Tuesday, August 26, 2014

FDR on Private Power, Democracy, and Fascism

(President Roosevelt, photo courtesy of the FDR Presidential Library and Museum.)

Many American corporations are making record profits, paying low effective tax rates, not hiring, not giving pay raises to their workers (despite increased worker productivity), and, of course, pumping millions of dollars into our electoral & political processes in an effort to acquire legal favors and/or have the government treat them lightly if they engage in fraud (see, e.g., "Actually, Corporations That Lobby and Make Campaign Contributions Get Special Benefits"). In other words, many American corporations are doing quite well, albeit at the expense of democracy, the middle-class, and the rule-of-law.

We also know that the richest 400 individuals in America have as much wealth as the entire African-American population of the United States. In other words, the super-wealthy are doing quite well, albeit without the job creation we were promised when our government gave them colossal tax cuts.

All this reminds me of a speech FDR gave to Congress on April 29, 1938, where he said:

"...the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power...Among us today a concentration of private power without equal in history is growing...No people, least of all a democratic people, will be content to go without work or to accept some standard of living which obviously and woefully falls short of their capacity to produce. No people, least of all a people with our traditions of personal liberty, will endure the slow erosion of opportunity for the common man, the oppressive sense of helplessness under the domination of a few, which are overshadowing our whole economic life...We must find practical controls over blind economic forces as well as over blindly selfish men."

For awhile, we heeded FDR's words. For example, we kept a close eye on monopolies, implemented common sense regulations on big financial institutions, kept taxes fairly high on the super-wealthy, and had strong union participation. Result? The middle-class grew like never before or since. Over the past 30+ years, however, we've turned away from New Deal policies & principles and have, instead, adopted the philosophies of Ayn Rand (regulations are bad!) and Arthur Laffer (taxes on the wealthy are bad!). Result? Wages have stagnated for decades, the middle-class has recently shrunk, and we've endured one of the worst periods of corporate fraud in American history.

Perhaps, in the not-too-distant future, we will once again listen to FDR's words about the dangers of concentrated power in private hands. And perhaps, on that day, we will once again pick democracy over plutocracy.

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