Whither the 21st Century New Deal?

16 August 2021


Review of Eric Rauchway, Why the New Deal Matters (Yale, 2021).


The ongoing pandemic is the worst crisis the United States has endured since World War II. Over 600,000 people have died, and there is practically no part of social or political life that has gone unaffected. And yet the American state’s response to this crisis has been, to put it mildly, incoherent. COVID vaccines have been readily available for nearly six months, the result of an unprecedented mobilization of public and private resources. But just this past week, Florida has posted a record number of new COVID cases, all while Governor Mike DeSantis is pushing for schools to reopen in the fall with no mask or vaccine mandates for students or teachers. COVID has laid bare just how poorly our governing institutions are functioning.


This was not always the case. In the 1930s, the United States was the laboratory for a remarkable experiment in governance and democracy: the New Deal. The administration of Franklin D. Roosevelt did not simply build state capacity, but made judicious and democratic use of that power to improve the lives of American citizens. The New Deal matters, historian Eric Rauchway writes in his new book, appropriately enough titled Why the New Deal Matters, because it is “a message for Americans from the past: democracy in the United States, flawed and compromised as it was, proved that it could emerge from a severe crisis not only intact but stronger.”




Rauchway has written extensively about the New Deal, and Why The New Deal Matters is essentially a series of essays building on his earlier work with the aim of making the New Deal relevant to contemporary audiences. It’s not a hard lift; Bernie Sanders ran an essentially Rooseveltian campaign for president in 2016 and 2020, and while he was unsuccessful in securing the Democratic nomination, his political appeal, especially among young people, has underscored the political relevance and appeal of the New Deal. Alexandria Ocasio-Cortez and Ed Markey, both of whom have enjoyed broad support from the Sanders left, co-sponsored a resolution—as Rauchway notes—calling for a “Green New Deal” to combat the existential threat of climate change. Even Joe Biden, the flagbearer of the moderate wing of the Democratic Party, talked about the New Deal on the campaign trail, and while the first six months of his presidency have been frustrating and disappointing to leftists and left-liberals, the Biden administration has advocated for massive increases in federal spending. Biden also reportedly decided to run for president after the Unite the Right rally in Charlottesville, seeing Donald Trump’s support of the militant, fascistic far right as an existential threat.


Rauchway makes it clear in Why The New Deal Matters that, for Roosevelt and his advisors, the New Deal was from its very inception an anti-fascist program. An entire chapter is dedicated to the Bonus Army march of 1932, where a group of some 40,000 World War I veterans and their families congregated in Washington, D.C. demanding the immediate payment of a promised lump-sum bonus for their military service due in 1945. President Herbert Hoover believed that the destitute marchers were communists. Some of the Bonus Army marchers were in fact quite the opposite; Walter Waters, the “commander” of the Bonus Army, was described by some of his own fellow marchers as a fascist; he even proposed turning the Bonus Army into a Khaki Shirt organization on the model of Mussolini’s Blackshirts or Hitler’s Brownshirts. While Hoover dithered on the economic crisis, rejecting out of hand relief for the unemployed, the ranks of the Bonus Army swelled. But when the violence did break out, it did not come from the marchers, but rather from the state itself. On July 28, 1932, Hoover instructed the Army chief of staff, Douglas MacArthur, to clear the Bonus Army from the capital. As the violence intensified in the streets of Washington—the sounds and smells of the fighting were discernable from Lafayette Square in front of the White House to the steps of the U.S. Capitol building—Hoover had second thoughts and ordered MacArthur to ease off; MacArthur, who was also convinced the Bonus Army was rife with communists, ignored the order. Hoover never publicly admitted the truth about what happened that day: that he had dangerously escalated the situation by ordering the Army into the capital and then lost control of his generals. The attack on the Bonus Army, according to Rauchway, was a “lawless act of organized violence against unarmed civilians by an army acting outside government authority, a real—if brief—coup committed for the purpose of inflicting violence on American citizens who suffered, as millions did, from joblessness and hunger.”


Hoover was defeated in a landslide by Franklin D. Roosevelt in November 1932. As Rauchway persuasively demonstrated in his earlier book Winter War, Roosevelt campaigned on an explicit platform of vigorous and active government intervention to ameliorate the economic crisis, but also as a defense of democracy. “We do not want dictators in the United States,” Roosevelt campaign literature read. Roosevelt told his aides after the Bonus Army incident that Douglas MacArthur was the “most dangerous man in the country,” and his actions on July 28 had won him many admirers among the “Nazi-minded” Americans. Although Roosevelt did not support the payment of the bonus, he repeatedly stressed on the campaign trail that “I oppose shooting veterans who ask for the bonus.” When marchers returned to Washington after Roosevelt’s inauguration, they were met not with tear gas but by First Lady Eleanor Roosevelt; most marchers accepted jobs with the newly-established Civilian Conservation Corps rather than continue to agitate for the bonus. Even Walter Waters, the would-be leader of the Khaki Shirt movement, declared that such an organization, in 1933, was now unnecessary.


Historians have debated for decades about the seriousness of the fascist threat in America in the 1930s—the late Leo Ribuffo famously concluded that there was never much prospect of either a fascist or a communist movement ever seizing power in America during the Depression decade, because rather than search for scapegoats most Americans simply blamed themselves for their problems. Rauchway’s account is an effective rebuttal, in no small part because it extends the analysis away from relatively small and ineffectual organizations like William Dudley Pelley’s Silver Shirts and focuses on the military. Marine Major General Smedley Butler, who was the de facto dictator of Haiti during the American military occupation of that country in the 1910s and is the subject of a forthcoming biography by Jonathan Katz, was approached by a group of Wall Street financiers, backed by the American Legion, to lead a fascist coup against Roosevelt in 1934; Butler, whose politics had shifted dramatically leftward since his days of toppling governments for the United Fruit Company, finked to Congress. The plan fell apart. But the Business Plot, along with MacArthur’s antics two years earlier, underscores just how real the danger on the right actually was—a point which obviously resonates six months after the storming of the U.S. Capitol by an angry mob of Trump supporters, many of whom were former or active-duty military and law enforcement.


Rauchway’s book, while explicitly a defense of the New Deal, also seriously engages with its shortcomings. Approximately two-thirds of Why the New Deal Matters is dedicated to the New Deal’s economic development agenda. There is a chapter on the Tennessee Valley Authority, which Rauchway credits with kickstarting the economic development of one of the most impoverished areas of the country. But Rauchway also points out that the end result of the work of the Tennessee Valley Authority planners—who, like their counterparts in the Soviet Union had an almost messianic faith in the ability of planning and technology to transform the countryside—was far from their utopian vision. The TVA was supposed to be a prototype for an all-encompassing regional development authority; today the TVA is almost exclusively a public electric utility; a valuable thing to be sure, particularly in the neoliberal age, but not an alternative way of life to the vicissitudes of the market.


The lofty ambitions of New Deal administrators to build an alternative kind of modern society, neither driven by the market nor by an authoritarian state—and their inability to actually do so—is a recurrent theme throughout the book. Another chapter tackles the relationship between John Collier, the commissioner for the Bureau of Indian Affairs, and the Navajo Nation. New Deal programs injected a considerable degree of capital into the Navajo Nation—the Agricultural Adjustment Administration provided nearly $1 million to promote cattle ranching among the Navajo, and another $1 million was allotted to construct new public buildings at Window Rock, the Navajo Nation’s seat of government. A genuine, iterative partnership between local Navajo and the federal government seemed possible; the architecture at Window Rock was a mixture of modern features—indoor plumbing, electricity, etc.—and traditional construction practices and techniques that met the test of local conditions. But there were limits to this collaborative approach; Collier, with his insistence on pressing through a livestock reduction program targeted at sheep and goat herds—in order to combat soil erosion, endemic in the Dust Bowl-era Southwest—over Navajo objections alienated locals. Collier preferred to dictate policy rather than develop it democratically; one delegate from the Navajo pointedly asked during a presentation by Collier on the necessity of reducing grazing herds if the Indians would be able to speak at all. Rauchway concludes that ultimately Collier “dismantled traditional ways of life and set Navajos ruthlessly on the road to a wage economy that looked much like any other in America, only poorer.”


Nowhere is the tension between the New Deal’s lofty antifascist and democratic ambitions and its actual material record more acute than the African American experience of the New Deal. Roosevelt punted on civil rights on the campaign trail in 1932, refused to endorse anti-lynching legislation, and actually lost the black vote in 1932. New Deal programs were specifically designed and administered to exclude black people from benefiting from them. In his chapter on the TVA, Rauchway notes that black workers were discriminated against in hiring practices by TVA officials, and paid less than white workers when they were hired. Black agricultural laborers were excluded from the Social Security program. The Federal Housing Administration and the Home Owner Loan Corporation were the federal agencies most directly responsible for enforcing the color line in American cities through the practice of redlining.


And yet despite the racist record of the New Deal and Roosevelt’s own lack of interest in civil rights, FDR decisively won the black vote in 1936. What explains this paradox? For Rauchway, the answer is straightforward: “If the New Deal’s efforts to assist black Americans were halting and small and always coupled with some slight or setback, they nevertheless existed.” The New Deal disproportionately helped the poor; African Americans were disproportionately the poorest Americans. Still, the core tension between the putatively democratic commitments of the New Deal and the actual practices of the New Deal administrative state were never resolved. J. Saunders Redding visited segregated labor camps in the Tennessee Valley in the mid-1930s and wrote that “democracy’s taking an awful beating on the TVA.”




Rauchway finished Why The New Deal Matters during the COVID-19 pandemic, and it is, to its credit, very much a book of its time. Peppered throughout the text are references to the restrictions and the uncertainty facing Americans in 2020—in his chapter on the Works Progress Administration, Rauchway laments that no one reading his book at the moment will be able to see firsthand the WPA buildings that remain the centerpiece of public life in so many towns and cities across the country. (My elementary school in Saint Paul, Minnesota, was built by the WPA in 1939). And one of the book’s major arguments—that centralized planning, legitimated by a commitment, however imperfect, to democracy, is necessary to resolve the great crises of the 21st century, is well taken, particularly in light of the pandemic.


Whether or not the modern American state is capable of another New Deal is another matter. An FDR-like figure ran for president in 2020; he lost. The Biden administration has backpedaled from an aggressive and comprehensive defense of liberal democracy. A handful of the January 6 insurrectionists have been tried and convicted; their political enablers in the U.S. Congress remain in office, and have helped to kill comprehensive voting rights legislation, surely a necessary bulwark of democracy. Even the fate of the vaunted federal spending bill remains unclear. The New Deal certainly continues to matter, but a new New Deal, the longstanding dream of left-liberalism, remains just that: a dream.


Image credit: Why the New Deal Matters [cover], Yale (2021), Fair Use.


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