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John West

Roosevelt Closes His Third Year
with New Deal at Low Ebb

Capitalists Desert ‘Savior’ as Crisis Clouds Lift

Only Privileged Few Benefit from New “Prosperity”

(30 November 1935)

From The New Militant, Vol. 1 No. 49, 30 November 1935, p. 8.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

In 1932 Roosevelt was swept stormily into office on a broad wave of middle-class bewilderment, working class and farmer resentment, and bourgeois fear. The curve of the business cycle was close to its very bottom, on the downswing of the mightiest depression the United States had yet experienced. Finance-capital itself was worried. The “orthodox” solutions, administered governmentally by Hoover, had got nowhere. The curve continued down. The middle classes, fluttering tremulously, saw no out. Faced with increasing impoverishment, proletarianization, and outright unemployment, they were losing all confidence in their former gods, the big industrialists and bankers. The farmers Were crushed by mortgages, taxes, and low prices. The workers were decimated by unemployment without adequate relief, by sharply decreased wages and part-time jobs. The entire population was looking for a savior.

Roosevelt pranced into the arena, with the banner of the New Bra flung high. He offered himself to the people as their needed savior. His powerful demagogy rolled out denunciations of the Tories and the money-changers. A new type of life was to be brought to America-freed from the domination of greed and private selfishness. The Forgotten Man was to become the basis of the new social order.

Savior of Capitalism

Now it is true that Roosevelt came into office in a sense as a savior: precisely as the savior of the capitalist order in the United States, as a stop-gap to tide over U.S. capitalism in a dark hour, as a channel to turn aside mass discontent from any development toward genuine social change. But, naturally, to accomplish these ends, Roosevelt could not appear in his actual economic role. The psychological and political requirements had also to be met. And to meet them, his program had to embody the half-formed dreams especially of the middle classes, and even, though to a lesser extent, of labor. This, then, was the material of the New Deal: in economic substance, a series of mostly temporary measures designed to help pull the business cycle out of the hole; in psychological and political form, a group of vague but enspiriting generalities constructed to rally behind the Administration all who were bewildered, confused, and resentful.

There was, thus, little systematic opposition to the New Deal in its first period. Big business was scared, and needed the help of the Administration. The middle classes were full of hope. The farmers were encouraged by preparations for commodity inflation and direct governmental subsidy. Labor, not thinking in terms of class issues, was willing to follow its official leaders in welcoming the savior.

The New Deal did its work. It is of course impossible to estimate exactly how great a part the New Deal policies played, over and above the normal economic developments, in getting the business cycle out of the basement. But on any account the part was considerable – was, indeed, unprecedented for this country. Without Roosevelt’s handling of the banks at the outset, it is probable that the “banking holiday” would have precipitated a most severe financial crisis. The inflationary measures helped the farmers and exporters directly and immediately, loosened up purchasing, and helped check bankruptcies. The NRA provisions aided the big corporations in putting some halt to the chaotic and destructive price-cutting, which was endangering the entire price and credit structure. The outlay of government funds through unemployment relief, the AAA, the various work relief agencies, loans of all kinds, etc., undoubtedly did a fair amount of the “pump priming” which the Administration promised. Section 7a, and and a judicious combination of government arbitration boards with tear gas, managed to choke off two potentially major strike waves, and to “keep labor in its place.”

The New “Prosperity”

Two minor upturns in the business cycle, during 1933 and 1934, have now been followed by a more considerable rise beginning in the early spring of this year. The dominant internal factor at present is the continuance of this new drift toward “prosperity.” It is a very peculiar prosperity indeed. Hardly a dent has been made in unemployment, particularly if we take into account the youth who have come to working age during the past six years. Though factory payrolls are considerably increased, real wages of factory workers generally are still far below the 1928 level, and in many industries close to the crisis low. The professional workers and recent college graduates have an enormous percentage of unemployment and a great lowering of living conditions where employed. The farm laborers, sharecroppers, and poor farmers continue in desperate straits. But the stock market has been steadily booming. Bonuses for executives have come back. A large number of independent as well as landlord and capitalist farmers have more money with the help of mortgage moratoriums, AAA benefits, and a combination of high prices and good crops during the current season (a combination resulting in part from inflation, in part from last year’s drought). Chemicals, autos, munitions, steel, agricultural equipment, are forging ahead. Above all, corporation profits have monted amazingly, each week bringing out new records since 1931 or 1930, and in some instances for all time.

Big Business Clamps Down

But what this means, from the point of view of finance-capital, is that the New Deal has served its purpose. With profits again rolling in, no need for any more nonsense about the Forgotten Man and a new social order. And no more extravagant governmental spending, with its necessary threat of either uncontrolled inflation or increased taxation.’ And no more playing around with “concessions” to the workers and the unemployed. And an end to this talk about Tories and money-changers, these slanderous attacks on American ideals, on the utilities and the banks and the Stock Exchange. Time to get down to real business again. It is all well and good to maneuver and talk and even accept certain devious methods and uncomfortable restrictions when things are on the edge of the abyss. But now that we have again picked up the scent of profits, away with this doll-playing and back to the high-road of true Americanism.

Thus has big business reasoned more and more openly during the past year and a half. And in the light of this reasoning, the campaign against the New Deal has taken form. The Chambers of Commerce throughout the land ring again with the old slogans. The editorials in the powerful newspapers denounce, deplore, and pile up the phrases about the Stalin, Hitler, Mussolini and anti-Christ in the White House. Finance-capital comes again out of Its lair; its limbs rejuvenated with the blood of profits, it roars once more with its lion voice. It smashes head on into the New Deal legislation through its courts; and where the courts have not acted, it goes its own way in open defiance.

And what a sham the battle is at heart! Who is this redoubtable enemy of theirs? What is his reply? We read it day by day. Roosevelt promises a “breathing spell.” He sends out Roper to glorify capitalism. He promises the bankers fullest cooperation. He pleads with big business, through the Administration press agents and the pro-Administration newspapers: “What have you boys against me? Haven’t I brought back your profits, kept labor in check, done all you asked of me?” He promises to stop the dole, to reduce the deficit next year to $500,000,000 and the year after to bring the budget into balance. He is the injured servant, who has given his all to his master, only to be thrust out into the cold.

Meanwhile, in a half-hearted way, he continues his play for middle-class support by talking about the utilities and social security and new taxes in higher brackets; and now by appealing to pacifist illusions in neutrality measures. But, alas, the middle classes no longer listen so readily. The middle classes always jump toward what looks at the moment like the winning side. With finance-capital again roaring, their depressed confidence again revives. It looks to them as if the big shots were right after all; and in any case only they seem to know their own minds. Ironically, every step forward toward “prosperity” loses for Roosevelt middle class support. If you can have the old-fashioned prosperity again, reasons the middle class, let’s let it be run by its authentic representative, by the bankers and the old-fashioned Grand Old Party. Besides, what has Roosevelt done that he promised? No, we will reborn to the former gods, and sign up at the Chamber of Commerce.

A thankless task, indeed, this job of political dish-washer for finance-capital.

But times do not exactly return, and 1935 is not nor can be 1929. The Chambers of Commerce overplay their hand. The farmers remain in the majority behind Roosevelt. The industrialists in the unionized industries stay with him. The middle class liberals have given up the Tories for good. And labor and the unemployed, for all their disillusionment. With the shattered New Deal, are not now willing to go back quite as far as the rugged individualists, whose only tangible promises are a balanced budget, a smashing of independent unionism, and a cutting of relief. Thus Roosevelt can in all probability still be re-elected next year, unless major economic and social alterations meanwhile intervene.

But Roosevelt’s victory taken in itself would not be the significant social symptom which it might seem – would not, for example, at all be a “vindication for the New Deal.” The real cleavages begin to take form beneath the public surface.

The masses have learned far more from three years of Roosevelt than from the depths of the Hoover crisis. Labor and the unemployed are beginning to realize more clearly than ever before in U.S. history that the 1936 choice, between finance-capital open and undisguised and finance-capital with a decoration of appealing phrases, is for them no choice at all. They begin to understand that the present upturn in business will necessarily be short-lived, and will in any case and however far it goes be of little benefit to them. They begin to move toward consciousness of class issues.

Growing Sentiment for Class Action

Already this us apparent in the “third-party” sentiment, in the strength of local Farmer-Labor organizations (as in Minnesota), in the Labor party demands appearing within the A.F. of L., and especially in the growing sentiment among the rank and file workers everywhere to settle issues by direct class action, without parliamentary intervention – a sentiment clearly reflected in the stormy A.F. of L. convention. Roosevelt seems to have retained enough of his demagogy to head this off from national expression in the 1936 campaign, but this can prove only a temporary diversion.

In the meantime, the energies of the far-sighted among the bourgeoisie itself, and of the reformists and betrayers within the working class, are being bent to make sure that this awakening consciousness of class needs and class issues is directed into safe channels. Labor fakers, Socialists, Stalinists, Lovestoneites and liberals alike try to move it toward a “sane” third party, toward a Labor or Farmer-Labor or People’s Party. Thus would it be able to avoid direct attack against capital. The central effort of the revolutionists must be to give this consciousness its authentic expression, to lead it toward the sole historical embodiment of its genuine meaning and the actual needs which it reflects: the revolutionary program and the revolutionary party.

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