A New Deal for Wisconsin

(Wisconsin state seal, image courtesy of Wikipedia.)

Trickle-down economics has not been kind to Wisconsin. For example, since 2000 the middle-class in Wisconsin has shrunk faster than in any other state. And Republican Governor Scott Walker's economic record leaves much to be desired: "The state lags in job growth and its budget faces a shortfall."

It doesn't have to be this way of course. Instead of focusing on campaign cash from out-of-state billionaires, pooh-poohing a minimum wage increase, reducing funding for education, and demonizing unions, Wisconsin politicians could learn a thing or two from the New Deal. Here are some New Deal facts & figures for the Badger State...

Federal Emergency Relief Administration (FERA):

In February of 1935, 2,835 college students in Wisconsin were employed in FERA's College Student Aid Program. This was a program "undertaken in order to enable young persons who would not otherwise have been able to do so to continue their education, and thereby reduce the influx of young workers into the labor market" (recall that during the Great Depression there was a large drop in the demand for labor).

Between 1933 and 1935, FERA granted $77 million to Wisconsin for relief efforts (about $1.3 billion in today's dollars). FERA funds typically went towards cash relief, rural relief projects, and a wide variety of work programs.

(Source: "Final Statistical Report of the Federal Emergency Relief Administration," 1942, pp. 64, 103, and 232)

Civil Works Administration (CWA):

In January of 1934, there were 134,000 Wisconsinites working in the CWA, building or repairing schools, roads, bridges, and more.

(Source: "Analysis of Civil Works Program Statistics," 1939, p. 18)

(A CWA work plaque at Breese Stevens Athletic Field, in Madison, Wisconsin. Photo courtesy of James Steakley and Wikipedia. Used here under the CCA-SA 3.0 Unported License.)

Public Works Administration (PWA):

By 1939, the PWA had contributed $35 million in funding towards 462 infrastructure projects in Wisconsin (not including federal projects). In today's dollars, that's about $596 million.

(Source: "America Builds: The Record of PWA," 1939, p. 284)

Civilian Conservation Corps (CCC):

Between 1933 and 1942, over 75,000 Wisconsin men were employed in the CCC. This included about 64,000 junior and veteran enrollees, 2,000 Indians, and 9,000 staff. Among their many accomplishments were the planting of 265 million trees and the stocking of 517 million fish.

(Source: Perry H. Merrill, "Roosevelt's Forest Army: A History of the Civilian Conservation Corps, 1933-1942," 1981, p. 190)

  (Being in the CCC wasn't just about work. Here, a group of enrollees in Menominie, Wisconsin are learning about auto repair. Photo courtesy of the National Archives and the New Deal Network.)

Public Works of Art Project (PWAP):

Between 1933 and 1934, in Region 10 of the PWAP (Illinois, Wisconsin, and Minnesota), unemployed artists were paid to create 4 bas reliefs, 56 sculptures, 513 oil paintings, and other works of art, for use in public buildings and parks.

(Source: Public Works of Art Project, "Report of the Assistant Secretary of the Treasury to Federal Emergency Relief Administrator, December 8, 1933 - June 30, 1934," 1934, p. 8)

National Youth Administration (NYA):

During academic year 1939-1940, 652 schools and colleges in Wisconsin were participating in the NYA program, employing about 12,600 students each month.

During any given month of fiscal year 1942, there were about 5,500 young Wisconsin men & women in the NYA's out-of-school work program.

(Source: Federal Security Agency - War Manpower Commission, "Final Report of the National Youth Administration, Fiscal Years 1936-1943," 1944, pp. 246-247, and 254)

(Young men and women in the NYA could learn trades to help them earn a living. These two NYA workers are training in Two Rivers, Wisconsin. Photo courtesy of the FDR Presidential Library & Museum and the New Deal Network.)

Post Offices:

During the New Deal era, the U.S Treasury built or expanded Post Office buildings in Wisconsin and commissioned artists to decorate them. See the Living New Deal's Wisconsin pages for examples.

Works Progress Administration (WPA):

Between 1935 and 1943, WPA workers in Wisconsin produced 7 million articles of clothing; served 15.4 million school lunches; created or improved 23,000 miles of roads; built or improved 1,000 bridges; installed or improved 19,000 culverts; engaged in 600 projects to build, repair, or improve schools; created or improved 452 parks; installed 400 miles of new water lines; constructed 110,000 linear feet of new airport & airfield runway; and more.

(Source: "Final Report on the WPA Program, 1935-43," 1946, pp. 134-136)

(These WPA musicians performed around the Prentice, Wisconsin area. Photo courtesy of the National Archives and the New Deal Network.)

Ayn Rand and the New Deal

(Ayn Rand. Photo courtesy of Wikipedia.)

The New Deal protected the bank deposits of Americans, provided electric power to rural areas, created or improved thousands of parks that we still use today, modernized our infrastructure, guarded against fraud on Wall Street, gave jobs to workers who had been cast aside by big business, planted trees in areas that had been wiped out by the logging industry, provided food to malnourished children, lessened the hardships of old-age poverty, and much more.

In 1936, Ayn Rand wrote, "My feeling for the New Deal is growing colder and colder. In fact, it's growing so cold that it's coming to the boiling point of hatred" (Jennifer Burns, Goddess of the Market: Ayn Rand and the American Right, New York: Oxford University Press, 2009, p. 38).   

Rand's feelings were more sympathetic towards William Hickman, a man who abducted, murdered, and mutilated a 12-year-old girl in 1927. Rand was dismayed by the public's anger at Hickman: "This case is not moral indignation at a terrible crime. It is the mob's murderous desire to revenge its hurt vanity against the man who dared to be alone" (Ibid. at p. 25). 

Ayn Rand, perhaps more than any other person, is responsible for the political right's philosophy that government should not help the less fortunate. Her books have sold by the millions, have been made into movies, and Rand herself "has been the ultimate gateway drug to life on the right" (Ibid. at p. 4). Is it any wonder, now that they have political power all across the country, that the political right is protecting millionaires & billionaires from increased taxation while, at the same time, they are forcing K-12 schools to shut down, closing homeless shelters, cutting off financial assistance for indigent funerals, denying Medicaid coverage to low-income workers, and calling poor Americans who receive food assistance "lazy pigs" and "wild animals"?

Ultimately, of course, it's up to us to decide who will govern us and who will create the public policies that shape our culture. If we keep voting for politicians who follow the Ayn Rand vision for our nation (or if we don't vote at all), then shame on us. As scientist Neil deGrasse Tyson recently said, "I don’t blame the politicians for a damn thing because we vote for the politicians. I blame the electorate."

I blame both. And I hope that some future generation of Americans will choose the New Deal path over the "Virtue of Selfishness" path - because the latter has unsettled our nation with extreme income & wealth inequality, an enormous national debt, a world-leading prison population, stagnant wages, unrestrained usury, crushing student loan debt, regressive taxation at the state & local level, racial tension, hatred of the poor, and just about every other type of negative cultural phenomenon you can imagine.   

What happened to our New Deal SEC?

(William Douglas (middle) was the longest-serving U.S. Supreme Court Justice in American history, and an avid environmentalist. Many might not know that he was also chair of the Securities & Exchange Commission (SEC) from 1937-1939. In the photo above, Douglas oversees the swearing in of a new SEC member. Photo courtesy of the Library of Congress Prints and Photographs Division.)

     

Yesterday, we learned that, "Senate Democrats are losing patience with the Securities and Exchange Commission over the agency's failure to implement a new CEO pay rule." In 2010, Congress required that the SEC make a rule that "would mandate that companies publicly disclose the ratio of their CEO's pay to the median earnings of workers at the firm." This congressional action was part of the supposed Wall Street reform (if you recall, millionaire CEOs were getting gargantuan bonuses even as the economy around them fell apart, workers lost their jobs, people lost their homes, etc., etc.). Why is the SEC delaying the rule? Well, maybe because "Corporate executives from dozens of different industries have pressured the SEC to delay the rule." (See, "Senate Democrats Are Getting Fed Up With The SEC's Delay On CEO Pay Rule," Huffington Post, April 6, 2015)

This isn't the first sign that the SEC has been commandeered by Wall Street.

When James Kidney, a well-respected lawyer at the SEC, retired he said the SEC had become "an agency that polices the broken windows on the street level and rarely goes to the penthouse floors. On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening" ("SEC Goldman Lawyer Says Agency Too Timid on Wall Street Misdeeds," Bloomberg, April 8, 2014).

When the SEC has gone after big financial institutions for securities fraud, they often reach settlements that allow the institutions to avoid admissions of wrongdoing. This helps to keep things hush-hush, so the public will be kept in the dark as to just how bad the actions of our big financial institutions really are. When the SEC brought such a settlement to U.S. District Court Judge Ned Rakoff in 2011, for review, Rakoff rejected the settlement, writing:

"...in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers. Even in our nation, apologists for suppressing or obscuring the truth may always be found. But the SEC, of all agencies, has a duty, inherent in its statutory mission, to see that the truth emerges; and if it fails to do so, this court must not, in the name of deference or convenience, grant judicial enforcement to the agency's contrivances."

  (SEC Chairman William Douglas (at the head of the table) holds a press conference in 1937. Photo courtesy of the Library of Congress Prints and Photographs Division.)

When New Deal policymakers created and ran the SEC in 1930s they were in no mood to play footsie with Wall Street. For example, when a big wig lawyer from Wall Street, William Harding Jackson, spoke to SEC Chairman William Douglas, in an attempt to weaken new rules, the following exchange occurred:

Jackson: "Have you read our proposed statement?"

Douglas: "The SEC has read it, and it is not satisfactory. The negotiations are off."

Jackson: "Well, I suppose you'll go ahead with your own program?"

Douglas: "You're damned right I will."

Jackson: "When you take over the Exchange, I hope you'll remember we've been in business one hundred and fifty years. There may be some things that you will like to ask us."

Douglas: "There is one thing I'd like to ask."

Jackson: "What is it?"

Douglas: "Where do you keep the paper and pencils?"

(From Michael Hiltzik, The New Deal: A Modern History, New York: Simon & Schuster, Inc., 2011, pp. 409-410)

Unfortunately, New Deal-type policymakers are few and far between today. Throw in an apathetic electorate, and you have the recipe for continued greed, corruption, and crime on Wall Street. And this is why Jaime Dimon, CEO of J.P. Morgan Chase, can smile at a U.S. Senator and say, "So hit me with a fine. We can afford it" ("Guess What Happened When JPMorgan's CEO Visited Elizabeth Warren's Office," Huffington Post, March 31, 2015).

The New Deal created the SEC to be tough on the misdeeds of Wall Street, for the benefit of investors and also for the benefit of the broader public. But today, one has to wonder: Who is the SEC working for?

The Reverse New Deal: A willing embrace of regressive taxation

(At Griffith Stadium in Washington, D.C., President Roosevelt throws the ceremonial first pitch for a game between the Washington Senators and the Boston Red Sox, 1934. Photo courtesy of the FDR Presidential Library & Museum.)

Sales taxes are highly regressive taxes. The lower your income, the greater your burden. For example, suppose you and Bill Gates both went to a store and bought the same dish washing machine for $500, and paid a 5% sales tax. The $25 sales tax that you paid required a higher percentage of your income to satisfy than it did of of Bill Gates' income. Indeed, to Bill Gates, the $25 is nothing more than a tiny fraction of a penny. But to you, the $25 could fill up your gas tank, buy a new pair of jeans, help pay for a family dinner, and so on. This is the nature of regressive taxation.

This fundamental unfairness of the sales tax caused President Franklin Roosevelt to shun it time and time again, in favor of more progressive business and income taxes. As historian Joseph J. Thorndike highlights, even as war escalated, "Roosevelt never wavered...Roosevelt came out firmly against the sales tax in all its forms. Time and again, when asked by reporters to reconsider his position, the president stood firm" (Their Fair Share: Taxing the Rich in the Age of FDR," Washington, DC: The Urban Institute Press, 2013, p. 240).

The favoring of progressive taxation over regressive taxation was a consistent theme in the FDR Administration. They weren't always successful, but they tried to adhere to that principle. FDR believed that the wealthy should pay more, out of a matter of fairness (i.e., their greater ability to bear the burden).

   (Republican Governor of Kansas, Sam Brownback. Photo courtesy of Wikipedia.)

My, oh my, how things have changed under Republican leadership. In contrast to FDR, Republican and Tea Party politicians all across the country are seeking to lower the tax burden on the super-wealthy, and raise it on the middle-class and poor. And the most remarkable thing of all, is that millions of middle-class and poor Americans are in agreement - as evidenced by their electing and re-electing of these politicians.

Governor Sam Brownback of Kansas recently promoted regressive taxation: "I think over time I would like to see us move toward a consumption basket of taxes. Not the property tax — leave that alone — but move more toward consumption set of taxes to overall fund the government." Indeed, Brownback and his fellow "conservative" legislators have already begun the process, with a proposal to raise the tax on a pack of cigarettes from 79 cents to $2.29. Their ultimate goal is "eliminating the income tax," so that the tax burden will shift more and more towards the middle-class & poor - in the form of higher sales & consumption taxes, higher road & bridge tolls, higher DMV fees, more traffic fines, etc. (See "Lawmakers tackle education, social issues but budget remains," The Topeka Capital-Journal, April 4, 2015)

Similar to the Kansas situation, a conservative politician and radio show host in Los Angeles has called for an increase in the sales tax to pay for the repair of roads, bridges, sidewalks, and so on, after his conservative colleagues in Congress have spent decades cutting taxes on the wealthy (thereby reducing the federal government's willingness and ability to help improve our nation's infrastructure). (See "Infrastructure Cracks as Los Angeles Defers Repairs," New York Times, September 1, 2014)

If you're interested in seeing other ways that Republican and Tea Party politicians are siphoning more cash from your wallet, see my blog post, "Ten Ways The Political Right Is Vacuuming Money Out Of Your Wallet With Their Trickle-Down Economics. Welcome To "The Great Right-Wing Revenue Switcheroo."

Welcome to the Reverse New Deal: A willing embrace of regressive taxation.

Easter Sunday Dust Storm

Above: A dust storm barreling through Baca County, Colorado on Easter Sunday, 1935. In response to dust storms like this, as well as other erosion events, New Deal policymakers created the Soil Conservation Service. Photo courtesy of the FDR Presidential Library and Museum.)

WPA Art - Alaska

The following images are from the 1939 WPA publication, A Guide to Alaska: Last American Frontier and, with respect to the paintings, probably only give a hint as to the fine quality of the actual art. I don't know if any of the paintings still exist. If you have any information, please let me know (wpatoday@gmail.com).

Click on any image to enlarge.

(Inside cover of the book.)

("Matanuska Valley," by WPA artist Merlin Pollock.)

("Glacier," by WPA artist F. Lo Pinto.)

("Spawning Creek," by F. Lo Pinto.)

New Deal Stamps

(President Roosevelt and his stamp collection. Photo courtesy of the Library of Congress Prints and Photographs Division.)

A while back I did some blogs about postage stamps related to, or reminiscent of, the New Deal. I recently found another one--the Rural Electrification Administration--so I thought I would show all the stamps again here. (All images are scans from personal collection.)