Tuesday, January 7, 2014

The Reverse New Deal: A few that are too big to fail, and millions who are too small to help

During the Great Depression, New Deal policy-makers understood that something was fundamentally wrong with American society. They understood that Wall Street fraud and incompetence was devastating the lives of millions of people. So, they created agencies/policies like the Securities & Exchange Commission (to police fraud) and the Federal Deposit Insurance Corporation (to protect the bank accounts of average Americans).

(Image courtesy of Wikipedia.)

New Deal policy-makers and their progeny tried to pass the torch of reform to us. But, through a combination of apathy and plutocracy, we have dropped that torch. We have, instead, resisted criminal prosecution of white collar crime and, when fines are imposed, they are often a pittance next to the gargantuan profits made through such corporate malfeasance (See, e.g., "JPMorgan's $7 Billion In Penalty Payouts Dwarfed By Monstrous Profits"). Large financial institutions have become "too-big-to-fail"--a phenomenon where regulators and law enforcement are afraid to prosecute aggressively (if at all), for fear that such prosecution will have a negative effect on the economy. Corporate America and big financial institutions are also immunized, to some degree, by the massive campaign contributions they make to politicians. A politician is unlikely to push hard for the prosecution of the very people who are funding his/her reelection campaign (plutocracy and white collar crime strengthen one another).        

On the other end of the spectrum, we have laid-off workers, homeless veterans, low-income workers, and the long-term unemployed. These Americans are too-small-to-help. This is why you hear politicians like Rand Paul, Herman Cain, and Paul Ryan talk about cutting off assistance to these folks, but you rarely, if ever, hear them talk about cracking down on accounting fraud, insider trading, or illegal tax evasion (the latter of which costs the United States about $300 billion in lost revenue...every single year).

(Unlike many of today's political "leaders," New Deal policy-makers didn't spend their days demonizing the less-fortunate. Instead, they created programs to help them. Here, a young man learns carpentry skills in a National Youth Administration workshop. The caption for the photo tells us that the young man "now has private employment with a sash and door firm." Image courtesy of the National Archives and the New Deal Network.)

Today, we are inundated with declarations from the political right that America is a Christian nation. But the failure of the political right to aggressively address white collar crime, while aggressively trying to dismantle our social safety net, makes those declarations impotent and farcical. The morality they display--in politics, and in their statements about the less fortunate--is not the morality I was taught in Sunday School (see, e.g., "The religious right is a fraud: Nothing Christian about Michele Bachmann’s values"). Furthermore, the political right's devotion to Ayn Rand, a woman who wanted to topple Christianity, makes their "America-is-a-Christian-nation" claim even more dubious. (I often wish America was a Christian nation; Christ's teachings about how to treat the poor, especially in the book of Matthew, are quite noble.)    

Even some Republicans are starting to question the attitudes of their colleagues, highlighting how the GOP/Tea Party movement is becoming uncomfortably cruel for some of its own members. Republican Governor John Kasich (Ohio) said, "I’m concerned about the fact there seems to be a war on the poor. That if you’re poor, somehow you’re shiftless and lazy. You know what? The very people who complain ought to ask their grandparents if they worked at the W.P.A.” For this, and other acts of human compassion, Kasich earned (temporarily) a Tea Party threat to his governorship (see "Tea Party Leader Ted Stevenot To Challenge John Kasich In Republican Primary").  

Welcome to the Reverse New Deal, where the rich & powerful are too-big-to-fail, and thus receive special treatment, and the poor & powerless are too-small-to-help, and thus receive scorn and punishment.

   (New Deal policy-makers tried to help Americans in need, and it worked. The New Deal set the stage for our nation's post-World War II economic prosperity. Sadly, America has steered away from the New Deal. Today, we have an increasingly right-wing government that demands cuts to our social safety net programs--programs that are already stingy compared to other developed countries--while Corporate America ships our prosperity overseas, in search of cheap labor, and thus more profit for the 1%. These two phenomena have facilitated extreme income & wealth inequality, as well as extreme income insecurity for much of the middle-class. We need another, stronger New Deal, to combat corporate greed, corruption, and crime. WPA poster image courtesy of the Library of Congress Prints and Photographs Division.)

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