Biden and New Deal nostalgia

It’s been 89 years since Franklin D. Roosevelt was elected president in the depths of the Great Depression. But nostalgia for FDR’s New Deal dies hard.

Giddy Democrats are hailing President Biden’s ambitious plans for COVID-19 and economic relief and for rebuilding America’s physical and social infrastructure – which together are estimated to cost more than $4 trillion – as the second coming of the New Deal. The White House is tweeting out FDR quotes and photos.

Farther left along the spectrum, Rep. Alexandria Ocasio-Cortez (D-N.Y.) complains that Biden’s “once-in-a-lifetime investment in America” isn’t nearly enough to finance her vision for a “Green New Deal” that would re-engineer the U.S. economy from the top down.

Hardly a day goes by without some idea monger (me, for example) calling for a new New Deal to solve this or that pressing national problem. And why not? It’s hard to think of a better model than FDR for the bold and inventive leadership our country needs now.  

As a universal metaphor for “going big,” the New Deal works pretty well. As a governing blueprint for today’s Democrats, it’s less useful. The real history of the New Deal was forged in a very different America, and its lessons are just as likely to challenge as reinforce contemporary progressive shibboleths.

For example, AOC may believe in a planned economy, but FDR didn’t. He resisted the advice of Brain Trusters like Rex Tugwell to replace the “chaos” of laissez faire capitalism with central planning and state direction of the economy. FDR instead carved out a “third way” between laissez faire capitalism and collectivism — regulation designed to preserve and extend the benefits of America’s free enterprise system.

What stands out about the New Deal wasn’t just its scale but its experimental spirit. To cope with an imploding economy, FDR improvised wholly new roles for the federal government. His administration delivered emergency relief to tens of millions of jobless and destitute Americans; ended bank runs and supported the farm economy; built public works on a pharaonic scale; created a national minimum wage and Social Security; and set up a slew of regulatory bodies to referee market competition.

Unlike Biden, who is proposing to sluice trillions of dollars through familiar programs and intergovernmental channels, FDR was painting on a blank canvas. In his time, the federal government was small and weak, not the musclebound behemoth it has become. In 1929, federal spending was less than 8 percent of GPD. In 2019, it stood at nearly 21 percent, and in 2020, owing to the  pandemic, it surged to 31 percent.

Biden’s core challenge isn’t to flood the zone with money, it’s to devise more creative ways to spend it that can spur a broad, inclusive recovery, narrow class, racial and gender disparities aggravated by the pandemic, and make our economy and society more resilient against the next pandemic or other national emergency.   

The best way to pursue these liberal goals isn’t to concentrate more power in Washington, but to decentralize decisions and resources to competent local governments, which have replaced the states as America’s laboratories of democracy. As The Atlantic’s Ron Brownstein contends, Biden’s agenda doesn’t run through Washington.

At a time when red state governments are fixated on suppressing voting and protests, the most innovative public problem solvers tend to dwell in metro regions. Mayors and county executives possess local knowledge and the unique ability to forge broad coalitions that cut across political and sectoral boundaries to include business, nonprofits, religious and civic groups, “anchor” institutions like hospitals and colleges, as well as public officials.  

Metro leaders also reside in the heart of blue America and are thus natural political allies for the Biden administration. That’s why the White House should pursue a new strategy of “metro federalism” that recruits local leaders to set common priorities, enlist civic capital and liberate federal dollars from siloed programs that prevent them from being used flexibly and creatively. Empowering metro leaders points to a new progressive paradigm for solving national problems through concerted local action.

Washington, however, is abuzz with ecstatic chatter among progressive activists and commentators about the supposed return of “big government” after decades in political exile. This view seems out of touch with the mood of U.S. voters, only one-fifth of whom say they trust the federal government to do the right thing all or most of the time. In contrast, public trust in local elected leaders is high.

The New Deal also offers progressives agitating to expand the Supreme Court a pointed lesson in the dangers of political overreach. Following his landslide reelection the year before, FDR in early 1937 turned in frustration to the Supreme Court, whose conservative majority had struck down key New Deal initiatives. Convinced “the people are with me,” he tried to ram through Congress a bill adding up to six new justices.

But FDR’s “court packing” scheme backfired when members of his own party balked. The debacle “marked the beginning of the end of the New Deal,” according to historian John Garraty. Conservative and Southern Democrats forged an alliance with Republicans that dominated Congress. “During the remaining seven years of Roosevelt’s administration, Congress blocked every major new domestic law he proposed,” says Garraty.

Most Americans approve of the job President Biden is doing. Unlike his predecessor, he’s warm-hearted, honest and fundamentally decent. But Biden has taken on an intrinsically difficult task: Trying to make sweeping policy changes on the basis of razor-thin Democratic majorities in Congress. To succeed, he’ll have to keep broader public sentiment, not just his own fractious party, behind him.

The president can’t afford to heed the most doctrinaire voices in his party or be as inflexible as they would like him to be about means (e.g., their demands for “$15 or fight,” which has left the minimum wage stuck at $7.25 an hour). Here Biden should take his cue from FDR, whose true genius was for radical pragmatism and improvisation.

Will Marshall is president and founder of the Progressive Policy Institute (PPI).