Michael Gove

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New Deal Rhetoric – Call the Midwife

Both Prime Minister Johnson and Minister for the Cabinet Office Michael Gove have evoked the transformative programme of Franklyn Delano Roosevelt’s New Deal in recent days. Whilst their description of some of the challenges we face is accurate the scale, focus and depth of the response leaves something to be desired, and they do not touch the heart of the problem

We are going to “build build build” our way out of the economic collapse that is accompanying the Covid-19 virus. To achieve this we are going to bring forward £5bn of already identified expenditure. That is a lot of money and compares favourably with the $3.3bn that FDR invested in the Public Works Administration.

Except… the $3.3bn was only the first significant investment in the New Deal in 1933, which is a long time ago. The figure has been estimated as representing some 5.9% of the GDP of the US economy. The UK economy is currently approximately £2.2trn per annum, 5.9% of which is £129bn. Even allowing for currency difference the scale is significantly different and it was just the start.

More significantly however is the fact that at the core of FDR’s vision was a concern about power. The fact that power had been monopolised by the monopolists. This left the vast majority of American citizens on the outside and impoverished with 25% unemployment, collapsing businesses, and agricultural chaos.

He certainly wanted to “level up” those languishing in the depression economy, to provide them with relief, establishing the first basic social security system in the US. He transformed agricultural finance and implemented a public works programme on an immense scale.

He understood the benefits of public ownership setting up Tennessee Valley Act which created a publicly owned electricity company generating cheap electricity for the residents of the Tennessee Valley.

However, FDR was not content to just provide relief to level up the dispossessed he also wanted to “level down” some of those, business and financial monopolists, speculators, reckless bankers and others who he saw as largely responsible for the economic collapse and enemies of peace. Speaking of this group he said, “They are unanimous in their hate for me – and I welcome their hatred.”

That “levelling down” involved addressing income inequalities with the Revenue Act in 1935 which imposed a top rate of 75% on incomes over $1m. It also involved measures to support the growth of independent trade unions to redress the balance of power between employers and workers.

Roosevelt also introduced measures to curb the finance industry, notably the Glass-Steagall Banking Act which, amongst other things, separated retail from investment banking, the repeal of which in 1999 opened the way for some of the excesses which led to the 2007/08 credit crunch.

In his first 100 days FDR introduced legislative and administrative changes which transformed the US. Not just providing much needed support to the unemployed, small businesses and family farms but much more significantly reducing the power of the economic elite. He paved the way for a almost half a century of recalibration of inequality in favour of the poor and middle classes. His actions can be seen as having both saved the US economy and more profoundly reconciling capitalism with democracy.

On the positive side much that he changed stands as a testament to his vision and determination even today. However, the conflict between capitalism and democracy faces the same challenge as it did when FDR came to power. A conflict generated by a return to similar levels of inequality and concentration of power.

It is difficult to see nationalistic bluster and a “reform” of the civil service which havers between a rehash of proposals made over decades and a desire to inspire its performance by making senior appointments political, as having anything like the impact FDR had.

If the Tory party are looking to history for something that rhymes with what they are doing now, they have alighted on the wrong person. FDR’s New Deal was short on rhetoric and long on action.

Mr Gove’s Ditchley lecture begins with a quote from Antonio Gramci analysing the problems of his time saying, “the inherited is dying – and the new cannot be born;”. I fear we need to call the midwife as neither Mr Johnson nor Mr Gove look up to the job.

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“Who do you think you are kidding Mr Johnson”

Once again Great Britain is threatened from across the Channel. After a protracted period of negotiation Prime Minister Theresa Chamberlain returned to the Commons with a piece of paper in her hand. Unfortunately she did not appreciate that the perfidious failure of the Europeans to accept our desire to leave and remain within the European Union would not satisfy the patriotic fervour of her colleagues who promptly shot her.

Things looked grim for Blighty but cometh the hour cometh… a new team to defend our shores. “Haves Army” a group of individuals led by those who had overcome the challenges and travails faced by their fellow citizens by applying their entrepreneurial  skills to carefully choosing their parents. Leading them, Boris Mainwaring, a man known for his serious attention to detail, integrity and probity but most of all his sophisticated negotiation skills.

Immediately the Captain eschewed  the defeatist thinking of the collaborators and adopted the “can do” attitude which had been lost with Empire. His central negotiating gambit was to play the Blazing Saddles opening. Who can forget the masterful strategy of the new black sheriff as he rode into town. The excited anticipation of the white towns-folk waiting to greet him turning first to disbelief, then anger, then threat.

Surrounded by a mob with pistols drawn the new sheriff calls their bluff. He draws his gun and points it at his own head. “Back off or the black guy gets it.” he calls. The crowd gasp. One of the townsfolk shouts “Put your guns down. He ain’t bluffing.” The crowd part as the sheriff retreats to the safety of his office, all the while pointing the gun at his head. One of the towns women-folk calls plaintively, “Is no one going to save that poor man?” The black sheriff/hostage enters his office and the crowd breaks up not even aware of what has just happened to them.

So Captain Boris tells those pesky Europeans to back-stop off or there will be no deal. To convince them he draws on his trusted ally, Lance Corporal Gove, tasking him to make sure there is plenty of ammunition for the suicide threat. Something Corporal Gove doesn’t need to be asked twice. Off he goes around the country to ports and industries repeating the carefully thought through no deal strategy of “Don’t panic! Don’t panic!”

Keeping his head down with self-deprecating promotion, Private Rees-Walker, promotes a strategy for the nation that will take it forward to the 1850’s when serious wealth could be generated and the lower orders knew their place.

What could go wrong? Although I think I do hear sotto voce from somewhere in the political ether the pithy statement of coherent opposition “We’re doomed, we’re all doomed!”