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The Moral of the Story

April 9, 2010

WASHINGTON -- The session, here at the annual meeting of the Organization of American Historians, was entitled “The Uses and Abuses of New Deal History” – but there was no question that those on the panel were more concerned with the latter. Their general tone, which seemed to be shared by those in the audience, was one of frustration; of anger at Republican lawmakers -- who, according to the panelists, are determined to repeat the same errors that brought about the Great Depression -- and dismay that so many Americans seem to be amenable to the idea.

Panelist Robert S. McElvaine, who is Elizabeth Chisholm Professor of Arts & Letters and chair of the department of history at Millsaps College, focused on the argument – made, he said, by many conservatives today – that the failure of the New Deal to end the Great Depression shows that government spending isn’t the way to revive a slumping economy. “The most important thing to realize,” said McElvaine, “is that so-called conservatives – I prefer to call them ‘regressives’ ” – have long been trying to “restore the conditions that created the Great Depression in the first place.”

“These are people of faith,” McElvaine continued, “and their basic faith is in the market as God.”

McElvaine showed graphs illustrating the share of overall income going to the richest Americans over the past century. During the Great Depression, he said, that share dropped dramatically, but it rose higher and higher during the last several decades; the income share of the richest 0.01 percent of Americans, he pointed out, was even higher in 2007 than in 1928.

President Obama, McElvaine said, has taken “flak for saying we need to spread the wealth a little, but that’s true, not just in a moral sense but in an economic sense.” People have got to have money to buy things, he said, in order to keep the economy strong. (Social Darwinism, he added, “should be called ‘antisocial Darwinism.’ ”)

And government spending, McElvaine argued, is crucial to reviving the still-anemic economy – but “what regressives are arguing in favor of is to repeat the mistakes that Roosevelt made when he worried about balancing budgets, or too large a deficit, and cut back spending.”

Though other panelists approached the theme from different tacks, each echoed some of the vexation expressed by McElvaine. Jeffrey Brooks, a professor of history at Johns Hopkins University who specializes in Russia and the Cold War, discussed how Roosevelt was able to “draw on the rhetoric of class war” to argue for his reforms. But once the Cold War began, said Brooks, “the rhetoric of anti-capitalism became unacceptable,” and as a result, President Obama “has had difficulty finding a rhetoric to use against the opponents of social reform.”

The morning's most pointed anecdote was related by Don Ritchie, historian in the U.S. Senate Historical Office. While Ritchie’s talk, which focused mainly on the relationship between President Roosevelt and Congress, was the least partisan of any at the session, the last part of his speech articulated perfectly the overall mood of the panel.

In 1987, Ritchie said, the U.S. Senate was considering the repeal of the Glass-Steagall Act – the part of the Banking Act of 1933 that separated commercial from investment banking by prohibiting bank holding companies from owning other financial companies.

The Senate began by consulting a group of historians, who explained that Carter Glass had not been “a New Dealer,” but instead one of the most conservative members of the Democratic Party in 1933. But Glass was “so appalled” by the information revealed in the Pecora Investigation – which brought to light the banking practices that led to the 1929 crash – that he felt it was necessary “to save the banks from themselves.”

Though the repeal of Glass-Steagall was filibustered in 1987, said Ritchie, “what historians had to advise was totally ignored by the policy makers” – and the repeal finally did pass in 1999.

Now, “of course we know some of the consequences of allowing the banks back into the stock markets” – consequences that could have been avoided, Ritchie implied, if lawmakers had listened to what historians had to say.

The idea that New Deal history offers a very specific set of lessons for our own time came up again during the Q&A period, when one attendee – Jennifer Ross-Nazzal, a historian with the NASA Johnson Space Center who also works as an adjunct instructor for the University of Maryland University College – asked the panelists about how to handle “students who are attracted to the arguments of the teabaggers.”

“Basically I try to present facts,” McElvaine said. Still, he acknowledged, “to some people, facts are irrelevant.”

 

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