A century of great government
Franklin D. Roosevelt delivered a national address at the White House in 1936. (Library of Congress)
The epic nature of the political struggle sparked by the ambitious Biden agenda can perhaps best be understood from its historical context, illuminated by the records of four presidents – Franklin Roosevelt, Dwight Eisenhower, Lyndon Johnson and Ronald Reagan . Together they most sharply represent the great American struggle of the past 90 years between those who, on the one hand, advocate increasing federal power and economic redistribution, and those who oppose this liberal agenda, on the other.
From this historical approach, it becomes clear not only how relentlessly and expansively the American left has pushed its vision, but also how much resistance the voters have put up in crucial times over the decades. The Biden forces now plan to end the struggle once and for all with final political conquest – a liberal rise so complete and so far removed from consensus that voter opposition will be meaningless for years or decades. They want America to enter its last great epoch of definition and join the democratic socialism that has been the European model for the past eight decades.
The political drama begins with the FDR. In creating his New Deal in the 1930s, he drew on the government activism of his distant cousin Theodore Roosevelt and the subsequent presidency of Woodrow Wilson. But these presidents, though passionate government activists, never achieved the expansion of federal power that Roosevelt brought to America during a crisis surpassed only by the Civil War in US history. Real GDP per capita had shrunk by almost a third. Foreign trade had collapsed. Around 83 percent of the stock exchange’s shareholder value had disappeared. Unemployment was almost 25 percent. For most farmers, harvest prices fell below the subsistence level. Many lost their land to banks that were themselves insolvent. The social fabric of the nation began to disintegrate.
In addressing this crisis, the FDR presided over annual GDP growth rates of around 7 percent in its first term, while manufacturing output rose 50 percent and unemployment, although still criminally high, fell below 17 percent. It is not surprising that the American people responded with widespread appreciation and even some reverence. They comfortably accepted the shift in the balance of power that favored federal intervention over federal forbearance.
All of this was reflected in Roosevelt’s bold legislative work: the National Industrial Recovery Act, the Agricultural Adjustment Act, the Glass-Steagall Act to create the Federal Deposit Insurance Administration and restricting financial activities deemed too risky, the Public Works Administration, the Tennessee Valley Authority, rural electrification, the Securities and Exchange Act, Social Security, and the Wagner Act create new roles in collective bargaining. This was an astonishing expansion of entrenched federal power through the creation of a new political class of government officials (part of the “managerial revolution” examined by James Burnham shortly thereafter) and the emergence of new national constituency groups committed to and deeply committed to Roosevelt’s party.
The voters rewarded the FDR with an impressive triumph in re-election. When the dust settled, his Democratic Party controlled 75 Senate seats out of just 21 for the opposition, while the House was Democratic with 331 seats out of just 89 for Republicans. It was an electoral mandate that was hard to beat in American political history. Then Roosevelt wasted the mandate trying to “grab” the Supreme Court and change its balance of power in favor of efforts to protect and expand his New Deal.
Much has been written lately – amid Democratic calls for similar action in favor of their current party – about the FDR’s humiliating failure to get Congress approval for its initiative, which is clearly an unsavory takeover. Less considered are the effects on his plans to expand the New Deal: the FDR’s takeover and the political capital it invested in connection with a relapse into the 1937 recession essentially frozen the New Deal. No more expansion. In the mid-term elections in 1938, the Democrats lost 71 seats in the House of Representatives and six in the Senate. With the war on the horizon in Europe and Asia, Roosevelt wisely turned his attention to foreign policy, with his domestic plans nearly complete. Regarding the New Deal Revolution, in 1936 and after, voters said, “Thank you. That’s enough for now. “
Note that Roosevelt did not choose to nationalize industries that some liberals advocated during the Depression. Instead, he opted for regulation and even included the banks, which failed in threatening numbers when entering the White House. When creating his large social security system, he specifically refused to make it a remittance program that was paid for with income taxes and instead opted for a safety net approach backed by benefit-linked wage taxes. That irritated the Liberals and continues to do so. Jill Lepore, her time between Harvard and the New Yorker (guess your political views) has despised this approach because it does not sufficiently satisfy their yen for income redistribution through tax policy. What she misses, but what the brilliantly political Roosevelt understood well, is that he could never have achieved social security if he had designed it as an income redistribution initiative. The American people would not have chosen it.
In any case, the country was on the axis of state intervention against the government cut when Republican Eisenhower became president in 1953 and urged some top party figures to dismantle key parts of the New Deal. Eisenhower said no. He understood that the manual work of the FDR was too popular and well established for such an initiative. Besides, it would have offended the American people. Voters do not want to be labeled idiots by their elected officials when they vote. But Eisenhower never tried to build on the New Deal either. His largest domestic initiative was the Interstate Highway System, an extremely useful infrastructure program that didn’t add much to federal power over states or the people. A new balance in the battle for the balance of power over government prerogative had been struck.
Until Lyndon Johnson, who tried to use the assassination attempt on Kennedy to transform America by expanding the government. It started, however, with Kennedy’s tax cuts, which were not of the type of redistribution favored by Lepore, but blanket cuts that did not increase the progressive nature of the tax system. The result was salutary: 4.3 percent GDP growth in the year it came into effect (1964) and 5 percent the following year. He next turned to the overdue requirements of civic equality with the landmark 1964 Civil Rights Act. Then came the Equal Opportunities Act, the linchpin of his vision of the “Great Society” to fight poverty.
Taken together, write researcher Alan J. Lichtman and journalist Ken DeCell, these initiatives represented “the most significant domestic policy initiative since the New Deal.” Then came major second-term initiatives such as the Voting Rights Act of 1965, Medicare and Medicaid, and one Range of direct benefit programs in housing, education, nutrition and the like. In total, according to the Bill of Rights Institute, LBJ submitted 87 bills to Congress, 84 of which were passed. It was a frenzy of domestic legislation that the federal government made more and more part of the lives of its citizens.
Aside from civil rights legislation, which the country deemed overdue and necessary, much of the Johnson legacy ultimately lacked the stamina of the FDR’s New Deal. In terms of poverty, the reality of disappointed expectations contributed to race riots in large industrial cities, killing dozen and unsettling the American people. According to a study, the government spent $ 22 trillion on poverty reduction programs between 1967 and 2014, and yet the poverty rate remained generally the same at around 14 percent during that period (although it fell significantly between 1950 and 1967 without a targeted federal government was initiatives). In addition, Johnson’s determination to spend large sums of money on domestic initiatives while waging his expensive Vietnam War strained the economy so badly that it sparked a wave of persistent inflation, worse known as “stagflation,” which means high inflation and low or negative growth . That ultimately led to the Ronald Reagan presidency.
Reagan took office under difficult economic circumstances. The week of his inauguration Newsweek announced from its cover: “The economy in crisis.” The magazine said the new president was “facing the most dangerous economic crisis since Franklin D. Roosevelt”. The numbers were bad. Unemployment: 7.4 percent. GDP: decreased by 1.5 percent in the previous year. Base rate: 21 percent for retail. Inflation: 13 percent. The economist Walter Heller stated: “What the Great Depression was in the 1930s, is world inflation in the 1980s.”
Reagan entered the White House on the wing of a concept that was completely unconventional for the time: this was a crisis that the great government forced upon the people. It couldn’t offer a solution to the country’s problems, he said, because it did was the problem. He sought sharp cuts in federal spending – and he did so for a while before liberal opponents mobilized a counterforce against further spending cuts. He deliberately stepped out of the New Deal and followed as much of Johnson’s Great Society as he could get his hands on. He lowered the tax rates, which had risen relentlessly and entangled more and more people in higher tax brackets through inflationary “bracket creep”. He advocated the Kennedy concept of general reduction to avoid redistribution.
Generally everything worked. After getting out of the severe recession that Fed Chairman Paul Volcker launched to suppress inflation (initiated with Reagan’s blessing), Reagan gave the country consistently robust GDP growth rates, including 6.2 percent in his 1984 election year and an average annual rate of 3.4 percent during his second term. The American people embraced the Reagan Narrative and its policies in large numbers, as reflected in its 58.8 percent re-election triumph and electoral college victories everywhere except Minnesota and the District of Columbia.
Reagan’s stamina was reflected in the early actions of Bill Clinton, who was elected president four years after Reagan’s departure (after George Herbert Walker Bush’s mediocre one-time achievement). On taking office, Clinton declared that he wanted to “overturn Reaganism” and thereby succumb to the mistake Eisenhower avoided: insulting voters by telling them that their previous election decisions reflected a certain ignorance. In 1994, after sputtering his first two years in office and throwing his head in the mid-term elections that year, he reversed course and declared, “The era of great government is over.” From there, he ruled credibly and, overall, showed a solid performance from the president.
Of course, nothing is ever over in politics, but the kind of FDR-LBJ activism of the 1930s and 1960s has not been seen for a long time. Barack Obama managed to get his Affordable Care Act passed and through subsequent GOP efforts to keep it eviscerated or killed. But Obama failed in his efforts to address the energy problem through substantial increases in federal power. Donald Trump spoke a good game in terms of anti-government, but proved unable to act sustainably in anything.
And now we have Joe Biden. He enjoys no mandate that buoyed Roosevelt and Reagan, and makes no effort to place his initiatives within a broad context of historical necessity. He sets out to accomplish what the American people have foiled for nearly a century – namely, establishing the federal government as a true Leviathan with unchallenged tentacles that encompass almost every aspect of American life and driven by an ethos of redistribution, that the FDR has foreseen itself.
The president predicts new spending of $ 6 trillion on an annual budget of only around $ 4 trillion. Spending targets include clean energy subsidies, electronic vehicle charging stations, free childcare, free preschool education, free community college education, free family and health vacations, and income drawing in a variety of non-work ways. Biden would also use the regulatory state to prevent banks from investing in old energy projects and achieving greater diversity. As the Wall Street Journal Says Biden, “seeks to incorporate government money and related rules into all major family life decisions.” He wants “to get Americans to rely on the government and the political class for anything they don’t yet offer.”
Notice the words “the political class”. This is essentially an elitist agenda that strengthens the power and influence of the country’s meritocratic elite, who will manage all of this, gaining ever greater power and wealth in the process. And because Biden does not have a mandate that has fueled the FDR and Reagan programs, he is determined to attack fundamental institutions in a way that – like Roosevelt’s trial scheme – is designed to improve the playing field in favor of the elite agenda. That is the meaning of the emerging initiatives to kill the Senate filibuster, grab the court, and give statehood to Washington, DC and Puerto Rico.
The history of America since Roosevelt’s first term provides little evidence that the American people hunger for this kind of great state enlargement and urgency. In fact, this story suggests that the American people have always been careful about going that far. And nothing in the country’s recent political utterance suggests that a serious wave is now approaching for the Biden vision. The president was elected leader of a nation afflicted by passionate discord and disorder, and which reached an almost terrifying intensity. He’s unleashed a program in his constituency that can only make it worse.
Robert W. MerryThe longtime journalist and publishing director in Washington is the author of five books on American history, including Where they stand: The American presidents in the eyes of voters and historians (Simon & Schuster).
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