Exclusive Interview with Michael Hiltzik Author of The New Deal: A Modern History

In an exclusive interview on The Hutchinson Report Newsmaker Hour with host Earl Ofari Hutchinson on KTYM 1460 AM Los Angeles on September 23, Michael Hiltzik Author of The New Deal: A Modern History

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EOH:   Why is the New Deal relevant today?

MH:      We live in a world that was created by the New Deal.  Social Security, unemployment insurance, the whole notion that the federal government has an accepted responsibility for the welfare of all its people.  This is a notion that was created under the New Deal under Franklin Roosevelt.  It’s more relevant today than it has been for 80 years because of the economic conditions we now live in.

EOH:   James Roosevelt Jr., grandson of FDR, stated that Social Security was not broke. 

MH:      Social Security is the cornerstone of the New Deal.  The program is not in trouble, but may need very minor tweaks.  It has been under attack since its inception, as has been the rest of the New Deal.  It requires concerted defense.  These are important programs.  Today 54 million Americans benefit from Social Security and more than half these benefits are 75% to 90% of their income.  It has served Americans over the years and it really needs to be defended.

EOH:   Do you think FDR’s shadow hangs over the current debates?

MH:      That’s true.  It tells you just how much of a transformative figure FDR was and how much of a transformative program the New Deal was.  It changed everything we think about in terms of what the Government owes its citizens and how much it should help.  Before Roosevelt was elected, the idea was that the federal government was responsible, maybe, for national defense and a few other things.  That’s what kept Hoover from addressing the depression when it started in 1929.  Roosevelt said we have all these tools in federal law and the constitution and we have to use them.  Government has a responsibility to act positively.  Inaction is negative action and helps a few incumbents and a few wealthy business owners, not everybody.

EOH:   Roosevelt and his team redefined an activist role of government.

MH:      One of the goals in writing the book was to re-establish the facts about the New Deal because they have been forgotten or covered over with ideology and misunderstanding.  It wasn’t easy for FDR.  There’s this idea he could have his way in Congress; they got out of his way and did anything he wanted.  That was true maybe for about 3 months.  But opposition arose quickly and not only from Republicans, but a very strong conservative block in the Democratic party, mostly the “Solid South”.  They were political conservatives, and the toughest opposition.

EOH:   What is the greatest threat to the New Deal programs and where are they coming from?

MH:      The greatest threat is to Social Security; it’s the largest program of the New Deal.  I think the threats come from the ideological right, as always.  What really bothers conservatives about the New Deal and its programs is the extent to which it injects federal government into industry and social relationships.  A lot of these conservatives want to turn back the clock prior to 1927 when the watchword was “you’re on your own.”  Because of 1929 we found it was a 19^th century notion and not equal to the challenges of the 20^th century, much less the 21^st century.  The idea persists and has never really changed.

EOH:   Would you walk us through the programs of the new deal that still have impact on American society?

MH:      The key elements of the New Deal were aimed at helping America recover from the “Great Depression”.  You had a lot of work relief programs.  The unemployment rate was in the neighborhood of 25%, which may have been a conservative estimate.  An important element was to put the unemployed to work by creating public works projects, civic works projects and the roads, airports, schools, and civic buildings; creations of the New Deal that still persist.  The New Deal is all around you because of Roosevelt’s determination to put people to work.  The other element was to create a safety net for the future.  It strengthened unemployment insurance by making it a partially federal program, and created Social Security to help the elderly and disabled and their spouses and dependents. 

EOH:   Talk a little about the role of banks and the financial industry and how the New Deal impacted on that.

MH:      There is no question the crash of 1929 that brought on the Great Depression was caused by the financial industry.  Banks were making unwise and risky investments in securities; the same thing we saw a few years ago when the banking system once again crashed.  Banks were not taking care of depositor’s money, investing unwisely, and when the bank failed, all money was lost with no way to get it back.  When the Roosevelt administration came in, one of their points was to address these abuses in banking and stock and bond trading, which they did within days of coming into office, issuing new banking regulations that did not allow them to make unwise investments, and enacting deposit insurance.  If your money was in the bank, even if it failed you would get that money back.  All the banks in the country had to contribute through insurance premiums to a fund that protects their depositors.  These programs are more important today than in the 1930’s.

EOH:   What happened to FDR’s National Healthcare plan?

MH:      When Social Security was first conceived, it was to encompass a lot more than old age and unemployment insurance.  Roosevelt also wanted a system of health insurance.  He understood protecting people’s health with proper medical care was important to the health of the country.  It fell by the wayside.  It was lower down on the list and by the time Roosevelt was ready to get back to it, 1939-1940, there were other concerns; war clouds over Europe and the country looked toward foreign affairs more than domestic.  When Truman came into office it went back on the table, but he wasn’t able to do it either.

EOH:   It’s ironic that Ronald Reagan was a warm supporter of FDR.

MH:      It’s important to note that under Reagan, Social Security faced a genuine fiscal crisis and managed to protect Social Security by instituting several changes that made it stronger for decades to come.  I think when you talk about Reagan’s view of FDR you touch on something important.  For decades after the Roosevelt Administration FDR was a hero to all Americans, Republicans and Democrats.  Not only for what he achieved in domestic policy, but as a war-time president.  He was everybody’s President.  Only recently do you see these concerted attacks and misrepresenting attacks on FDR and his legacy.

EOH:   What is the main lesson for today from the New Deal of the 1930’s?

MH:      The main lesson here in America is that we have a shared responsibility for each other and if we don’t accept that responsibility, the country fails and we end up in depression and recession, and everybody suffers.  But if we maintain the sense of shared responsibility, everybody profits.  It makes the country stronger, creates jobs, creates wealth, and the wealth is spread to everybody.  The beating heart of the New Deal is the sense of shared responsibility, and we tend to forget it, but forget it at our own peril.  We have to remember that’s what helps us get out of crisis time and time again.