Here’s the premise: Massive infrastructure and spending bills generally do not help ordinary people as much as they facilitate the transfer of wealth from average incomes, through corporate entities and into the hands of the wealthy. which exacerbates rather than relieves economic and social ills.
After two terms under Franklin Delano Roosevelt and massive New Deal spending, FDR’s treasury secretary, Henry Morgenthau, said to the House Ways and Means Commitee in 1939, “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises… I say after eight years of this Administration we have just as much unemployment as when we started… And an enormous debt to boot!”
Roosevelt has been almost deified by popular culture and official narrative. Politics looks at the Roosevelt years at a glance and sees massive government intervention for the common good, the end of the Depression and victory in war, followed by some of the most rapid industrial and economic growth that the planet has ever seen. The extraordinary measures enacted during the New Deal years have been with us so long that society has forgotten how controversial they were and how vigorously contested. Roosevelt’s New Deal has become part of the dogma which justifies government expansion.
Personally I think there is much to admire about FDR. There is no doubt that programs like the Civilian Conservation Corps and the WPA helped lift people out of poverty, but a wider focus on the cumulative results of Roosevelt’s many programs reveals a much more complicated story than a hero administration intent on rescuing the common citizen. As is the case with most government spending, some companies prospered as favored recipients of government contracts, and they gobbled up scores of smaller companies which were not politically connected. Economic conditions did not improve until after WWII.
Whenever we talk about massive government intervention, whether it’s Roosevelt’s New Deal, Johnson’s Great Society, Reagan’s massive cold war military buildup, Bush’s budget deficits and expansion of the regulatory state, Obama’s disappearing 800 billion “Shovel Ready” dollars, Trump’s 39% increase of the National Debt or Biden’s proposed multi-trillion dollar infrastructure program, we can find similarities.
When government spends big, the bulk of the money is absorbed long before it reaches the citizen. Consider the anecdotal evidence of our recent $3 trillion stimulus bill. Had it been evenly distributed in the spirit of the “equitable outcomes” philosophy trending on college campuses today, every family in the US would have received over $40k. Instead we got $1400 of conjured pixel money. Where did the rest of the money go?
Let’s take a closer look at the New Deal dogma, but from a contrarian perspective. It has been argued that it was WWII and not the New Deal which rescued the American economy from The Great Depression. I think that is also incorrect. Economic indicators were dire during the war, but after WWII, America had the only economic and manufacturing infrastructure left standing, and we were without competition for decades.
History shows us that massive government intervention is a tail which cannot be pinned exclusively on a donkey or an elephant (a pig tail would be closer to the truth). They are more a symptom of oligarchy attempting to protect political power from economic or social collapse. Tragically, too often war has functioned as an effective way of covering the tracks of political and economic mistakes. Mistakes which lead to economic collapse are usually followed by social collapse, and if that doesn’t directly lead to war, it certainly makes war more likely.
In conclusion, while some are prepared to celebrate Biden’s new spending spree, I’m more inclined to clutch my wallet, save my seeds and horde toilet paper. Change my mind.