The Great Depression, for conservatives and their priests, the economists, poses a special problem, in that it calmly and casually blew up everything they had to say, every claim they ever made, about the political economy. For this reason, it has, over the years, been buried under a mass of country club myths that are circulated reverently in the editorial pages of the Wall Street Journal like holy relics of some perverse cult. And, say what you will about myth and history, when the myth is held by the people making the most money in a society, it will, sooner or later, penetrate the historian’s work.
It is in this way that the movements for economic justice that arose in the Great Depression have been relegated, for a long time, to the category of demagoguery. One of those movements is, as a matter of fact, of burning relevance to today’s health care crisis. It was started by a sixty year old physician in Long Beach, California, who noted that people over sixty five were severely affected by the Depression. Francis Townsend, the physician’s name, came up with a solution – a national 2 percent sales tax that would then be used to provide everybody in the U.S. over the age of sixty five with 200 dollars per month. And to give the money more effect, Townsend thought the money should come with the condition that it could not be saved – rather, it had to be entirely spent every month.
Townsend publicized his plan and soon found takers for it among America’s elderly. By 1934 there were 2,000,000 members of the Townsend clubs. Their influence was increased by the fact that, even back then, the elderly were reliable voters.
In 1934, Roosevelt realized that the first wave of programs had merely stymied further deterioration in the economy, which was at a historic low. But Roosevelt was being impeded in his actions by conservative Democratic senators. In a fireside chat, he said:
“It is true that the toes of some people are being stepped on and are going to be stepped on. But these toes belong to the comparative few who seek to gain position or riches or both by some shortcut which is harmful to the greater good.” And, as Ronald Edforth quotes the talk in his book on the New Deal, he continued: “A few timid people who fear progress, will try to give you new and strange names for what we are doing,” he told his radio audience, “Sometimes they will call it Fascism, sometimes Communism, sometimes regimentation, sometimes Socialism. But in doing so, they are trying to make very complex and theoretical something that is really very simple and practical.”
Townsend’s plan was as simple, practical, and toestepping as one could possibly wish. It was the impetus, but not the model, for Roosevelt’s own plan. Roosevelt knew how to use pressure that was being applied upon him – a quality that I have seen glimmers of in Obama. True success in politics is having other people make you do what you want to do in the first place. Roosevelt told Francis Perkins, who chaired his committee of economic advisors: “We have to have it [pensions]. The Congress can’t stand the pressure of the Townsend plan unless we have a real old-age insurance system.”
Now, fastforward to our time and what do we see? A tour d’horizon shows how very much the party system has eaten up independent political movements, like that of the Townsend plan. And yet, from Social Security to Civil Rights, it is extra-party social movements that have driven real change. Which is why I am both delighted in the polls showing such strong support for the Public Option – the option of having the government put itself in the business of insuring health care, to put it at the simplest – and sad that the issue is so wholly engulfed in D.C. politics. Obama, of course, has come out for the public option, and presented an excellent defense of it last week at his press conference. We’ve seen a few senators fall in line – and not the senators you would think. Jay Rockefeller of West Virginia and Arlen Spector have come out for the Public Option – for reasons that are, I think, related to the fact that even conservatives in the 1930s were on the losing side in the battle for old age pensions. The people who will derive the most benefit from the public option are a mass of pretty reliable voters, whose politics is not particularly liberal, but whose health has a liberal bent – it keeps going from bad to worse, and the medical bills have become surreal.
However, it is easy to see that if the politics of the public option are confined to a party led fight, the public option will lose. Townsend’s populist tactics can now be reproduced in the laboratory by even a mediocre lobbyist. The money is heavily against the public option, and the money will buy newspapers, the money will buy tv, and the money will buy its own popular movements. The money, at the moment, has had its credibility hurt – its own health care problem, viz, gambling the global economy on a completely stupid attempt to wrack up derivative wealth, had to be cured by the instant delivery of a trillion dollars in TARP and other aid, and of course the more than 2 trillion loaned at such reasonable, reasonable rates by the Fed. But the money is impervious to seemingly moral contradiction, because in the end there is no contradiction: the money wants money. Whether that comes from goldmining the treasury or getting up on its hind legs and talking about government inefficiency, quotas for medical care, and the evils of socialism – the money will simply do it. The money is pragmatism minus the edifying language.
We are in one of those curious moments in which the money is balanced against an intangible: which way will Obama jump? Clinton, who tried, with all his neo-liberal heart, to carve out a compromise to please the Money, ended up getting his ass kicked. For one thing, in 1993, Clinton just wasn’t that popular. Obama, on the other hand, is. Plus, we are still in a downturn. It has vicious proportions. Obama’s whole economic policy, so far, has been one of satisfying the money – hence, the Larry Summer’s back-to-2007 plan for the banks. Partly this is just a survival strategy – holding off the power of the money gave Obama some breathing room. But now is the time that will test our President’s soul. He truly does have to go beyond the party – he has to arouse an extra-party movement for this change. It is a change that will take from the predators – and, like social security, actually allow the predators to pounce and eat in the long term. But the predators are short term beasts. Live by the points, die by the points. There is no question that the financial sector, which has been the recipient of the most amazing bailout in history, thinks, a., that they deserved it, b., that it didn’t happen, and c., that it oppressed them. There is nothing like the whining of your 2 –5 million dollar bonus baby in some evil division at Citi.
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