Racism killed the New Deal

Sent from my iPhone Begin forwarded message: From: Charles Brown Date: September 21, 2021 at 7:54:00 PM EDT To: marxism-thaxis@lists.riseup.net Subject: Racism killed the New Deal https://aninjusticemag.com/racism-killed-the-new-deal-and-gave-us-neoliberalism-1c794a8f2154 Racism Killed the New Deal (and Gave Us Neoliberalism) Understanding the racial roots of colorblind “free market” capitalism will help us transition to a better future for everyone. Art by Mary Parsons Introduction The United States is clearly a capitalist country. But its version of capitalism — its political economy — has looked different at various points in American history, changing when a confluence of three factors collide: an economic crisis — or crises — occurs that reveals the flaws or deterioration of the previous economic system; expanded public support for a changing role for government in the economy; and a victorious political coalition that supports the change. For the past 40 or so years, America’s political economy has been largely based on a free-market ideology promoted by economist Milton Friedman. Central to this ideology is the economic principle that markets of all kinds are self-correcting, so much so that the government should not play a role in regulating the market or provide a social safety net for those whose needs are not met by the market. Much of these ideas were based on late 19th century liberal economic thought, which is why Friedman’s free-market capitalism is sometimes called “neoliberal” capitalism. Politically, free-market capitalism became ascendant with the conservative coalition brought together by Ronald Reagan in 1980 after the economic crises of the 1970s. Prior to the rise of neoliberalism in the late 1970s-early 1980s, America’s system of capitalism was based on the economic theories of John Maynard Keynes. Keynesian economics supports a role for government in the economy, including deficit spending, to stabilize the overall economy, prevent recessions, and support full employment. It was the primary approach of the federal government under the New Deal regime ushered in by Franklin Delano Roosevelt and his political coalition, first as a response to the Great Depression but then especially so after the United States entered World War II. Both are systems of capitalism, yet each is based on very different approaches for the role of government in the economy and for whom the economy should work. The difference in economic outcomes for Americans is telling: During the New Deal era the federal government established Social Security, minimum wages, and jobs and housing programs to financially support people at the lower income levels. After World War II, the GI Bill helped build a solid middle class, and taxation policies and support for unionized labor helped ensure that a broad swath of Americans benefited from the steady growth of the economic pie. This era — 1945–1973 — is often called the Golden Age of Capitalism for its economic prosperity alongside high and sustained levels of productivity growth. The shared prosperity that was seen in the three decades following World War II is long gone. Wages started to stagnate in 1973, even as productivity continued to increase. But the gap in income and wealth between the top and bottom deciles began to grow rapidly after 1980 when Reagan’s new political coalition took office. Based on the theory of “trickle-down” economics that posited that money in the hands of wealthy people would lead to increased investments, which would then lead to more jobs for people on the lower-income rungs, a new political economy was established. As a result, over the past four decades, the before-tax incomes of the top 1 percent of America’s households have increased nearly seven times faster than the bottom 20 percent. Now the United States sees the greatest concentration of wealth since the Gilded Age, as an estimated 40 percent of Americans are poor or low-income. The racial wealth gap is also stunning. White families hold an average of 10 times more wealth than Black families. The homeownership rate — the main source of family wealth in America — is nearly 30 percent higher for White families than for Black ones. And the gap between the two is bigger today than it was in 1960 when discriminatory housing and banking practices were still legal. The social, economic, and political upheaval of 2020 accentuated the pain of the Friedman paradigm for many people and instigated a growing awareness among White people of the persistent racial inequality ingrained in our economy. The calls for more shared prosperity helped Joe Biden win the Presidency, with the support of a strong multiracial coalition. Together with congressional Democrats, Biden is pushing for broad investments in America and Americans. Indeed, investments will be the largest since the New Deal programs of the 1930s and the Interstate Highway Act of the 1950s — both times when a majority of Americans supported an activist role for government in the economy. It appears that the three factors required for a change in America’s political economy are in place. Could we be on the cusp of a new chapter for American capitalism? As the country looks to rebuild the American economy in the post-pandemic era, it’s important to understand how America came to accept four decades of neoliberal, free-market capitalism that did not work for a lot of people for a long time. What changed in Americans’ attitudes around the role of government in the economy that led Americans to support it, even with its uneven economic outcomes, especially for Black and brown Americans? Considering that the last political and economic realignment happened in the wake of the civil rights era, what role did race play in ushering in and maintaining America’s neoliberal political economy? Understanding the role of race in the transition from Keynesian New Deal capitalism to neoliberal free-market capitalism can inform how America can now more successfully transition to a more shared prosperity model. FDR Builds A Tenuous Multiracial Coalition The 1932 election was a watershed moment for America. Twelve years of conservative Republican rule, including laissez-faire economic policies, led to the disastrous stock market crash in October 1929 that triggered the Great Depression. President Herbert Hoover’s tone-deaf calls for “rugged individualism” at a time when Americans were looking to the federal government to find some relief for their economic woes led to a dramatic political shift towards the Democrats. Many folks who voted Republican throughout the “Roaring 20s” joined the traditional Democratic voting base of urban northerners and Southern segregationists to give Democrat Franklin Delano Roosevelt the White House — and with it a mandate to tackle the troubled economy. FDR did not disappoint. As soon as he was inaugurated in March of 1933, he kicked off an activist approach to governing that helped build a regulated economy with a social safety net that put guardrails on American capitalism. Social Security, unemployment insurance, the abolition of child labor, minimum wage and the 40-hour workweek, the right to join a union, were all established, alongside market and banking regulations, housing programs, infrastructure investments, and jobs programs. Through institutions, regulations, and new economic relief programs, FDR’s policies established a new social contract with the American people, a New Deal that established a role for the government that redirected American capitalism towards a shared prosperity model. Roosevelt’s policies were also drawing Black voters to his coalition from their historic home in the Republican Party. Ever since the end of the Civil War, most Black voters were aligned with Republicans as the party of Lincoln, the Great Emancipator. Indeed, in 1932 between 2/3rds and 3/4ths of the Black vote in northern urban cities went to Republican Herbert Hoover. Two main factors drove a pronounced shift in Black Americans’ political party affiliation after FDR instigated the New Deal. First, the Republican Party consistently refused to pursue civil rights for Blacks, especially during the 1920s when Republicans courted wealthy industrialists. Second, as more African Americans fled the white supremacy of the segregated South to northern industrial cities, they had access to the vote in their new homes. Finding greater opportunities in areas dominated by Northern Democrats fueled many Blacks to switch parties. By 1936, the shift was complete, with Blacks squarely in FDR’s New Deal coalition, even as New Deal programs extending economic relief to struggling Americans reached disproportionately fewer Blacks than Whites. For the next 30 years, the unlikely coalition that FDR forged under the banner of the Democratic Party proved formidable. Its main components were lower-income groups in the great cities — African Americans, union members, and ethnic and religious minorities, many from recent immigrant groups — and the traditional source of Democratic strength, White segregationists in “the Solid South.” What kept these seemingly oppositional groups together was an economic platform that allowed for regional peculiarities (read: local implementation of programs that didn’t challenge Southern Jim Crow segregation). But as the movement for civil rights grew, tensions within the New Deal coalition grew, eventually delivering it a fatal blow by 1968, ushering in a new political and economic order that shredded the commitment to shared prosperity. The Post WW II Civil Rights Movement and the Dixiecrat Revolt of 1948 When war came to America in December 1941, millions of Americans enlisted, including 1.2 million Black men and women. Black Americans were motivated to sign up for many of the same reasons that compelled Whites: to fight for democracy abroad, even as they were subjected to racial segregation at home. Once the war was over, Black soldiers returned to the United States and found themselves still treated as second-class citizens at home. Some Black GIs were even advised to not wear their armed forces uniforms in public in order to avoid being the victims of violence by Whites who targeted them. This blatant hypocrisy kicked off a new civil rights movement wherein many Blacks demanded equal access to the rights and privileges of American citizenship. Civil rights advocates led campaigns to end discrimination in housing and employment, among other issues. The movement achieved several victories in 1948. In May of that year, the U.S. Supreme Court ruled in Shelley v. Kraemer that racially restrictive housing covenants could not be enforced by the government. In July, President Harry Truman issued an Executive Order directing the desegregation of the armed forces. Within that same week — at the Democratic National Convention where Truman would receive the official nomination for re-election — the Democratic Mayor of Minneapolis Hubert H. Humphrey and other Northern Democrats pushed for the Democratic Party to adopt a civil rights platform, calling on members to “get out of the shadow of states’ rights and walk forthrightly into the bright sunshine of human rights.” The narrow adoption of the civil rights platform by convention delegates outraged Southern Democrats, leading delegates from Mississippi and Alabama to walk out and establish their own pro-segregation Dixiecrat Party. The Dixiecrats went on to nominate South Carolina Senator Strom Thurmond for President as an alternative to Truman. The Dixiecrat Revolt drew the longstanding tensions within the New Deal coalition between the Northern liberals and Southern segregationists into the open. Generally, Southern Democrats had long believed that FDR’s Democratic coalition was their only path to be a part of a national majority party. But they also had a shaky relationship with the New Deal. They were able to protect the white supremacist social order in the South as the federal government passed national New Deal programs by demanding that many of the programs be implemented locally. This allowed them to extensively limit access to many New Deal benefits to Whites only, or implement them in racially segregated ways. Still, many of them were worried about the expansion of federal power at this time, concerned that an expanded federal government could lead to a loosening of their one-party rule over the political, social, and economic order in the South. Especially their racial system of Jim Crow segregation and white supremacy. Protecting the existing Southern racial hierarchy and white power was at the heart of the revolt. The Dixiecrat’s eight-point platform affirmed their support for “segregation of the races and the racial integrity of each race” and their opposition to “the elimination of segregation, [and] the repeal of miscegenation statutes.” Their agenda also included support for anti-labor union “private employment” arrangements over intrusion by the federal government and other conservative economic principles. Dixiecrats (and other Southern Democrats who supported their ideology but not the strategy) began to realize their cause would be strengthened if they shifted from explicitly racial language to using more race-neutral tones. “The South’s fight is not being waged on the theory of white supremacy,” Thurmond insisted, “but on the theory of State sovereignty.” It was a lesson that many white racially conservative Americans would learn as the civil rights movement advanced. Despite the tumult within the Democratic coalition in 1948, Truman famously won reelection with the narrowest margin. In the end, Truman owed his victory to two of the New Deal coalition’s staunchest members: Southern Democrats who stayed with him despite the Dixiecrats’ efforts (the Dixiecrats received only 20 percent of the popular vote in the Southern states where they were on the ballot), and northern urban African Americans who voted for him in increased numbers in parts of Chicago and Cleveland, giving Truman narrow victories in Illinois and Ohio. Brown v. Board of Education and Setting the Stage for the Nationalization of the Massive Resistance One of the most impactful civil rights movement’s victories came on May 17, 1954, with the U.S. Supreme Court’s ruling in Brown v. Board of Education of Topeka, Kansas. The ruling declared unconstitutional the legal doctrine of “separate but equal” that had until then defended the Jim Crow system of racial segregation. Most notably, the ruling called for the desegregation of America’s public schools. Reaction in the former Confederate states was considerable, leading the white supremacist U.S. Senator from Virginia Harry Byrd to coin the term “massive resistance” to describe the reactions by Southern Whites. Several Southern states passed bills outlawing desegregation and conforming to the court order. Local communities across the South resisted orders to racially integrate their public schools by disbanding their public school systems and selling their properties to newly formed Whites-only private schools. Over 250,000 Whites joined local White Citizens Councils (WCCs) to fight school integration and integration of other public facilities in their local communities such as public pools and libraries through political, economic, and social intimidation. The civil rights movement was increasingly successful at toppling Southern segregationist policies and practices. As a result of its success, it spurred a nationalization of the White backlash that would go on to undermine the movement’s goal of racial equality. It did so in two important ways: reframing the defense of legal racial segregation as a race-neutral issue of constitutional “states’ rights”, and bringing the fear of integration to de facto segregated communities in the North. First, while some massive resisters used explicitly racial language in their defense of racial segregation and the white supremacist racial order, other anti-integrationists began to amplify their defense through the use of race-neutral language. “Home rule,” “local control,” “states’ rights,” and even the newfound constitutional right of states’ “interposition” became race-neutral rationales for stopping the implementation of desegregation orders. As some Southern Democrats and their allies became more and more concerned with the increasing power of the federal government working to “end their way of life,” they began to build relationships with Northern conservatives to amplify the defense of Southern segregation using race-neutral language. In 1957, the conservative New York-based National Review wrote in defense of the Southern racial hierarchy as being about “whether a central or local authority should make [the] decision” about educating their children, not the federal government, even calling a decision to deny Blacks equal rights as “enlightened” if a majority of voters supported it. The seeds were being planted for a future political realignment marrying traditionally Republican Northern economic conservatives with traditionally Democratic Southern racial conservatives, using race-neutral language in defense of policies that directly supported a racial social hierarchy. Second, even though Northern communities didn’t have the explicitly white supremacist Jim Crow laws and social order of the South, they did have their own forms of legal and racial discrimination that kept Whites and Blacks separate and unequal. Much of the North’s racial segregation was established in response to the Great Migration when Blacks began to move North seeking economic opportunity and an escape from racial segregation and violence. As Blacks were arriving in Northern cities starting in the early 1900s, local zoning laws, racially restrictive covenants attached to residential properties, and significant anti-Black violence by Whites limited where housing was available to Black families. New Deal federal housing programs refused government-backed mortgages to redlined communities where Blacks could live. Then post-war programs for returning GIs supported suburban homeownership for White families but denied it to Black ones. Further, the federal interstate highway system was being built to assist the transport of suburban residents to downtown jobs, often through disinvested Black neighborhoods. The impact of these policies was to segregate cities by design, with Blacks living in aging urban areas with extremely limited opportunities to build wealth through homeownership, while Whites moved to new suburban communities with the support of the federal government. As legal segregation was being dismantled in the South through court orders, and Blacks were winning more legal rights and access to public facilities, White communities in the North became fertile ground for racial anxiety. Race-Neutral Anti-Civil Rights Defenses Marries Free Market Anti-Government Views The shifting political rhetoric of Southern opponents to Black civil rights — initially from explicit support for white supremacy to racially neutral calls for “local control,” and “states’ rights” — matured to center and prioritize individual economic rights. In this way, the movement for a continuation of a racial order that advantaged Whites intertwined with the neoliberal movement for a free market political economy that sought to remove the government from economic policies that supported middle-class Americans. As the civil rights movement continued to advance, U.S. Senator Barry Goldwater from Arizona emerged as a critical national voice of the white supremacist message wrapped in an emerging neoliberal economic rhetoric. Before becoming the 1964 Republican Presidential candidate, Goldwater published his book, Conscience of a Conservative in 1960. Ghost-written by a Republican Party activist who was seeking to bring together Northern businessmen with Southern segregationists in a new conservative movement, the book was both a commercial and messaging success. It included not only defenses of school segregation (“the Constitution does not permit interference whatsoever by the federal government in the field of education”), but also presented a values-based argument for “economic freedom”, including arguing that economic freedom and political freedom were “inextricably entwined.” Until this reframing, many Americans still associated economic conservatism with the soulless corporations that caused the Great Depression. Goldwater himself was more of an economic conservative than a racial conservative. He personally supported many desegregation efforts. But as the Republican Party’s candidate for President, Goldwater found that he won more support through the party’s increasingly stronger stance against civil rights than its conservative, anti-government economic platform. His campaign marked an important step in the development of the modern conservative movement that combined conservative free-market economic beliefs with being against equal rights for Blacks. Alabama Governor George Wallace was another political figure who practically perfected the use of race-neutral “racial coding” rhetoric of racial resentment on the campaign trail, expanding the messages of White grievance beyond his Southern state into Northern communities. Running as a Democrat in the 1964 Presidential primary in Wisconsin, Wallace carefully avoided explicitly racial matters, instead of attacking the government itself for its “overreach” and other aspects of the impending civil rights legislation. He warned middle-class suburbanites and White working-class ethnic voters of attacks on private property rights, federal encroachments on individual market freedoms, union job protections, their children’s schools, and other ways President Lyndon Johnson’s racial liberalism would threaten their safety and economic status. While Wallace didn’t win, he made a surprisingly strong showing in what the Harvard Crimson called “The White Revolt.” He earned one-third of the votes cast in the primary, reflecting that his racially coded anti-government messages were tapping into white voters’ increased racial anxiety as Congress was on the verge of passing the Civil Rights Act of 1964. President Johnson still won the 1964 Presidential election — indeed, by a landslide — proving the staying strength of the New Deal coalition and the Keynesian economic model that government can increase prosperity by playing a role in the economy. But the ties between the Democratic Party and its traditional voters were loosening, including support for its economic platform. An electoral shake-up was coming, one that was driven by the transition in the country’s racial order from Jim Crow segregation to “color blind” legal equality. This transition to a new post-civil rights racial order would buttress the new economic order based on the free-market principles advocated by Goldwater and Wallace in 1964. One Step Forward, Two Steps Back: Civil Rights Advance, Triggering a Decline In Support of Government and the Rise of A New Colorblind Racial Order A new racial order that continued to preference Whites even after the civil rights advances of the 1950s and 1960s was able to form because racial conservatives were able to hijack two key pillars of the civil rights movement, shift their meaning, and use them to build a new racial order with Whites still at the top. One was the civil rights movements’ campaigns for equal access to public facilities, which triggered a retreat from an active government that provided public goods and economic support for middle-class Americans. The second was the fight for an end to racial discrimination in housing, education, employment, and before the law, which led to a “colorblind” approach to implementing policies, programs, and laws that denies the impacts of past and present racial discrimination and disparate impacts unless ( Continued) Sent from my iPhone