Welcome Michael Hiltzik (LA Times), and Host Toby Wollin (KitchenCounterEconomics.com)

[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions. Please take other conversations to a previous thread. - bev]

The New Deal: A Modern History

Host, Toby Wollin:

A president elected in reaction to the economic and political environment. A president hated on the left for lack of bold action and accused by the right of being a socialist. A president who appears to struggle with any sort of confrontation within his own Administration and who appears to have continuing issues with quality of staffers. A president accused of promoting class warfare and ‘uncertainty’. A president with a justice on the Supreme Court who opposes him named Roberts. A president with a wife who is, to many, as controversial as he is. A president and an Administration during a time when bold decisive action is required, but who seem to suffer from chronic timidity.

Obama or Roosevelt? Both?

For those of us of (ahem) a certain age, unless we took modern American History in college, our high school exposure to American history slogged through the colonial period up through the Civil War and perhaps the First World War, at which point the teacher realized there was only a month left before finals. The next 40 year period, covering the Great Depression, The New Deal, World War II, Korea, McCarthyism, Dwight Eisenhower, Kennedy and Vietnam was performed through something approaching the Evelyn Wood Speed-Reading™ method, and for most of us, The New Deal stands out for two issues: the WPA and ‘packing the Court’.

For all of us whose background in the period between 1930 and 1941 is not filled with rigorous study, Pulitzer Prize winning journalist Mike Hiltzik’s book The New Deal is an accessible, detailed and moving account of people literally throwing anything they could think of at the economic wall to see if it would stick. And for those of us who have been watching with increasing dismay at the rocket-fueled efforts from groups and families such as the Koch brothers and the GOP/Tea Party to not only roll back programs, such as Medicare, but also New Deal efforts themselves, like Social Security and financial reforms; it is a very good idea indeed to dive into Hiltzik’s deep and wide-ranging book. In this way, we can grasp the process of how the programs which Americans hold very dearly actually came about, understand the forces at work on both sides of the issues, and attain a long almost parade-like view of the philosophies of the people and of the economic interests which threatened Roosevelt’s efforts 75 years ago, which re-emerged later, and which have now grown to monstrous size over the past 20 plus years.

I’d like to remind participants that Mike is our guest; please keep your questions on topic and your comments in support of the discussion. For those attending for the first time, if you would like to respond to another participant’s comment or question, please use the ‘reply’ button on the right hand side of the comment box.

Please join me in welcoming Los Angeles Times Business Columnist, Mike Hiltzik.

155 Responses to “FDL Book Salon Welcomes Michael Hiltzik, The New Deal: A Modern History”

BevW November 26th, 2011 at 1:52 pm

Michael, Welcome to the Lake.

Toby, Thank you for Hosting this Book Salon.

Michael Hiltzik November 26th, 2011 at 1:54 pm

Thanks, Bev, Delighted to be here with you….

TobyWollin November 26th, 2011 at 1:59 pm

Welcome, Mike!!! We’ll get started in a couple of moments. Bev – as always, thanks so much for doing all the upfront work organizing this.

TobyWollin November 26th, 2011 at 2:01 pm

Welcome everyone to our Book Salon – Mike Hiltzik is already with us. Let’s look at the First Hundred Days for FDR and Obama. FDR had an advantage in terms of the 73rd Congress – there were 311 Democrats in the House to 117 Republicans and 5 Farm-Labor party people who could be counted on for the Democratic side. In the Senate, there were 60 (give or take) Democrats to 35 Republicans and 1 Farm Labor party member. Obama started out with 256 Democrats and 178 Republicans in the House (with 2 vacancies) and 56 Democrats and 41 Republicans in the Senate with 2 Independents. FDR, on paper, had a stronger majority to get things done but was the atmosphere in the country such that it would not have made any difference? Were people so much more frightened and willing to work together? Even for people who have been so disappointed at what was not accomplished in President Obama’s first 100 days, was there anything that could have been done, given the Congress and the atmosphere in the country and the attitude of the Republicans?

Elliott November 26th, 2011 at 2:02 pm

Hi Mike, Toby.

Where all Democrats supportive of FDR’s efforts when he started out?

TobyWollin November 26th, 2011 at 2:04 pm

Mike – Just a little bit of housekeeping – do you see the ‘reply’ at the lower right? That is how you respond to questions.

eCAHNomics November 26th, 2011 at 2:05 pm

There seem to be more similarities than diffs betw O & FDR. Both were members/defenders/pawns of PTB. Neither wanted to admit that PTB were intellectual morons, who only wanted to loot rest of U.S. econ. Zinn version is that FDR punted to preserve 1%.

Comments?

Michael Hiltzik November 26th, 2011 at 2:06 pm

Let’s take a look at the Thirties first: The atmosphere when FDR was inaugurated on March 4, 1933, was one of real despair–the incoming cabinet members all remarked on the look of fear on the faces of the spectators at the inauguration. After four years of inaction, the voters and Congress were all willing to go along with almost anything FDR proposed….at first…

But that evolved. By the end of 1933 and the beginning of 1934, FDR was already facing strong opposition from Conservatives and Wall Street, and was alredy compromising on legislation.

dakine01 November 26th, 2011 at 2:07 pm

Good afternoon Michael and welcome to FDL. Good afternoon Toby.

Michael, I have not had an opportunity to read your book but was wondering, were the elected officials of both parties as divorced from the reality facing their constituents in the ’30s as they are today?

bluewombat November 26th, 2011 at 2:09 pm

Welcome, Mr. Hiltzik. I live in Los Angeles and remember your byline from when I was a more avid consumer of corporate media.

My question: To what extent do you think Obama’s failure to respond to our depressed economic conditions with FDR-like boldness is a function of Republican obstructionism, Obama’s timidity or the fact that Obama is an eloquent b.s. artist who never had the least intention of helping the people he pretended to care about when he was campaigning?

marymccurnin November 26th, 2011 at 2:09 pm

Mike,

Do you think that the MOTU are running scared right now? If so, is there a chance that sanity could rear its nicely trimmed head and give voice to the American citizen? And is there a FDR anywhere on the horizon?

Michael Hiltzik November 26th, 2011 at 2:09 pm
In response to eCAHNomics @ 7

PTB=the powers that be? It’s certainly true that FDR was not interested in overturning the existing order, but in addressing specific abuses that had made the markets unable to function. This created some disaffection among his more radical advisors, like Rex Tugwell, who advocated nationalizing the banks. That was never going to happen in a Roosevelt administration. But FDR was determined to correct abuses in the market that hurt ordinary people. In this he was a student of both Louis Brandeis and Adolf Berle.

TobyWollin November 26th, 2011 at 2:10 pm
In response to Michael Hiltzik @ 8

Mike – as I was reading along, I could not help but think of how Mitch McConnell and John Boehner announced right after the Inauguration that they were not going to cooperate with anything the President proposed; I think the whole attitude in Congress has changed and certainly McConnell and Boehner were not afraid of anything.

Michael Hiltzik November 26th, 2011 at 2:11 pm
In response to dakine01 @ 9

Some were, some weren’t. Certainly the impact of imprudent investing, financial chicanery, and dysfunctional markets appeared to be more widely understood in the 30s, possibly because the effects were so much more immediate and dire.

DWBartoo November 26th, 2011 at 2:12 pm

Good evening, Mike and Toby.

What do you imagine that it shall take, Mike, for the people of this country to come to understand the necessity of two things to a civil society; an actual, functioning Rule of Law and a social contract that picks up where the New Deal left off?

Thinking of Roosevelt’s “Four Freedoms”, here, with extra emphasis on “freedom from want”, extended to a single-payer heath CARE system and an end to endless war, including the War on Drugs, and the less-publicised war on reason, as a major part of “freedom from fear”.

If “hard times” will suffice, then I imagine that in about ten years the people will be ready. What do you think?

DW

TobyWollin November 26th, 2011 at 2:12 pm

Mike – Obama’s choice of people when he first came in did not include anyone even close to a Tugwell -

bluewombat November 26th, 2011 at 2:13 pm
In response to TobyWollin @ 16

Or a Howard Dean or a Russ Feingold…

Michael Hiltzik November 26th, 2011 at 2:15 pm
In response to bluewombat @ 10

I think there are lots of reasons, many of which we could learn about by reexamining the New Deal era. Roosevelt didn’t face such intransigent opposition at first, certainly not such a powerful veto from a bloc aiming to prevent any action. But for him, as for Obama, the Presidency required a learning curve. you can see a very different spirit in the New Deal surfacing during 1935, after the first group of aides departed and were replaced by Tommy Corcoran, Ben Cohen, and others who were better legislative draftsmen than the first NEw Dealers and better able to work out compromises with opposition in Congress–but also in many ways more intransigent themselves.

emptywheel November 26th, 2011 at 2:16 pm

To what degree do you think the money in politics and the mass media is a difference?

Elliott November 26th, 2011 at 2:16 pm
In response to TobyWollin @ 13

Did the Republicans cooperate back in FDR’s time?

Michael Hiltzik November 26th, 2011 at 2:16 pm
In response to marymccurnin @ 11

Let;s never overlook the fact that FDR was a unique political talent. But the times often produce the man, or woman….When FDR came to the White House, there were plenty of observers on both sides of the ideological deivide who didn’t believe he could rise to the occasion, either…

Michael Hiltzik November 26th, 2011 at 2:17 pm
In response to TobyWollin @ 16

Fair enough, Obama’s team didn’t include a Tugwell–but Tugwell himself was pretty quickly marginalized within the White House. He was kept far from the banking and financial regiulatory discussions, and kept busy working on agriculture (his academic specialty, in any case)

TobyWollin November 26th, 2011 at 2:18 pm

Mike – you allude to FDR’s time as governor of New York; what effect do you feel it had on him in terms of his ability to manage the people who he brought in? Was that ‘executive governing experience’ the maker for him?

marymccurnin November 26th, 2011 at 2:19 pm

I don’t believe that Obama has a learning curve. He has achieved exactly what he needed to. He sold out his base in ways that were so startling and stunning that it must has been the plan from the beginning. I reference the BP tragedy and the EPA rollback to bolster my argument. I can come up with at least a dozen more examples.

Michael Hiltzik November 26th, 2011 at 2:19 pm
In response to Elliott @ 20

The Republicans were more cooperative in FDR’s time than they are today, but the partisan structure was very different–the GOP had a very strong progressive wing, dating from Teddy Roosevelt (his 1912 VP running mate, Hiramn Johnson, was still in the Senate as a senior GOP member), and the Democrats had a very strong conservative wing, mostly from the Solid South. So the New Deal Congressional majority comprised both Democrats and Republicans

TobyWollin November 26th, 2011 at 2:20 pm
In response to Elliott @ 20

The spectrum of philosophy on all sides was different – there were three members of Congress from the midwest who came from the Farm-Labor party – you’d never see that now. No one could get elected running on anything with the word ‘labor’ in the title.

Michael Hiltzik November 26th, 2011 at 2:21 pm
In response to DWBartoo @ 15

The single most important factor, given the times, is leadership–political leadership adept at making clear to the voters what’s really at stake in the partisan battle. That’s something that FDR mastered better than anyone else in recent history. As I said, he was unique…but that doesn’t mean today’s leaders can’t learn from him.

TobyWollin November 26th, 2011 at 2:22 pm

What role do you feel Roosevelt’s family/connections/ money played in that ‘unique’ talent? Part of me felt, reading about his operating ‘casualness’, that one of FDR’s great advantages was the supreme confidence that came from his background.

bluewombat November 26th, 2011 at 2:22 pm

Thank you for your answer. But do you think the problem with Obama, a Harvard- and Columbia-educated Constitutional scholar, is that he’s still learning about the Presidency? I’m inclined to think that he would do good if he could do it without getting his hair mussed, but otherwise, it’s not worth the hassle to him.

CTuttle November 26th, 2011 at 2:23 pm

Aloha, Mike, Mahalo for writing the book and spending some time here at the Lake…! Mahalo, Aunty Toby for hosting…!

What was the make-up of the Dems that were elected into office with FDR, considering that many of them were the old school Southern Dems…? How many Dems were truly Populist/Progressive in nature…?

Phoenix Woman November 26th, 2011 at 2:23 pm

True. The Republicans had yet to totally jettison African Americans in pursuit of the bigot vote — that wouldn’t come until the 1960s. Corporate America hadn’t yet been utterly indoctrinated by the Birchers (which Fred Koch helped found) and Ayn Rand.

Michael Hiltzik November 26th, 2011 at 2:23 pm
In response to marymccurnin @ 24

Not to specifically defend Obama, but I think it’s worthwhile to examine how FDR’s own contemporaries regarded his willingness to compromise with conservatives. After the Securities Act of 1934 was drafted, for example, it was regarded by progressives as a near total giveaway to Wall Street. The New Republic editorialilzed: “The Stock Exchange should remember Mr. Roosevelt with gratitude.”
Yet the 34 act gave us the SEC and rules for corporate transparency and disclosure that still benefit us even today.

Michael Hiltzik November 26th, 2011 at 2:26 pm
In response to CTuttle @ 30

I don’t have the exact count conveniently at hand. But the New Deal majority was made up of (a) progressive Democrats from the cities and the Northeast, (b) moderate and conservative Dems who went along for party solidarity (such as Senate Maijortiy LEader Joe Robinson, a conservative from Arkansas) but were shaky on some specific initiatives, and (c) progressive Republicans. This coalition stayed reasonably intact, especially after the 1936 FDR reelection landslide, but frayed in 1937, especially after FDR launched his court-lacking scheme.

DWBartoo November 26th, 2011 at 2:27 pm

On the flip-side of the same “token”, Mike, the Democrats are much more conservative today, indeed, both “ends” of the “corporate party” are very much of a neoliberal “bent”. And Obama is little concerned with saving capitalism, it seems, as I imagine he “believes” that nothing can effectiverly challenge the $tatu$ quo.

You appear to have some hopes that Obama will, somehow, “grow” in office and “rise” to the “occassion”? Is that a fair assessment of your position regarding Obama?

DW

Michael Hiltzik November 26th, 2011 at 2:28 pm
In response to TobyWollin @ 23

FDR’s governorship introduced him to many of the issues that would require his attention during the New Deal, including unemployment relief and the economic avuses of private utilities. And of course it bequeathed him many of his Presidential aides, such as Frances PErkins and Harry Hopkins. And certainly there’s no doubt that he learned a lot about executive power in Albany. That said, he was a remarkably instinctive polician and a quick study…

emptywheel November 26th, 2011 at 2:30 pm

To what degree is one difference a very mobilized, radical left?

Obama has at least made noise about progressive politics since Occupy Wall Street started. Republicans very quickly co-oped the Tea Party. It seems like no one has a real fear that the people will object. So whereas then we got real policy changes, now we’ve got austerity, which risks radically cementing rising inequality.

TobyWollin November 26th, 2011 at 2:30 pm
In response to CTuttle @ 30

CT (Maholo to you too!) – I don’t have details on the House, but in the Senate, there were Republicans from all over the place – both senators from NJ were Repub for example, and lots of Repubs from New England and the upper midwest, so these folks were all over the place in terms of what their interests and fears were. After all – in the midwest, bankers were threatened with hanging when they showed up to foreclose on farms.

Michael Hiltzik November 26th, 2011 at 2:31 pm
In response to DWBartoo @ 34

What my study of the New Deal has taught me is that it takes time even for an experienced politician to get his hands around the Presidency, even when the country is less polarized than it is now. I would also argue that some of the Obama White House’s achievements, especially healthcare reform, rank on the same level as some New Deal accomplishments…and the New Deal record also came under heavy fire at the time, not least from the Supreme Court.

CTuttle November 26th, 2011 at 2:33 pm
In response to TobyWollin @ 37

After all – in the midwest, bankers were threatened with hanging when they showed up to foreclose on farms.

*sigh* The good old days, eh…! ;-)

vastleft November 26th, 2011 at 2:34 pm

From the deficit-hawk discourse of both major parties, one would never imagine there was a notable precedent of deficit spending helping the nation recover from a massive economic funk — or a proven economic theory of how that works.

Don’t you think it’s striking, given the degree to which our present circumstances rhyme with those of the 1930s, that the facts of that era have so little, well, currency in discussing how to solve the problems at hand?

PeasantParty November 26th, 2011 at 2:34 pm

Michael, thank you so much for being here.

Toby, well… ya know I love ya.

Michael, do you think this Economic episode is made worse by Bush’s determination to remove our system from Industrial to Service? The only Service economy that I can think of other than the standard ones is Banking.

bluedot12 November 26th, 2011 at 2:34 pm

Was the country better able to accept changes owing to the experience of tough times under Hoover ?

Michael Hiltzik November 26th, 2011 at 2:35 pm
In response to emptywheel @ 36

It’s easy to overestimate the influence of a “radicalized” left in the 1930s. The strength of organized labor, for example, is commopnly overestimated–the AFL was not by any means a strong voice for progressive politics (that’s why it engendered the CIO as a splinter group) and unions in general were just then beginning their growth in influence. The New Dealers and other progressive political leaders were very wary of radicals–to be called a “communist” or “Socialist” was not something they welcomed at all…FDR’s rhetoric consistently tends toward to the idea of fixing the abuses in the system, not in remaking the system…

wigwam November 26th, 2011 at 2:35 pm

Hi Michael. It’s strange that the LA Times puts their finest political commentator in the Business section. I’ve been a big fan for several years now. Keep up the good work.

Michael Hiltzik November 26th, 2011 at 2:37 pm
In response to CTuttle @ 39

that points to a common failure by both the New Deal and the current administration–failure to address the housing foreclosure crisis, which as Toby suggests was bad in the 30s both in residential AND farm real estate. The New Deal instituted a mortgage refinancing program in 1933 (HOLC), but followed up so spottily over the next few years that it even drew criticism from John Maynard Keynes for inaction.

TobyWollin November 26th, 2011 at 2:37 pm

The New Dealers and other progressive political leaders were very wary of radicals–to be called a “communist” or “Socialist” was not something they welcomed at all..
And yet, Mike, as I saw from your book, this was something that was put at FDR’s door constantly, even to the point (and I can’t recall which publication you quoted for this phrase but it sticks with me) of claiming FDR was taking his orders from Moscow!

Michael Hiltzik November 26th, 2011 at 2:37 pm
In response to wigwam @ 44

Thanks for the kind words….

DWBartoo November 26th, 2011 at 2:38 pm

Well, as you will note in my response @ 34, Mike, I do not “see” two political parties, in opposition, rather one “party” with two “ends” one, it is said, resembling an elephant … and the other, quite frankly, a jack-ass.

The move from the Bush Presidency to the Obama Presidency was seemless and Obama’s unwillingness to hold the Bush administration to account, doubtless at the urging of Cass Sunstein, to not “… criminalize policy differences …” suggests a VERY fundamental agreement on foreign poloy and the continuing embrace of the moneyclass, the “have-mores”, seems notably shared between the “ends”.

I am convinced that “leadership” and an over-reliance upon it are critically central to the dilemma the people, the human beings of this nation now face. Again, to be frank, I am further convinced that if democracy is to rise again, in the U.S., that the people will have to insist upon it.

I see no evidence that the political class (which includes the media) care very much about conditions for “the people”, as the National Security state and the extensive use of secrecy seem perfectly to the liking and benefit of both big money and big power.

DW

OldFatGuy November 26th, 2011 at 2:39 pm

What????

Comparing the corporate giveaway with mandated customers health care plan to ANYTHING in the New Deal is a disservice to FDR and the New Deal itself.

This is bullcrap.

Michael Hiltzik November 26th, 2011 at 2:39 pm
In response to TobyWollin @ 46

That may be a reference to the attack on the New Deal by Al Smith at the Liberty LEague dinner of 1936…of course, the New Dealers struck right back at Smith by dredging up a speech he had given as a PResidential candidate complaining that anytime anyone didnb’t like what he was saying , they called him a “socialist”!

TobyWollin November 26th, 2011 at 2:40 pm

Mike – you bring up a point that I feel is very important for people who believe that the New Dealers knew what they were doing and got it right from the get-go — a lot of the programs they proposed were considered timid, not bold enough and they ended up having to keep going back for more funds when things fell apart.

eCAHNomics November 26th, 2011 at 2:40 pm

O’s “health care reform” is nothing more than a sellout to PhRMA & insurance. Not an ‘accomplishment,’ but yet another way to loot the middle class & poor.

And on the backs of college grads who have already been looted by their institutions & banksters.

OldFatGuy November 26th, 2011 at 2:41 pm
In response to eCAHNomics @ 52

Amen, we have someone here with an agenda, methinks.

eCAHNomics November 26th, 2011 at 2:41 pm

Reviews of your book say there was no ‘model’ for FDR, but Keynes preceded him by quite a bit. Why was Keynes NOT the model?

eCAHNomics November 26th, 2011 at 2:42 pm
In response to OldFatGuy @ 53

My agenda? Or O’s agenda?

Not sure which you mean?

TobyWollin November 26th, 2011 at 2:42 pm
In response to OldFatGuy @ 53

What we have here is a gentleman, a journalist, who has written a book about the New Deal. Let’s talk about Roosevelt and the New Deal, ok?

Michael Hiltzik November 26th, 2011 at 2:43 pm
In response to bluedot12 @ 42

There’s no doubt that a lot of the ease with which the first NEw Deal initiatives passed in 1933 was due to the sheer despair of the public and the political leadership–the country’s impression was that nothing had been done to address the Depression. Although Hoover had done rather more than he gets credit for today, he still wielded presidential power very timidly and was more conscious of the constraints of tradition than FDR would be.
But a more normative give and take between Congress and the President, and between Democrats and Reoublicans, began to emerge by 1934. FDR still managed to get most of his program eneacted thorugh 1936, but as I’ve mentioned, things got progressively harder (so to speak) after his reelection…

emptywheel November 26th, 2011 at 2:44 pm

Right–I wasn’t talking about labor, which was never really radicalized.

I’m talking about the existence of alternative ideological choices which everywhere else in the world were presenting existential threats to democracy. It doesn’t take huge numbers in the US to make the real threat elsewhere scary.

And the biggest existential ideological threat today–the mercantilism of Asia–is not even reported truthfully as such by most outlets in the US.

vastleft November 26th, 2011 at 2:45 pm
In response to OldFatGuy @ 49

Though I’d phrase it a little more delicately in an author chat, I completely agree. ObamaCare is an achievement of cementing the problem — for-profit healthcare — via a wholly corrupted process.

Rahm Emanuel even bragged about how conservative and Republican-like it is:

“[The Patient Protection and Affordable Care Act is] very similar to the bill Republicans advocated in ’93. And, if you look at Mr. Frum’s piece, former Bush speechwriter, he noted, which is some of the things I have said before even to this show and others, that this is very similar to policies advocated back in the ’90s by Republicans, not individual policies, the basic approach, which is a free-market, market-based-system approach.”

eCAHNomics November 26th, 2011 at 2:46 pm

How would you compare & contrast the political climate today vs. 193x?

Impression today is that Ds=extreme rightwing Rs of earlier decades and Rs=batshit nuts. Do you agree? Did FDR have to confront such a political morass?

Michael Hiltzik November 26th, 2011 at 2:46 pm
In response to eCAHNomics @ 54

Keynes’s theories were simply not widely understood, or even known, by policy makers in the US until very late in the 1930s–Marriner Eccles, FDR’s very Keynesian chairman of the Federal Reserve, claimed not to have read ANY Keynes when he took over at the Fed. That doesn’t mean that there weren’t students of Keynes in the administration, such as Lauchlin Currie, a top economist at the Fed who had studied with Keynes in the UK. But they were in the minority and not at the center of power.
It’s perhaps more accurate to say that the New Dealers were proto-Keynesians–they understood that when the private sector withdraws from the economy, government must step in–but they didn’t have the theoretical underpinnings at hand that Keynes contributed later.

TobyWollin November 26th, 2011 at 2:46 pm
In response to vastleft @ 59

guys – let’s keep to the topic at hand, which is The New Deal.

bluedot12 November 26th, 2011 at 2:47 pm

Did Keynes have any impact on FDR’s thinking or was that thought of more in the light of something alien? (I’m not sure when he wrote his book but he was not a shrinking violet in any case.)

I ask this bc Obama seems to be locked into a kind of classical economics featuring austerity.

Teddy Partridge November 26th, 2011 at 2:48 pm

Thanks for writing this book and stopping by today to chat, Mike Hiltzik. (And thanks to Toby for hosting today!)

Jumping right in without reading the thread, I’d like to ask about FDR’s Labor Secretary, Frances Perkins. You call her the “carrier of social progressive ideas in the White House.” Many of us had hoped for the same of the almost invisible Hilda Solis in the current regime.

What made it possible for Frances Perkins to maintain her visibility and influence (while excoriated by both sides in a very polarized debate)? How can we encourage Secretary Solis to model her own role on Perkins?

Standing up for workers is so important now; was it Perkins’ novelty or outside constituency that gave her the clout she wielded?

TobyWollin November 26th, 2011 at 2:49 pm

Mike – I also think we need to remember who these folks were, in the sense that by and large, they were brought up in an atmosphere where people still believed the same way their parents did, in the Dickensian ‘please, sir, may I have some more’/workhouse/people are poor because they are bad sense. So, I think to break away from that was difficult.

bluedot12 November 26th, 2011 at 2:50 pm

That will answer my 63/thanks

vastleft November 26th, 2011 at 2:51 pm
In response to TobyWollin @ 62

The author made this statement in this very thread:

I would also argue that some of the Obama White House’s achievements, especially healthcare reform, rank on the same level as some New Deal accomplishments…and the New Deal record also came under heavy fire at the time, not least from the Supreme Court.

It’s inappropriate to respond to that? Anyway, I have to run, but I appreciate Michael doing this chat and hope he has a chance to respond to my earlier question (#40).

DWBartoo November 26th, 2011 at 2:52 pm
In response to OldFatGuy @ 53

Perhaps a differing view, OFG?

It may be that we might find areas of interest, as EW is, clearly, broadly probing, if not of more narrow “agreement”?

This is not partisan hackery, methinks, merely a “perspective” which may not have trod upon the same pathways as many of those “here”, this evening, have “explored” over time.

DW

Michael Hiltzik November 26th, 2011 at 2:54 pm

I should begin by mentioning that Perkins was not universally regarded as an effective cabinet member by her contemporaries–progressive commentators often even dismissed her as an apologist for what they saw as anti-labor tendencies in the White House.
That said, she had an unusually close personal relationship with FDR and an unusually determined approach to achieving social programs within the White House. She was one of the only two cabninet members to remain in the cabinet for all 12 years of FDR’s tenure (the other was Ickes, also a strong progressive, but a Republican). Perhaps wisely, she waited to push her social insurance agenda upon FDR until 1934, after the New Dealers were done with the most immediate crises. But then she reminded FDR that she had agreed to join the cabinet on his explicit promise to enact social insurance. Even then, she had to keep pulling and tugging at him to keep his support for elements of Social Security such as old-age pensions (he was very skeptical).

TobyWollin November 26th, 2011 at 2:57 pm

Would you say that FDR’s pragmatism checked him? He was also pretty uncomfortable with race issues as well, despite the fact that no matter what program was put into place, by and large, few black people, either in the north or south, got use out of them and in many cases, the programs worked to their disadvantage.

Michael Hiltzik November 26th, 2011 at 2:58 pm
In response to TobyWollin @ 65

Yes, there was certainly a commonplace attitude that those who were reduced to needing relief were in some sense the victims of their own failings. But Harry Hopkins, importantly, understood that both the urbanization of the US and the existing economic crisis made that attitude anachronistic. One of his real goals as relief administrator was to wipe out that attitude among relief workers–he strived to eliminate means testing and other demanining elements of relief, among other things. One could say that Hopkins brought the delivery of relief into the modern age…

Michael Hiltzik November 26th, 2011 at 3:01 pm
In response to TobyWollin @ 70

My book makes very clear that pragmatism is FDR’s single most important characteristic. His goal was to get legislation drafted that would have a chance of passage. To his contemporaries–and to those of us who examine his record closely–this can create an impression of lost opportunities. And it’s also plain that the New Deal’s greatest failure is in the area of civil rights–FDR was very, very relluctant to poke a stick into the lion’s cage of Solid South Democratic conservaitves. He once explained quite candidly to Walter White, president of the NAACP, that he couldn’t support the NAACP’s anti-lynching bill in Congress because the inevitable filibuster would block all his other legislation, “and the country can’t afford that.”

CTuttle November 26th, 2011 at 3:02 pm
In response to DWBartoo @ 68

…which may not have trod upon the same pathways as many of those “here”…

*heh* We do have to keep up our fire bagger image, DW…! ;-)

bluedot12 November 26th, 2011 at 3:02 pm

I can’t help but notice that FDR had a couple of advantages. He had a larger majority, a ready made prolonged crisis and he was not averse to having progressives around him. Even seemed to listen to them just a little.

TobyWollin November 26th, 2011 at 3:03 pm

Mike – am I not remembering this correctly – there was at least one if not two people in the Administration who were members of the NAACP – am I right? The Sec’y of the Interior was one, I think.

OldFatGuy November 26th, 2011 at 3:04 pm
In response to DWBartoo @ 68

Perhaps.

If so, my apologies to all.

But all my warning beepers internally are going off DW, so I calls ‘em as I sees ‘em.

Michael Hiltzik November 26th, 2011 at 3:04 pm
In response to bluedot12 @ 63

A little more on Keynes–he and Roosevelt met once, under the auspices of Frances PErkins. The encounter is in my book: neither took a shine to the other. Keynes complained that FDR’s understanding of economics was shallow, and FDR that Keynes sounded more like a mathematician than an economist…PLus, FDR didn’t take kindly to JMK’s public critiques of the New Deal, including his objection to FDR’s attack on private utilities and to the New Deal’s tendency to try to accomplish recovery and reform at once–he though recovery should come first, and then let the New Deal turn to reform. FDR thought they were inextricable.

Michael Hiltzik November 26th, 2011 at 3:07 pm
In response to TobyWollin @ 75

Yes, Harold ickes had been president of the Chicago N AACP. He and the first lady were jointly the carriers of civil rights in the adminitration…but Eleanor was by no means at the center of policy during the New Deal, and Ickes didn’t have adequate authority over many New Deal programs that tended to perpetuate racial inequality, including the TVA….Many New Deal programs were placed in the hands of state-level or local administrators, who followed their racist instincts, especially in the south.

CTuttle November 26th, 2011 at 3:09 pm

FDR thought they were inextricable.

I’d posit that FDR was correct on that count…! What was it about FDR’s attack on private utilities, that Keynes disliked…?

bluedot12 November 26th, 2011 at 3:10 pm

Yes, I think I heard that story. What I was thinking was that JMK’s thinking was then somewhat new. So you can “forgive” someone for being a little skeptical or even cynical. Today, it is a foolish man as President who does not understand the economics of JMK. In fact, we seem to have a planet full of fools. Another advantage to FDR, it seems.
.

DWBartoo November 26th, 2011 at 3:10 pm
In response to OldFatGuy @ 76

Aye, OFG.

;~DW

RevBev November 26th, 2011 at 3:11 pm

Was there any effort to combat the racist tendencies or just a “blind eye”, typical of the times?

TobyWollin November 26th, 2011 at 3:11 pm

Mike – one of the issues that is probably not given as much attention as others from the New Deal era is the use of the media – on both sides. FDR had his ‘fireside chats’, but on the other side were people like Father Coughlin and Huey Long. Radio certainly existed during Hoover and Coolidge’s administrations – did they not make the same use of electronic media or was it a case of what was available in people’s homes?

Teddy Partridge November 26th, 2011 at 3:11 pm

Anyone with the clout to say to FDR, “Hey, I joined your team because you made this promise — so it’s time to keep your promise” must have had an outside constituency to rally around her if she noisily quit, I suppose. Was there a broad public sense of the need for social insurance, or did Perkins push that aloft through her personal charisma?

It’s always interested me that FDR allowed such a well-known person her own public profile, and throughout his presidency. None of the men who worked for him were permitted that long a high-visibility tenure (or wanted it, I suppose).

Michael Hiltzik November 26th, 2011 at 3:11 pm
In response to bluedot12 @ 74

True, as far as it goes, though obviously FDR might have preferred to have not such a sever and prolonged crisis to deal with…He wasn’t averse to having progressives around him, but many of them eventually became disaffected, Tugwell being a notable example. Even that outstanding progressive Louis Brandeis, whose progressive DNA infused the New Deal, was uneasy with some of its programs–he was part of the 9-0 unanimous vote to overturn the NRA in 1935, after all…and told Tommy Corcoran specifically to tell FDR to take that vote as a warning that the New Deal was letting government get too big!

Michael Hiltzik November 26th, 2011 at 3:13 pm
In response to CTuttle @ 79

Keynes didn’t lilke FDR’s attack on the utilities (via the Public Utilities Holding Company Act) because he thought it was futile and therefore a distraction. The act including the so-called “death sentence” clause that would outlaw utility holding companies that couldn’t justify their existence on ecnomnic grounds. Keynes argued that the government would never be able to eradicate holding companies in the utility industry, therefore it shouldn’t waste time on the effort.

bluedot12 November 26th, 2011 at 3:14 pm

As ususal, the devil is in the details.

Michael Hiltzik November 26th, 2011 at 3:17 pm

I doubt that the thought of quitting ever crossed Perkins’s mind. But yes, there was a very strong constituency for social insurance, and one that scared the Democrats. The core of this was the Townsend movement, the nation’s first old-age lobby, which actually got a couple of congressmen elected in 1934. The Townsendites militated for a federal pension program, and Townsend Clibs had so many memvbers across the country by 1934 that their strength moved old-age insurance to the foregront of the Social Security Act–at first the general political opinion was that the prime purpose of the act would be to federalize uemployment relief. By the time of the act’s introduction in 1935, old-age pensions were job one.

PeasantParty November 26th, 2011 at 3:17 pm

Michael,

The New Deal’s Social Security program, was the Corporatists at the time as bent out of shape as they are now about the tax on their part to match up with the employees part?

Teddy Partridge November 26th, 2011 at 3:20 pm

I remember reading, long ago, about the relationships between some Supremes and Presidents (particularly FDR and LBJ) and being shocked at the easy flow of information, advise, and counsel. Do you think we’d do better not to have constructed such a wall between those two branches? And do you think that FDR forever closed off the possibility of having a larger Court?

There is nothing in the Constitution mandating its size, after all. Bill Rehnquist used to complain about the workload all the time; I think a Democratic president could propose an expansion to 11 or even 13 Justices by naming the bill in his honor. It would at least provide great theater as GOPs railed against The Rehnquist Court Relief Act on the floor of the Senate.

I’ve elsewhere read that perhaps FDR’s plan was simply a lifeline to allow his programs a few more months to operate; that he never expected to win the chance to expand the Court but that the shock of his proposals re-set the debate enough to allow more relief and recovery to reach the people. Do you think FDR was serious about “packing the Court?”

eCAHNomics November 26th, 2011 at 3:21 pm
In response to TobyWollin @ 65

Who are ‘these folks’ you refer to and how do you defend such assertions after all the labor strife of the preceding 150 years?

Michael Hiltzik November 26th, 2011 at 3:22 pm
In response to TobyWollin @ 83

Radio really came into its own during the Roosevelt adminbistration. There were probably millions of set in American homes during Hoover’s day, but constitutionally his style was not suited to the medium. His oratorical style was technical, jargon=laden, flat and pedantic. But FDR was not the only politician to take to the new medium. Father Coughlin was known as the “radio priest”–his sunday brodcasts had an audience of millions. Huey Long also came over great on radio. But so did supporters of the administration, not least among them General Hugh JOhnson, the creator of the NRA and one of the great masters of oratorical invective of his time. The 1935 battle of radio speechifying between Johnson on one hand and Coughlin and Long on the other is a landmark in American media history.

Michael Hiltzik November 26th, 2011 at 3:24 pm
In response to PeasantParty @ 89

If by corporatists you mean big business, yes, they attacked Social Security vehemently in 1936, as the payroll tax was about to be implemented. Workers would find anti-Social Security flyers in their pay enveloopes. FDR would use that as part of his campaign for releection. Of course, Alf Landon fashioned his 1936 presidential campaign as an attack on Social Security. But then, after all, he lost in a landslide.

TobyWollin November 26th, 2011 at 3:24 pm
In response to eCAHNomics @ 91

eCAHN – Sorry – I was not clear who I was referring to – ‘these folks’ was my reference to the people in Congress, some of whom were literally born during the Civil War.

Michael Hiltzik November 26th, 2011 at 3:26 pm

I haven’t seen any evidence that FDR was NOT serious about packing the court–indeed, he carried on the fight long after his closest advisors told him he had lost.
As for the relationship between the justices and presidents, history tells us that it’s an artifact of personality. As my book details, Brandeis kept very much an open line to the FDR white house, generally via Felix Frankfurter. And at a critical moment, both he and Justice Harlan Fiske Stone quietly advised Perkins how to inoculate Social Security from being overturned by conservative justices.

bluedot12 November 26th, 2011 at 3:27 pm

Was SS always an insurance program that was to be funded from payroll taxes? I mean this is a regressive tax and, after all, we don’t fund the military out of a payroll tax. And from the corporate side, it reduces profits.

eCAHNomics November 26th, 2011 at 3:29 pm
In response to TobyWollin @ 94

Thanks for the clarification. But labor strikes began in the 1820s, so even peeps born during the civil war should have been aware.

Michael Hiltzik November 26th, 2011 at 3:30 pm

A bit more on Frances Perkins…I’m not sure she maintained as much of an independent public profile as you believe. She was, in fact, a rather prim and demure New England Brahmin who resented the invasion of her personal privacy that was becoming a part of political leadership. She really detested press conferences and had a very difficult relationship with the press. Her constituency was witihin the social insurance and social work community, but that wasn’t a very strong or well-known community in general terms.

TobyWollin November 26th, 2011 at 3:31 pm

Just a note: “by the end of the 1920s, one third of U.S. households owned a radio and by 1933 that number climb close to 60%. ” http://www.radiostratosphere.com/zsite/behind-the-dial/radio-in-1930.html

PeasantParty November 26th, 2011 at 3:33 pm

Thank you for your reply. In my opinion, that is why they are screaming about taxes today and doing everything to remove SS and Medicare through our politicians.

When I get my annual statement it neatly shows my contributions all the years that I have worked, but does not show the employers/business contributions. I’m pretty pissed about that.

Michael Hiltzik November 26th, 2011 at 3:33 pm
In response to bluedot12 @ 96

The payroll tax became part of Social Security very early in the discussion. Social insurance experts were of two minds about–they saw it was a flaw in terms of saddling the workforce with the costs of their own insurance (in Germany this led to civil unrest in the 19thy century, when unemployment made the cost of relief for the shrinking working class unsupportable) …but they also believed that a contributory scheme was necessary to keep the size of the program from overexpanding. As for the payroll tax reducing profits, I think you’ll find that in economic terms it’s generally regarded as coming out of the wages of the workers–both the direct tax and the employers’ share–not out of profits.

Michael Hiltzik November 26th, 2011 at 3:34 pm
In response to PeasantParty @ 100

I don’t have my SS statement handy, but your employer’s share is exactly equal to your own.

Michael Hiltzik November 26th, 2011 at 3:39 pm
In response to RevBev @ 82

There were occasional efforts to combat the racial inequities of locally-administered New Deal relief programs–Perkins threatned to cut off CCC programs in Georgia and Mississippi, for example (as a result, more spaces were awarded to black youths, but still not anywhere near equality)…but just as often, New Deal spokespersons explained the inequities as sort of inevitable. In the 1936 election, black leaders backed FDR, but often explained that they did so because he was a better choice than the Republican . The NAAACP magazine Crisis explained that of the four candidates, the best for black voters would be Earl Browder of the Communist PArty or Norman Thomas of the Socialists. But since neither had a chance, Crisis advocated a vote for FDR.

TBogg November 26th, 2011 at 3:40 pm

Hi Michael-

Care to take a whack at Amity Schlaes’ Forgotten Man theory that the real victims of the Depression were people like Andrew Mellon…

TobyWollin November 26th, 2011 at 3:40 pm

And yet – she acted as ‘go-between’ and ‘nurturer’ for FDR with at least one member of his group, didn’t she?

bluedot12 November 26th, 2011 at 3:40 pm

Well, if the employers tax doesn’t come out of their profits, maybe we should use that trick to get money for the military? :)

eCAHNomics November 26th, 2011 at 3:40 pm

Self-employed?

Also, what about the regressiveness of SS tax. What is the history of that.

Kelly Canfield November 26th, 2011 at 3:41 pm

The statement doesn’t break it out by year – but it does in a totals box below, saying “You paid: (totals of above years) Your employers Paid: (totals of above years.)”

It does the same for Medicare too.

Teddy Partridge November 26th, 2011 at 3:42 pm

I admit my sense of her is probably strongly influenced by my own mother’s great and vocal admiration of her, passed down to me. Raised in a virulently anti-FDR household, her Perkins fandom was probably as much a growing teen’s rebellion against her father as it was anything more broadly based in our culture.

She did go on about Frances Perkins, though. (Googling Perkins now, I’d forgot she’s a Mount Holyoke College grad, as is mom, which probably explains my mom’s interest).

TobyWollin November 26th, 2011 at 3:42 pm
In response to TBogg @ 104

Evening, Mr. Bogg….

Teddy Partridge November 26th, 2011 at 3:44 pm
In response to TBogg @ 104

It is to laugh.

Michael Hiltzik November 26th, 2011 at 3:44 pm
In response to TBogg @ 104

Hi Tbogg and welcome….
I think it’s pretty obvious that the Mellons were able to take care of themselves…Somehow, the plight of the Mellons never seemed to come to the attention of Lorena Hickock…
Shlaes and I pretty plainly disagree on a number of aspects of the New Deal, not least that the evidence shows that the economy experienced very strong growth during most of the period, that the unemployment rate plummeted, and that the US workforce expanded by 25%–a record any administration would be pleased to have.

TobyWollin November 26th, 2011 at 3:45 pm

I wonder if Perkins had any connection with Eleanor Roosevelt – I think Mrs. Roosevelt did some social work when she was young.

DWBartoo November 26th, 2011 at 3:46 pm
In response to eCAHNomics @ 97

And, eCAHN, Dickens made two visits to the US, in 1842, and in 1867. During the first, he vigorously denounced slavery and during the second he said that he would not again condemn the US, for he saw many “changes in the people” …

It should be remembered, however, that according to some scholars, it took the American people three years to stop blaming themselves for the Great Depression … and that is when it became “advisable” for FDR to try to “save” capitalism, at least as a few see his behavior to really have been about.

Certainly, today in Congress, we see a very outmoded (and beneficial to the “holder’s”) view of “economics” … which is very Dickensian in many ways, held by the ruling class. One imagines that Toby is correct about the elitist “viewpoint” of superiority held by many “representatives” of “the people” during the late thirties, even if those “representatives” were not so clearly “owned” as, very clearly, is the case today …

DW

bluedot12 November 26th, 2011 at 3:50 pm
In response to DWBartoo @ 114

The more things change …..

Michael Hiltzik November 26th, 2011 at 3:51 pm
In response to eCAHNomics @ 107

The regressiveness of the payroll tax is obviously an artifact of its having one rate, capped. It’s worthwhile to note that when initially implemented, it did cover 90%+ of all wage income in the country, a percentage that has slipped materially, especially in the last 20 years.

Keep in mind that the original payrol tax rate was 1% (and another 1% from employers. At the time, the income tax was more progressive than today, rising to 63% of income over $1 million (though that would be $16.5 million today). So the regressivity may not have looked as severe at the time.

Michael Hiltzik November 26th, 2011 at 3:52 pm
In response to TobyWollin @ 113

I haven’t documented that. But Eleanor roosevelt played an important role in creating the rural settlement program under the New Deal–much to the frustration of Harold Ickes, who was nominally in charge of it and thought (justifiably) she was meddling to the extent of driving up the program’s cost and undermining it’s effectiveness….

bluedot12 November 26th, 2011 at 3:53 pm

I guess in the last 75 years no one noticed it was becoming more regressive even as the tax rate on the elites went down./s

CTuttle November 26th, 2011 at 3:53 pm
In response to bluedot12 @ 115

*snort*

TobyWollin November 26th, 2011 at 3:54 pm

Mike – given what has happened over the past 30 years (and perhaps longer – I’m sure there are some folks here who can correct me)in terms of attacks on the products of the New Deal and the programs which have evolved (the Great Society, Medicare, Medicaid and so on), and the strength of the attacks today, are we faced with a situation where we can no longer progress but must accept that the best we can do is try to retain what might be a shadow of what is available now? Is this to be the constant fight?

BevW November 26th, 2011 at 3:54 pm

As we come to the end of this great Book Salon,

Michael, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book and The New Deal.

Toby, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Michael’s website and book

Toby’s website

Thanks all, Have a great evening.

Sunday – John Geyman / Breaking Point – How the Primary Care Crisis Endangers the Lives of Americans; Hosted by Wendell Potter

If you want to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

Michael Hiltzik November 26th, 2011 at 3:55 pm
In response to bluedot12 @ 118

Perhaps not, but it’s worth noting that one proposed reform that’s won a good score from the SS actuaries is to raise the cap to the point it again captures 90%+ of all wage income (probably about $200,000 or more).

eCAHNomics November 26th, 2011 at 3:55 pm
In response to DWBartoo @ 114

I get that part, about the inside-the-bubble dwellers not having a clue as to how the real world works.

Was hoping to provoke Hiltzik into an explication, since I’m always curious about how PTB can be soooo blind to what’s really happening and always curious for another explanation for how that can happen.

When I asked the academic bubble Q at some event at my son’s college during spring of his frosh year, all I got from prez was embarrassed titters and assertions that every institution was accused of living in a bubble.

I spose that’s the most honest A I’ll ever get.

eCAHNomics November 26th, 2011 at 3:56 pm

Very helpful A. Didn’t know that. Thanks.

Michael Hiltzik November 26th, 2011 at 3:57 pm
In response to TobyWollin @ 120

Opinion polls pretty consistently show that the public likes the programs it’s inherited from the New Deal just fine, and doesn’t like thinkering. In sum, the New Deal changed the very relationship between the government and its citizens, and from what I can see, its citizens like things that way.

Teddy Partridge November 26th, 2011 at 3:57 pm

Thanks very much for this great chat, Mike, and especially for taking time on a holiday weekend. I’m really enjoying your book; just started, and looking forward to finishing it. It’s great to see a really knowledgeable and intelligent person write about the New Deal, given the no-brain fluff and misdirection that Miss Amity is paid to confetti-toss into much of our media today.

Thanks to Toby and, of course, to Bev as well. Hope everyone enjoys the rest of their holiday weekend!

eCAHNomics November 26th, 2011 at 3:58 pm

doesn’t like thinkering

Best type of the whole salon.

bluedot12 November 26th, 2011 at 3:58 pm

For another day, but I object to any SS tax. I was not kidding. SS should be funded just like other government services, including medicare and medicaid and the military.

TobyWollin November 26th, 2011 at 3:58 pm

And it requires vigilance as well. :)

Michael Hiltzik November 26th, 2011 at 3:59 pm

Many thanks to all of who participated…great discussion. And thanks to Toby and Bev. Hope you all visit me at http://www.latimes.com/hiltzik, http://www.facebook.com/hiltzik, or hiltzik@gmail.com.

OldFatGuy November 26th, 2011 at 3:59 pm

not least that the evidence shows that the economy experienced very strong growth during most of the period, that the unemployment rate plummeted, and that the US workforce expanded by 25%–a record any administration would be pleased to have.

Yes, thank you for this.

It amuses me no end when the right tries to rewrite history into “the only thing that ended the Great Depression was World War II.” They’ve spread that lie so much that it’s widely beleived now. But this is correct, every year GDP rose and unemployment fell during the New Deal years with the lone exception of the recession of 1938. No doubt the spending during the war helped, but the fact is the policies taken were working even before the war ever started.

bluedot12 November 26th, 2011 at 3:59 pm

Thank youm Michael.

Michael Hiltzik November 26th, 2011 at 3:59 pm

Thanks for your very kind thoughts

TobyWollin November 26th, 2011 at 4:00 pm

Mike – thanks again for spending time with us today to talk about the New Deal and your book, “The New Deal” – I learned so much that I did not know about the era, the people, and how close we came. I’d like to thank everyone for taking time on a holiday weekend to be with us and participating. Have a great evening!

DWBartoo November 26th, 2011 at 4:01 pm
In response to eCAHNomics @ 123

Yes, that is about the best “answer” we may “hope” for, eCAHN.

Just WHY, do you suppose, it always benefits the “holders” to “go along”?

Mayhaps we should ask the Attorney General such a question?/sssss

;~DW

CTuttle November 26th, 2011 at 4:02 pm

So the regressivity may not have looked as severe at the time.

It was a hell of a lot better than what they’d had before…! ;-)

Mahalo Nui Loa, Michael, Toby, and all, for a great Salon…! *g*

homeroid November 26th, 2011 at 4:02 pm

Great book salon thanks all.

OldFatGuy November 26th, 2011 at 4:03 pm
In response to bluedot12 @ 128

Absolutely.

Agreed.

DWBartoo November 26th, 2011 at 4:03 pm

Thank you, Mike.

Thank you, Toby.

As always, thank you, Bev.

As ever, thank you, everyone.

As usual, FDL done itself proud …

DW

BruceWebb November 26th, 2011 at 4:05 pm

Welcome Michael, as I have said previously online and via list serv action you seem to be the only economic reporter in a paper of record (as opposed to columnists like Krugman and perhaps E Klein) who actually understands the mechanics of Social Security. It gets pretty damn dispiriting reading the news sections of the NYT, the WaPo, the WSj (tho not as bad as their od ed) and worst of the worst USA Today. A little Hiltzik corrective helps.

But responding to other commenters. The Social Security Act of 1935 can only be regarded as unfair to blacks if the focus is narrowly on the Title 2 part we know as Social Security today. There was also a Title 1 Old Age Pension plan that directly benefited ag and domestic workers excluded under Title 2, many of whom were black, as well as another Title that established Federal funding for State based unemployment systems. A lot of the “FDR was a racist and Social Security proves it” narrative derives from the same Amith Schlaes “the New Deal was a failure in putting people to work” narrative. One that notably rested on statistics that had German slave labors as “employed” and WPA and CCC folks as welfare recipients.

I have asked the top leftie experts on Social Security for pointers to a study on relative effectiveness of Title 1 as opposed to Title 2. But nobody seems to have a definitive study. On the other hand ssa.gov/history reports that both tthe total number of recipients under Title 1 welfare and total dollar payments out were higher than those of insurance based Title 2 until the Social Security Amendments of 1950. Until I see a solid numeric study I am not willing to buy into the ‘Social Security was racist’ narrative that so well fits the larger ‘New Deal was a failure’ one pushed by the Right. There were solid practical reasons to exclude domestics and ag workers from Social Security withholding in the context of 1935, too many ‘employers’ were housewives and small farmers bringing in weekly or seasonal help and compensating in part with room and found. Translating any part of that into dollar wage compensation equivalents and then tracking the employers of your casual washerwoman or harvest hand not being practical. Hard as it is to believe even the working class hired folk for heavy work in pre-war conditions. With some much limited literacy and numeracy on both sides.

BruceWebb November 26th, 2011 at 4:07 pm

Not this year. The payroll holiday of 2% was exclusively on the employee side. Although Obama is pushing for an equivalent cut on the employer side for next year the current split is 4.2% to 6.2%

DWBartoo November 26th, 2011 at 4:08 pm
In response to BruceWebb @ 140

Thank you for those insights and perspectives, Bruce, they are very much appreciated.

DW

eCAHNomics November 26th, 2011 at 4:08 pm
In response to BruceWebb @ 140

Unfair to women too.

Dontcha see the larger picture. It was just a start. /s

DWBartoo November 26th, 2011 at 4:11 pm
In response to BruceWebb @ 141

What do you think is the intent of these “cuts”, Bruce?

It seems to me that it is an effort to undermine SS in the longer run, by “proving” that SS is NOT able to “sustain” itself.

DW

DWBartoo November 26th, 2011 at 4:13 pm
In response to eCAHNomics @ 143

“Things” are “beginning” to get out of (RWM’s) hand, eCAHN.

(Nervous twitters now heard in the “background” …)

DW

BruceWebb November 26th, 2011 at 4:19 pm

And to rebeat the dead horse, Social Security expenses under Title 1, a General Fund financed State based Old Age Pension Plan were larger than those incurred under Insurance Based Title 2 until 1951. Which makes the apparent regressivity of the system much reduced.

The first monthly benefits under Title 2 didn’t kick in until 1940, at that a year ahead of schedule, whereas Title 1 benefits cut in right in 1936. Until you compensate for the early kick in and the overall greater level of spending on Title 1 for the first 15 years of the program it is literally impossible to pass judgement on ‘regressivity’. A little knowledge as almost always being a dangerous thing.

BruceWebb November 26th, 2011 at 4:20 pm
In response to eCAHNomics @ 143

Women were covered under Title 1. In their own right and as survivors.

Got numbers?

BruceWebb November 26th, 2011 at 4:35 pm
In response to DWBartoo @ 144

Intent of the cuts?

Neo-lib dicks thinking they are smarter than FDR and Perkins and buying into the whole ‘regressive tax’ narrative.

The current Social Security system is not ‘regressive’. Not once you calculate in insurance benefits that disproportionately benefit minorities and widows plus a payout formula that has lower income workers getting a higher replacement ratio of final wages than higher income workers do. Not to the point that a higher income lifetime worker actually gets a smaller check, FDR made sure Title 2 unlike Title 1 wasn’t a pure redistribution system, I.e welfare. But there is significant transfer from top to bottom. But commenters would need to take a page from Hiltzak and know something about the mechanics involved. Tinker with it at your peril.

Which of course the Obama people not only did but propose to double down on. People like Nancy Altman and Dean Baker who have been on this beat for decades as well as proles like me started squealing about this in e-mail when it was proposed. Because this is DC, there is no such thing more illusorary than a “temporary tax cut” that “sunsets”. Didn’t these brain boys learn anything from 2001?

PJEvans November 26th, 2011 at 5:01 pm
In response to BruceWebb @ 148

Didn’t these brain boys learn anything from 2001?

No. Or at least, not what they should have learned.

DWBartoo November 26th, 2011 at 5:06 pm
In response to BruceWebb @ 148

“Learning” seems to be a slow and “selective” process, Bruce. Would you have any problems with raising the “top end”, perhaps doing away with the idea of a “cap” on paying SS “taxes” above a certain “point”?

Which also gets us to the question of the “work” penalty, whereby actual work, brains or brawn, effort which earns money is taxed at a higher rate than “money” which “earns” money.

However one benefits or “profits” from a society, and the “rules” of society’s “games, there seems some need of essential fairness in “taxation” … or the concept of “giving back” … a fact which seems to elude far too many who benefit from fundamental unfairness … we see much the same thing before the “law” where “money and “standing” determine how much actual “justice” the law will “dispence” … suggesting that the “law’s” primary purpose is to protect the status quo …

DW

fatster November 26th, 2011 at 5:21 pm
In response to PJEvans @ 149

Or, perhaps, what they didn’t care to learn.

(If it doesn’t fit your agenda, chuck it.)

Hi!

BruceWebb November 26th, 2011 at 5:39 pm
In response to DWBartoo @ 150

I am a long time opponent of raising the cap totally and/or extending FICA to investment income. Not because I am opposed to progressive taxation, we could go back to Reagan or Kennedy rates and tax capital gains at regular top rates and only get huzzahs from me.

The fact is that Social Security does not need a subsidy for capital, all the hysteria is just that and in the end just a malicious attempt to make workers believe a worker financed social insurance system is ‘unsustainable’ and that the answer to to ggo begging hat in hand to the top 10% to bail us out. It is bullshit, under current CBO scored proposals Social Security can finance 100% of the scheduled benefit with no increases in retirement age at an initial cost of 40 cents per week per worker.

In short we don’t need their fucking help. For this limited purpose. On the other hand we will gladly take their money to pay for their wars of choice, or to educate our kids to provide their future trained workforces or the health care that will allow them to show up on the job. But Social Security doesn’t need their money. At all, and only progressives that have bought into bullshit ‘regressive taxation’ arguments advance by plutocrats believe their is.

Social Security can be fully funded for literal couch change. In 1999 Dean Baker and Mark Weisbrot titled their book “Social Security: the Phony Crisis”. And it was and is. Frankly when I encounter smart ass progressives that smugly insist that the answer is so simple it can be summed up in three words: “Raise the Cap” my impulse is to smack them on the side of their heads and reply “Couch Change”. The current 75 year projected gap is 2.22% of payroll with around 75% of THAT not showing up until after 2036. Per CBO you could fix the whole thing by raising FiCA by 0.1% per year, split between employers and employees, for 20 years, or stretch it out at 0.03% a year in an economic model that has real wage going up in historically sucky fashion at 1.2% per year.

Tax the crap out of the rich, take rates back to Eisenhouer 90% for all I care. Leave Social Security the fuck alone. Or be prepared to show your spreadsheet.

In answer to your specific question I am not opposed to increasing the actual incidence of the cap back to 90% from current 84%. But that is not where the class enemy is. What part of 99% are we missing here? Taxing six digit public interest lawyers as opposed to the 0.01% represented by hedge fund billionaires is just to lose focus. Tinkering with the cap is just rearranging Titanic deck chairs while the first class passengers are taking all the lifeboats.

Math is a bitch. But it is our bitch.

DWBartoo November 26th, 2011 at 5:51 pm
In response to BruceWebb @ 152

Very much appreciate your comments, Bruce, and hope to “see” your thoughts much more often on these threads.

DW

juliania November 26th, 2011 at 6:03 pm

I’m late on here, but very much thanks to the author, to the hosts and to the commenters for a great discussion. In particular, I thank Bruce Webb for the following:

“The current Social Security system is not ‘regressive’. Not once you calculate in insurance benefits that disproportionately benefit minorities and widows plus a payout formula that has lower income workers getting a higher replacement ratio of final wages than higher income workers do. Not to the point that a higher income lifetime worker actually gets a smaller check, FDR made sure Title 2 unlike Title 1 wasn’t a pure redistribution system, I.e welfare. But there is significant transfer from top to bottom. But commenters would need to take a page from Hiltzak and know something about the mechanics involved. Tinker with it at your peril.”

This so much expands on my own simple mantra – if it ain’t broke, don’t fix it. Beautiful, Bruce – thanks very much.

fatster November 26th, 2011 at 6:46 pm
In response to juliania @ 154

Right now we’re struggling to keep them from breaking it (which they’re itching to do on the pretense that they simply must fix it).

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