Racial Exclusion in the Mirror of New Deal Responses to the Great Crash

Abstract

The economic and financial collapse of 2008 is one of the most alarming events since the Great Depression. Although President Obama is working overtime to save American capitalism, evidence mounts that his 'recovery plans and proposed new programs would leave government permanently bigger, more costly, and more intrusive.' President Obama’s approach to the current crisis recalls his predecessor and model, Franklin D. Roosevelt. FDR also worked to save capitalism, and many observers believe that FDR succeeded. But this largely unreflective view ignores the past and current consequences, which the New Deal imposed on African Americans and others. Jonah Goldberg’s book explains how the Great Crash of 1929 provoked a progressive response by the federal government including a number of initiatives by President Hoover that culminated in FDR’s New Deal. Many of these initiatives such as the Davis-Bacon Act and the National Labor Relations Act created labor market cartels that widened the unemployment gap between blacks and whites and expanded economic inequality.

Drawing parallels from the French Revolution as well as the experimentation of Mussolini, Lenin and Hitler, Jonah Goldberg's book, Liberal Fascism shows how American Progressivism represented the flowering of a romantic movement tied to nationalism, pseudo-scientism and eugenics that was transmuted into social Darwinism. These developments, taken together, gave rise to collectivism led by autocratic elites. Representing a transparent effort to centralize government power in the hands of hierarchs, the New Deal advanced arbitrary regulation and disadvantaged members of racially and politically marginalized groups. By contrast, too often trapped by the halo-glow of FDR’s hagiography, many of today’s progressives take shelter in the unpersuasive contention that the New Deal successfully reduced inequality and created the conditions necessary for social justice. To the extent that such arguments are accepted today, the probability surfaces suggesting that the contemporary policies mimicking the New Deal will expose Americans to authoritarianism and inflict adversity on African Americans and members of other politically marginalized groups. Today amidst new calls to expand the role of the federal government, Americans would do well to heed the implicit and explicit warnings that Jonah Goldberg provides in his multifaceted book.

Keywords: Labor Law, Law & Economics, NIRA, NLRA, National Industrial Recovery Act, Stock Market Crash

JEL Classification: B20, D63, E24, J23, J71, J78, N00