Saturday, January 29, 2005

That Man

Daniel Gross offers a concise and compelling defense of the New Deal in the wake of its continued assault by the GOP:

The theory that new taxes and regulation would inevitably hamper economic growth and destroy America exerted a powerful hold on the minds of the business establishment and the economic right in the 1930s—just as it does today. FDR's proposals seemed to fly in the basic everything these experts knew about how the economy works. In particular, FDR upended the hallowed equation: taxes and regulation equals tyranny and depression.

But a funny thing happened on the road to serfdom. FDR may have gone too far on occasion. He was great, not perfect. And the consumer-based economy that defines our age emerged only after World War II. But the economy did come back to life. Gross domestic product rose 90 percent between 1933 and 1941. Far from turning the United States into a Western version of the Soviet Union or Nazi Germany, the New Deal allowed the United States to function as the world's bulwark against both. The institutions that stood at the heart of the American experiment—representative democracy, the separation of powers, a system of managerial capitalism, liquid capital markets—survived in a world gone mad.

It's difficult to discern the short-term political gain for Republicans to try to dismantle Social Security now. So the payoff must be more psychological or intellectual. Now that they indisputably control all three branches of government, Republicans finally have the opportunity to slay some of the liberal demons that have been bedeviling them for so long.

The point is not that we shouldn't reform, modernize or jettison many long-standing government programs and regulations. Rather, it's that we should be mindful of the historic forces that gave birth to the economic and political systems we have today. The United States avoided the malevolent ideologies that afflicted much of the rest of the world during the 20th century because it had a political system that is dynamic and responsive to the needs of the day, not to any specific dogma.


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