What We Learn From FDR's New Deal

Lessons from the New Deal. It wasn’t one big package wrapped in political consensus. We look at the real, messy process that pulled the U.S. out of the Great Depression.

Lizabeth Cohen, professor of American Studies at Harvard University. Author of “Saving America's Cities: Ed Logue and the Struggle to Renew Urban America in the Suburban Age." (@Harvard)

Jack Beatty, On Point news analyst. (@JackBeattyNPR)

On what the 1930s looked like economically, socially and politically

Jack Beatty: "The country was in a economic freefall, an unprecedented economic crisis. To which no one knew the dimensions, the future was opaque. People thought maybe it was just another dip in the business cycle and we just had to wait it out. And in the face of this worsening and deepening economic disaster, the field of economics was helpless. How helpless? Well, an instructor and economics instructor at Harvard in this period was reprimanded by his department head. For what? For telling his class, discussing with his class the benefits of deficit spending.

"In other words, it was such a heresy you couldn't even bring it up. And that grip of orthodoxy, balanced budget, tight credit, gold standard. That intellectual paradigm, if you will, held in thrall. It seemed to hold in thrall the ability of a great country to deal with its problems. The first problem was, you know, as Lincoln said, we have to think anew to act anew. They couldn't think anew. And it looked as if the future was going to be, as John Maynard Keynes said, a battle between orthodoxy and revolution.

"But then something else happened. And he talked about what the New Deal was. He said, Roosevelt is the trustee of those in every country who seek to mend the evils of our conditioned by reasoned experiment within the framework of the existing social system. ... We had a period of what he calls reasoned experiment."

"It looked as if the future was going to be, as John Maynard Keynes said, a battle between orthodoxy and revolution."

Jack Beatty

On the 'Roosevelt Recession'

Lizabeth Cohen: "They were feeling uncomfortable without a balanced budget. They still believed in that orthodoxy that Jack was referring to at the start of the hour. And the result of pulling back in government spending for jobs and other agencies was a real collapse. And so unemployment shot back up from 14% to 20%. And they recognized that they had to play this differently. And Keynes, who we heard about earlier, at that point had really put out there an alternative, a kind of Keynesian economics that was very different. That argued that the way to deal with a depression was to spend. To spend into a deficit, to prime the pump. And that was what Roosevelt and his advisers ultimately embraced. And still, unemployment never got back to the levels that had been before the Depression. It would take World War II to do that. But things did recover in the late 1930s."

Do we have the kind of government today that can experiment the way that they did in the earliest years of the New Deal?  

Lizabeth Cohen: "One thing that would have to happen, if we got a president who was of the mindset to experiment. He — looks like it's going to be a he — would have to have a Congress that supported him. Roosevelt had that until the late 1930s, where he met more obstacles when Republicans did better in '38 after that Roosevelt recession. So, you know, a president alone can't do everything. That president needs a supportive Congress. And Roosevelt got what he wanted. And so it really does take the Congress and the executive branch working together to really re-instill that confidence."

Jack Beatty: "An FDR goal, I think, that is still, and newly and even profoundly relevant is what he said to Frances Perkins, his secretary of labor. He said, we are going to make a country in which no one is left out. Well, that is a noble sentiment. And I think it's something that everybody feels needs to happen. ... How many people have felt left out? How many Trump voters felt left out of the national feast? The urban feast? How many minorities are left out? That's a big job. And it's a worthy goal for any president. And that and security. Security, as FDR said, against the hazards and vicissitudes of life. Boy, we know about those today."

"A president alone can't do everything. That president needs a supportive Congress."

Lizabeth Cohen

The Atlantic: "The Lessons of the Great Depression" — "Americans are out of work. More than 20 million lost their jobs in April alone. Lines at food banks stretch for miles. Businesses across the country are foundering. Headlines scream that the coronavirus has brought about the worst economic crisis since the Great Depression."

New York Times: "Opinion: States Are in Crisis. Why Won’t Trump Help?" — "When most people think of the New Deal, they think of the enduring institutions it created — above all, the web of agencies and programs that has provided the social safety net, such as it is, for life in the United States since the 1950s."

The Guardian: "Roosevelt's New Deal offered hope in desperate times. We can do the same now" — "A larger proportion of Americans have lost their jobs during this pandemic than at any time since the Great Depression. In the UK, unemployment increased to 2.1 million in April, and economists expect millions more people to become unemployed once the furlough scheme ends."

Associated Press: "Out of pandemic crisis, what could a new New Deal look like?" — "The New Deal was really a series of new deals, spread out over more than six years during the Great Depression — a menu of nationally scaled projects that were one part make-work and many parts lasting impact."

New York Times: "Opinion: The New Great Depression Is Coming. Will There Be a New New Deal?" — "Until very recently, Andrew Yang thought that the need for a universal basic income would be a big issue in the 2024 election, as 'many of the trends that I campaigned on were going to become completely clear to more and more Americans' over the next four years."

USA Today: "What would FDR do? We need a new WPA to fight massive unemployment in the coronavirus era." — "In January 1935, facing an unemployment crisis not unlike today’s, President Franklin Delano Roosevelt declared in his State of the Union address that the exigencies of the moment demanded a massive, unprecedented public works program that became the Works Progress Administration."

The Atlantic: "The New Deal Wasn’t What You Think" — "The term Green New Deal might remind Americans of high-school history class. What was the original New Deal about, again? Most kids are taught that it was a decidedly left-wing project to end the Great Depression, a series of big-spending government programs such as the Public Works Administration, with its schools and stadiums."