The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

Roosevelt’s New Deal:
Big Government’s Rescue of Big Business

Oct 6, 2008

This spring marked the 75th anniversary of the introduction of Franklin D. Roosevelt’s New Deal. In the depths of the Depression, the Democrats swept into the White House, took control of Congress, and in 100 days pushed through 15 massive bills. Ever since, the Democrats have taken credit for rescuing the economy, carrying out massive public works that put the jobless to work, starting up new social programs for the aged and poor, and – last but not least – granting new rights to workers and their unions.

The history of the Roosevelt New Deal shows something else entirely.

The “New Deal” did not spell an end to the attacks against the working class and its militants. On the contrary, it continued.

The government moved to break strikes. In 1941, Roosevelt’s government actually sent in federal troops to put down a strike of aircraft workers at North American Aviation in Los Angeles. Later that year, the government prosecuted and imprisoned leaders from the Socialist Workers Party (SWP) and those allied with them in the Teamsters Union, who had led the 1934 Minneapolis strikes and had just successfully organized long haul drivers in the northern Plains states.

Nor did Roosevelt’s New Deal programs end the Depression. Certainly, there was a partial economic recovery, between 1933 and early 1937. But above all, it was a recovery in corporate profits, which went from a net loss in 1933 to a net profit of seven billion dollars in 1937. Despite these profits, businesses invested almost nothing and hired even less, leaving the unemployment rate stuck at over 14%.

Against this backdrop, Roosevelt reduced government outlays in June 1937, especially on public works. He cut the WPA rolls drastically, claiming “fiscal responsibility,” and additionally cut hundreds of thousands of government jobs. The economy plunged. In October 1937 a new panic cracked the stock market, and it fell much faster than after the October 1929 crash. Steel production in the last quarter of the year fell to one-fourth the level of the previous year, pacing a 40% decline in industrial output. By the end of that winter, more than two million workers had received layoff notices, raising the unemployment rate to 20%. In Detroit, the relief rolls ballooned to four times their 1937 size. The worst conditions from the earlier part of the decade reared their head.

Only when the Roosevelt administration began to pour record amounts of money into production for war did the economy begin to recover. In other words, all the New Deal programs, all the public works projects did not pull the capitalist economy out of its crisis. Economic recovery was a product of war. What came out of that new investment and production, of course, was the slaughter of tens of millions of people, the destruction of numerous cities, towns and villages, mass starvation and homelessness, along with the death camps.

Humanity had to pay an unbelievable price twice, once for the break-down of the capitalist system, the Great Depression, and an even bigger price for the supposed “cure” from the Depression, the mass slaughter of World War II.

(For the real story, see the article about the New Deal in Issue #59 of the Class Struggle magazine.)