(This is the first of a few posts laying out some of the very basic intellectual background for the political parts of this blog. Not at all a scholarly effort, but an attempt to put into words some widespread progressive assumptions about how America’s domestic economic policy and politics arrived at their current state.)
In response to the Great Depression, America went through a political and constitutional transformation. The New Deal violated classical liberal notions of the division between the government and the private market economy, created a federal safety net against economic insecurity, and put in place innovative regulatory schemes that provided a democratic counterweight against the power of organized wealth. Through these and other measures, the New Deal redefined the role of the federal government.
The political opponents of the New Deal tried to resist this transformation. But by the end of World War II, once-radical innovations like Social Security were no longer subject to serious political challenge. What was once seen as an unconstitutional overreach—a violation of the limits placed on the federal government’s power by the Constitution—came to be accepted by the American public as an ordinary state of affairs. Eisenhower’s presidency showed that the New Deal regime had become bipartisan. Even right-leaning politicians who attempted to resist the expansion of the New Deal vision often found themselves lacking a viable large-scale alternative and adopting a basically New Deal way of framing the issues. Principled, branch-and-root opposition to the New Deal was relegated to far-right organizations lying outside the political mainstream.
Through the 1960s and 1970s, the New Deal era built toward its culmination in Johnson’s Great Society programs, including Medicare and Medicaid. The presidency of Richard Nixon can be seen as the final capitulation of the elected right’s resistance to the New Deal. Even though Nixon won the White House in part through veiled (and not-so-veiled) opposition to the civil rights goals of the New Deal’s liberal inheritors—the so-called “Southern Strategy,” grounded in racial hostility toward blacks—he accepted the basic premises of the New Deal, and even expanded the scope of regulatory activity through the creation of the EPA.
In retrospect, however, the 1970s were also the high-water mark of the New Deal era, which was already beginning to collapse. The usual symbols of this collapse would include: on the internal ideological front, the rise of the New Left and hippie communalism, not to mention militant left organizations such as the Black Panthers and the Weathermen, all of which divided the left without gaining the democratic support of the American public; on the external front, strains on the New Deal regime including the Vietnam war and the oil crisis; and on the domestic policy front, real or perceived failures including stagflation, unpopular court-imposed busing plans, rising crime rates and urban rioting, and failures of ambitious, inadequately funded, poorly executed government programs (which themselves could be symbolized by the Pruitt-Igoe housing project)—all of which served to undermine the great expectations of the New Deal era.
Just as the Great Depression created a window for the discrediting of the classical liberal vision of government that coalesced in the Gilded Age, suffered setbacks in the progressive era, and reached its peak in the relative prosperity of the 1920s, the unfulfilled promise of government in the 1970s created a window for the discrediting of the New Deal regime.