Not the Spirit of the New Deal Maimon Schwarzschild

It's already a cliche, among supporters and opponents alike, that Obama and the Democrats are modeling themselves on FDR's New Deal.  There are some similarities (mostly worrisome ones) but there are big differences too.  A crucial difference is that the New Dealers - and liberals and leftists generally in the first half of the twentieth century - really believed that greatly increased government power would be good for growth and would usher in a bigger, stronger, more prosperous economy.  The key word was "planning", and the idea that the "anarchy" of free markets was inefficient and held back prosperity.

Almost no serious person, I think, believes these things today.  It's not that everyone has actually read Hayek - though everyone should - but the fundamental perception has penetrated that millions of minds and entrepreneurs will do better over time than a command and control economy.  And most people have at least some realisation of the "public choice" idea: that the political class will tend to exercise power in its own interest, corruptly in the long run if it can get away with it, and no more disinterestedly or altruistically than anyone else or any other interest group would do.

There are different streams of ideas on today's politcal left than there were in the 1930s.   There is the idea that prosperity and growth are bad: bad for the "planet", hostile to the environment, vulgar, and linked to immoral individualism.  There is the idea that a humbler, poorer, less powerful America would be a good thing.  These are fundamentally pessimistic ideas, pessimistic about America at least: very different from the buoyant and self-confident (if sometimes, or often, misguided) outlook of FDR and the liberals and leftists who made the New Deal (and who went on to fight the Second World War.)

The spirit of the Obama-Pelosi "stimulus", and the conscious atmosphere of corruption and payoff that surrounds it, is consistent with today's negative, if not sour, leftist worldview.  The New Dealers believed they were building a more "scientific" and much more prosperous world.  There was a great deal of genuine idealism among them.  Today's triumphant political class does not seriously imagine that it will promote economic growth and prosperity.  The political class is, at best, ambivalent about whether it even wants such things.  What today's political class wants is a massive transfer of power and money to itself.  This is what the "stimulus", and much else that will follow, is openly intended to do.  If there were a spirit of optimism and generosity and idealism about it, as there was among the New Dealers, there would at least be reason to hope that things wouldn't quickly degenerate into corruption.  It seems to me that there is little such spirit, or none at all, today.

What will be the consequences for America and the rest of the world?  Claudia Rosett puts it well:

Europe — sclerotic, bureaucratized and social-democratized – has for decades enjoyed the protection, inventions and security afforded by its more laissez-faire, strapping, and exuberant cousin across the Pond, the United States. America, with its free markets, its market incentives, and its relatively large private sector, has been the engine of global growth. America’s system, based fundamentally on individual risk and responsibility, has been the great incubator of innovations that have become the staples of the modern age — from medical advances, to computers, to the internet and beyond. Around the world, people have benefited in ways beyond measure.

All that energy poured into progress is likely to fade, as America devolves into a nation of carbon-capped civil servants, tending to a much-shrunken private sector, and a growing line of people on the dole. However high-flying President Obama’s rhetoric, he can’t re-engineer human nature. If you tax and subsidize Americans more, they will — like anyone else – produce and create less. In many realms, there will be fewer gains from trade. In the middle of every transaction will be the taxman, or the government regulator. For the dramatic reshaping on which Obama has embarked, the cost will be paid not only in taxes, but in a pervasive souring of climate (and I am not talking about hocus-pocus with the weather).

In short, where there was America the superpower – with its almost bottomless pockets and limitless drive — there will be a shabbier America, quite likely more self-absorbed. There will be a growing vacuum on the world scene. If, a generation into the post-Soviet New World Order, that shift is already underway, we can now expect it to accelerate. Since World War II, America’s capitalist system has allowed it to stand as a bulwark of democracy, provider of security and font of commerce and creativity for the world. Europe has had America at its back. There is no candidate right now to replace America in that role.

But as Rosett says, there are violent and undemocratic forces around the world eager to replace a poorer, humbler America.  Read the whole thing.

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