.
With such a mandate for change, President Biden could begin to create a 21st Century “New Deal” including many of the legislative priorities that he, Bernie Sanders, and Elizabeth Warren advocated in the run-up to November. These could include Extending health insurance to all Americans through private insurance and Medicare.
• Extending health insurance to all Americans through private insurance and Medicare.
• Greater regulation of the pharmaceutical industry to help reduce drug prices.
• Expanded funds for education from pre-Kindergarten through graduate school, including a plan for “income contingent” college loans so that all college students could borrow funds from the government and then pay them back over their working lives as a small percentage of their yearly income.
• Free community college adding two additional years to the public K-12 education system.
• Free nationwide adult vocational education utilizing the nation’s technical and vocational high schools.
• Massive new investments in infrastructure permitting states to improve highways and mass transit.
• Implementation of the ‘New Green Deal” to help address climate change and economic inequality.
• Federal encouragement and protection for a new form of labor-management agreement encouraging cooperation between companies and their unionized workers to boost productivity, improve product quality, and increase innovation all of which would improve job security.
• Expand trade readjustment assistance to help companies and workers adjust to world competition.
• Tariff policy switched from a “stick” to a “carrot” so that countries working to increase the wages and living standards of their own citizens would have favored treatment over others.
• Raise the minimum wage to $15.00 an hour and index it to match the average annual increase in wages.
• Boost the Earned Income Tax Credit to help individuals and families struggling to survive on low-wage jobs.
And how would we pay for all of this? By reversing the regressive tax policies of the Trump Administration and increasing taxes and closing loopholes on the very wealthy who benefited from Trump’s largesse.
So in these critical and scary times, we might take solace in the potential for a new era of enlightened American leadership and bold new policies, very much like FDR and his party brought to this nation in the 1930s.