The Internet Responds to the Voluntarism Fantasy

Apr 8, 2014Mike Konczal

My recent Voluntarism Fantasy piece (pdf) for Democracy Journal has gotten a fair amount of coverage. So I'm going to use this post, which will be updated, to keep track of the links to other people engaging, if only so I can respond in the future.

The piece was also reprinted at The Altantic Monthly.

Reddit thread with comments.

In favor of the piece:

Michael Hiltzik covers the argument in the LA Times' opinion page and EJ Dionne in the Washington Post's opinion page.

Matt Bruenig notes that the way we discuss this reflects a deep status quo bias at The Week.

Elizabeth Stoker, channeling Niebuhr, makes the strong Christian case that charity and government social insurance go together at The Week.

Sally Steenland of Center for America Progress also addresses the fantasy in this article.

Erik Loomis makes an excellent point that in addition to the rest of the 19th century state, the "federally subsidized westward expansion was also part of this welfare state, as Republicans especially explicitly saw the frontier as a social safety net that would alleviate poverty without directly giving charity to people."

James Kwak agrees that there's "No Substitute for the Government" here.

Jordan Weissmann argues that "Charity Can’t Replace the Safety Net" over at Slate.

I discuss the piece on the Majority Report with Sam Seder (also in-studio video here).

Less in favor:

Marvin Olasky, author of the Tragedy of American Compassion (which is one focal point of the article), responds in World.

Philathrophy Daily ran two articles critical of the piece, both at the forefront of the voluntarism fantasy's worldview. The first is from Hans Zeiger and the second from Martin Morse Wooster, who breaks out the paralipsis "I could argue that Mike Konczal and the Roosevelt Institute has a hidden agenda: to force the U.S. to accept Soviet-style communism ... I won’t make that argument because I know it isn’t true."

Rich Tucker at Townhall says that I do "a better job than Barack Obama did explaining the president’s 'You didn’t build that' philosophy," which I'll take as a compliment.

Reihan Salam has a set of responses at The Agenda.

Howard Husock argues that  charitably-funded, non-governmental programs are better than government at helping help individuals thrive at Forbes.

Don Watkins at the Ayn Rand Institute has a five part (!) critical response; you can work backwards from the fifth part here.

Anarchist Kevin Carson sees "the welfare state nevertheless as an evil necessitated by the state-enforced model of capitalism, and ultimately destined to wither away along with economic privilege and exploitation" in his response.

I'll add any more as they happen. (Last updated April 11th.)

My recent Voluntarism Fantasy piece (pdf) for Democracy Journal has gotten a fair amount of coverage. So I'm going to use this post, which will be updated, to keep track of the links to other people engaging, if only so I can respond in the future.

The piece was also reprinted at The Altantic Monthly.

Reddit thread with comments.

In favor of the piece:

Michael Hiltzik covers the argument in the LA Times' opinion page and EJ Dionne in the Washington Post's opinion page.

Matt Bruenig notes that the way we discuss this reflects a deep status quo bias at The Week.

Elizabeth Stoker, channeling Niebuhr, makes the strong Christian case that charity and government social insurance go together at The Week.

Sally Steenland of Center for America Progress also addresses the fantasy in this article.

Erik Loomis makes an excellent point that in addition to the rest of the 19th century state, the "federally subsidized westward expansion was also part of this welfare state, as Republicans especially explicitly saw the frontier as a social safety net that would alleviate poverty without directly giving charity to people."

James Kwak agrees that there's "No Substitute for the Government" here.

Jordan Weissmann argues that "Charity Can’t Replace the Safety Net" over at Slate.

I discuss the piece on the Majority Report with Sam Seder (also in-studio video here).

Less in favor:

Marvin Olasky, author of the Tragedy of American Compassion (which is one focal point of the article), responds in World.

Philathrophy Daily ran two articles critical of the piece, both at the forefront of the voluntarism fantasy's worldview. The first is from Hans Zeiger and the second from Martin Morse Wooster, who breaks out the paralipsis "I could argue that Mike Konczal and the Roosevelt Institute has a hidden agenda: to force the U.S. to accept Soviet-style communism ... I won’t make that argument because I know it isn’t true."

Rich Tucker at Townhall says that I do "a better job than Barack Obama did explaining the president’s 'You didn’t build that' philosophy," which I'll take as a compliment.

Reihan Salam has a set of responses at The Agenda.

Howard Husock argues that  charitably-funded, non-governmental programs are better than government at helping help individuals thrive at Forbes.

Don Watkins at the Ayn Rand Institute has a five part (!) critical response; you can work backwards from the fifth part here.

Anarchist Kevin Carson sees "the welfare state nevertheless as an evil necessitated by the state-enforced model of capitalism, and ultimately destined to wither away along with economic privilege and exploitation" in his response.

I'll add any more as they happen. (Last updated April 11th.)

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Do Negative Rates Call For a Permanent Expansion of the Government?

Nov 19, 2013Mike Konczal

Everyone has been talking about the recent Larry Summers speech on secular stagnation, written up with force by Paul Krugman here. Gavyn Davies, in his own nice coverage, noted that the Q&A had an interesting exchange about fiscal stimulus between Bernanke and Summers, so I decided to write that up.

From the IMF video, starting around 1h 2m 15s:

Bernanke:
 
I remember another course we had at MIT with Mr. Samuelson, who I think is a relative of yours [laughter], where he explains…why the real interest rate couldn't be negative indefinitely. He said there was always the possibility of leveling a hill so that a locomotive could get to a destination [faster]…
 
If the real return is negative, first of all, monetary policy can get negative interest rates with positive inflation. But on the fiscal side, the return to public investment, as long as it's real, as long as it's above zero, would always be an approach. It would always be profitable at negative interest rates.
 
Summers:
 
[…] If you think about it as a private investment, it requires that there are perfect property rights, that you can get the benefit of that through all of time, which is reasonable to suppose you don't. If you think of it as a public investment, it's sort of the point that there may be a case for what, in some ways of thinking, be a permanent fiscal expansion, where you are constantly undertaking projects of that kind. It is precisely how one should think of medium-term and long-term fiscal policy that the kind of argument that I made goes to, to a very substantial extent.
 
[…] if you generate inflation, you can have as negative of a real interest rate as you want. It's often assumed, from that, that monetary policy can necessarily solve the problem alone. But that depends on the ability of pure monetary policy to achieve any desired inflation.
 
There's no question… if you drop enough dollar bills from enough helicopters, you can get as much inflation as you want, but in the classic economic lexicon, that's expansionary fiscal policy, because you are making a transfer. And we've done a lot of quantitative easing, and the inflation rate is not conspicuously higher than what it was before it started.
I would normally edit a transcript a bit more, but I wanted to make sure you saw that Summers has a triple hedge ("it's sort of the point that there may be a case for what, in some ways of thinking") before he says that we may need a permanent, or at least a permanent enough, fiscal expansion. This is a long way away from the "timely, targeted, and temporary" mantra Summer had for fiscal stimulus in 2008. Stimulus should still be very well targeted, but now temporary and perhaps even timely are up for grabs.
 
Of course, if we needed to expand government for our new era, we have a lot of projects, like fighting global warming and rationalizing our safety net with some kind of basic income, with which we could start. So we aren't lacking for genuine investment opportunities. But would a serious and sustained expansion of the size of government be a necessary or sufficient condition for combating the issue of secular stagnation? I'm curious what everyone thinks and why.
 
I can imagine the steam coming out of Ryan Avent's ears at Summers's description of quantitative easing and the inflation rate (see Avent's response to the Summers speech here). I will say that 11 months ago, when the Evans Rule and QE3 were announced, I thought there would be a small but reasonable chance that we'd experience anemic growth but above-trend inflation (say 2.25 percent). The question then was why people should be happy about this, and whether it would translate into wage growth. Instead, we have anemic growth and record-low inflation, and I don't know how to explain that.
 
The old complaint was that Bernanke was targeting volumes instead of prices (I'll buy so many bonds, but not set the 10 year interest rate at 1.75% and the mortgage rate at 3%), in part because he was afraid of failing at hitting a target and, perhaps, was afraid of the optics of it. But the one target he has gone for - 2% inflation - he hasn't hit. I imagine that's a big problem for bigger actions going forward.
 

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Everyone has been talking about the recent Larry Summers speech on secular stagnation, written up with force by Paul Krugman here. Gavyn Davies, in his own nice coverage, noted that the Q&A had an interesting exchange about fiscal stimulus between Bernanke and Summers, so I decided to write that up.

From the IMF video, starting around 1h 2m 15s:

Bernanke:
 
I remember another course we had at MIT with Mr. Samuelson, who I think is a relative of yours [laughter], where he explains…why the real interest rate couldn't be negative indefinitely. He said there was always the possibility of leveling a hill so that a locomotive could get to a destination [faster]…
 
If the real return is negative, first of all, monetary policy can get negative interest rates with positive inflation. But on the fiscal side, the return to public investment, as long as it's real, as long as it's above zero, would always be an approach. It would always be profitable at negative interest rates.
 
Summers:
 
[…] If you think about it as a private investment, it requires that there are perfect property rights, that you can get the benefit of that through all of time, which is reasonable to suppose you don't. If you think of it as a public investment, it's sort of the point that there may be a case for what, in some ways of thinking, be a permanent fiscal expansion, where you are constantly undertaking projects of that kind. It is precisely how one should think of medium-term and long-term fiscal policy that the kind of argument that I made goes to, to a very substantial extent.
 
[…] if you generate inflation, you can have as negative of a real interest rate as you want. It's often assumed, from that, that monetary policy can necessarily solve the problem alone. But that depends on the ability of pure monetary policy to achieve any desired inflation.
 
There's no question… if you drop enough dollar bills from enough helicopters, you can get as much inflation as you want, but in the classic economic lexicon, that's expansionary fiscal policy, because you are making a transfer. And we've done a lot of quantitative easing, and the inflation rate is not conspicuously higher than what it was before it started.
I would normally edit a transcript a bit more, but I wanted to make sure you saw that Summers has a triple hedge ("it's sort of the point that there may be a case for what, in some ways of thinking") before he says that we may need a permanent, or at least a permanent enough, fiscal expansion. This is a long way away from the "timely, targeted, and temporary" mantra Summer had for fiscal stimulus in 2008. Stimulus should still be very well targeted, but now temporary and perhaps even timely are up for grabs.
 
Of course, if we needed to expand government for our new era, we have a lot of projects, like fighting global warming and rationalizing our safety net with some kind of basic income, with which we could start. So we aren't lacking for genuine investment opportunities. But would a serious and sustained expansion of the size of government be a necessary or sufficient condition for combating the issue of secular stagnation? I'm curious what everyone thinks and why.
 
I can imagine the steam coming out of Ryan Avent's ears at Summers's description of quantitative easing and the inflation rate (see Avent's response to the Summers speech here). I will say that 11 months ago, when the Evans Rule and QE3 were announced, I thought there would be a small but reasonable chance that we'd experience anemic growth but above-trend inflation (say 2.25 percent). The question then was why people should be happy about this, and whether it would translate into wage growth. Instead, we have anemic growth and record-low inflation, and I don't know how to explain that.
 
The old complaint was that Bernanke was targeting volumes instead of prices (I'll buy so many bonds, but not set the 10 year interest rate at 1.75 percent and the mortgage rate at 3 percent), in part because he was afraid of failing to hit a target and, perhaps, was afraid of the optics of it. But the one target he has gone for, 2 percent inflation, he hasn't hit. I imagine that's a big problem for bigger actions going forward.
 

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Progressivism in America: Are We Opening a New Chapter in Our Book of Self-Government?

Nov 7, 2013David B. Woolner

As Americans reject the extreme right wing at the polls, FDR's vision of self-government may be on the rise again. Note: On Nov. 8-9, David Woolner and other leading thinkers will explore the past, present, and future of progressivism at a conference hosted by the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin. Click here for details and livestream.

As Americans reject the extreme right wing at the polls, FDR's vision of self-government may be on the rise again. Note: On Nov. 8-9, David Woolner and other leading thinkers will explore the past, present, and future of progressivism at a conference hosted by the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin. Click here for details and livestream.

The results of this week’s elections have led to a good deal of speculation in the press about the repudiation of the hard right among the American electorate. Democrat Terry McAuliffe’s victory over Tea Party-backed Ken Cuccinelli in the Virginia gubernatorial race and Republican Governor Chris Christie’s impressive reelection win in heavily Democratic New Jersey have both been interpreted as evidence of the broader appeal of moderates in both parties. If true, this would be a welcome development, particularly on the Republican side of the ledger, where the obstructionist winner-take-all attitude of the extreme right has rendered the United States virtually ungovernable and nearly brought the country to ruin on two occasions within the past two years.

President Obama and other political leaders on both sides have frequently cited the economic damage that this “crisis governing” has wrought to our economy. But equally significant—particularly for those of us who favor more activist social and economic policies—is the damage done to government itself, and by extension, to our democracy.

Indeed, the American people’s faith in government, especially Congress, is at an all-time low. Of all the issues confronting liberals or progressives today it is this issue, faith in government, that is perhaps the most important. For without the support of the broad electorate it will be impossible for Congress and the executive to move forward on a whole range of issues.

Eighty years ago, in the midst of an even worse economic crisis, Franklin Roosevelt won the support of the American people by asking them “to find through government the instrument of our united purpose to solve for the individual the ever-rising problems of a complex civilization.” Moreover, he insisted that the failed non-governmental attempts to meet the crisis brought on by the financial collapse of 1929-1932 left the American people “baffled and bewildered,” without the means to fashion “practical controls over blind economic forces and blindly selfish men.”

But in the wake of the many programs that Congress and the president put in place to meet the crisis from 1933 on, the people began to sense the truth “that democratic government has innate capacity to protect its people against disasters once considered inevitable, to solve problems once considered unsolvable. We would not admit”, he continued, “that we could not find a way to master economic epidemics just as, after centuries of fatalistic suffering, we had found a way to master epidemics of disease.”

In making this argument, FDR insisted that the American people were not discovering a wholly new truth, but were simply “writing a new chapter in our book of self-government.”

Our history, then, tells us that it is possible for us to meet the challenges before us—but only if we are willing, as FDR advised, “to find through government the instrument of our united purpose."

On November 8-9, the Roosevelt Institute and the Clinton Institute for American Studies at University College Dublin will hold a major international conference entitled Progressivism in America: Past, Present and Future. Featuring such noted figures as Nobel Laureate and Roosevelt Institute Chief Economist Joseph Stiglitz, journalists like E.J. Dionne and Jonathan Alter, and historians such as Alan Brinkley and Ellen Chesler, the conference seeks to address today’s policy challenges with solutions grounded in and inspired by the legacy of Franklin and Eleanor Roosevelt—including the all-important realization, as FDR remarked years ago—that “government is competent when all who compose it work as trustees for the whole people.” This event will be livestreamed. Click here for more details.

David B. Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. 

 

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The Ongoing Crisis Demands Jobs, Not Deficit Reduction

May 16, 2013David B. Woolner

Today's leaders must recognize that job creation is the key to boosting revenues for the government and the people.

Today's leaders must recognize that job creation is the key to boosting revenues for the government and the people.

Now, the rise and fall of national income—since they tell the story of how much you and I and everybody else are making—are an index of the rise and fall of national prosperity. They are also an index of the prosperity of your Government. The money to run the Government comes from taxes; and the tax revenue in turn depends for its size on the size of the national income. When the incomes and the values and transactions of the country are on the down-grade, then tax receipts go on the down-grade too. If the national income continues to decline, then the Government cannot run without going into the red. The only way to keep the Government out of the red is to keep the people out of the red. And so we had to balance the budget of the American people before we could balance the budget of the national Government.Franklin D. Roosevelt, 1936

The news that the nation added 165,000 jobs in April and that the unemployment rate has dipped to 7.5 percent—its lowest since December 2008—is of course welcome. It has eased the fears of many economists that recent cuts in federal spending might stall our somewhat anemic recovery, helped boost the stock market to record levels, and has been cited by Alan Krueger, the Chairman of the President’s Economic Advisors, as “further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression.”

But as many economists have also reported, the April rate of job growth is still far too low to bring about the level of re-employment needed to bring us back to full employment, and, worse still, the slight improvement in the overall unemployment rate masks a good many far more disturbing statistics. Many of the jobs acquired in April are low-skill and low-paying. Some of the drop in the unemployment rate can be attributed to the fact that millions of Americans have stopped looking for work and have dropped out of the work force all together—496,000 people in March 2013 alone. Then there are the under-employed, who also rank in the millions. If we add their ranks to those who are unemployed or have dropped out of the work force altogether, we arrive at an overall “underemployment rate” of 13.9 percent, up from the previous month’s rate of 13.8 percent. Taken together this means that roughly 22 million Americans are either unemployed or under-employed—a staggering figure, which after four years of so-called “recovery” has some economists predicting that long-term un-and under-employment may now be a permanent fixture of the American landscape.

What is even more shocking, however, is that in spite of all of these grim statistics, grim statistics that reflect the hardship and pain of millions, much of the political discourse in Washington—and in the media—remains fixated on the debt and deficit and the Republican demand for a balanced budget. It is almost as if Washington has all but given up on trying to take direct action to bring about a better employment picture. This realization is perhaps best evidenced by the fact that one of the more significant contributors to our persistently high unemployment rate in the past year has been public sector layoffs. 

Calls for the federal government to balance its books are not new, of course. Thanks to the extremely effective public persuasion campaign of the conservative right, we have heard this refrain time and time again. It has now become de rigueur for most politicians— no matter what their party—to pay lip service to the need to get “our house in order” and cut the deficit no matter what the consequences for the average American.

It wasn’t always this way, however. In the mid-1930s, when faced with a similar economic crisis and similar calls for cuts in federal spending, Franklin Roosevelt took an entirely different tack. He insisted that in the midst of a crisis where—much like today—we faced both declining federal revenues and increasing unemployment, “a national choice had to be made” between those who argued that the government should do nothing and “let Nature take its course” and those who argued for federal intervention in the economy, even if it meant running a deficit. As FDR saw it, what stood between his administration and a balanced budget were “millions of needy Americans, denied the promise of a decent American life.” In light of this, he argued that “to balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people,” which would have required either “a capital levy that would have been confiscatory” or accepting “human suffering with callous indifference." "When Americans suffered,” he went on, “we refused to pass by on the other side. Humanity came first.”

And so the Roosevelt Administration launched programs like the Works Progress Administration that built much of the infrastructure we still enjoy today and which gave millions of Americans, from common laborers to structural engineers, the joy and dignity of work. FDR admitted that “this cost money”—and the American people understood that this would continue to cost money “for several years to come.” But given the dire state of the economy and the lack of demand in the private sector, the American people understood that it was the right thing to do.

Unlike today’s politicians, however, FDR refused to pander to the sky-is-falling rhetoric of the conservative right on the disastrous consequences that would accrue to the country by running a deficit in the midst of an economic crisis. For them FDR had a simple answer. He flat out rejected “this foolish fear about the crushing load the debt will impose upon your children and mine.” On the contrary, he went on:

This debt is not going to be paid by oppressive taxation on future generations. It is not going to be paid by taking away the hard-won savings of the present generation. It is going to be paid out of an increased national income and increased individual incomes produced by increasing national prosperity.

In other words, FDR understood that the real crisis the country faced in the Great Depression was an employment crisis—not a deficit crisis—and that in the long run the “only way to keep the Government out of the red” was, as he said, “to keep the people out of the red.” And so he set his priority on the one thing he knew would help bolster the revenue of both the American people and their government: millions upon millions of jobs.

Unfortunately, much of our leadership in Washington today seems to have lost sight of this fact, and instead of taking meaningful action to help grow the economy and alleviate the suffering of the millions of unemployed, would prefer to cut spending and engage in another endless round of bickering about the debt and deficit. Such “callous indifference” to the plight of millions of Americans is no way to bring about an end to the current crisis or build a better future for our children.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

For more on solutions to the ongoing unemployment crisis, join the Roosevelt Institute in Washington, D.C. on June 4th for A Bold Approach to the Jobs Emergency: Setting the Political Agenda for 2014 and 2016.

 

Unemployment line image via Shutterstock.com.

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The WPA: A Flawed Model for Women, but an Inspiration for Progress

Apr 9, 2013Andrea Flynn

The New Deal left women behind, but it proved government can be a champion for the economically downtrodden.

The participation of women in the American work force has expanded dramatically in the 78 years since the Roosevelt administration launched the WPA to provide jobs to Americans out of work and on relief. Today women comprise nearly half the work force and typically work through the life cycle, not episodically, before and after childrearing, which for so long was considered their principal occupation.

The New Deal left women behind, but it proved government can be a champion for the economically downtrodden.

The participation of women in the American work force has expanded dramatically in the 78 years since the Roosevelt administration launched the WPA to provide jobs to Americans out of work and on relief. Today women comprise nearly half the work force and typically work through the life cycle, not episodically, before and after childrearing, which for so long was considered their principal occupation.

Today married, as well as single, women play a critical role in the U.S. economy. In nearly half the country’s dual income families, women earn as much or more than men. And as a percentage of the total, there are many more single women heading households today. For these reasons, today’s employment policies must be sensitive to gender in ways they never have been before.

Women were an afterthought of policymakers back in the Roosevelt years. Prevailing cultural mores still viewed work among married women as a threat to the sanctity and moral fabric of the family. New Dealers actually passed legislation (over the objection of Eleanor Roosevelt and others with feminist leanings) that prevented two workers in any one family from claiming a government salary, which meant that women during the Depression often were fired or forced to quit their jobs.

Women actually claimed only 13.5 percent of the 8.5 million total jobs created by the WPA, the majority of them in traditionally female occupations such as sewing, childcare and eldercare, teaching and education, etc. No surprise, these jobs paid less than other positions occupied by men, with WPA salaries ranging from only $20 to nearly $100 dollars per month. And most of those jobs, in fact, went to women who were divorced, widowed or unmarried.

With the advent of World War II, record numbers of women entered the work force to fill jobs left by men conscripted to fight the war. Despite postwar conventions that again celebrated domesticity and pushed women out of positions reclaimed by returning veterans, the war actually ignited a behavioral shift that forever reshaped the U.S. labor force.

In 1948, women comprised 29 percent of the labor force overall, and 17 percent of married mothers worked outside the home. Most of them were part of families living at the edge of poverty and needing two salaries, but some were in the professions and in business and simply rejected prevailing values. Those numbers have steadily increased over the last 60 years. Today, women make up nearly 47 percent of the labor force, with more than 79 percent of mothers now working.

But old ways die hard. Women may make up nearly half the American work force, but they still face an ever-increasing number of obstacles to balancing work and family and to achieving economic security. A report recently released by the Ms. Foundation for Women illustrates the myriad challenges facing women workers:

  • The Bureau of Labor Statistics lists more than 440 occupations. Four out of five women are concentrated in only 20 of these jobs, most of them traditionally female roles such as secretaries, home health care and childcare workers, teachers, waitresses, etc. that barely afford women a living wage.
  • Approximately 63 percent of minimum- and sub-minimum-wage workers are women.
  • The recent recession has had a particularly negative impact on women. By 2011, women had regained only 11 percent of jobs lost (compared to men’s 24 percent), and by the end of 2012, the women had regained 46 percent (compared to men’s 50 percent).
  • Of families headed by single mothers, 28.7 percent — 4 million of them — live in poverty compared with 13 percent (or 670,000) of those headed by men.
  • Underemployment is a serious issue facing women workers. Approximately 26 percent of working women are in part-time jobs, which do not provide essential benefits and job security.

Though not sufficiently attentive to the needs of women at the time, Roosevelt’s New Deal and WPA exemplified the role government can and should play in guaranteeing a basic floor of well being for all Americans. We would be wise to revisit those ideals today as we think about how to protect and advance women workers across the United States.

President Obama has suggested many such initiatives: universal pre-school; better job training to equip students to pursue trades; a historic expansion of Medicaid and private health insurance that will guarantee all women basic preventative services (including reproductive health care and family planning); and pay equity and a raise in the minimum wage.

Indeed, the first piece of legislation President Obama signed upon entering office was the Lilly Ledbetter Fair Pay Act, which overturned the 180-day statute of limitations for women to contest pay discrimination. Today, in commemoration of National Pay Equity Day, President Obama said:

Wage inequality undermines the promise of fairness and opportunity upon which our country was founded… Our country has come a long way toward ensuring everyone gets a fair shot at opportunity, no matter who you are or where you come from. But our journey will not be complete until our mothers, our wives, our sisters, and our daughters are treated equally in the workplace and always see an honest day's work rewarded with honest wages. 

There are other significant steps we can take:

  • Congress should pass the Paycheck Fairness Act, legislation that has been introduced a number of times since 2009 but has failed to secure support from both chambers of Congress. The legislation – an update to the 1963 Equal Pay Act – would prohibit employers from paying a man more than a woman for the same job and would prevent employers from punishing women who call attention to pay disparities.
  • We should ensure that women who work as nannies, home health care workers, housekeepers, etc. – positions that are a major backbone to our economy – receive a fair wage and benefits necessary to lead healthy, financially secure lives.
  • We should ensure that all workers are guaranteed sick days and parental leave so their families don’t play second fiddle to a job.
  • We should task our best and brightest with creating innovative job training programs (and job creation initiatives) that will enable women to move beyond the 20 or so occupations the majority currently occupy. And we should think critically about how the federal government can provide better job security for women in part-time and seasonal jobs.
  • We should create affordable childcare programs that would allow women to know their children are being well-cared for while they earn a living to support their families. This would also give women greater flexibility to occupy full-time, more stable positions.

FDR may not have offered women their rightful place in the New Deal’s employment programs. But today we know better. Only by lifting the barriers that prevent women from achieving real economic equity, can we regain real security for American families and re-establish our country’s stronghold as a global economic leader. 

Andrea Flynn is a Fellow at the Roosevelt Institute.

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Where There's a Will, There's a WPA: Stopping the Slow-Motion Jobs Disaster

Apr 8, 2013Richard Kirsch

We can create the political will to tackle the jobs crisis by advancing a progressive economic narrative.

The question we must ask today, as we remember the Works Progress Administration is: why isn’t there the political will to take dramatic steps to address today’s jobs emergency?

We can create the political will to tackle the jobs crisis by advancing a progressive economic narrative.

The question we must ask today, as we remember the Works Progress Administration is: why isn’t there the political will to take dramatic steps to address today’s jobs emergency?

Let’s start with the obvious; there was a far greater share of Americans unemployed in the Great Depression. In 1934, unemployment peaked at 24.9%.  One-out-of-four people officially out of work is much more of a crisis than one-out-of ten (9.6%), the peak in the current recession in 2010. The impact is even greater than two-and-a-half times, as such a huge drop in consumer spending means that marginal businesses able to survive 10% unemployment rates were swept away in the Depression. And during the Depression – much more than now – it was impossible not to know people whose lives had been devastated.

The other obvious difference is that we have cushioned the impact on the unemployed through the establishment of New Deal programs, notably unemployment insurance, which is providing income to half of the more than 12 million people who have been laid off, and Social Security, which has helped older workers unable to find a job. In a broader sense, the bailout of the financial sector in 2009 was a lesson learned from the New Deal, stopping the Great Recession from becoming a second Great Depression.

For most middle-class Americans, the Great Recession was not a sudden shock to a prosperous lifestyle. It was a deepening of a three-decade long trend of families seeing their incomes and lifestyles squeezed by stagnant wages and eroding benefits. Median household income increased in real terms by only 14% from 1972 to 2007.  During this period, the richest Americans captured most of the benefits of economic growth: their share of national pre-tax income of the top one-in-a thousand quadrupled from 3% to 12%. Much of the meager growth through 2007 was lost in the Great Recession; by 2011 median household income had dropped below 1996 levels.

Of course, the Great Recession did real harm to tens of millions of Americans, as Wall Street took away their retirement savings and banks took away their homes. The more than 20 million who are out of work or working less than they would like feel the pain every day. However, most people whose homes were foreclosed are not on the streets, and the long-term unemployed are scraping by and aren’t in bread lines. Additionally, the retirement crisis — another slow-moving crisis — represents a long-term crippling of prospects rather than an immediate disaster.

The New York Times coverage of Friday’s weak jobs report highlights the slow motion nature of today’s jobs crisis. The Times focused on a report by the National Employment Law Project, written by Roosevelt Institute Fellow Annette Bernhardt, that revealed most of the new jobs emerging from the Great Recession pay low wages. The Times article also highlighted the persistent growth in temporary jobs, and concluded with a quote from NELP Executive Director Christine Owens, underscoring the nature of today’s job crisis:

“This seems to be a long-term sleeper crisis too, as we think about long-term unemployed workers who are in midlife and older workers who are likely dipping into retirement savings in order to stay afloat. We’re setting ourselves up for somewhere, 10 years down the road, when a lot of retirees who didn’t expect to live in poverty are going to be in poverty.”

For those of us who understand that we do have a jobs emergency today — even if it is a slow-motion disaster — the question is, how do we create the political will to address the underlying crisis? The answer is to make jobs the central issue in the bigger story about the economy, so that the concerns of the unemployed are the same as the great majority of Americans who are employed.

The economy and jobs remains by far the top issue of concern to Americans. As a March Pew Research poll found, “Despite substantial public awareness of recent gains in the stock market and rebounding real-estate values, the percentage saying economic conditions will get worse over the next year has risen to its highest point in nearly eight years.”

We need to be consistently telling our story: the crushing of the middle class did not happen by accident. It is a result of decisions to cut taxes for the wealthy, stop investing in infrastructure, destroy the ability of unions to organize, saddle college students with huge debts, and deregulate Wall Street. We need to remind people that the stock market is at record levels because powerful corporations are making huge profits by cutting wages and benefits and shipping jobs overseas.

We need to champion our vision of an economy driven by working families and the middle class. We need to show how we can rebuild the middle class by deciding together to provide “good jobs for everyone in America.” We should put forth a bold program, which addresses all three aspects for our vision:

  • Good Jobs. We can assure that every job – private and public – pays enough to support a family, with decent wages, health and retirement benefits, and family-friendly leave policies. That will mean new wage standards, such as a higher minimum wage and paid sick days; social insurance programs for paid family leave and retirements; and modernization of labor laws so workers can effectively organize unions again.
  • Jobs for Everyone. We can create tens of millions of jobs for our future. Jobs for a green economy of energy independence. Jobs to rebuild our infrastructure and create a new infrastructure for the information age. Jobs to educate our children and take care of our seniors. Government must both make direct job investments and pave the way for businesses to create good jobs.
  • Good Jobs in America. We can create good jobs in America by enacting fair trade and currency policies, as well as government purchase of American-made goods and an end to tax breaks for companies that ship jobs overseas.

There are promising efforts already taking place to build a movement around these issues — efforts to innovate new approaches to organizing low-wage workers; campaigns to press for higher minimum wages and paid sick days; and local initiatives to create good paying green jobs. Progressives in Congress have put forth comprehensive jobs bills and President Obama is touring the country asking for investment in infrastructure.

Building a movement that is big enough to address the jobs emergency will require tackling the basic tenants of our financialized, trickle-down economic paradigm. For everyday Americans, the stakes could not be higher. We have no choice but to build the political will to create a 21st century America that works for all of us. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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The WPA Had a Low Price Tag but a Lasting Legacy

Apr 8, 2013Ellen Chesler

The WPA looks like a small investment by today's standards, but it remade the country.

There’s hardly a community in the United States without a park, bridge, school, or library constructed by the WPA. Just think of the built legacy right here in New York: Hunter’s College’s handsome mid-century modern building on Park Avenue; LaGuardia Airport; the bucolic parkways, enduring beachfront facilities and swimming pools of Robert Moses; stunning murals in public spaces throughout the city.

The WPA looks like a small investment by today's standards, but it remade the country.

There’s hardly a community in the United States without a park, bridge, school, or library constructed by the WPA. Just think of the built legacy right here in New York: Hunter’s College’s handsome mid-century modern building on Park Avenue; LaGuardia Airport; the bucolic parkways, enduring beachfront facilities and swimming pools of Robert Moses; stunning murals in public spaces throughout the city.

So it is actually surprising to learn on this anniversary that the entire federal appropriation for the legislation in 1935 was only $4.9 billion. And total spending across the country reached only $13.4 billion before the program expired in 1943, when wartime conscription and the recovery of private industry and manufacturing finally ended the unemployment crisis brought on by the Great Depression.

Of course, money went a lot further back then. Salaries at 30 hours per week were pegged to prevailing wages and varied considerably by region, ranging from $20 to $100 per month. Federal spending on some WPA projects also leveraged state and local funds, adding by one estimate up to another 10-30 percent in investment. All together the program funded some 8 million jobs and put a meaningful dent in the number of unemployed who were looking for and able to work.

This was far from a foundation for state socialism or a “seed bed for Communists,” as some of the program’s strongest critics on the right then described it. Spending was also, by and large, not politically motivated or determined by partisanship, as many feared it would be – with jobs distributed across party lines and, just as meaningfully, across ethnic and racial divides, even in the south. To placate unions skeptics on the left, no formal job training was allowed, and yet evaluations of projects demonstrated high levels of efficiency and little corruption or waste.

Yet the WPA was most definitely a watershed in the history of American state building. The country’s entire GDP was only $860 billion in 1935. Of that, a mere 5 percent or so represented total government spending, and most of that money paid for local school teachers, police, fire, and sanitation.

Federal Social Security expenditures were just ramping up. Defense spending was still negligible, with U.S. foreign policy focused mainly on being a “good neighbor” as FDR memorably put it. Even as the president promised to invest in public works and social welfare to reboot the economy, he also committed to rebalance the budget, and by attempting to do so in his second term actually prolonged the economic downturn. More public works, not less, would have been a good thing, stimulating and vastly expanding the private economy, as World War II wound up doing only a few years later.

Today, U.S. government spending, inclusive of local, state, and federal, domestic, foreign, and military expenditures, represents some 40 percent of our giant $13.67 trillion GDP. Years of Republican presidencies notwithstanding, we live in a mixed-economy and a country remade by Franklin Roosevelt.

This 78th anniversary of the WPA inspires us to find in our history a model for increased investment in public works today, perhaps leveraging the private sector, not just hard-strapped states and municipalities. With the WPA as a model, federal resources can easily capitalize a U.S. infrastructure bank, which could in turn raise capital in markets across the globe. The financial structure is not complicated. All we need is the political will.

Might it be helpful to remind deficit hawks that Roosevelt was reelected in 1936 with 60 percent of the popular vote and 98 percent of the electoral vote in 1936, with a budget in deficit but the WPA underway?

Ellen Chesler is a Senior Fellow at the Roosevelt Institute and author of Woman of Valor: Margaret Sanger and the Birth Control Movement in America.

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To Build a Nation and a People: FDR and the WPA

Apr 8, 2013David B. Woolner

Today's Congress needs to step up as it did in the 1930s to address high unemployment and crumbling infrastructure.

Today's Congress needs to step up as it did in the 1930s to address high unemployment and crumbling infrastructure.

To those who say that our expenditures for Public Works and other means for recovery are a waste that we cannot afford, I answer that no country, however rich, can afford the waste of its human resources. Demoralization caused by vast unemployment is our greatest extravagance. Morally, it is the greatest menace to our social order. Some people try to tell me that we must make up our minds that for the future we shall permanently have millions of unemployed… But…I stand or fall by my refusal to accept as a necessary condition of our future a permanent army of unemployed. On the contrary, we must make it a national principle that we will not tolerate a large army of unemployed and that we will arrange our national economy to end our present unemployment as soon as we can and then to take wise measures against its return. I do not want to think that it is the destiny of any American to remain permanently on relief rolls.—Franklin D. Roosevelt, September 30, 1934

One of the most alarming statistics about America’s persistently high unemployment rate over the past four years is the large number of long-term unemployed. Current estimates by the Bureau of Labor Statistics put the total number of these largely forgotten workers at 4.8 million people—or roughly 40 percent of the total number of jobless Americans. Unlike previous recessions, where there was a good deal of movement in and out of the job market, loss of employment is much more serious in today’s Great Recession, as an individual’s chances of getting back to work are much lower. This leads to what one recent article terms a “loss of skills, loss of trust, and loss of networks,” all of which exacerbates the problem.

Worse still, there seems to be little political will to tackle this problem in Washington, as any serious effort to address the issue of the long-term unemployed has been sidelined by the endless budget debates in Congress and the sky-is-falling rhetoric of the extreme right, which remains ideologically opposed to government intervention in the economy. Perhaps the great symbol of this callous indifference can be found in the fact that while the recent sequester did not result in any loss of pay among the members of Congress, the long-term unemployed will see their benefits cut by 10 percent.

In the meantime, a recent report by the American Society for Civil Engineers notes that while there has been a slight improvement in the overall state of America’s infrastructure in the past four years, the current state of our nation’s roads, bridges, water systems, energy grid, and other transportation networks remains dismally low—receiving a grade of D+ as opposed to the nearly failing grade of D- four years ago. Thanks to this persistent neglect and Congress’s reluctance to appropriate the funds needed to fix our crumbling roads and other facilities, the U.S. now ranks 25th in the world in terms of infrastructure, far behind the rest of the industrialized world.

This juxtaposition of long-term unemployment and a failing infrastructure is not unlike the situation that Franklin Roosevelt faced in 1935 when, in a bold and unprecedented effort to alleviate the suffering of the long-term unemployed, FDR pushed Congress to pass the Emergency Relief Appropriations Act. It was through this piece of legislation passed 78 years ago today that Congress appropriated the funds FDR needed to launch the most ambitious public works program in American history—the Works Progress Administration, or WPA.

As the generation that lived through the Great Depression passes away, fewer and fewer Americans may be aware of what a great debt this nation owes to this remarkable government program. Indeed, the WPA not only employed 8.5 million people, it also built much of the infrastructure we still use today. How many New Yorkers, for example, are aware that the WPA is responsible for the construction of the Lincoln Tunnel, Tri-borough Bridge, the Belt, Grand Central, and Henry Hudson Parkways, the East River (FDR) Drive, or LaGuardia Airport? How many Chicagoans know that Midway Airport and much of Lake Shore Drive were built by the WPA? What about the fabled “river walk” of San Antonio, Texas? Do the residents of this community know that this critical piece and driver of much of their local economy was conceived and constructed by WPA architects and engineers? Are the people of New Jersey aware that they owe the Palisades Parkway to the WPA? What about those of us who have enjoyed the beauty of a drive along the Blue Ridge Parkway in North Carolina – are we aware that it too was built by the WPA? And what about Los Angeles International Airport or the Glendale Viaduct and countless other public works projects in California? Or the many WPA constructed buildings, parks, and other facilities constructed in New Mexico and other parts of the Southwest?

This list could go on and on, for before it was through the WPA would construct nearly 600,000 miles of rural roads, 67,000 miles of urban streets, 122,000 bridges, 1,000 tunnels, 1,050 airfields, 500 water treatment plants, 1,500 sewage treatment plants, 36,900 schools, 2,552 hospitals, 2,700 firehouses, and nearly 20,000 other state, county, and local government buildings. Most importantly, it would also give meaningful employment to millions of skilled and unskilled workers, providing our nation with the infrastructure it needed to become the most efficient and productive economy in the world and the long-term unemployed with the one thing they needed above all else—a job.

Seventy-eight years ago, our leaders in Congress had the courage and vision to engage in what FDR called “bold, persistent, experimentation.” In the face of the worst economic crisis in our history, they came to recognize that there are times when government itself must step in to provide employment if the free market fails to do so. They had no plans “to take the country down the path to socialism” as some critics charged, or to make the WPA into a permanent institution. What they did see was a need—a critical need to provide employment and to secure the skills of an entire generation of workers, juxtaposed with an equally important need to bring America’s rickety 19th century infrastructure into the modern world. They understood that this would cost money, but they also understood that in the long run this investment—even if it required deficit spending—would pay off.

They were right. Just ask any member of the “greatest generation” who lived through the seemingly massive federal investments and spending of the 1930s and 40s and then went on to enjoy the largest expansion of the American middle class in our nation’s history. Or ask yourself, the next time you land at LaGuardia Airport or enjoy an evening out among the many shops, cafes, and restaurants that cluster around San Antonio’s River Walk.

If today’s Congress had the same vision and courage that existed in Washington in 1935, it would see that with nearly 5 million people suffering the ill effects of long-term unemployment, and with an infrastructure that is now ranked 25th in the world, the least it could do is get behind President Obama’s nearly forgotten call for a modest $50 billion in spending for infrastructure. But unfortunately it does not appear that today’s Congress—particularly the conservative membership of the House—possesses anything like the vision of its counterparts in 1935. This is very bad news, for as FDR remarked about the “generation of self-seekers” that brought the country to ruin in 1933, “they have no vision, and when there is no vision, the people perish.”

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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Defeating Laissez Faire Thinking in the Name of the WPA

Apr 8, 2013Jeff Madrick

Winning the war of ideas will be vital if we ever hope to implement such a successful program again.

Winning the war of ideas will be vital if we ever hope to implement such a successful program again.

Many thinking people are surprised that the lessons of the Great Depression have been so easily forgotten as the rich world struggles to get economies back on track after the worst recession since the 1930s. Keynes himself would have been surprised, because he thought the end of laissez-faire economics was well on its way even before the Great Depression. He wrote an essay in 1930 to that end called "The End of Laissez Faire," nicely summarized in a new book by Angus Burgin, The Great Persuasion, which predated his magnum opus, The General Theory, by six years.

But laissez-faire rose again with a vengeance under the articulate, if simplistic, preachings of Milton Friedman. It remains a guiding principle today partly because of the very allure of its simple core principle. For those of us who believe government is needed not merely to tame capitalism but to make it work, as well as to provide for a decent society that rewards all fairly and promotes social cohesion and optimism, we should remind ourselves how profoundly appealing laissez-faire is and what a battle we face. It is a set of elegant principles, while the correct critiques of it are ugly by comparison. Also, it was in the 1920s, and is today, the philosophy of the rich and powerful, not a small matter.

The rise, momentary fall in 2008, and rise again of laissez faire is therefore not really a stunning historical event. Fiscal stimulus, the main legacy of John Maynard Keynes, was derided when President Obama got an $800 billion stimulus passed. Then it was said by many that it didn’t either save or create new jobs. Meanwhile, Europe is overwhelmed by the disease of austerity economics. Only Germany stays above water based on exports made cheap by the low value of the euro -- something it would not be able to enjoy if it were independent of the Eurozone and had its own currency. Austerity economics has spread to the U.S. in the form of allegedly sensible budget balancing commissions that are not sensible at all. They helped foment the pressure to balance the budget as soon as possible, even with unemployment at nearly 8 percent.

It is not only fiscal stimulus that is derided. Programs to spur job growth have been limited to relatively modest infrastructure investments and tax cuts, especially payroll tax cuts. Less obvious, the push by mainstream economists to explain income inequality almost solely in terms of inadequate education is deeply misleading. Such an expalantion neglects the low minimu wage, persistently high unemployment rates, the failure to implement labor organization laws, and on.

There have been new programs. A modest investment in infrastructure and tax cuts. We do have a healthcare bill, which we should applaud on balance. But none of this compares to the adventure of the New Deal, and in particular the Works Progress Administration, whose anniversary we are celebrating today. The WPA went out and hired Americas to do jobs, including building infrastructure. By some estimates, some 8 million jobs were created.

We need a wide range of New Deal ideas made contemporary: higher minimum wages, living wages, aggressive public investment, green investments, and on. Government will be the generator of these jobs. Some, but very few, argue we need outright public employment programs, just like the WPA.

What made that happen then? A more severe recession than now, for one thing. A far bolder president, for another.   

But the ideology of laissez faire still had to be defeated. Laissez faire was not mentioned by Smith, Ricardo, or Mathus, Keynes wrote. “Even the idea is not present in any form in these authors,” he said in “The End of Laissez Faire.” He went on, the public had “come to regard the simplified hypothesis as health and the further complications as disease.”

Keynes blindly believed reason would prevail. The many over-simplifcations of laissez faire would become obvious, he optimistically thought. Sane criticism would prevail over simple ideology. For a while, he was right—a pretty long while. Arguably a version of Keynesian progressivism, which even included fixed exchange rates and plenty of social programs, especially in Europe, prevailed until the 1970s. Then it turned to over-simplifications and scapegoats, mainly driven by the painful inflationary economy of the 1970s.

Many are enamored of the idea that a revitalized right wing of effective think tanks, lobbying, and media disinformation ended progresssivm in the U.S. But that misreads history. Margaret Thatcher introduced stern anti-Keynesian policies well before the U.S. did at the start of the 1980s. Germany was anti-Keynesian throughout the 1970s. Ideas matter, and the acceptance of the idea of laissez faire regained the upper hand.

As we battle in memory of the marvelous WPA, we should keep in mind how intensely compelling laissez faire ideology is. It has captured, without their really noticing, the hearts and minds of most orthodox economists. As usual, it has the rich mostly on its side. If we recognize it is a tough, ongoing battle to defeat the simple version of it, we will fight it better. In the meantime, we can rejoice in how well we once did. That is the proof that we can win. American history can be repeated.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed

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The FDR Library Counts Down to a New Deal for a New Generation

Mar 26, 2013

Last week, our partners at the Franklin D. Roosevelt Presidential Library and Museum in Hyde Park, NY began their "100 Days" Countdown to the opening of their new permanent exhibits on June 30. This is the culmination of a full-scale renovation that began in May 2010, and the exhibits, which will bring the Roosevelt presidency to life through an interactive and immersive audio-visual experience, will be well worth the wait.

Last week, our partners at the Franklin D. Roosevelt Presidential Library and Museum in Hyde Park, NY began their "100 Days" Countdown to the opening of their new permanent exhibits on June 30. This is the culmination of a full-scale renovation that began in May 2010, and the exhibits, which will bring the Roosevelt presidency to life through an interactive and immersive audio-visual experience, will be well worth the wait. Library Director Lynn Bassanese and Roosevelt Institute President and CEO Felicia Wong joined the WAMC Roundtable to mark the occasion and explain how the revamped Library will bring the New Deal to a New Generation.

Lynn notes that June 30 was chosen for the rededication "because on June 30, 1941, FDR opened his presidential library and museum for the first time to the public." She promises that "visitors will see a whole new museum," but one that maintains the vision and spirit of the library as designed by FDR himself. "The legacy of Franklin and Eleanor Roosevelt has never been so relevant as it is today," she says, "but there are fewer and fewer people who actually remember" them. A wide range of new exhibits will allow visitors to listen to Fireside Chats in an authentic 1930s kitchen or recreate FDR's secret White House map room, providing "access to that essential evidence that people need to understand what the Roosevelts did."

Felicia explains that the Roosevelt Institute supports the federally funded Library with additional resources for public outreach and education -- in this case, funding for the new exhibits. "Everybody loves FDR and Eleanor Roosevelt," Felicia says, "so in that sense, helping people to re-remember their importance to our culture today -- as Lynn often says, FDR and Eleanor Roosevelt built the world that we live in today -- the social contract that we still enjoy, the role that government plays, that's something that Franklin and Eleanor Roosevelt really ushered in in the early part of the 20th century, so as long as we can remind people of that and remind them of the heroism that they embody, it's not that hard a sell."

Follow along with the countdown on Twitter with hashtag #NewDealNewGen, and mark your calendars for June 30.

 

Countdown from 100 image via Shutterstock.com.

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