Killing the New Deal, Or Who Doesn’t Love a Hooverville?

Last month, Steve Bannon told an audience at the Conservative Political Action Committee that the Trump Administration’s objective is to deconstruct the Administrative State. That sounded pretty terrifying at the time, but it was unclear how exactly they intended to do that, other than appointing patently incompetent leaders at federal agencies. Now that Paul Ryan’s healthcare plan and Donald Trump’s budget have been unveiled, it’s clear that the real target of the Trump Presidency is the idea that government should play a role in citizens’ welfare. They want to kill Franklin Roosevelt’s New Deal, and we should all be ready to fight them, because even if the New Deal ain’t perfect, we definitely do not want the old one.

The old deal made America pretty great for business, but pretty bad for people

FDR was not the first President to try to pass laws to protect public safety – his cousin Theodore, leader of the Republican Progressive movement, holds that distinction. However, prior to the Great Depression, the Republican Party was heavily dominated by an extreme brand of economic conservatism that rejected all regulation of the economy, even to preserve public safety. The Conservative Supreme Court led the way, ensuring that Progressives were unable to make many of the real reforms they wanted. The Court read a “right to contract” into the Constitution, and from 1897 to 1937, it knocked down efforts to establish workers’ rights. A few things they found unconstitutional include: limiting work hours to 60 a week, ensuring the right to join a labor union, regulating child labor, taxing employers who hire children, mandating a minimum wage, and regulating the coal industry. By the 1920s, the activism of the Court was supported by the election of Calvin Coolidge, who believed that government should deregulate industries and stay out of the economy, while instituting low taxes for the wealthy.  Although Coolidge presided over a period of prosperity (partially fueled by Woodrow Wilson’s wartime spending) wealth inequality was so extreme that half of Americans lived below the subsistence level. Sound familiar? It should. And just as our deregulation efforts from 1980 to 2008 unleashed the worst parts of Wall Street and crashed the economy, Coolidge’s policies helped cause the Black Monday crash of 1929 and bring on the Great Depression.

The New Deal wasn’t just new programs, it was a new concept of government

Franklin Delano Roosevelt inherited a demoralized, dysfunctional country, and he had a clear plan to fix it. Building on the Progressive movement led by his cousin Theodore, he set out to establish a regulatory structure that could protect citizens from the economic, environmental, and personal consequences of capitalism. When we talk about liberalism today, we are talking about New Deal liberalism, which is the idea that capitalism is the right system, but only if it is properly regulated to curb its excesses. This notion of regulating business to promote public safety and equalize opportunity is really the core of the New Deal. It passed the Fair Labor Standards Act, which established a national minimum wage and national labor standards, as administered by the already existing Department of Labor. It established agencies like the FDA (in its modern iteration), the Federal Housing Administration, or FHA, which grew into the Department of Housing and Urban Development, the Securities and Exchange Commission, which regulates Wall Street, the National Labor Relations Board, to protect union activity, and the Social Security Administration. It is these agencies, along with the EPA and structures of Lyndon Johnson’s Great Society, which built on the New Deal, that Donald Trump has targeted with his budget.

You may wonder how, when faced with the same Supreme Court philosophies that hampered the Progressives, FDR managed to pass all of these laws. Well, he threatened to pack the Court with three additional liberal Justices. Somehow, the Court reconsidered the whole right to contract idea, and started playing ball. Many Republicans accused FDR of being a dictator, and that accusation wasn’t out of left field. These changes were radical, and FDR did not pussy foot around – he imposed his will on everyone. His core Conservative opposition opposed both his tactics and his theory of how government should work, but they had virtually no power to block his initiatives, because after the Court-packing plan, all three branches of government belonged to the Democrats.

Conservatives have been waiting to unmake the New Deal for 85 years*

The Calvin Coolidge adherents didn’t evaporate because FDR got elected four times. Instead, they became a dedicated group of ideological purists hiding in a corner of the Republican Party. Conservative opponents of the New Deal formed a large part of the  America First Committee, and the eventual leader of the wartime and post-war Conservative movement, Senator Robert A. Taft of Ohio, opposed American intervention in WWII. As a result, they were disfavored by many Republicans after the war.  The Truman and Eisenhower years saw an emphasis on moderation and a relative lack of distinction between the parties (indeed, in 1952 both parties asked Eisenhower to run). However, in the tumult of the 1960s, with the rise of the civil rights movement, movement Conservatism made a comeback. In order to take over the Republican party, Conservatives made an alliance with segregationist Dixiecrats and, in the 1970s, socially conservative evangelical Christians to create the coalition that elected Ronald Reagan in 1980. Reagan certainly began deregulation and tax cuts for the wealthy, but he did not give the Conservative movement the extreme change it wanted. In the end, he was willing to compromise. Now the Conservative movement has its chance; Trump, who does not appear to care about any sort of ideology, seems willing to sign anything Congress sends him. It’s going to be a challenge. To return us to pre-New Deal America, Conservatives are going to have to remove all of the checks on corporate power designed to protect us… and then convince us we like it.

There are still moderate Republicans, and only they can stop this

Conservatives in the Calvin Coolidge mold have only gained dominance in the Republican Party in the last 8 years. It is really the Tea Party movement that brought them to power. That isn’t long enough to wipe out the moderate Republicans who still think regulations for public welfare are a good thing, and, more importantly, that swift and radical change is a bad thing. Disliking radical change is pretty much the definition of a moderate. In order to combat this disaster, it isn’t enough to rely on Congressional Democrats, who have relatively little power at the moment. If you really want to stop the deconstruction of the Administrative State, write to Lisa Murkowski of Alaska, and Susan Collins of Maine, and Rob Portman of Ohio, and Lindsey Graham of South Carolina, and John McCain of Arizona. With the election of Trump and a Congress led by Ayn Rand devotee Paul Ryan, the Conservative movement has finally gained enough power in the Republican Party to get its wish list. If we do not stop them, they will undo 85 years of American progress, and we can’t just look to our own “team” to get in their way. If you want to save the New Deal, call a Republican.


* The summary in this section is taken from the excellent Rule and Ruin by Geoffrey Kabaservice.  Kabaservice, Geoffrey M. Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party, from Eisenhower to the Tea Party. New York: Oxford University Press, 2012.