We Need a New Deal | Cassandra Voices

We Need Another ‘New Deal’ and Umbrella to Unite Under


Franklin Delano Roosevelt (FDR), U.S. President between 1933 and 1945, was born to enormous privilege. He came from one of the most aristocratic families in America. A distant cousin, Teddy, had even been elected President.

In his youth FDR was a bon vivant and ladies man, who strayed from Eleanor, his saintly but still formidable wife. This blue blood seemed an unlikely person to buck the entire system of US capitalism. He remains a hate-figure for U.S. Conservatives today.

Any account of his life should include the enormous personal tragedy of his incapacitation due to polio. He could not walk, and this disability may have broadened his empathy for others’ suffering.

Roosevelt was elected President in 1932 on a platform of change: to provide a New Deal to the American people after the Wall Street Crash of 1929 and ensuing global depression. The destitution of the American people is movingly depicted in John Steinbeck’s Grapes of Wrath, where a group of ‘Okies’, led by Tom Joad, are ruined by dustbowl conditions, and the calling in of loans by ruthless bankers.

Similarly, devastation arrived in the urban centres, captured in the lyrics of the song and Broadway musical E.Y. Yip Harpurg’s ‘Buddy, Can You Spare a Dime’. Even brokers were forced to eat from soup kitchens, as erstwhile respectable folk were reduced to ‘hobos’.

What had happened was that the bull market of speculation had simply collapsed. The unregulated free market had built mountains of sand out of folly and greed. A dominant economic philosophy of laissez faire had brought light touch regulation and government passivity, as with our own, similarly hegemonic, neo-liberalism.

The view then, as today, was that government had no business interfering in private transactions and that wealth, growth and efficiency are best achieved by the operation of the invisible hand.

The crash beginning in 2007 was not that different from the 1929 version, and the political consequences are increasingly similar too. A neo-liberal consensus endorses a shock doctrine allowing crisis to follow crisis, precipitating social and economic collapse.

FDR adopted the seemingly paradoxical, and certainly heretical, advice of the legendary economist John Maynard Keynes that to save capitalism it was necessary for the government to intervene in the market. Thus Roosevelt set up national agencies and support structures for aid and assistance. It was a bailout to protect the poor and disenfranchised, not the rich.

His New Deal was in the national interest. Not a shibboleth or paper mask, cloaked in woolly ideas, to protect vested interests.

The Supreme Court initially blocked New Deal legislation, rejecting what the legendary Justice Oliver Wendell Holmes contemptuously branded social statistics in his dissenting opinion in Lochner Herbert Spencers. He insisted the court had no business varying contracts.

‘the switch in time’

The assumption of liberty of contract is that anyone has the freedom to enter into a bargain under whatever terms they choose, and once a contract is struck they are bound by their word. But that is based on the pretence that the market is a level playing field, which it never has been. Many still sign on the doted line without fully understanding the implications. Moreover, neo-liberalism sells short term fixes which often fail.

An exasperated Roosevelt informed the Supreme Court that if they did not approve his legislation he would appoint new judges, which soon led to a change of heart. This became known among wags as ‘the switch in time that saved nine’.

Roosevelt displayed an ambivalence towards democracy, but was the best of all leaders: a benevolent dictator. He favoured those at the bottom of the social ladder, who were increasingly aware that democracy had been sabotaged by vested interests. At that time, just as is the case today, transnational corporations and law firms were dictating to governments.

Roosevelt revived the U.S. economy, with Keynesian pump-priming: government expenditure increasing aggregate demand. It did not lead to a bail out of corrupt banks, but their nationalisation. This brought investment to help ordinary people, not the infliction of wanton cruelty in the form of perma-austerity, which runs contrary to even capitalist logic.

The best evidence is that a mixed economy, combining private enterprise and public initiative, with social safety nets and public assistance for small enterprises, is a model that works best for society as a whole, rather than the cartelisation of wealth, under the voodoo promise of trickle down.

Keynes was right then, and still is, but over time he became unfashionable and was derided.

In late 1970’s Britain, in particular, the excesses of socialism were becoming obvious, with the three-day-working-week, litter on the streets, and the stranglehold of the Unions. With initiative thus stifled, Thatcher and Reagan championed the old formula of untrammelled free markets: new clothing for old and obsolete ideas of unregulated markets, conveniently referred to as neo-liberalism.

The ideological underpinning came from the Austrian Friedrich Hayek and the Chicago school under Milton Friedman. The curious assumption was that wealth would trickle down like manna from heaven from rich to poor, if a market is left alone. Instead we got the yuppies, like Donald Trump, who siphoned off great wealth.

Over time we have seen the dismantling of the welfare state; the removal of social protections and safety nets. More sinister developments are of a more recent vintage.

‘the new serfdom’

Firstly, a rapidly declining percentile of the global population is controlling an ever-increasing share of the wealth and resources of the planet, with everybody else increasingly impoverished.

As a result the distinction between working class and middle class is being eroded. The new class system is a reversion to a medieval pyramid of landlords and serfs: feudal capitalism.

This blurring of class boundaries is an important point to appreciate, making Antonio Gramsci’s idea of an accommodation between working and middle class interests more compelling than ever. Old-fashioned Marxist class divisions no longer make sense, amidst corporate feudalism, where working and middle classes are both succumbing to serfdom.

Conversely Hayek, one of the architects of neo-liberalism, actually called socialism the new feudalism or serfdom. It is ironic in the extreme therefore that his ideas have led precisely to what he sought to avoid. Socialist brainwashing has been replaced by neo-liberal.

More to the point, the unprecedented banking collapse after 2007 led to bail-outs being award to those responsible who were responsible, and the infliction of austerity on the wretched of the earth. Nobel laureate economist Joseph Stieglitz, referred to this false paradigm as ‘socialism for the rich and capitalism for the poor’.

Those countries which adopted ‘Roosveltean’ or Keynesian approaches, including nationalisating banks, such as Iceland have been vindicated. This brought stabilisation and recovery.

Ireland achieved the worst of all possible ends. It established a bad bank NAMA, which cut deals with failed property speculators and lawyers and the congeries of the corrupt. As the IMF and Europe imposed austerity on the defenceless masses those responsible were bailed out and their debts cancelled.

The fraudulent Irish banks had made their money on misrepresentations, and providing negligent lending advice about the value of stocks, investments and credit ratings. This had caused the economy to overheat and generated a property bubble that many had warned against.

Now the institutions foreclose against the poor and defenceless, as sanctity of contract is insisted on. The perversion of the system it that the richer you are, the more easily you can cut a deal: the logic of ‘a bank too big to fail’.

homo economicus

The neo-liberal recasting of homo sapiens into homo economicus, also initiates a new form of Social Darwinism, permitting only the survival of the fittest or rather the most ruthless in a dog eat dog universe.

We have seen a slippage in standards, where the young are habituated to lying, as deceit has become the norm among holders of high office. The lines between fact, semi-fact, lies and deceptions have been blurred entirely. Even in the courts of law fabricated cases have reached pandemic proportions.

It has also led to increasingly vicious tactics against those who demure: like a plague the corruption of banks has spread to other private agencies and even state institutions, where those who blow the whistle or otherwise expose toxic levels of corruption are systematically destroyed.

In this distorted universe the mugshots of those that should be acclaimed as heroes of our time, now feature in rogues’ galleries of infamy and subversion. The indicted include human rights lawyers, activists, whistleblowers, publicly-minded citizens, and anyone with a shred of a social conscience.

It is a divisive ‘them’ and ‘us’ social setting. ‘Them’, the poor, the migrant, the displaced, the activist, the troublemaker, the public intellectual, are all marginalised and insidiously destroyed in increments or possibly state-sponsored murder, as in the case of journalists in Malta and Slovakia.

Targeted assassination by the state is now the norm, and not just under Mr Putin.

Making Hodge-Podge of Everything

Even though I am a Harvard law graduate I doubt whether Mr. Trump would grant me leave to enter the United States right now. I am no longer one of ‘us’ but one of ‘them’, what Franz Fanon called The Wretched of The Earth. I should not have given unconditional praise to human rights activists, who impede capitalist interests.

Our corporate suzerains lead people to safe issues around individual entitlements. We are all in favour of gay marriage, gender equity and not criminalising someone for puffing on a joint. But what about more fundamental rights intrinsic to human life, such as health care, housing and social support? If you argue in favour of this just see what happens.

Around the world courts are rapidly evicting and rendering homeless surplus populations and in India dumping them on the streets. Housing, either buying or renting, is increasingly unaffordable, diminishing the prospect of human flourishing.

The privatisation of health care has ineluctably led to life or death being a matter not of right or entitlement, but of affordability.

There are other sinister ramifications. Those teachers, academics or professionals in badly paid but socially worthwhile occupations must toe the line, and are fired for exposing corruption. In order to survive they have to sing for their supper, and he who pays the piper calls the tune.

The wise sensei or village elder is no longer looked up to, but instead the old are being asked to quietly await their death.

Intelligence and achievement have to be costed and channelled into wealth producing activities. You are not a man if you do not descend to the mentality of the hunter.

Short-termism both in contracts and thinking, has led to reactive decision-making, wherein people are desensitised to the suffering of others.

In my view these depredations being heaped on society are deliberate. The tactics of social disruption peddled in Chile and Indonesia by the neo-liberals in the late 1970s are now being replicated in Ireland and Greece, among other places. It is a social experiment assessing what level of suffering is required to bring compliance to authority, and obedience to the will of the mega rich.

This is accompanied by cuts in funding for socially useful public agencies, such as libraries, which are being gradually eliminated. There have also been huge cuts to legal aid, imperiling the ability of the innocent to defend themselves against criminal charges.

It brings to mind the prescriptions of one Dostoyevsky’s Devils Pyotr Stepanovich who advocates the ‘systematic undermining of every foundation, the systematic destruction of society an all its principles’, which would: ‘demoralize everyone and make hodge-podge of everything’. Then, ‘when society was on the point of collapse – sick, depressed, cynical, and sceptical, but still with a desire for some kind of guiding principle and for self preservation’, his faction would, ‘suddenly gain control of it’.

The New Deal

We demand a New Deal. But what will that entail today, and how could it be feasible?

  1. Urgently in Ireland, and other neo liberal countries, the courts need to recognising housing (even without recourse to Article 45), including prohibition against arbitrary eviction, as well as access to health care, as fundamental human rights. The courts need to show leadership and recognise the common good of protecting people against the corporate predation by vulture funds and transnational interests.
  1. We urgently require Keynesian stabilisation including support for small businesses, social safety nets and structural regulation of a wildcatting private sector.
  1. The EU needs to be streamlined to a form of looser associational ties, which do not impose austerity or globalisation of capital, but reinforce standards and regulatory protection of rights and resistance to the interventions of globalised capitalism. There is no point in Brexit if it is replaced by the interests of Steve Bannon and other American ranchers.
  1. The power of officers of the state needs to be strictly regulated. We are living in an age when an over powerful state and police force is intruding unconstitutionally in private lives of others, and state sponsored is increasingly apparent. Where subversion is emanating from the state, and where criminalisation is opaque and multi-faceted: where many of the real problems of criminality can be traced to the state itself.
  1. There is a paucity of political leadership at national and international level. The possibility now exists that various NGOs raising awareness on the impact of Climate Change awareness, miscarriages of justice and social and economic rights, band together in an alternative transnational organisation fronted by the good and the wise. To oppose internationalisation we need an alternative internationalisation lobbying not for growth but sustainability, conservation and a reverse to small is beautiful and artisanal livelihoods. We need to remould human nature to promote altruism, community and compassion for others, engendering a New Deal of collaborative and associative responsibilities.

So let us organise a petition then for an umbrella organisation to bring a New Deal for the world.


About Author

David Langwallner is a human rights lawyer and founder of the Innocence Project in Ireland. He was previously Dean of Law at Griffith College. He was made Pro Bono & Public Interest Team/Lawyer of the Year at the AIB Private Banking Irish Law Awards 2015.

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