Barack Obama on the New Deal, conclusion.

Barack Obama on the New Deal: References from The Audacity of Hope (hard cover edition).

(6) p.153: But it was during the stock market crash of 1929 and the subsequent Depression that the government's vital role in regulating the marketplace became fully apparent. With investor confidence shattered, bank runs threatening the collapse of the financial system, and a downward spiral in consumer demand and business investment, FDR engineered a series of government interventions that arrested further economic contraction. For the next eight years, the New Deal administration experimented with policies to restart the economy, and although not all of these interventions produced their intended results, they did leave behind a regulatory structure that helps limit the risk of economic crisis: a Securities and Exahnge Commission to ensure transparency in the fnancial markets and protect smaller investors from fraud and insider manipulation; FDIC insurance to provide confidence to bank depositors; and countercyclical fiscal and monetary policies, whether in the form of tax cuts, increased liquidity, or direct government spending, to stimulate demand when business and consumers have pulled back from the market.

(7) p.158: Without any clear governing philosophy, the Bush Administration and its congressional allies have responded by pushing the conservative revolution to its logical conclusion -- even lower taxes, even fewer regulations, and an even smaller safety net. But in taking this approach, Republicans are fighting the last war, the war they waged and won in the eighties, while Democrats are forced to fight a rearguard action, defending the New Deal programs of the thirties.

(8) p.177: Certainly the impuse behind the New Deal compact involved a sense of social solidarity: the idea that employers should do right by their workers, and that if fate or miscalculation caused any one of us to stumble, the larger American community would be there to lift us up.

(9) p.178: Rather than use the government to lessen the impact of these trends, the Bush Administration's response has been to encourage them. That's the basic idea behind the Ownership Society: If we free employers of any obligations to their workers and dismantle what's left of the New Deal, government-run social insurance programs, then the magic of the marketplace will take care of the rest. If the guiding philosophy behind the traditional system of social insurance could be described as "We're all in it together," the philosophy behind the Ownership Society seems to be "You're on your own."

The last time we faced an economic transformation as disruptive as the one we face today, FDR led the nation to a new social compact -- a bargain between government, business, and workers that resulted in widespread prosperity and economic security for more than fifty years. For the average American worker, that security rested on three pillars: the ability to find a job that paid enough to support a family and save for emergencies; a package of health and retirement benefits from his employer; and a government safety net -- Social Security, Medicaid and Medicare, unemployment insurance, and to a lesser extent federal bankruptcy and pension protections -- that could cushion the fall of those who suffered setbacks in their lives.

Certainly the impuse behind the New Deal compact involved a sense of social solidarity: the idea that employers should do right by their workers, and that if fate or miscalculation caused any one of us to stumble, the larger American community would be there to lift us up.

But this compact also rested on an understanding that a system of sharing risks and rewards can actually improve the workings of the market. FDR understood that decent wages and benefits for workers could create the middle-class base of consumers that would stabilize the U.S. economy and drive its expansion. And FDR recognized that we would all be more likely to take risks in our lives -- to change jobs or start new businesses or welcome competition from other countries -- if we knew that we would have some measure of protection should we fail.