Will Obama’s “New Deal” Save Workers?

Roosevelt Era Shows that Labor Upsurge is the Key

Barack Obama is taking over from the most unpopular president in U.S. history. The country is headed into the worst economic crisis since the Great Depression of the 1930s. While many people look to him with anxious hope, what can we reasonably expect from Obama?

Pundits compare him to Franklin D. Roosevelt (FDR), whose New Deal is credited with bringing the U.S. out of the Depression. It was the most devastating global crash in history, bringing the U.S. 25 percent unemployment, Hoover ville homeless camps, bread lines — and militant working-class revolt.

Even before he was elected, the London Times asked, “Could Obama be the new Roosevelt? … We need an exceptional Amer i can president.”

Be warned: “Great Man” politics, the irrational hope that a larger-than-life hero will single-handedly usher in a new day, is a dangerous myth for working people. It serves ruling-class interests by implying that people should passively wait for deliverance. The “Great Man” theory of history discounts the material conditions and class struggles that actually shape events.

The New Deal’s main feats were unemployment benefits, public works, and Social Security — which gave people money to buy the products capitalism must sell.

The nearly hidden historical fact is that these gains were not delivered by a munificent benefactor. Workers fought for the advances in an epic struggle the like of which the U.S. has not seen before or since. Roosevelt responded to this tsunami of revolt, not because he was a friend of labor, but to save the system. His choices about how to do so were dictated by forces no one person can control.

FDR had to shore up profits and protect the system from itself with regulation, and he had to deflect working-class revolt.

Accepting that those who don’t know history are doomed to repeat it, let’s evaluate the New Deal and the struggles that brought it about. In the light of that history, how does Obama’s “New Deal” stack up?

Roosevelt — defender of capitalism

In FDR’s first 100 days, Congress passed 15 major pieces of legislation, including regulation of banks, corporations, and agriculture, relief and public works programs, and the creation of the federal Tennessee Valley Authority.

The National Industrial Recovery Act (NIRA) is considered the defining legislation of the New Deal in countering the depression. It suspended anti-trust laws to allow price fixing. Industries were called on to set minimum wages and maximum hours, but not required to negotiate with workers. A vague endorsement of the right to organize was included to pacify labor but did not distinguish between real and company unions.

Two years later, when the worst of the crisis was past, the NIRA was ruled unconstitutional by the Supreme Court for violating anti-trust laws.

FDR only made necessary concessions to labor. According to Art Preis in Twenty Years of the CIO: Labor’s Giant Step, public works projects never gave jobs to more than a quarter of the unemployed, and hiring always peaked before elections, which were followed by large layoffs.

Roosevelt, like Obama, promoted the mystique of friendship to both business and labor to mobilize the sup port of all classes. But since the interests of the elite are directly opposed to those of working people, the image of the champion of “all Americans” is a con. The Great Man romance ignores the part working people always play in winning social gains. And their role is decisive.

Mass action dynamo

A major strike wave began in 1933 and built for five years. It involved a million to two million workers a year and kept a fire lit under the president and Congress. Workers gained Social Security, the Works Progress Administration, the National Labor Relations and Fair Labor Standards Acts, and the Bonneville Power Administration.

Communists and radicals played a central role in these gains. One of their innovations was the unemployed leagues, whose support for many strikes was crucial to victory. In 1934, the Toledo Auto-Lite strike, the Minneapolis Teamsters strike, and the West Coast dock strike (which included the San Francisco general strike) were enormous struggles involving thousands of workers who stood up to brutal state violence. Trotskyites, other socialists, and anarchists were leaders in all of them.

The victories of these epic battles helped ignite the formation of the Congress of Industrial Organizations (CIO), which unionized hundreds of thousands. U.S. workers invented the sit-down strike in 1936 and used it powerfully to organize the auto and other mass production industries.

If this struggle had kept its momentum, who knows what the outcome would have been? Instead, conservative union officials acted as FDR’s “labor lieutenants” to tame workers and tie them politically to the Democrats.

Philip Murray of the United Mine Workers called off the bitterly fought 1933 coal strike on Roosevelt’s command.

John L. Lewis and Sidney Hillman of the CIO set up the Labor’s Non-Partisan League to support Roosevelt and forestall a mounting drive for an independent labor party. This was the forerunner to today’s political action committees (PACs), which spend millions on Democrats and indoctrinate unionists to support the “good” capitalists — like Obama.

Will a New Deal work today?

Obama is marketing him self with Roosevelt’s very words, “we need action and action now,” to propose a $775 billion “economic stimulus” package. But despite the Rooseveltian rhetoric, this “bipartisan” plan bears little resemblance to the New Deal.

Fifty percent is supposed to fund the huge areas of infrastructure rebuilding and alternative energy development. But instead of a WPA-style public program, 80 percent of the jobs are to be in the private sector. Most of the billions will go to businesses which will fritter away money on cost overruns and the usual federal contractor skulduggery.

Only 10 percent is to go directly to extended unemployment insurance and health care. Forty percent is scheduled for tax cuts to businesses, supposedly for job creation, and the “middle class” (read: workers). Aid to state and local governments, which could help to stave off massive budget cuts, may be sacrificed to accommodate Republicans.

The tax breaks for workers will, like last year’s rebates, go to paying off debts, not to consumer buying. Jobs are created by the demand for products. Without demand, tax breaks to businesses will disappear without creating employment.

It is also questionable whether an all-out New Deal could heal this depression. World capitalism today has progressed much farther into a process of progressive, terminal decay. Corporate globalization and “free trade” have dramatically cut workers’ wages and buying power. Neither astronomical deficit spending on two wars nor a financial bailout have done much to help the economy.

The bright spots in the situation are labor fights like the recent Republic Windows and Doors sit-down strike in Chicago and the hard-fought victory in unionizing the Smithfield meatpacking plant in Tar Heel, North Carolina. With so much outrage over corporate bailouts, other labor battles can’t be far behind.

Fact is, the rulers can give up more of their wealth. But they won’t unless workers put the fear of revolution in them. And if we can do that, we might as well go all the way to socialist revolution, making the wealth everyone creates public property, controlled by the workers. Sound utopian? Actually, it’s crisis times like this when people do remake society, because there is simply no reasonable alternative.

Obama has already shown that, like the “Great Man” FDR, he will only do what is necessary to save capitalism. His loyalty is to the system, not to working women and men. It falls to the labor and social change movements to win an even break for the bulk of humanity and the fundamental change we desperately need.

Megan Cornish worked at the Shelter Half G.I. coffeehouse in Tacoma, Wash., in the early 1970s. She can be reached at: MCornish@igc.org. Read other articles by Megan.

10 comments on this article so far ...

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  1. bozh said on February 2nd, 2009 at 9:28am #

    is the communist party in US still banned legally? wld a socialist party also be declared illegal?
    why isn’t in US a socialist or an opposing party?
    will uncle ever allow more than one party; i.e., his own?
    isn’t cia, fbi, and army there just for the purpose of preventing establishment of a second political party.
    wld amers fire on amers just because of politics?

  2. Max Shields said on February 2nd, 2009 at 10:12am #

    Doesn’t anyone see the ultimate irony is looking for another “Roosevelt”. Aside from peeling way myth from reality, what were the media saying when Roosevelt became President? Who was he to be like? Lincoln? Doubt it. Washington? Again, hardly.

    Let’s bag this dumb talk about the next this or that. There is a truism that resonates with me: you never return to the same stream twice. While history may have the broad texture of repeatability, the moments of crisis are essentially non-repeatable. This is a nation in a context which bears little to no resemblance to the 1920s or 30s.

    The sooner we realize that we must face the dark and make of it a new beginning the better off we’ll all be.

  3. Ron Horn said on February 2nd, 2009 at 11:01am #

    The writer of this article is spot on, as the English would say. There is no choice unless the choice is to live in a world of have-yachts and have-nots, with the continuing destruction of environments and communities, with fascist governments ruling with iron fists to preserve and defend their system, with imposing upon our children and our children’s children essentially indentured servitude to the ruling capitalist class so that they can continue their mad pursuit of wealth accumulation.

    In the 1930s the capitalists chose outright fascism in Germany, Italy, and Japan and often aided and abetted by the softer capitalist classes in other countries. The latter looked the other way as fascist forces crushed the left wing government that democratically came to power in Spain. They went out of their way to appease the fascist governments when they saw them as useful in destroying the Soviet Union and controlling the threat of organized labor, and only entered the WWII in a serious way when the Soviets decisively turned the tide against the German army at the battle of Stalingrad.

    The system is a cancer on the humanity of the world, and it is in the advanced stages. If we are to survive as a reasonably decent human race in a habitable planet, we have no choice but to destroy this system.

  4. Max Shields said on February 2nd, 2009 at 11:42am #

    I agree that Megan has written a pretty good piece. And I do agree that the Roosevelt era was one of saving the corportists, which is why we are where we are and Obama is clearly in the same tradition. But today is clearly not then.

    What I do think, though is that scaring the plutocrats is not going to get change. Roosevelt had socialists and labor on his heels and look what happened back in the day when they had real power, when the Soviet Union posed as an alternative, etc. etc.

    I think this is a new day and one that will not be fear based change per se – plutocrats fear of a people’s revolt. The “fear” will come from the lack of energy sources to keep the empire going. That’s happening. The collapse must be met with an alternative, not simply masses in the street (not that I’m against that).

    The empire was put together with a militia and police force to handle “mob control”. Revolts during the course of US history have occurred sporadically, but were isolated and subdued.

    There are altneratives. What to do with the collapsing empire and it’s rulers? That’s another story.

  5. Brian said on February 2nd, 2009 at 4:22pm #

    Obama’s plan is New Deal-lite and will not fundamentally change the economic system in the ways that are needed.

  6. HR said on February 2nd, 2009 at 8:36pm #

    I’m looking forward to the final collapse of laissez-faire capitalism, including the petty bourgeoisie small business owners who run local affairs with an iron hand. Communism wouldn’t be all that bad. It’s never been tried on a vast scale, really, all the propaganda about the U.S.S.R. and China, notwithstanding. Both were, and China is still, nothing more than brutal, totalitarian regimes. It’ll be tough, but the suffering will be worth it for the sake of future generations, if we working class types actually do take control of the country … not the ‘taking it back’ BS we hear from the pseudoprogressives, but actually taking it for the first time. A real French-type revolution, perhaps even with guillotines, which will be needed, because the elite, like the royalty then, will not go quietly. They can not be trusted.

  7. Garrett said on February 3rd, 2009 at 12:30pm #

    Max wrote, “The collapse must be met with an alternative, not simply masses in the street (not that I’m against that).”

    Can masses in the street force the collapse (and replacement of capitalism) to happen sooner than it will otherwise?

  8. Max Shields said on February 3rd, 2009 at 12:58pm #


    Perhaps, but there is nothing like an enemy to get the imperial monster’s juices going.

    If there is a workers’ revolt then the divide and conquer tactic may not work for the Empire and the MSM may not be able to muffle it as they have the anti-war demonstrations.

    Still the power is on the side of the Empire when it comes to a frontal attack.

  9. Garrett said on February 4th, 2009 at 8:43am #

    What might a workers’ revolt look like? One hundred million workers going on strike at the same time? Will people living paycheck to paycheck be willing to stop working?

  10. ian said on February 4th, 2009 at 10:31am #

    i have read that because of fdr new deal policies, during the 30’s we had the biggest decrease in unemployment in the country’s history, which slowed in 37′ i bleive because of conservative pressure to change policy, but picked up again in 38′ after fdr stopped apeasing conservatives,
    wondering your thoughts, was i minsinformed?