Classic FDR

Franklin Roosevelt mocks Republicans that say they will take care of Social Security, unemployment and foreclosure without having to pay for it in tax increases. If we only had a president who would speak to the American people in the same manner.

Quote of the Day

"It was never intended as a retirement program. It was set up in '37 and '38 to take care of people who were in distress—ditch diggers, wage earners—it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That's why they set retirement age at 65."

Alan Simpson, on Social Security.

Simpson is wrong. Franklin Delano Roosevelt intended for Social Security to protect Americans from "poverty-ridden old age."

"We can never insure one-hundred percent of the population against one-hundred percent of the hazards and vicissitudes of life. But we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age. This law, too, represents a cornerstone in a structure which is being built, but is by no means complete.... It is...a law that will take care of human needs and at the same time provide for the United States an economic structure of vastly greater soundness."

FDR designed Social Security so that Republicans could not repeal it. Unlike Obama mandating Americans buying private health insurance. FDR did a more painless thing by making it part of the tax system. Over the course of time people would be used to the Social Security tax. Under Obama's health care reform, Americans can look forward to states allowing health insurers to increase insurance rates.

FDR in a private conversation on Social Security.

“I guess you’re right on the economics. They are politics all the way through. We put those pay roll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.”

Why Alan Grayson is Right on a Federal Jobs Program

Alan Grayson will not go quietly into the night. Grayson makes an argument that instead of the federal governmenmt losing $100 billion-a-year by extending the Bush tax cuts for top earners. The $100 billion could be used for a jobs program. Franklin Delano Roosevelt's jobs program was able to put 4 million people to work in two months. Obama's stimulus idea of throwing money at the private sector was the economic equivalent. Obama is a neoliberal. He wanted money thrown at private contractors for the same reason public dollars is thrown at the health insurance industry. Obama and other neoliberals eject the achievements of the New Deal and Great Society.

If Obama studied history he would have understood FDR through the Public Works Administration.

The Public Works Administration (PWA) was a New Deal agency in the United States headed by Secretary of the Interior Harold L. Ickes. It was created by the National Industrial Recovery Act in June 1933 in response to the Great Depression. It concentrated on the construction of large-scale public works such as dams and bridges, with the goal of providing employment, stabilizing purchasing power, and contributing to a revival of American industry. Most of the spending came in two waves in 1933-35, and again in 1938. The PWA was closed down in 1939.

It is much easier to have the federal government directly hire people for federal projects. Obama could have politically and factually said that Roosevelt's jobs program was successful. Obama's neoliberal ideology could not support a federal jobs program; in the same manner Obama refused to back universal health care. Obama believes in a hybrid of government and private partnerships. Obama in closer to Jeb Bush than Alan Grayson. Personally, I think Obama is politically cautious and never gave the merits of the stimulus v. a jobs program any thought.

JFK Speech on Social Security

John F. Kennedy paid tribute to Franlin and Eleanor Roosevelt on the 25th aniversary of FDR signing the Social Security Act into law.

Money quote:

For millions of Americans, with that one stroke of a pen, their insecurity and fear were transformed into hope - their poverty and hunger were transformed into a decent life - their economic degradation was transformed into a chance to live out their days in the dignity and peace they had so richly earned.

But the job which Franklin Roosevelt set out to do in 1935 is not yet done. That opening battle was won - but the war against poverty and degraduation is not yet over. And no one realized this more than Franklin Roosevelt himself. "This law," he said, 25 years ago today as he signed it, "represents a cornerstone in a structure which is being built, but which is by no means complete." We are here at Hyde Park today - not merely to commemorate the cornerstone - but to help complete the edifice.

Roosevelt wanted to move forward against poverty with "a strong and active faith." America has a Democratic President and Congress. Yet the current political dialogue is cutting Social Security and entitlements such as Medicaid. Change is not made by letting conservatives drive the policy agenda. That isn't governing by Democrats, whom were giving a clear mandate by the people. Pandering to whims of your political enemies will get Social Security destroyed.

Just a bit of complaining...

Let me preface this rant with yes, I know we need a bailout. But...

President Obama has promised to make government more open, a task which shouldn't be too difficult in the computer age where information can be digitized, indexed, and searched with querying assistants like Google. So for the bailout, Obama has launch "Recovery.gov" for government openness on how the bailout money is spent.

There's one problem, though: Recovery.gov currently contains none of that information, just a message which says "Check back after the passage of the American Recovery and Reinvestment Act to see how and where your tax dollars are spent."

How about I know what the bailout wants to do with my money beforehand?

Afterall, the government stating where the money goes beforehand could help guard the bailout bill against attacks from the seemingly anti-economy right. And not to echo their talking points, but a column about the bailout in today's Wall Street Journal that the starboard side is yammering about does have me worried.

We've looked it over, and even we can't quite believe it. There's $1 billion for Amtrak, the federal railroad that hasn't turned a profit in 40 years; $2 billion for child-care subsidies; $50 million for that great engine of job creation, the National Endowment for the Arts; $400 million for global-warming research and another $2.4 billion for carbon-capture demonstration projects. There's even $650 million on top of the billions already doled out to pay for digital TV conversion coupons.

In selling the plan, President Obama has said this bill will make "dramatic investments to revive our flagging economy." Well, you be the judge. Some $30 billion, or less than 5% of the spending in the bill, is for fixing bridges or other highway projects. There's another $40 billion for broadband and electric grid development, airports and clean water projects that are arguably worthwhile priorities...

Another "stimulus" secret is that some $252 billion is for income-transfer payments -- that is, not investments that arguably help everyone, but cash or benefits to individuals for doing nothing at all. There's $81 billion for Medicaid, $36 billion for expanded unemployment benefits, $20 billion for food stamps, and $83 billion for the earned income credit for people who don't pay income tax. While some of that may be justified to help poorer Americans ride out the recession, they aren't job creators.

On the last point the WSJ makes, they are correct -- Medicare is not a "job creator". Of course, I (as well as anybody else on the left, I imagine) would argue that such social safety nets are need to keep money in American's wallets. One thing that knocked the recession of the late 1920s into the Great Depression is that money dried up -- period. People literally didn't have a cent. And when you don't have money, you can't purchase anything, so the business sector stops producing, more people lose their jobs without government benefits to fall back on, so more people have not a cent... You can see how it snowballs. Indeed, the "safety net" is no joke -- social programs help keep recessions as recessions.

But what's also needed is job creation. As far as I can see, the $30 billion going to infrastructure repairs is the bulk of the act's job creation -- and that's less than 5% of the bill's money!

And why not put the expenses for different programs in their own bill? Why do we have a 647 page recovery bill in the first place chockful of payments to different programs? While some of this I can agree with, like social programs and aid to keep Amtrak running, other items are bullshit. $650 million for digital TV conversion? Uhm, why? I know in the face of an $850 billion bill, $650 million is a drop in the bucket ... But why?

How many other needless payments are there in the bailout? Damned if I know -- Recovery.org certainly doesn't contain that information!

I haven't looked over the actual legislation documents -- congressional bills and such -- that FDR signed during his first 100 days in office, but they look like single acts; single pieces of legislation. The Civil Workers Administration act setup the CWA and what the organization was supposed to do; the Tennessee Valley Authority setup the TVA, etc. There was no lump sum -- one all encompassing recovery act that included these programs. Back during the Great Depression, we had acts meant to create jobs, provide relief, save banks, etc.

And one thing FDR was successful with doing was getting American citizens to trust the government. Indeed before FDR took office, our government provided virtually no economic protections for citizens -- and many Americans liked it that way. They were proud and didn't want the government paying for them. But FDR developed a relationship with Americans through his fireside chats, telling them about the legislation he signed and how it would help them. FDR told it straight and became a trustworthy figure.

With clusterfuck bills like the Orwellian named "American Recovery and Reinvestment Act", Obama is not following FDR's footsteps. I know people will jump on me for attacking Obama after he's only spent a week in office and he hasn't changed the culture in DC yet, but this kind of government looks the same as the government we've seen for the past two decades: complex legislation with hardly any way to check it unless you have the time to read 650 pages of Washingtonian legalese. I expected more openness from the Obama administration -- I expected better. And yeah, his inauguration is not yet a distint memory, but the Obama administration isn't going to earn the trust of the American people if it keeps this up.

Additional reading and differing opinions:

dday @ Hullabloo points out good parts of the bill, including aid to state (so they can balance budgets) and the poor.

Steve Benen points out that some Democrats do not think the bailout bill goes far enough.

Liberal Oasis points out that most economists support the bailout bill. Libertarians from the Cato Institute oppose the bill, but the last time I checked Ron Paul got .02% of the vote, so nobody gives a shit what they think.

Kevin Drum is another blogger who points out the disappointment over funding for infrastructure repairs provided by the bailout. Given that engineers have given the state of America's infrastructure a near-failing grade of D and...

...estimated that it would take a $2.2 trillion investment…over the next five years to bring it into a state of good repair.”

I think there's room for a lot more than merely $30 billion of infrastructure repair. $2.2 trillion is a hell of a lot of jobs.