Chapter Four, Part One
A serial journal of cogent reflections and irreverent insights on the social effects of capitalism and the roots of partisan politics. Pairing prose with HDR photography and “flash points” drawn from current and historical perspectives, the author seeks to recover lost wisdom and courageous action beyond the shouting and noise of today’s headlines.
Chapter Four, Part One:
Out of Depression and War, a
New Vision of Wealth Distribution
Time Range: 1929-1944, 2012
FLASH POINT
Wall Street, October 1929
The Roaring Twenties
collapsed amid a giant speculative bubble. The Dow Jones Industrial Average had
increased fivefold over a six-year period, and there seemed no end in sight. As
if in a giant craps game, players were left with their cash on the table. Who
would have guessed? The wealth benefits of surplus value appeared to have no
real counterforce, or so it seemed. Simultaneously, an investor class now began
to understand that speculation about the future of profit could be more
profitable than creating goods and services. It was this latter lesson that
stuck even as a whole army of economists would be engaged to figure out how to
avoid the next crash. Financial services, particularly the purchase and sale of
commercial paper, would eventually become the new game in town, but not quite
yet.
Freedom from Fear and
Want: State of the Union, 1944
In his final State of the Union speech at the end
of his second term of office, President Franklin D. Roosevelt laid out his thoughts
in a particularly blunt fashion. World War II was nearing an end but still far
from a clear conclusion. He had to rally a country that had been through a
desperate depression and still faced an uncertain future. In this speech, he
laid out the clear connection between security and poverty. He declared: “And
an equally basic essential to peace is a decent standard of living for all
individual men and women and children in all nations. Freedom from fear is
eternally linked with freedom from want.”
Yet
he knew this was not a shared belief. He warned of the insanity of “the
so-called ‘normalcy’ of the 1920’s” and went as far as to call those financial
excesses “the spirit of Fascism here at home.” Acknowledging American sacrifice
that had met the demands of war with courage and stood ready to make further
contributions, he cautioned about a “noisy minority” demanding “special favors
for special groups … who swarm through the lobbies of the Congress and the
cocktail bars of Washington, representing these special groups as opposed to
the basic interests of the nation as a whole.”
Was Roosevelt feeling a little stressed out? No wonder his opposition suggested that he was a Socialist; he was making points remarkably similar to those of Marx at the Red Lion Pub. It was as if he were declaring the danger of lobbying groups shilling for owners of capital, congregating on an imaginary Das Kapital Street right in the heart of the nation’s capital. Could such a K Street ever exist? Would we allow it?
FLASH POINTS
Corporations
That Spent the Most on Lobbying Saw Tax Rates Decline: Report
“The top eight companies that spent the most on federal lobbying from 2007
to 2009 all saw their reported tax rates decrease from 2007 to 2010, according to a new analysis released Monday by the
Sunlight Foundation.
“The report notes that these top eight firms spent
$540 million on lobbying from 2007 to 2009. They filed 332 lobbying reports
that mentioned taxes and named 491 different tax bills in those reports.
“The top eight companies that spent the most on
lobbying were Exxon Mobil, Verizon Communications, General Electric, AT&T,
Altria, Amgen, Northrop Grumman and Boeing. Exxon Mobil spent the most, some
$81.92 million from 2007 to 2009.
“AT&T recorded the largest tax reduction, with
its tax rate falling from 34.0 percent to negative 6.4 percent from 2007 to
2010, or an estimated reduction of more than $7.3 billion.”
— Huffington Post, April 17, 2012
Roosevelt understood that we were entering a
period of increasing interdependence: “In this war, we have been compelled to
learn how interdependent upon each other are all groups and sections of the
population of America.” Not individuals, but groups. This is a critical
distinction, meaning that subgroups of the whole must learn to work toward
common purposes. We must, Roosevelt insisted, be concerned with groups made up
of businesspeople and farmers but also teachers on pensions and soldiers
returning from duty. We are all
interconnected. A high standard of living that leaves behind significant
subpopulations is a dangerous illusion. “We cannot be content,” he declared in
one of the more famous lines from his speech, “no matter how high that general
standard of living may be, if some fraction of our people — whether it be
one-third or one-fifth or one-tenth — is ill-fed, ill-clothed, ill-housed, and
insecure.”
Declaring
the need for an economic bill of
rights, he proclaimed that without them, individual rights of life and liberty
would be compromised and our political
bill of rights would be in jeopardy. Just as today we have, as a matter of
national pride, a system of government that protects free speech, free press,
free worship, trial by jury, freedom from unreasonable searches, and free
elections, Roosevelt hoped that one day we could say the same about an economic
bill of rights. What were some of these rights?
- The right to useful and remunerative work
- The right to earn enough to provide
adequate food and clothing and recreation
- The right of every family to a decent home
- The right of adequate medical care
- The right of adequate protection from the
economic fears of old age, sickness, and unemployment
- The right to a good education
During
Roosevelt’s time in office, he oversaw the creation of the Social Security
System, Securities and Exchange Commission (SEC), Federal Housing
Administration (FHA), and Works Progress Administration (WPA), and the passage
of the Wagner Act, which aided the promotion of unions. If Roosevelt sounded at
all like Marx in his warnings, his actions could not have been more different.
He believed in government’s right to act on behalf of those in need, rather
than have those in need organizing together in revolt. Marx was far more
cynical, if not realistic. He believed that governments would be lackeys
catering to whichever class of owners currently held power. He predicted that governments
would be socially incapable of reining in capitalism’s excesses.
Roosevelt
believed otherwise. He thought government should be willing to be referees in
the capitalist’s game of concentrating wealth in fewer and fewer hands. He
believed it was essential on both moral grounds and in the name of democracy as
a living, viable entity. For Roosevelt, political rights in the United States
and around the world depended on freedom from want as well as fear. If
political and economic rights diverged too greatly, he feared that terrorism,
fundamentalism, and extremism of all forms would split the nation and the
world. Was he just a worrier?
Next Week: Out of Depression and War, a New Vision of
Wealth Distribution, Part Two
The economic bill of rights highlighted a scar in the American psyche.
Roosevelt’s time in office, which included a failed coup d’état directed
against him, deepened the resolve of factions opposed to government
intervention. From this moment on, a
widening split would cleave those who believed in federal intervention from
those who perceived arrogance in a government that addressed questions of
economic distribution.
Conservatives, as opposed
to liberals, proclaimed that people had a right to own what they owned and
government should be on a very short leash. Government intervention should be
held to the strictest criteria for determining what benefited the nation as a
whole, especially in regard to infringing on private property and wealth
accumulation.