1949 – A Fair Deal
As we emerge from the economic and social traumas resulting from the current pandemic, we’re hoping for a better future, a set of initiatives to restore our community. Yet when we’re offered a deal, we become suspicious, wondering who the real beneficiaries will be. If cynical suspicion informs responses to a personal deal, concerns are greatly increased when it’s a government plan or in political party platform promises. When Harry Truman, early in his second Presidential term, announced his ‘Fair Deal’ in his 1949 Inaugural Address, he must have known his view as to what was fair wouldn’t be shared by a Republican controlled Congress. Once it was clear his plans included many proposals they regarded as antithetical to business interests, the challenges began. He wanted money for education, universal health insurance, fair employment practices, and to repeal restrictions on labour organisations: who did he think he was kidding?
In many ways, Truman’s Fair Deal was a continuation of Franklin Delano Roosevelt’s approach in the 1930s. FDR’s ‘New Deal’ was a program to enable recovery from the Great Depression. The economy was in a mess, people were starving, and unemployment was high (does this sound all too familiar?). Roosevelt set out an agenda for ‘relief, reform and recovery’. Relief was aimed at the unemployed and the poor, recovery was intended to put the economy back on a path to growth, and reform was intended to fix the issue that had caused the depression, the failures in the financial and banking system. It was necessary, ambitious and visionary.
Almost from the day he took office Roosevelt started making changes. With fixes for the banks in place, his priority in 1933 was to get people back to work, setting up a Public Works Administration to undertake major construction activities, roads, dams and even schools, and a Civilian Conservation Corps, which hired 250,000 unemployed young men to work on rural projects. He presented ways to give mortgage relief, encourage more productive farming, and, through a National Industrial Recovery Act, he wanted to force industries to accept minimum prices, non-compete agreements, and raise wages. However, the NIRA was a step too far, and the Supreme Court found it unconstitutional. Protesting, he continued his action program, which included establishing the Tennessee Valley Authority, (TVA), the largest government-owned industrial enterprise in American history, one which built dams and power stations, controlled floods, and modernized agriculture and home conditions in the poverty-stricken Tennessee Valley. An impressive public works led recovery; I’m sure Keynes was proud of him!
He was worried about the mid-terms in 1934, but the Democrats picked up seats in both houses of Congress, and he continued to develop initiatives. Given his concerns over the financial security of workers, in his second New Deal Roosevelt established the Social Security Act. Compared to similar provisions overseas, it might appear rather conservative, but the federal government took on responsibility for the economic security of the aged, the temporarily unemployed, dependent children, and the handicapped. While resistance continued to build, especially from the business community, he was undaunted. Winning a second term, in 1936, he kept up the pace of reforms. FDR was elected twice more, but his third term in 1940 saw the agenda necessarily shift to a focus on international events and the Second World War.
Following the end of the war, the financial consequences of years of fighting began to hit home. The UK was burdened with a huge war debt, having survived only through the US Lend Lease program. That came to an end in September 1945, soon after Labour’s landslide victory in a General Election. Churchill was out, Clement Attlee was the new Prime Minister, and he set in motion an ambitious program of welfare reforms, as well as nationalising many industries. With a quarter of its national wealth gone, the abrupt withdrawal of America’s Lend-Lease support dealt a severe blow to Attlee’s plans. However, an Anglo-American Loan was agreed, which restored some stability to the UK’s fragile economy, although the loan was limited to overseas expenditure, not the Labour government’s domestic policies. It was a strange time. Reforms and privation sat alongside each other, with extensive social services put in place while rationing continued. The UK never used the terminology, but a ‘new deal’ was being implemented.
Back in the US, Roosevelt began a fourth term as President in 1944, but died only a few months later. As Vice President, Harry Truman took over, and in September 1945 he outlined a 21-point program of domestic legislation to Congress. Building on Roosevelts New Deal, it was the first step to his ambitious program of 1949. The measures put forward in 1945 included a series of proposals on economic development and social welfare. Major improvements were planned in the unemployment compensation system and the minimum wage: in the maintenance and extension of price controls; in a variety of measures to grow employment and to keep down the cost of living in the transition to a peacetime economy; in a major expansion of public works, conserving and building up natural resources; and in other measures aimed at post-war recovery.
President Truman’s approach was hands-off. He didn’t send legislation to Congress, but expected it to draft the bills, which proved a serious mistake. Much of what he wanted faced opposition from the conservative majority in Congress Despite setbacks and resistance, he persevered with his agenda, and by 1948 he was ready with a comprehensive program, the Fair Deal. Truman set out his approach in his 1949 State of the Union address ,“Every segment of our population, and every individual, has a right to expect from his government a fair deal.” [i] The measures built on the 1945 proposals and extended them, including federal aid to education, a large tax cut for low-income earners together with an increase in the minimum wage, an anti-lynching law, a farm aid program, increased public housing, an immigration bill, establishing a new Department of Welfare, national health insurance, expanded Social Security coverage, and a $4 billion tax increase to reduce the national debt and finance these new programs. Truman was determined to build on and continue the reforms Roosevelt had pursued under his New Deal.
Many aspects of his vision weren’t realised in practice, but he did establish an agenda for the Democratic Party for the longer term, especially in seeking universal health care. However, in a way that anticipates much of what would be repeated in the Post-Reagan era, the Fair Deal faced continued opposition from Republicans, who wanted a reduced role for the federal government, and preferred privatised social services. Truman was successful in some areas, and Congress supported public housing subsidies and slum clearance. Helped by the election of a Democratic Congress in 1949, the country saw change at a level not to be repeated until LBJs’ Great Society program in the middle 1960s. As noted by one study:
“This was the Congress that reformed the Displaced Persons Act, increased the minimum wage, doubled the hospital construction program, authorized the National Science Foundation and the rural telephone program, suspended the ‘sliding scale’ on price supports, extended the soil conservation program, provided new grants for planning state and local public works … Moreover, as protector, as defender, wielder of the veto against encroachments on the liberal preserve, Truman left a record of considerable success – an aspect of the Fair Deal not to be discounted.” [ii]
The Fair Deal achieved considerable social and economic progress in the late 1940s and early 1950s. Reports confirmed that gains in housing, education, living standards, and income under the Truman administration were unparalleled in prior American history. By 1953, 62 million Americans had jobs, an increase of 11 million in seven years, while unemployment had all but vanished. Farm income, dividends, and corporate income were at all-time highs, and there hadn’t been a failure of an insured bank in nearly nine years. There were significant reductions in poverty, and incomes rose faster than prices, resulting in real living standards considerably higher than seven years earlier. Successes counterbalanced failures, and the Fair Deal, following on the New Deal, took major steps in creating a more egalitarian society.
One important area concerned civil rights. As a senator, Truman hadn’t supported the emerging civil rights movement. However, speaking to the NAACP [iii] in 1947 he said, “Every man should have the right to a decent home, the right to an education, the right to adequate medical care, the right to a worthwhile job, the right to an equal share in the making of public decisions through the ballot, and the right to a fair trial in a fair court.” His proposals were resisted by southern Democrats, but he used presidential executive orders to end discrimination in the armed forces and denied government contracts to firms with racially discriminatory practices. He also named African Americans to federal posts. His progress on civil rights led one historian to comment Truman had “done more than any President since Lincoln to awaken American conscience to the issues of civil rights”. [iv] The agenda was clear, yet, seventy years later, so much remains to be done: key legislation is still to be enacted, and Trump is opposed to most civil rights reforms.
Reading Truman’s program today encourages a score-sheet perspective: give a point for a win, and drop a point for a loss. He lost on a comprehensive health care program, but increased funding for hospitals, and extended the range of research areas that came under the National Institutes of Health, especially in relation to aged care, mental health, dental health and numerous major diseases. He managed to bring about many adjustments to the social welfare system, although he was unable to accomplish his plan to extend Social Security coverage to all Americans. Despite this, 10 million received Social Security coverage, numerous specific programs were put in place, increases in Social Security benefits were authorized in 1948, and in 1950 welfare benefits were increased, Social Security coverage was extended to elderly Americans, and the minimum wage was raised. According to one view, the 1950 act “was almost as significant as the original 1935 legislation.” [v] While Truman failed to get the union-limiting Taft-Hartley Act repealed, his administration made several important changes in labour law. Similar observations can be made about achievement in education and housing. I don’t want to continue my game or scoring wins and losses, but there is no doubt the balance went to wins (even of you deduct two points for some of the major proposals failing). Above all, the Fair Deal demonstrated government programs were essential to overcome the continuing effects of the Depression by spreading the benefits of economic growth and social reforms throughout society, and doing so through federal policies and services. For two decades, the US prospered.
Once again, the US, like many other countries, is facing disaster today. The pandemic is closing businesses, leaving millions without income, many facing the loss of their homes, and the economy is sliding backwards. Once again, this is the time for major change, and commentators are suggesting the US will be different in 2021. While some of the ideas about this ‘new world’ are clearly unrealistic and even foolish, this is the moment to support a progressive agenda, the one being championed by Alexandria Ocasio-Cortez, and her fellow ‘Squad’ members Ilhan Omar, Ayanna Pressley and Rashida Tlaib, an agenda focussed on such critical and much needed reforms universal health insurance (Medicare for All) and a ‘Green New Deal’, amongst others.
Will the progressive agenda gain momentum? As one example, early in 2019 Ocasio-Cortez submitted her first piece of legislation, the Green New Deal, to the Senate, a 10-year “economic mobilization” that would phase out fossil fuel use and overhaul the nation’s infrastructure, while creating jobs and boosting the economy. Naturally, it’s opposed by Republicans, and even some Democrats are lukewarm. However, support from younger voters is clear. These progressives worry Trump. In July, he attacked the Squad, saying that they should “go back and help fix” the countries they came from rather than criticize the American government (even though three were born in the United States). Pointing out Trump’s words used the ‘hallmark language of white supremacists’, support for the Squad is growing, even while attacks continue, reprising 1949.
As Ocasio-Cortez keeps pressing for progressive changes, criticism is never ending. She has shown grace and determination under pressure. On July 21, Republican Representative Ted Yoho accosted Ocasio-Cortez on the steps of the Capitol, called her “disgusting” and told her, “You are out of your freaking mind” for suggesting that poverty and unemployment were driving a spike in crime in New York during the coronavirus epidemic. As she walked away, Yoho called her a “fucking bitch” Two days later, Ocasio-Cortez responded in the House, condemning male privilege, systemic sexist behavior and culture, violent language against women, as well as Yoho hiding behind his wife and daughters in his apology the day before. “Having a daughter does not make a man decent. Having a wife does not make a decent man. Treating people with dignity and respect makes a decent man. I am someone’s daughter, too. My father, thankfully, is not alive to see how Mr. Yoho treated his daughter. My mother got to see Mr. Yoho’s disrespect on the floor of this House towards me on television. And I am here because I have to show my parents that I am their daughter and that they did not raise me to accept abuse from men.” [vi]
Can the US recover from the pandemic disaster and reclaim its determination to create a better world? Will it re-emerge as a beacon for democracy? One thing is clear. If the US wants to stand tall in the world, it needs a new and inclusive deal to restore fair and inclusive political processes, to turn back the excessive income inequalities that exist today, and to restore justice and a sense of common purpose for all Americans. To do that, it has to move past the many older, and often out-of-touch politicians in Congress, and build on the determination shown by Representative Alexandria Ocasio-Cortez and young progressives like her. A new Fair Deal needs new thinking, not a reliance on past allegiances, and we need it now.
[i] Truman Delivers his Fair Deal speech, January 5, 1949, History.com
[ii] See E L Davin, Crucible of Freedom, November 2011, quoted in Wikipedia
[iii] The National Association for the Advancement of Colored People
[iv] David McCullough, Truman, Simon and Schuster 1992, and Mark Byrnes, The Truman Years 1945-1953, Routledge, 2001 provide an excellent coverage of Truman and the Fair Deal. Please note President Trump!
[v] Byrnes, op cit.
[vi] Reported in The Guardian: https://www.theguardian.com/us-news/2020/jul/23/aoc-speech-video-ted-yoho
