Dorian Warren on Why We All Need a Strong Labor Movement

Jul 18, 2011Bryce Covert

dorian-warrenI got the chance to talk with Roosevelt Institute Fellow Dorian Warren, who just publis

dorian-warrenI got the chance to talk with Roosevelt Institute Fellow Dorian Warren, who just published new research on workplace anti-union campaigns. We discussed his surprising findings about illegal employer intimidation tactics, the labor movement's biggest weaknesses, and why comprehensive labor reform would amount to some of the best economic stimulus we could find.

Bryce Covert: You recently published new research on workplace intimidation tactics against union organizing. Can you explain the important findings that came out of your work?

Dorian Warren: As background, let me start by saying that we already know what happens when workers try to organize into a union: employers routinely violate the law. They use a range of legal and illegal tactics. The most egregious one is firing workers who are seen as union leaders or union influencers, and that happens in about 34% of union election campaigns. A number of other illegal tactics include threatening workers, threatening to close the plant, threatening to close the shop, illegal pay raises, that kind of stuff.

The other thing to note is that usually when workers file a petition with the National Labor Relations Board for an election, the wait from the date they file a petition to when the election is scheduled is really long. Throughout all that time, employers engage in anti-union campaigns, again using these legal and illegal tactics. So the National Labor Relations Board proposed a rule change to potentially decrease the number of days between when workers file a petition and form election and when the election is scheduled and held.

The research that I did with my coauthor Kate Bronfenbrenner was to look at the timing of when employer campaigns start through the election and what difference the proposed rule change would make. What we found was that the employer campaign starts very early. It definitely starts once workers start filing a petition for election, it continues constantly, and the number of tactics they use are multiple. So every single day before an election the employer campaign is constant, the tactics are cumulative, and it's unrelenting.

But the surprising finding is that employer campaigns start even before workers petition. So let's say Target or WalMart hires new employees and as part of the orientation it gives them an anti-union video to watch. From day one that's basically an employer anti-union campaign. Then it's constantly probing and trying to find out if there's any talk of unionization. The employer knows that workers are talking about potentially wanting a union, and they start doing things way before workers even file a petition to ask for an election. The longer employers can delay an election, the more time they have to harass and intimidate workers. But our research shows that from before the workers file a petition to when they file a petition, leading all the way up to an election and even after the election if they win the election, the employer's still using these tactics to intimidate and harass workers.

BC: What are the details of the NLRB rule change proposal and what are its implications?

DW: The proposal is to streamline the NLRB election process, which is very clunky. There are lots of delays and it takes a long time for workers to actually get an election. It would also prevent employers from attempting to delay. Workers usually file for election, the election date is set, but then close to the election date the employer files a claim with the National Labor Relations Board, usually falsely accusing the union of some kind of unfair practice or tactic, which then the Board has to investigate. So they delay the election. Then after the investigation, which usually finds nothing wrong, the election is rescheduled, and then that starts all over again. This rule would say there will be no delays. There will be an investigation after the election as opposed to postponing elections to investigate these delays, so-called infractions, either by employers or the union. The idea would be obviously that these changes would give workers a better chance to unionize free of intimidation and coercion.

Assuming this rule change goes through, it would make it potentially easier for workers to organize because they wouldn't be subject to the employer campaign for as long and therefore would probably end up winning more union elections. It will make organizing easier in a climate where employers are absolutely hostile by default and break the law because the penalties aren't that strong.

Employers are going crazy about this. The Chamber of Commerce is going crazy about this proposed rule change because they know that this would make it easier for unions to organize.

BC: If the rule goes through, does it address what you identified in your research? What goes unaddressed?

DW: The only thing that would address what we found in our research would be comprehensive labor reform. But obviously the political possibility for that is zero. This rule change would help address what we find, but it's not going to eliminate the employer campaign. Employers are still going to violate the law and fire people and threaten people. They'll just have a shorter time to do it, so hopefully it won't have as much impact on workers as it does now. This rule change does nothing about our big finding that employers already violate the law before workers even file for a petition. Those practices are still going to happen and employers are still going to be spying on workers, essentially, to see if there's any talk of a union and then go into action immediately when they hear it.

It's a systemic problem. There's really nothing that would change it. There are no quick fixes in terms of what the National Labor Relations Board can do. They really need legislative change to alter the incentive structure against employers violating the law.

BC: Are there other short-term things that can be done right now short of comprehensive reform?

DW: After this I'm not sure what's left. There was another rule change that another federal agency did issue. The National Labor Relations Board covers all private sector workers except transportation workers. Railroad and airline workers are covered by the Railway Labor Act. If you're an airline worker and you want a union, the election goes to the National Mediation Board, not the NLRB. Last year, with two pro-labor Obama appointees, the National Mediation Board made a rule change for their election rules. In political elections, basically whoever gets the majority of the vote wins, and the same with the NLRB union elections. The Railway Labor Act was always different. It said that a majority of all workers was what it took to win unionization. So if people didn't show up to vote you were kind of screwed. Basically if someone didn't show up that was a no vote. The rule change was to make it similar to the National Labor Relations Board and our basic election rules for political campaigns -- just a majority of who shows up. They issued that rule change last year and again business groups went crazy. One of the implications of that is probably thousands of flight attendants at a couple of airlines, something like forty or fifty thousand flight attendants, are going to have elections to decide whether they want to join a union or not.

But after that I'm not sure what else the Board can do. They're already trying to speed up the processing of cases when employers or unions, but really employers, violate the law. There has to be an investigation and there's a trial to see if the employer violated the law, and then there's a ruling. There are hundreds if not thousands of cases and there's always a backlog because Republicans are trying to defund the Board and compromise its work.

After this latest rule change that's pretty much it. That's all they can really do.

BC: Ignoring politically impossibility, what would a modern-day Wagner Act to update labor laws look like?

DW: The first thing is there'd be no occupational exclusions. We should have a national campaign right now to take out the occupational exclusions of the Wagner Act. We know the history of why they're in there in the first place. It's unacceptable that they're still in. No worker should be denied protection or the fundamental right to freedom of association.

The second thing would be really, really strong penalties for violations of the law. Ideally it would match the whole system of employment law, including all the anti-discrimination laws like sex discrimination, race discrimination, age, disability. For instance, if employers fire a worker for union activity, the only penalty is that they have to hire the worker back and they have to post a sign in the workplace saying they won't do it again and potentially pay the worker back pay. That's not a strong incentive against violating the law. Unlike, say, anti-discrimination law, where you can sue for punitive damages, which works as a stronger sanction against employers for violating the law. Even raising the penalties so that you create strong incentives for employers to actually obey the law would be important. The potential for class action lawsuits when employers violate workers rights, the potential for triple or even hundred times back pay if they fire workers, really huge fines, punitive sanctions for violating any workers rights -- that would be, I think, ideal in any kind of twenty first century Wagner Act.

It’s free! Sign up to have the Daily Digest, a witty take on the morning’s key headlines, delivered straight to your inbox.

BC: To play devil's advocate, many say that pro-labor reforms in a recession will hamper businesses from creating jobs. What do you say to that?

DW: In the preamble to the National Labor Relations Act, the justification is to level the playing field so that workers can bargain for higher wages with employers, which would then help the economy and help get us get out of the Depression because it would fundamentally give workers consumption power. They'd buy more goods and services, which would create more jobs, which would help the economy. It's economic stimulus, essentially.

I would say the same thing is true now. The problem has been that with wage stagnation for forty years, people had to take on debt to keep up with inflation and to buy basic things because they weren't getting raises. If we were to pass a new Wagner Act today that gave workers the right to organize free of intimidation, they could bargain for higher wages with employers, who have record profits, and that would help to stimulate the economy again. First, it would help people get out of underwater mortgages, and second, it would help people be able to buy more stuff. Especially in an economy that's 70% based on consumption, actually giving workers more bargaining power is a form of stimulus.

BC: Following that logic, with all the backward movement against labor -- what happened in Wisconsin, the Supreme Court decision on WalMart -- is there an anti-stimulus effect from these attacks?

DW: Part of that process of downward mobility has been the loss of pensions and economic security for private sector workers, especially with declining unionization, which is only 7% in the private sector down from almost a third in the 1940s. The aim of these attacks on public sector workers is to put them in the same boat as private sector workers -- strip them of pensions, strip them of the ability to bargain for higher wages. In that sense I do think there is a huge effect on the economy because with higher unemployment and as people lose their bargaining power they're not going to be able to purchase more stuff. Also, as people lose their pensions I can't even imagine what that's going to do in terms of pushing older people into the workforce longer at the same time that there's probably going to be an increase in age discrimination.

For all those reasons, I think the attacks are very dangerous. It's basically figuring out a way to eliminate the middle class, which is just absurd to me, and to fundamentally destroy the labor movement, because the public sector is now the strongest part of the labor movement. A majority of unions are public sector workers for the first time in history. They're not in the private sector. And think about teachers and the attacks on teacher's unions: one in four union members in this country is a teacher. It's mind-blowing actually. It's also a political attack and an explicit attempt to weaken the strongest base of the Democratic Party.

BC: In your view, what can the labor movement focus on right now to help the tide flow in the other direction?

DW: The labor movement's big Achilles' heel is the fact that it never organized the South. That's important for two reasons. It's important for labor's strength because the South is a whole different economy. Because it was a non-union economy, it actually ended up destroying the manufacturing sector and the labor movement. The auto industry essentially moved to different states to get out of UAW contracts.

The second implication is political. Because labor has a huge influence on how workers vote, it's not coincidental that the South is pretty Republican and pretty right-wing. If you're a white working class man there's basically a twenty-point gap between whether or not you'll vote Democrat or Republican and it's all based on union membership. So if you're a white working class man and you're in a union, you're much more likely to vote Democrat than Republican -- it's the union difference. If you're a white working class woman you're already a little bit more likely to vote Democratic, but you're much more likely if you're a member of a union.

There has to be some really transformative strategy and real commitment, even if it's just targeting three key states for instance, for labor to organize the South. It would help make the labor movement stronger but also change the politics of the country, frankly. Labor's been the core base of the Democratic Party since the New Deal. It seems extraordinarily short sighted that the party is looking at the destruction of its base and just standing by like a deer in headlights, and in some cases aiding and abetting the attack on labor.

BC: Many saw what happened in Wisconsin as a sign of the labor movement's reinvigoration. Do you have hope for the future of the movement?

DW: I have a different take on Wisconsin. Yes it was great that people mobilized, but I would stop short of what others have called it -- a victory of some kind. I'm not very hopeful at all, even of Wisconsin. That was a moment. And we lost, frankly. And we're losing in more than a dozen states around the country. Wisconsin's either a sign of reinvigoration or a sign of the last gasp. I think people over-interpreted it. I want to be more sober about it and say okay, where do we go form here, what's the strategy? It's a defensive fight. We're the ones trying to defend fundamental rights. We lost. Now what do we do? What's our vision? First we have to get those rights back. And it's not like things were great before. What's our vision for revitalizing workers' rights broadly? Unless there are some serious breakthrough strategies that labor, that workers, can come up with, I think the labor movement has about five years to figure out how to stay alive. Otherwise it's all over.

There is a bit of good news. Last week there were recall elections in Wisconsin and all the anti-labor incumbents were defeated. That suggests that there is some sustainability and some momentum from what happened in February. That's hopeful. But we haven't seen the efforts of people to mobilize in Wisconsin in any other place. In Ohio, in New Jersey, in New Hampshire, in Michigan, Oklahoma, all across the country, there are these basically same bills, but there hasn't been the same kind of mobilization that was shown in Wisconsin. Something more has to happen on a large scale. I don't see it yet.

BC: You just described a very bleak picture. What's the difference between now and FDR's time, when there was a huge movement for labor rights in the midst of a depression?

DW: A couple of things. One key point was the 1934 sit-down strike of autoworkers. That helped to spark a movement to unionize industrial workers, whether in auto or steel or rubber or textiles. But that was five years into the Great Depression. I don't think we're at a point where workers overall feel like the existing system is discredited. Maybe we're getting there as these quarterly reports keep coming out on corporate profits and CEO salaries. I think we're getting there. It can't happen fast enough.

The second factor I think is that there was a real fight in the labor movement around a new model. The old craft model of unions that worked for the building trades, for instance, was not adequate for the new industrial economy. There had to be some other model of unionism, so industrial unionism was created in the 30s to match the new kinds of work and the new kinds of employers. I think we need a similar kind of breakthrough strategy now. What kind of unionism do we need for the current moment, for the current economy? We've been toiling at the edges. The labor movement has been trying different strategies incrementally, but there hasn't been a new model of unionism that can recruit people by the thousands, if not hundreds of thousands.

Third is frankly a question of presidential leadership. The 1933 National Industrial Recovery Act was the first time that workers were given the right to organize. Then it got declared unconstitutional, and then the response was the Wagner Act. But in both cases there were posters and signs that union organizers would walk around with and on them was FDR saying ‘the president wants you to join a union.' There was a sense that now the law is on your side, the president's on your side, it is your fundamental right to do this. I think we're absolutely lacking that today. There's no sense that the law is on the workers' side, there's no sense that the president is on workers' side.

There's this new effort, Caring Across Generations, to organize workers from early daycare workers to home health workers who work with seniors. It's promising. There's an effort to organize WalMart, there's an effort to organize warehouse workers who are actually part of a crucial supply chain to WalMart and other big box stores. That looks promising. There are efforts by restaurant workers, carwash workers. So there are all these pieces that are definitely promising. I think the big question is a question of scale. Can they scale up fast enough to really make an impact sooner than later, or have an impact sooner than later? That's what I'm worried about.

*For more on the Wagner Act, see Roosevelt Institute Senior Fellow Thomas Ferguson discuss its history and relevance to contemporary struggles at last year's panel at the FDR Library at Hyde Park, NY: "1935 and the Enduring New Deal" (click on video for Sept. 26, 2010).

Share This

What is the Future of the American Dream of Progress?

Jul 14, 2011Brittany McMahan

flag-150There’s a lot of talk lately about American dream. But what is it, really? We asked our Roosevelt Institute summer interns to give us their perspective. Here, Harding University rising junior Brittany McMahan looks at the idea of progress in the American Dream.

flag-150There’s a lot of talk lately about American dream. But what is it, really? We asked our Roosevelt Institute summer interns to give us their perspective. Here, Harding University rising junior Brittany McMahan looks at the idea of progress in the American Dream.

The "American Dream" means a lot of things for different people. However, at its core, it's really about progress. Historically, America has had a reputation as a place where you can escape persecution or oppression and progress to something better.

That message is built into our unlikely history -- our progress from a provincial territory granted independence through a small revolution to the most powerful nation in the world. The dream is about overcoming obstacles, rising above negative circumstances or restrictions, setting a goal, and stopping at nothing to achieve it.

Join us at the Hamptons Institute July 15-17 to hear distinguished speakers take on today’s most pressing issues!

Our history is also about expanding our idea of what progress means -- and to whom it applies. A nation that once enslaved people of color is now lead by a man of color. This past June, America progressed from sexual stigma for gays to equal marriage. In many ways, we have moved from a nation where the value of a person was measured by race, gender, sexual orientation and financial status to a nation of equal opportunity for everyone -- men, women, and children of every race, ethnicity, socioeconomic status, religious belief or non belief, sexual orientation, grit, and creed.

But in terms of economic equality, we're regressing.

Nearly fifty years ago Dr. Martin Luther King, Jr. told America about his dream. He worked for a nation of freedom and equality for all its inhabitants. We remember him for his work on racial justice, but he also promoted a message based on a fundamental idea laid out by President Franklin D. Roosevelt in his vision of the Four Freedoms that should be granted to all: Freedom of Speech, Freedom of Religion, Freedom from Fear, and Freedom from Want. It was this last idea, Freedom from Want, or economic justice, that King took up towards the end of his life. As FDR had done with his Economic Bill of Rights, King's Poor People's Movement sought to raise the standard of living, economic opportunities, and security for Americans on the premise that such things were rights -- not privileges. Such ideas may seem radical, but today, as our nation's economic inequality continues to grow, there's a renewed interest in them. Active citizens are lobbying for a living wage as opposed to a minimum wage. People are getting passionate about the quality of life for individuals. They want economic stability and some measure of security in their lives.

With the current job market, rising national debt, continuous big business melodramas, and the need for reform, economic equality has become perhaps our most pressing issue. Going back to the American Dream, it means that economic opportunity is part of what we believe in. And a complete lack of it should be out of the question. The American Dream is progress-- progress from apathy to political empowerment, persecution to liberation, stigma to acceptance. It is also a progress from the back of the soup line to the corner of Wall Street. From being financially powerless to economically independent. America guarantees its people certain inalienable rights -- life, liberty, and the pursuit of happiness. And the next stage of our progress will be about giving people the economic empowerment to express them.

Brittany is currently serving as a Roosevelt Institute Summer Academy Fellow with the Communications team in the New York office and a student at Harding University.


Share This

What Conservatives Don't Want You to Know About Government's Role in the Economy

Jun 28, 2011Jon Rynn

fdr-we-need-you-200If we don't learn the lessons from the Great Depression, our infrastructure will crumble, the recovery will stagnate, and our economy will be left behind.

fdr-we-need-you-200If we don't learn the lessons from the Great Depression, our infrastructure will crumble, the recovery will stagnate, and our economy will be left behind.

The current conventional wisdom for many in the U.S. is that the less government is involved with the economy the better. But this is precisely the moment in history when more government is needed. Without government intervention, the recovery will continue to stagnate, the economy as a whole will remain off balance, and we won't be able to meet the challenges facing the country.

I have been proposing a different way of looking at an economy than the traditional, neoclassic one. In my view, each industry fits into a wider system, as say trees or deer or bears fit into a wider forest ecosystem. In the same way, goods manufacturing, machinery industries, service industries, infrastructure, and the myriad other parts of a functioning society -- including the health and education systems -- have to work properly in order for the economy as a whole to function, with manufacturing functioning as the central sector. All industries are co-evolving, dynamically growing, concentrated within discrete geographical regions. And it is the responsibility of government to help orchestrate this interaction, or else it can turn into an ugly riot.

But at the root of the neoclassical world view is the idea that the economic system is self-regulating, that is, if the economy is pushed off course by "external" forces, then it will become stable by itself -- without government interference. And yet we know that economies are constantly growing and changing -- that is, they are not stable -- and they are often under threat of recession and depression. That is why governments always have to be part of the solution. They are needed in order to support economic growth, maintain the right structure of the economy, and intervene when the economy goes bad.

FDR's presidency is the perfect example of this. When he became president, Herbert Hoover had just spent several years trying to reverse the Great Depression with market-based solutions, but FDR championed a set of governmental policies that turned the country around. To deal with unemployment, FDR established the Works Progress Administration, or WPA, which was not only designed to employ one fully able member of each household in which no one could find work, but also to build up the country's physical infrastructure. Building infrastructure is what governments do best. In fact, one could say that civilization started when the first governments constructed the irrigation and drainage systems that enabled agriculture to flourish. The United States, like every successful country, has a long and rich history of infrastructure building, without which the country would have very likely stayed poor. From canals like the Erie Canal before the Civil War, to the railroads after, from the dams that even conservative Republicans like Calvin Coolidge initiated, to the WPA that built libraries, schools, airports, roads, and other structures in virtually every town, to the Interstate Highway System championed by a Republican president, the United States has kept itself at the forefront of the global economy by making the building of transportation, energy, communications, water, education, and other systems the foundation of prosperity.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

Partly as a result of his interventions into the economy, FDR was able to lead the nation into World War II by fundamentally transforming the economy to produce military equipment. At its height, one third of the country's GDP was devoted to the war effort, with millions fighting overseas. That's five trillion dollars in today's economy. In other words, even assuming the continuation of a one trillion dollar military budget in the face of no wars of necessity, the economy has four trillion dollars left over to remake itself while providing for a comfortable standard of living for its inhabitants.

Instead of learning this lesson of history, however, our current political class seems determined to follow Herbert Hoover, not FDR. Meanwhile, the long-term domestic problems we face are worse than what FDR confronted. In the 1930s, the US was by far the leading manufacturing power and the top producer of oil; now the manufacturing sector is sinking fast, and not only do we import almost two-thirds of the crude oil we process, the global supply of oil is becoming harder to produce and is shrinking. In addition, we desperately need to eliminate the use of fossil fuels and transform agriculture and forest management in order to avoid the worst of global warming. The path forward is clear: we need an electric transportation system based on high-speed rail for long-distance travel, electric rail for freight, transit and small electric cars for intra-city movement, wind and solar power for electricity generation, recycling on a serious and massive scale, a densification of urban areas, and a more labor-intensive, localized, organic agricultural system. And these could provide the market for a revived manufacturing sector.

Only the government can build all of these systems in the time needed to both save the economy and save the environment. Incentives can go part of the way, but not fast or far enough. Taxing carbon or trading rights to carbon won't solve global warming or decrease the use of oil as quickly as we need them to; lowering taxes or reducing the deficit won't bring the manufacturing sector back. Government-as-builder does not mean government-as-warrior or government-as-Big-Brother. It is possible to have a strong government that is peaceful, democratic, and not beholden to our economic royalists, as we currently are. But maintaining democracy is never easy; the political system is no more a self-regulating system than is the economy. At least we can have a clear vision of where we are heading.

History doesn't care if the political conversation of the United States won't allow for talk about large-scale government intervention into the economy. The path to economic and ecological collapse is paved with "realistic" intentions. If the conservatives can be audacious enough to threaten policies that will further destroy the middle class and poor for the sake of the superwealthy, why can't progressives draw on a rich American history, from before FDR and after, to rebuild a once mighty nation and help the rest of the planet move toward a sustainable future?

Jon Rynn is the author of the book Manufacturing Green Prosperity: The power to rebuild the American middle class, available from Praeger Press. He holds a Ph.D. in political science and is a Visiting Scholar at the CUNY Institute for Urban Systems.

Share This

Ellen Chesler on Wal-Mart v. Dukes: "The Simple Answer is an Equal Rights Amendment"

Jun 24, 2011Bryce CovertEllen Chesler

ellen-chesler-150In the wake of this week's Wal-Mart ruling on the sex discrimination class action suit, Bryce Covert spoke to Roosevelt Institute Senior Fellow Ellen Chesler.

ellen-chesler-150In the wake of this week's Wal-Mart ruling on the sex discrimination class action suit, Bryce Covert spoke to Roosevelt Institute Senior Fellow Ellen Chesler. Chesler calls for constitutional protection of women's rights, explains why women's success is linked to economic growth, and remembers Eleanor Roosevelt's tireless work to bring human rights to all.

Bryce Covert: Why is this ruling considered by many to be so dangerous?

Ellen Chesler: Women and minorities who think they are underpaid will now find it nearly impossible to band together to sue their employers and claim punitive monetary damages. Class actions have been a significant vehicle to establish discrimination in employment and seek redress during the half-century since the civil rights revolution of the 1960s. But with this ruling, the Supreme Court is now saying that employees can sue collectively only if there is proof of an explicit company policy to discriminate. It's no longer enough to demonstrate a clear statistical pattern of women earning less and winning fewer promotions. This is outrageous. What company announces up front that it discriminates?

The court, of course, did leave the door open to individuals who can still try and vindicate their rights one by one. But without the economies of class actions, protection against discrimination is beyond the reach of most workers, who don't have the resources to sue one person at a time. Management is effectively left with little liability. It can do whatever it wants.

Moreover, the same five justices who prevailed in this decision ruled against Lilly Ledbetter several years ago when she brought an individual action claiming she had been paid less than men doing her same job over many years. That decision rested on a technicality -- that Ledbetter had not taken action within the time limits required for lawsuits under Title VII of the 1964 Civil Rights Act. With Democrats controlling both houses of Congress in 2009, women's rights advocates then passed the Lilly Ledbetter Act, which simply extends the timeframe. President Obama signed the law as his first official act. But we don't have a comparable political situation now, which makes the Wal-Mart ruling even scarier.

Legislative remediation in this situation could be achieved through the Paycheck Fairness Act, which was passed by the House of Representatives in 2009 when Democrats were in control, but was then blocked by Republicans in the Senate. That measure puts more teeth into claims of pay discrimination from women by authorizing their right to demonstrate unfair practices through exactly the kinds of aggregate data that the majority has challenged in this ruling. But with Republicans now controlling the House there is no chance for this bill.

BC: What elements are missing in American law that would better ensure women's rights?

EC: The simple answer is an Equal Rights Amendment to our constitution. Ironically, we are the only major democratic country in the world that does not offer women a constitutional guarantee of equal protection under the law.

Let's remember that the rights of women in the United States have essentially been cobbled together case by case, with no more than the due process clause of the 14th Amendment as an underlying constitutional principle. Even with respect to employment discrimination, women were an afterthought -- actually a kind of joke. We were added into the 1964 Civil Rights Act by a racist Southern member of Congress who thought he could kill the whole thing by specifically including women as a minority class. Ingenious young women lawyers then seized on that provision, among others, and built a vibrant body of jurisprudence to establish equal protection as a foundation for women's rights.

But sadly enough, it's a whole lot easier to unravel a body of law, no matter how clever it may be, when there are no deep constitutional principles framing it beyond due process. And one of the great ironies of history is that Ruth Bader Ginsburg, who was foremost among the pioneers of the women's rights revolution of the 1970s, is now being made to witness the evisceration of her work by her own colleagues on the court.

It’s free! Sign up for weekly ND20 highlights, mind-blowing stats, and alerts.

Justice Ginsburg, of course, wrote the minority opinion in the Wal-Mart case, citing evidence that gender bias suffuses the company's culture -- that women make up more than 70% of the wage earners but only 33% of the management who have a free hand to make decisions about pay and promotions. She was joined in that opinion by the two other women on the court, Justices Sotomayor and Kagan, and by Stephen Breyer.

I also want to remind readers that international human rights conventions growing out of the landmark work of Eleanor Roosevelt also provide a binding legal framework to prevent sex discrimination. The landmark Convention on the Elimination of All Forms of Discrimination Against Women, commonly known as CEDAW, is quite a visionary document in terms of the obligations it places on countries to protect the civil, political, social, and economic rights of women. But another great irony of history is that the United States is not a party to this treaty. We're one of only four countries in the world that has never ratified it, which places us in the unlikely company of Iran, Sudan, and Yemen. CEDAW was passed by the United Nations in 1979 and signed by Jimmy Carter before he left office. But for years its been held up in the Senate by conservatives opposed to human rights and multilateral engagement as a general matter and to women's rights agreements of just about any stripe. The US Constitution requires a super-majority of 67 Senators to ratify a treaty, and that's been hard to achieve on just about any matter in recent years.

This also reminds me that the Paycheck Fairness Act, which closes some of the loopholes in the Equal Pay Act of 1963, is also part of Eleanor's legacy. The Equal Pay Act was the central piece of legislation recommended by the Kennedy Commission on the Status of Women, which Eleanor chaired until her death in 1962. Eleanor had for many years supported protective labor legislation for women, which took into account their primary obligations as mothers. But through the Kennedy Commission, she came to understand that this approach had created silos for women and closed off opportunity. This change in her thinking was also influenced by her work on global women's rights. It's an important piece of Roosevelt history.

BC: Beyond the individual women who lost in this case, what's the fallout for our country?

EC: Hillary Clinton's iconic status notwithstanding, the historic leadership of the United States in the global women's rights revolution is steadily being eroded.

In comparative gender equality rankings by the World Economic Forum, the United States today stands only 19th among the 144 countries surveyed. We're outranked predictably by the Scandinavian countries, by the UK, France, and Germany, but also by Canada, Australia, and even some of the small democracies of Eastern Europe. Obviously, American women are not disadvantaged in these comparative rankings just by wages, which remain low here for so many women, especially at the bottom of our wage scale. Also considered are measurements of public policies that support women and families, such as subsidized childcare and health care, paid family and medical leave, and flexible work arrangements, where the United States too often falls short.

Conservatives so often claim that women are not victims of discrimination in the workplace -- that they chose easier assignments and less demanding work in order to balance work and family. But this seems to me a rather feeble argument because the absence of family-friendly work policies for both men and women is itself a disadvantage that governments in modern industrial societies ought to redress.

BC: Women's rights have clearly become a hotly partisan issue. Was it always this way?

EC: Quite to the contrary, the Republican Party was actually the party that first supported an equal rights amendment for women. There's been a substantial partisan realignment on these issues. Who today would believe that Richard Nixon was a strong enforcer of affirmative action for women and other minorities?

Everything changed when Ronald Reagan's political handlers recognized that they could finally unravel the New Deal coalition by appealing to social conservatives who had traditionally voted with Democrats on pocketbook issues. They could be lured away because of their growing discomfort on matters like affirmative action and reproductive rights. Conservative Republicans are shamefully guilty of spreading the spurious claim that gains for women always come at the expense of men, when the truth is that expanding opportunity has exactly the opposite effect.

We now have concrete metrics from more than 100 countries around the world to demonstrate the direct correlation between improvements in women's status and overall well-being.

Share This

FDR, Quantitative Easing Wonk, Used Every Tool in His Box to Jumpstart Recovery

Jun 22, 2011Mike Konczal

Rather than focusing on far off threats, FDR chose to combat high unemployment and sluggish growth with everything he had.

Rather than focusing on far off threats, FDR chose to combat high unemployment and sluggish growth with everything he had.

I’ve been reading this important David Beckworth post on the quantitative easing and monetary policy FDR implemented during the Great Depression. Beckworth argues that the first QE policy happened during this time and that it benefited from the fact that Roosevelt explicitly said he would do what it took to get to the pre-trend price-level target. Beckworth links to this Gauti Eggertsson paper that argues that when FDR took office, he signaled that they’d get the price-level back to pre-Depression trend by going off the gold standard, financing a Federal government through deficit spending, and explicitly stating target levels for prices, and this change in expectations from Hoover's administration did a lot of the work of recovery.

I wasn’t sure how serious to take this -- a president talking about price levels with the public? But sure enough, here’s the second Fireside Chat from May 7th 1933 (my bold):

Much has been said of late about Federal finances and inflation, the gold standard, etc. Let me make the facts very simple and my policy very clear. In the first place, Government credit and Government currency are really one and the same thing. Behind Government bonds there is only a promise to pay… [I]n the past the Government has agreed to redeem nearly thirty billions of its debts and its currency in gold, and private corporations in this country have agreed to redeem another sixty or seventy billions of securities and mortgages in gold… [They] knew full well that all of the gold in the United States amounted to only between three and four billions and that all of the gold in all of the world amounted to only about eleven billions.

If the holders of these promises to pay started in to demand gold the first comers would get gold for a few days and they would amount to about one-twenty-fifth of the holders of the securities and the currency… We have decided to treat all twenty-five in the same way in the interest of justice and the exercise of the constitutional powers of this Government. We have placed everyone on the same basis in order that the general good may be preserved.

The Administration has the definite objective of raising commodity prices to such an extent that those who have borrowed money will, on the average, be able to repay that money in the same kind of dollar which they borrowed. We do not seek to let them get such a cheap dollar that they will be able to pay back a great deal less than they borrowed. In other words, we seek to correct a wrong and not to create another wrong in the opposite direction. That is why powers are being given to the Administration to provide, if necessary, for an enlargement of credit, in order to correct the existing wrong. These powers will be used when, as, and if it may be necessary to accomplish the purpose.

I discussed most of the parts of that quote dealing with gold clauses here and here. FDR told rentiers who had put suicide-pact clauses in their contracts, which allowed them to collect more gold than existed in the world so as to allow private parties to profit while the country suffered and was in a deflationary spiral, that he was going to come at them like a spider monkey. Beyond establishing credibility and changing expectations, it makes me happy to see a president so actively go after broken, destructive contractual schemes that prevent the management of bad debts and threaten the general good. But there’s the bold quote, stating what the final goal of monetary policy was at the beginning of his administration.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

Economic and monetary policy commentators like Ryan Avent have noted that "the Fed chose a direction rather than a destination” when it comes to QE and monetary policy. If Avent wants to see a destination mentioned by a sitting president, he should check out FDR’s fourth fireside chat on October 22, 1933 (my bold):

Finally, I repeat what I have said on many occasions, that ever since last March the definite policy of the Government has been to restore commodity price levels. The object has been the attainment of such a level as will enable agriculture and industry once more to give work to the unemployed. It has been to make possible the payment of public and private debts more nearly at the price level at which they were incurred. It has been gradually to restore a balance in the price structure so that farmers may exchange their products for the products of industry on a fairer exchange basis. It has been and is also the purpose to prevent prices from rising beyond the point necessary to attain these ends. The permanent welfare and security of every class of our people ultimately depends on our attainment of these purposes…

Some people are putting the cart before the horse. They want a permanent revaluation of the dollar first. It is the Government’s policy to restore the price level first. I would not know, and no one else could tell, just what the permanent valuation of the dollar will be. To guess at a permanent gold valuation now would certainly require later changes caused by later facts.

When we have restored the price level, we shall seek to establish and maintain a dollar which will not change its purchasing and debt paying power during the succeeding generation. I said that in my message to the American delegation in London last July. And I say it now once more.

I have two takeaways:

1. Wouldn’t it be funny if in this fireside chat, years into a sub-trend growth and massive waste from high unemployment and unused capacity, Roosevelt said something like, “Someday, 25 years from now, Russia might be able to get a space dog into orbit before us. In order to Win the Future against this space dog, we should immediately forget everything going on right now in order to prepare for research competition with potential adversaries decades from now. We must immediately start planning for this battle right now, lest we lose the future, so let’s give a bunch of tax holidays and easily captured credit benefits to various rocket manufacturers and other incumbents.”? That would be crazy. But that's how the discussion is now framed by the current administration. Instead, FDR was really serious about using every pressure point and every lever to get monetary and fiscal policies going instead.

2. Obviously back then the Democratic coalition had a lot of farmers in it, people for whom “the price level” wasn’t a graph pulled from the St. Louis Fed to put on their blogs but a real thing that they dealt with daily. There is a chance that insomuch as hipsters are an influential Democratic coalition group, and hipsters begin to engage in urban farming, “the price level” might become more of a thing that Democrats are responsive to in order to meet the needs of urban hipster gardeners. Until then, it’s up to economic bloggers to carry this message.

Mike Konczal is a Fellow at the Roosevelt Institute.

Share This

Progressives Can't Afford to Exclude the Working Class

Jun 21, 2011Frank L. Cocozzelli

workers-200Without explaining how the government can create prosperity for all, progressives risk playing into charges of elitism.

workers-200Without explaining how the government can create prosperity for all, progressives risk playing into charges of elitism.

Contemporary liberalism runs the risk of becoming isolated. But this threat does not solely come from the likes of Michele Bachmann or Glenn Beck. It also comes from some self-described liberals whose behavior feeds into the right's caricature of who we are. We risk becoming a group that restricts membership to a certain kind of liberal, one that is educated, not merely nonreligious but anti-religious, and one that is simultaneously smug and self-righteous.

One of the dark risks in an open society is the ascendancy of the enemy/friend dichotomy: one helps only those seen as having similar goals, customs, and beliefs and opposes those who don't. Just observe the poisoning of American political discourse over the past few decades. Discussion and engagement have given way to rants and demonization. In his September 2, 2009 edition of The Daily Howler, Bob Somerby identified a good example of how the right uses this to its advantage -- and how liberals enable its use:

It's simple-minded - but it works. On our side, we stand in line to help. For decades, almost all conservative spin has derived from two simple messages. When you get to work with such clear messaging, being a conservative pundit is the easiest job in the world:

Big government never did anything right. Liberal elites think they're better than you are.

Almost all Republican spin derives from those two messages. The conservative movement has been actively pushing those messages at least since the time of Nixon. No matter what happens in the real world, the conservative pundit simply dreams up a response which derives from one of those notions.

What was Somerby talking about? With regard to the charge of elitism, part of the answer could be found in a Washington Post column by conservative commentator George Will. Writing in April 2008 shortly after then-candidate Obama's comment about working-class voters who “cling” to God and guns, Will noted:

What had been under FDR a celebration of America and the values of its working people has become a doctrine of condescension toward those people and the supposedly coarse and vulgar country that pleases them.

When a supporter told Adlai Stevenson, the losing Democratic presidential nominee in 1952 and 1956, that thinking people supported him, Stevenson said, "Yes, but I need to win a majority." When another supporter told Stevenson, "You educated the people through your campaign," Stevenson replied, "But a lot of people flunked the course."

Does President Obama despise working-class folks? Of course not. His economic policies, though far from sufficient from a Keynesian standpoint, are more beneficial to these very folks than anything put forth by today's movement conservatism.

But his comments on guns and faith clearly display something of a disconnect that, three years later, still exists with many of our liberal talkers. Public faces of progressivism Ed Shultz, Rachel Maddow, and Bill Maher would rather play in the mud, demonizing the other side, than explain how contemporary liberalism is the best means available to create a prosperous capitalist economy for all, including those in the working-class.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

Instead of broadening the liberal base, the aforementioned public faces of the left act as though our philosophy were a restricted community. Too many of us howl with delight when Bill Maher derides poor working people as “one-toothers” or those who believe in God as delusional. During any give broadcast of Real Time, the host's constant drumbeat of proclaiming "American dumbness" is ever-present. If anything, he risks turning himself into the poster boy for what movement conservatism says is wrong with liberals. Would FDR, Harry Truman, or Robert F. Kennedy have engaged in such self-defeating, elitist behavior?

What these public figures could be doing instead is rebutting the conservative mantra that Reagan's tax cuts drastically increased revenue (they didn't). Better yet, how about pulling the rug out from under the GOP myth that big government doesn't do anything right? Projects put forth by economic liberals have led to generations of local wealth creation, such as the TVA or the Lower Colorado River Authority. They brought electrical power -- and production -- to whole sections of the South, areas “the invisible hand” of laissez-faire didn't want to touch. More importantly, such a discussion would be a very powerful tool in explaining how an activist government does indeed create private sector jobs.

Maddow and Shultz could take a cue from Thom Hartmann and use their programs to explain how administrations that based their domestic policies upon Keynesian economics were also examples of “big government” getting things very right. (In fairness, Maher does this with Real Time.) For the 30 years after World War II, an activist government ensured increased wealth for a greater number of citizens in a manner far more disciplined than those based upon laissez-faire dogma. Instead, Maddow wasted precious airtime on a June 15 segment with Samuel L. Jackson narrating "Go the F**k to Sleep," a bedtime story for adults.

Such silliness is an ongoing wasted opportunity; it is snarky entertainment that plays to a crowd of cynics instead of engaging those beyond the base. More than that, it is smart alec behavior that can cause some independent folks to feel empathy for liberalism's adversaries.

“When men are once enlisted on opposite sides," Enlightenment thinker David Hume observed, "they contract an affection to the persons with whom they are united, and an animosity against their antagonists: And these passions they often transmit to their posterity." Movement conservatism has taken Hume's observation and honed it into a potent weapon, all while some self-described liberals insist on telling the world how clever they are.

Glenn Beck and Rush Limbaugh can shape the public perception of liberals because we too often choose to disassociate ourselves from blue-collar folks. Whether it be the public or private faces of liberalism, we constantly fail to refute the myth that “government doesn't work.” That, too, illustrates the “liberal elites think they're better than you are” meme Somerby warned us about. The right's talking heads know full well that it is easier to hate a stranger and his ideas than the beliefs of a real-life friend. And to that end, when we segregate ourselves from the very folks contemporary liberalism was intended to help, we make it easier for movement conservatives to beat them down a bit more. It tends to make those who empathize with some, but not all of the of the political right defensive and protective of their own, creating greater identity with "whom they are united." Ranks close and camps become further polarized. Then we all retreat into our restricted communities and the discourse sinks deeper into the mud. And that plays right into the right's hands.

It doesn't have to be this way. One of my favorite photographs is of FDR shaking hands with a soot-covered coal miner during the 1932 Presidential campaign. That photograph of the patrician politician locking grips with a hard-bitten but proud everyday man speaks of common dreams. And it reminds us that contemporary liberalism should never be an exclusive club for the well-educated. As FDR knew, it should be a true pathway to mutual prosperity, one that is equitable and inclusive for all Americans.

Frank L. Cocozzelli writes a weekly column on Roman Catholic neoconservatism at Talk2Action.org and is contributor to Dispatches from the Religious Left: The Future of Faith and Politics in America. A director of the Institute for Progressive Christianity, he is working on a book on American liberalism.

Share This

Subprime on the Subcontinent: The Value of Bold, Persistent Policy Experimentation

Jun 8, 2011Georgia Levenson Keohane

In a three-part series, Roosevelt Institute Fellow Georgia Levenson Keohane explores India's microcredit crisis and what it teaches us about combating poverty. In her final post, Keohane questions the efficacy of microcredit. Does it really transform lives? How do we know?

In a three-part series, Roosevelt Institute Fellow Georgia Levenson Keohane explores India's microcredit crisis and what it teaches us about combating poverty. In her final post, Keohane questions the efficacy of microcredit. Does it really transform lives? How do we know?

Beyond yesterday's question of non-profit versus for-profit, the microcredit crisis in India has emboldened naysayers who question whether either model has proved itself the hoped-for panacea for global poverty. Does microcredit even work, they ask? And how do we know?

This spring, Esther Duflo and Abhijit Banerjee, the highly regarded MIT economists who run the Abdul Latif Jameel Poverty Action Lab (J-Pal), published Poor Economics: a Radical Rethinking of the Way to Fight Global Poverty. In it, they draw on their field research: hundreds of randomized control trials designed to examine which policies and practices (and under what conditions) successfully reduce poverty, and which do not. Duflo and Banerjee's empirical approach is widely credited with transforming the field of international development and the economics discipline more broadly. Moreover, their work on microlending finds "clear evidence that microfinance was working." Because Duflo and Banerjee, like other empiricists, also conclude that micro-lending produced little "radical transformation" in the lives of the poor people they studied, many have been quick to pronounce microcredit's failure.

The value of bold, persistent policy experimentation

Duflo and Banerjee insist otherwise. "The main objective of microfinance seemed to have been achieved," they write. "It was not miraculous, but it was working... In our minds microcredit has earned its rightful place as one of the key instruments in the fight against poverty."

The lessons here about what Franklin D. Roosevelt called "bold, persistent experimentation" are crucial for policy makers the world over. First, the absence of panacea does not amount to program failure. Second, the value of the 'controlled experiment' paradigm lies in its parsing power. These kinds of studies -- akin to the randomized contrail trials (RCT) of medical research --  offer a tool to pinpoint which components make a policy effective, which do not, and which can be improved to enhance service delivery and social benefit. Duflo and Banerjee suggest, for example, that most existing microcredit lending structures (for-profit or not for profit) do not permit the poor to borrow and invest sums large or long-term enough for higher risk and return projects that might actually transform their lives. The experiment indicates that creating access to this kind of credit is the next -- and more complex -- frontier in improving capital markets for the poor.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

A different empirical tact has shown that microcredit works when loans are combined with other products or services, like savings or insurance. In Portfolios of the Poor, researchers Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven examined the financial diaries of the hundreds poor people in India, Bangladesh, and South Africa and determined that credit to build small businesses, though effective, was not enough. Borrowers also benefited from credit for things like doctor's bills, school fees, weddings, and funerals.  Increasingly, microfinance institutions (MFIs) are experimenting with product and service innovations along these lines.

Portfolios of the Poor also describes how Grameen made enormous strides in learning from its own experience. In a series of reforms known as Grameen II, the bank began to offer a broader range of savings and credit accounts, and more flexibility as to when and how its clients could access them. A number of other Grameen inspired organizations continue to learn from these experiments. The Grameen Foundation, for example, promotes poverty reduction through microenterprise and technology, with recent innovations like Mobile Financial Services and Mobile Technology for Community Health (MoTech). Grameen America is adapting Yunus's original microlending archetype to serve the poor and unbanked in New York City.

Though microenterprise in developing countries has been an important testing ground for empirical research, the broader lessons about evaluation and experimentation are applicable across fields and are vital for American policy makers. In recent years, we have witnessed greater adoption of this approach in the U.S. in both the non-profit and public sectors. New York City's Center for Economic Opportunity (CEO), for example, aims to function as a kind of anti-poverty laboratory. Seeded primarily with philanthropic funds, the CEO pilots and evaluates innovative and untested social programs to assess which might be successfully scaled. The CEO has been cited as one of the models for the recent federal efforts in this area, including the new Office of Social Innovation in the White House, and its various funds and activities. In 2009, Peter Orszag, then the Director of the White House Office of Management and Budget, famously called for more rigorous and "evidenced based" evaluation of federally funded programs, advocating a kind of clinical trial methodology. Others have pointed to Duflo and Banerjee's J-PAL at MIT as an action lab template for other areas of public policy, from global climate change to domestic social programs.

Not surprisingly, a strict RCT approach raises a host of implementation concerns related to cost, ethics, and scope, and is not without detractors.  However, the spirit of this kind of inquiry, and the success of its numerous and modified applications, has helped to shift policy makers towards more risk-taking experimentation and exacting evaluation, both essential in the fight against entrenched and persistent poverty in the U.S. and around the world. This, too, will be a focus of my research in the coming months, and the subject of future posts. I welcome your comments.

Georgia Levenson Keohane is a Fellow at the Roosevelt Institute.

Share This

Failing to Learn from the Past: FDR, Obama, and the Looming Double Dip

Jun 6, 2011David B. Woolner

The key difference between then and now is a president who learns from his economic mistakes.

The key difference between then and now is a president who learns from his economic mistakes.

Two recent articles in the New York Times make reference to the perilous state of the US economy and the possible political consequences for President Obama in 2012. In a piece entitled "Employment Data May Be the Key to the President's Job," Binyamin Appelbaum notes that no American president since FDR has won reelection with an unemployment rate higher than 7.2 percent on election day. He goes on to observe that, as most economists agree, we are unlikely to see a significant drop in the current rate over the next 12 to 18 months. President Obama must defy this historic trend if he wishes to keep his job.

In his editorial "The Mistake of 2010," Paul Krugman is similarly pessimistic about the state of the US economy and the prospects for significant gains in employment over the coming year. He takes issue with the Federal Reserve's recent assertion that quantitative easing has avoided the mistake that the Fed made in 1937. At that time, out of fear of inflation, it engaged in what Krugman calls a "premature fiscal and monetary pullback that aborted an ongoing economic recovery and prolonged the Great Depression." Krugman insists that not only was the original fiscal stimulus not large enough, but thanks to the deficit hawks on Capitol Hill and elsewhere, conventional wisdom has it that public enemy number 1 is no longer unemployment, but the deficit. The tragic result is that the possibility of further spending to stimulate the economy has all but vanished from the public discourse. Seen from this perspective, he argues that we have already repeated a version of the mistake of 1937 by withdrawing fiscal support much too early. He also fears that pressure from conservatives and European central banks over possible inflation may lead the Fed to reverse course and raise interest rates, even though we have a long way to go before we pull ourselves out of the current economic malaise.

Krugman calls all of this the "economic mistake of 2010," which he likens to a partial replay of the Great Depression. But there is one important difference. In the "Roosevelt Recession" of 1937-38, FDR and his economic advisers were quick to recognize their mistake. Instead of stubbornly holding course, they promptly reversed themselves and went back to Congress in the spring of 1938 to demand a massive increase in government spending. This spending was to put some of the millions who had lost their jobs due to the misguided policies of 1937 back to work. Within a few months, the downward spiral that was initiated by the 1937 pullback was over and the economic recovery -- that had been running at an average annual rate of 14 percent between 1933 and 1937 -- resumed.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

Sadly, it seems highly unlikely that this President and Congress will draw the same lesson from the recession of 1937-38 that FDR and his advisors drew from their experience. Steeped in a bitter partisan divide and arguing not about how much the government should spend, but rather about how much it should cut, there appears little chance that we will see any meaningful attempt to alleviate the plight of the millions of Americans still suffering the burden of unemployment. With such gridlock in Washington, perhaps we would all do well to reflect on what FDR said as he struggled with those who criticized his policies and demanded he cut back on the New Deal:

Governments can err, Presidents do make mistakes, but the immortal Dante tells us that divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted in different scales. Better the occasional faults of a Government that lives in a spirit of charity than the consistent omissions of a Government frozen in the ice of its own indifference.

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

Share This

President Obama Reaffirms the "Special Relationship" with the UK

May 26, 2011David B. Woolner

The bond between the US and the UK runs deep, especially when it comes to their economies.

The bond between the US and the UK runs deep, especially when it comes to their economies.

In an historic speech before both houses of the British Parliament yesterday, President Obama reaffirmed the "special relationship" between Great Britain and the United States. He made reference to the joint sacrifices both countries have made on the battlefield in defense of freedom, taking special note of the wartime alliance and friendship between Winston Churchill and Franklin Roosevelt that helped give birth to the relationship as the two nations fought "side by side to free a continent from the march of tyranny."

References to the alliance between Great Britain and the United States in World War II are of course entirely appropriate, as the "special relationship" as we know it began in the dark days of 1939-40. But the President also made reference to the two countries' strong economic ties and the fact that today we "live in a global economy that is largely of our own making."

Here, too, the President is correct. Yet most Americans remain largely unaware of this economic aspect of the "special relationship." Much of the global economy we operate in today does indeed have its origins not in the 1980s or 90s, but the 1940s, as Great Britain and the United States struggled to defeat fascism in Europe and Asia.

To understand this, let's take a look at the link between the Great Depression and World War II -- especially from the American perspective. For Franklin Roosevelt and his Secretary of State Cordell Hull, this link was not only obvious, but tragic. The two men, in fact, were absolutely convinced that the cause of the Second World War lay in the economic depravity and dislocation of trade and commerce that were the hallmarks of the Great Depression. Near the end of the war, for example, in his State of the Union address of January 1944, FDR observed that we "had come to a clear realization...that true individual freedom cannot exist without economic security and independence. Necessitous men are not free men. People who are hungry and out of a job are the stuff of which dictatorships are made." And as early as the early 1930s, Cordell Hull was frequently quoted as saying, "If goods cannot cross borders, armies will."

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

As a consequence of these beliefs, the Roosevelt administration committed itself to the concept of freer trade, beginning with the passage of Hull's Reciprocal Trade Agreements Act in 1934 and continuing right up through the war. Hull's policies took the United States in a new direction away from the high tariff policies of the Hoover years, and in many respects laid the foundation for the opening up of the world's trade immediately after the end of the Second World War. This was best exemplified by the establishment of the General Agreement on Tariff and Trade (GATT) in 1947.

Ironically, in response to the high tariffs of the Hoover administration, the British had established an intra-Empire trading system called "Imperial Preference" in 1932 that allowed most goods within the British Commonwealth to be traded with little or no tariff while keeping US goods out. This was an anathema to Hull, and during the war he used the leverage of Lend-Lease aid to try to get the British to drop it. Hull was never able to get the sort of rock solid commitment to ending Imperial Preference he would have liked, but under Article VII of the 1942 Lend Lease Consideration Agreement (governing Lend-Lease aid), the British did agree to take "joint action directed towards the creation of a liberalized international economic order in the postwar world."

By 1944, US military and economic preponderance was such that there was little doubt the Roosevelt administration had the upper hand in the "special relationship." As such, the agreements that were negotiated and signed at Bretton Woods and Dumbarton Oaks that year (establishing the International Monetary Fund, the World Bank, and laying the groundwork for the United Nations) largely reflected the American, as opposed to the British, negotiating positions. The same was true a few years later when the GATT was signed in Geneva.

Viewed from this perspective, the Second World War was as much about the re-ordering of the world's economic system along American -- and away from British -- lines as it was about defeating fascism in Europe and Asia. Still, there is no question that during these years the United States considered British cooperation in this effort not only vital, but essential, for without it they doubted their plans for a new world order could succeed. While it may true that Great Britain has always been America's junior in the transatlantic partnership, President Obama is correct when he says that the Anglo-American relationship is not merely "special" but "essential" to the development of "a world that is more peaceful, more prosperous, and more just."

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

Share This

Saving a “Lost Generation” Through the National Youth Administration

May 19, 2011David B. Woolner

We could use the ingenuity of FDR's program to combat unemployment and skill stagnation among the country's youth.

We could use the ingenuity of FDR's program to combat unemployment and skill stagnation among the country's youth.

As college seniors prepare to graduate across the country, recent reports on the state of employment among young people offer discouraging news. In 2010, for example, the unemployment rate for youth between the ages of 16 and 24 was 18.4 percent, and in January of 2011, the Department of Labor reported that it had climbed to a staggering 21 percent. Moreover, even for those college graduates lucky enough to find work, the jobs they acquire often pay less and do not require a college degree. And with grads taking on employment in the lower and unskilled market, the prospects for work among those without a college degree become even more discouraging. At the same time, those who do go to college in the hopes of better employment often graduate under a heavy burden of student loan debt -- an average of $22,900 for the class of 2011.

Statistics like these -- which represent the highest youth unemployment rate in more than 60 years and the highest level of student debt ever recorded -- have led to concerns about a the emergence of a "lost generation." Thanks to the Great Recession, this group may lose skills and/or follow a career trajectory that will place them in a lower income bracket for years.

Such concerns are not new. More than three-quarters of a century ago, Franklin Roosevelt faced a similar set of problems. During the Great Depression, youth unemployment was estimated to be as high as 30 percent and many young people found themselves unable to afford the cost of even a high school education. Taking stock of these grim statistics, Eleanor Roosevelt remarked in 1934 that she often had "moments of real terror when I think we might be losing this generation." To combat this problem, the Roosevelt administration created a unique federal agency dedicated to helping young people: the National Youth Administration.

Sign up for weekly ND20 highlights, mind-blowing stats, and event alerts.

The National Youth Administration (NYA) was launched by executive order in June of 1935. Its goals were two-fold. The first was to prevent young people already enrolled in high school and college from dropping out due to financial hardship. This was accomplished by providing the students with grants in return for part-time work in libraries, cafeterias, as janitors, etc., with the twin objectives of developing the talents of young people while at same time keeping them out of the struggling labor market. The second goal was to provide training and/or employment of long-term value. By 1937, more than 400,000 youth were either employed or in job training programs under the auspices of local NYA offices. With the outbreak of the war in Europe in 1939 these figures increased significantly, with the vast majority of those in the program getting training as skilled machinists to work in the nation's burgeoning defense industries. The productive labor of these NYA-trained workers helped turn the United States into the great "Arsenal of Democracy" that made it possible for us to win the war against fascism.

Moreover, under the leadership of such enlightened figures as Aubrey Williams, the NYA also worked to specially address the problems of unemployment and access to education among African Americans. Williams created an Office of Minority Affairs headed by Mary McLeod Bethune, who would soon become one of the most effective and outspoken advocates for the employment and educational rights of blacks in the country.

Overall, the NYA helped over 4.5 million young people find work, get vocational training, or afford a better education before the office was closed down in 1943. Equally important, it helped a struggling generation not only to maintain its dignity, but also to contribute to the growth and productivity of the American economy at a desperate time in our history. Indeed, even though the NYA was a federal program, it became enormously popular among the business community and offers us a fine example of what enlightened leadership can do in a moment of great crisis. Surely providing jobs and making education and vocational training more affordable for young people is an investment in our future that this generation of Americans -- and all generations -- deserve. With youth unemployment approaching 25 percent, and with the cost of higher education skyrocketing, perhaps it is time to offer this generation the hope and promise of another NYA.

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

Share This

Pages