The Ideological Significance of the New Deal in American Political Culture by Wittgenstein

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The lecture allows us to understand the significance of Franklin Roosevelt and the New Deal to American political culture. Particular attention is paid to the domination of progressive liberalism in American politics from Roosevelt through the 1960s. Just as agrarian ideology was killed off by Lincoln and industrialization, so too does Roosevelt kill off laissez faire (only he does so at the ballot box). The country is transformed in its thinking about taxing the rich (progressive taxes), deficit spending (Keynesianism), wealth distribution, and the role of government in our lives. Finally, the lecture ends with a comparison of parties and ideology after FDR with the way they existed prior to the civil war. Today’s Democrats, it is argued, are nothing like yesterday’s – and the same is true for Republicans.

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									          Today’s Lecture:




  The Significance of Roosevelt and
            the New Deal



Session                      Topic(s)


  7                           5
Lecture Organization:

     Class Announcements
       Review
     Help With Slides


     The Second Wave
      The New American Hegemony
     The Death of Laissez Faire
      Deficit Philosophy
      Wealth Politics
     Parties, Ideology and Musical Chairs
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                Class Announcements


midterm
-- May 4th

Reading

-- Chapters: 7, 9, 18, 21, 24, 25, 26, 30
-- I’ll give you some tips on that next week

 Study Guide
-- I’ll be posting sample test questions next week

Review Session
-- There will be a review session scheduled
                     Class Announcements


next Thursday
                                           Questions?
-- April   22nd   – no class

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                   Help: Too Many Slides?
                                            # 120



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           change from slides to
                handout




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handout

numerous
 options




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handout




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                         Review
                                                             # 121



 Hamilton’s America Arriving
-- massive industrialization
-- rise of economic goliaths (mergers, trusts, monopolies,
oligopolies)
-- the boom and bust of capitalism (bi-polar)
 Rise of the Progressives

-- a new labor v. capital dynamic in politics
-- calls for government to start regulating capitalism
                  Social Transformation


Transformation in the organization of political ideology

-- something fascinating results
-- how political ideology is organized, changes




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                                               Farmers
                                               Steelworkers
                                               Coal Miners
                                               etc



   Plantation                                Labor
                                     The forces of
   Hegemony                          capital




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                              A new rationalization for the
                              power center!


                               No more states rights!
       Laissez
       Plantation
       Hegemony
       Faire




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       Laissez
                                                Progressivism
       Faire




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                         Review
                                                            # 122



Key progressive idea:

-- For government to BE government in this age, it had to
behave differently
      (no longer in the horse-and-buggy days)




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                       Review


Great Depression
-- massive collapse of the economic system

     Stock Market    90% of its value
    Unemployment 1/3rd of the country

        Growth       negative 1/3rd


       Banking Collapse
                          Review


 First 100 days
-- FDIC legislation passed in 24 hours

   (the banks can’t fail unless the country fails)
   (as long as the United States Government is here, your
   money is safe)

-- All sort of programs
   • aid to the poor and employed
   • help with mortgages
   • regulations for capitalism (Government steering it)
                         Review


 Maps
-- the election maps …
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            Something will come along that will
            fundamentally change American
            politics




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                   The Second Wave
                                                                  # 123



second “New Deal”
    -- Social Security Act

the Social Security Act, which created the modern social security
system, provided old age pensions, unemployment compensation,
and financial assistance to the disabled and for mothers with
dependent children (it established the principle that Americans had
certain entitlements from government. The idea was that this act
was providing assistance to those who could not fend for
themselves in the dog eat dog free market world. The social
security act was financed by payroll taxes, and may have impeded
economic recovery a bit;
                     The Second Wave


  second “New Deal”
      -- More serious regulation of utilities
      -- significant progressive taxation policy (“tax the rich”)
      -- National Labor Relations Act
          • the right to strike (considered illegal prior to this)
          • a perpetual federal forum for resolving labor disputes

The National Labor Relations Act -- [the Wagner Act] created a
National Labor Relations Board, which gave collective bargaining and
organization of workers the sanction and protection of the federal
government (this would forever submit the loyalty of the labor
movement to the democratic party).
                   The Second Wave


second “New Deal”
   -- work programs for the employable
   -- entitlement programs for people who could not work


The Works Progress Administration -- providing remunerative
work for more than 3 million Americans. These workers would be
the most loyal of the fdr voters, leaving republicans to charge that
he was buying his votes;
                   The Second Wave
                                                                # 124



 Did it Work?


Economic impact -- Although recovery was far from complete, from
1933 to 1936, unemployment dropped 1/3, manufacturing production
and farm parity prices increased 50 percent, wholesale and retail
trade nearly doubled, and real per capita economic growth soared by
nearly 30 percent.


 (Note: Sophistry and Politicization of Economic Arguments)
           The New American Hegemony
                                                           # 125



how FDR changed American politics
  -- No other election victory in American history every
  experienced two realignments successively in the same
  direction
  -- “The gift that kept giving” …
              The Gift That Kept Giving




                  1929      1931           1933      1935   1937
House Dems          163          216           313    332   333
House Rep:           267         218           117   103     89
Senate Dems           39           47           59     69    75
Senate Rep           56            48          36      25    17




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             The New American Hegemony
                                                                     # 126



 “tax and spend politicians”
    -- new phrase invented by FDR insiders

Tax and spend politicians -- This began a new era of criticism of
democrats for being tax and spend politicians. It is a little different
though: what they do is "tax and tax and spend and spend and get
elected and get elected." The idea: the benefits go to people who
turn around and vote for them as a functional exchange. It is sort of
a larger scale kind of Tammany Hall in some respects (without the
corruption). By the way, that tax and spend quote came from a
democrat inside FDR administration.
               The New American Hegemony
                                                               # 127



The Constitutional Philosophy of the New Deal

-- The New Deal really was a NEW DEAL
-- The idea:
   • let’s have a new constitutional bargain
   • let’s let the Federal government lead in policy matters
   • let’s have the President captain the government
             The Death of Laissez Faire
                                                             # 128



Government’s New Role in Capitalism

  -- government has a different role now
  -- government must correct market failure
  -- it must buffer society from the harsh effects of capitalism
  -- capitalism is now a three-party transaction
      Capitalism




     Government




Sellers            Buyers
               The Death of Laissez Faire


  Ideological Legacy
    -- capitalism is government’s business, too
American culture fundamentally changed --

American business would never again enjoy the kind of freedom
and confidence that they had in the 1920s. In the 1940s, the
committee of the mighty National Association of Manufacturers
summed it up this way: "rightly or wrongly, the people have
attributed the business collapse and the depression of the 30s to
short sighted selfishness and to a lack of vision on the part of
businessmen. The concept that the basic control of economic
policy properly rests with the people through their government
and not with businessmen or any other private group is
permanently established in American culture."
              The Death of Laissez Faire
                                                            # 129



 Difference From Socialism

-- American conservatives frequently call FDR “socialist”
-- Not true: FDR saved America from socialism
   (the extreme left felt he had stolen their chance)
    Mixed Systems!
   -- instead of having either capitalism or socialism, now you
   could have an intelligent mix
   -- government-structured capitalism (capitalism within
   parameters)
                Deficit Philosophy
                                                     # 130



Keynesian Economics
 -- FDR initially believed in balanced budgets
     (Keynesian economics comes later in the term)
 -- Deficits might be good?
     • England in the late 1600s – early 1900s
     (depends upon whether you get a return on the
     investment)
(Explain WWII debt and
post-war generation)
                    Wealth Politics
                                                          # 131



taxation
   -- “progressive tax”
       Economic Principle: Diminishing Marginal Utility
       (compare to chocolate pie)
   -- tax rates
       During the Great Depression and World War II, the top
       income tax rate rose to 75%. The top rate reached 94%
       during the war and remained at 91% until 1964.
                     Wealth Politics
                                                           # 132



distribution
    -- “progressive tax”
        Economic Principle: Diminishing Marginal Utility
        (compare to chocolate pie)
    -- tax rates
        During the Great Depression and World War II, the top
        income tax rate rose to 75%. The top rate reached 94%
        during the war and remained at 91% until 1964.
            Party, Ideology & Musical Chairs
                                               # 133



role of party
-- to organize the political marketplace
1776-1787

              Impulse A

Political
“goop”




            Impulse B
                          Impulse A




elites know better




         Finance      strong
         Capitalism   central         more racially
                      government      accommodative
                          Impulse B




populist




           Agrarian
           Ideology   state’s
                      rights          less racially
                                      friendly
                               Impulse B
  Impulse A




   “Federalists”             “Republicans” (Jefferson)

“National Republicans”       Democrats (1830s – 1860s)
      (1812-1824)
                                      Question:
 Whigs (1832 – 1856)
                                  How does this get
Republican Party (Lincoln)        transformed in the
                                        1900s?
          Question:                                       # 134

   Who has this impulse       Impulse A
         today?



elites know better




         Finance          strong
         Capitalism       central         more racially
                          government      accommodative
                              Question:
                             Which party or
                           ideology tends to
                         believe this, and give
elites know better
                               examples



         Finance      strong
         Capitalism   central         more racially
                      government      accommodative
                               • The Court?
                               • The cultural elite?
                                   (Hollywood)
                                   (academics)
elites know better                 (Northeasterners)
                                   (media???)

                     Jack Kennedy – The Best and the Brightest

                           Obama?
                   Question:
              What about this one?
Finance
             Which party or ideology
Capitalism    tends to believe this,
               and give examples
                  Question:
                 Which party or
               ideology tends to
             believe this, and give
                   examples
strong
central
government
     Question:
    Which party or
  ideology tends to
believe this, and give
      examples




             more racially
             accommodative
                                                         # 135
                               Impulse B
     Impulse A




Republican Party (Lincoln)   Democrats (1830s – 1860s)
                               Impulse B
       Impulse A




Republican Party (Lincoln)   Democrats (1830s – 1860s)
  Kennedy

                  Clinton      Wilson
                                         LBJ




Carter
                                         Truman
            FDR
                            Jackson???
       George 2                   Teddy
                               Roosevelt???

                  Ike
                                                Nixon
Reagan




George I
                                         Ford
                  Lincoln???
                                                           # 136
                               Impulse B
    Impulse A




Republican Party (Lincoln)   Democrats (1830s – 1860s)



                                      Question:
                              What are the objections to
                                        this?
                             • Issue Change?
                                      Impulse B
       Impulse A             • Balance logic?
                                (recipe logic)
                             • New Issues?



        “Federalists”
                                    “Republicans” (Jefferson)
  “National Republicans”
                                    Democrats (1830s – 1860s)
        (1812-1824)

    Whigs (1832 – 1856)

Republican Party (Lincoln)

								
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