The legacy of the New Deal and Great Society vs. the fallacy of Reaganomics

By James J. Devine

The current presidential election is a referendum on two competing opinions about the role of government in the United States of America, with Republicans tapping into the anger and frustration caused by the reckless set of policies that the GOP forced onto the nation and Democrats seizing an opportunity to restore faith in democracy and revive the kind of economic prosperity that enriches almost everyone.

For all the yelling and screaming about Socialism, Kamala Harris is not proposing a full restoration of the 90 percent top tax rates in force during the Eisenhower administration— or even the 70 percent maximum levied under JFK, LBJ, Nixon, Ford, and Carter —but a milder remedy for the dangerous consolidation of wealth among 600 or so people among the 325 million citizens of this country.

For half a century, America thrived under the New Deal and Great Society programs, which played pivotal roles in expanding the working middle class, enriching the nation, and strengthening democracy. People like Howard Hughes amassed great wealth as the booming economy lifted millions of working people into the realm of middle-class home ownership.

The contrasts with the subsequent decades of Reaganomics—rooted in discredited trickle-down theories—could not be more stark. These Republican policies turned millionaires into billionaires but deregulation, government austerity, piling up massive debt and a reckless lack of investment in maintaining our infrastructure have driven many typical Americans into poverty or near it enough to despair for the future.

The transformative policies of the mid-20th century created a robust, equitable society, while the economic doctrines of the last 50 years have led to increasing inequality and widespread economic despair that fundamentally weaken America.

The Triumph of the New Deal and Great Society

The New Deal, initiated by Franklin D. Roosevelt in the 1930s, and the Great Society, championed by Lyndon B. Johnson in the 1960s, represented monumental strides toward a more equitable and prosperous America. These policies were not mere legislative changes but seismic shifts in how the American government interacted with its citizens, addressing both immediate needs and long-term goals.

The New Deal’s comprehensive reforms, including Social Security, unemployment insurance, and the establishment of labor rights, laid the groundwork for a thriving middle class.

The Great Society built on this foundation with landmark programs like Medicare and Medicaid, which broadened access to healthcare and reduced poverty.

These initiatives not only provided immediate relief to those who were struggling despite the greatest middle-class expansion in history, a booming economy, and a surge in technology but also ensured that economic growth reached a broader swath of the population, promoting social mobility and stability.

During these decades, the U.S. witnessed unprecedented economic growth and prosperity.

The investments in infrastructure, education, and healthcare under the New Deal and Great Society led to a booming economy that created jobs, improved living standards, and fostered a sense of collective progress. The wealth generated was distributed more equitably, ensuring that the benefits of economic success were shared by all Americans.

The expansion of civil rights, voting rights, and social welfare programs during this period bolstered American democracy. As President Franklin Roosevelt explained, “Necessitous men are not free men. People who are hungry, people who are out of a job are the stuff of which dictatorships are made.”

The Great Society’s focus on reducing inequality and enhancing education ensured a more informed and engaged citizenry. This era saw increased voter participation and a more inclusive political landscape, reflecting a commitment to democratic principles and social justice.

Americans with material things also gained free time and the ability to participate more in our democratic republic.

The establishment of Medicare and Medicaid as part of the Great Society significantly improved public health outcomes. By providing access to healthcare for the elderly and low-income individuals, these programs reduced health disparities and increased life expectancy.

The overall health of the American population improved, reflecting the effectiveness of these policies in addressing critical social needs.

The transition to Reaganomics in the 1980s marked a sharp departure from the Democratic policies that had previously fostered prosperity and equality. The decline under Reaganomics is marked by growing inequality, economic decline, diminished democracy, and deterioration of public health.

Rooted in the discredited trickle-down theories, Reaganomics championed tax cuts for the wealthy and deregulation, with the promise that economic benefits would eventually trickle down to the broader population. The results have been disastrous.

The policies of Reaganomics exacerbated income inequality. Tax cuts for the wealthy and deregulation led to a massive accumulation of wealth at the top, turning millionaires into billionaires while the working and middle classes saw their wages stagnate.

The promise of trickle-down economics proved to be a fallacy, as the benefits were concentrated in the hands of a few, leaving the majority struggling to keep pace as labor unions lost power. Millions of middle-class families lost their homes in the Great Recession or similar economic calamities that followed the end of Glass-Steagall banking rules.

The deregulation of industries and the weakening of labor protections under Reaganomics contributed to economic instability and a decline in job security. The middle class, once the backbone of American prosperity, began to erode.

The decline in manufacturing jobs and the rise of precarious employment contributed to a growing sense of economic insecurity and diminished opportunities for advancement.

The focus on reducing government intervention and promoting individualism under Reaganomics had detrimental effects on democratic engagement. The reduction in social services and public investments weakened the social safety net, disproportionately affecting the most vulnerable and diminishing public trust in government.

The shift towards a more individualistic society eroded the collective sense of responsibility and community. Instead of recognizing that we are all in this together, more Americans adopted the notion that it is every man for himself, a formula that creates weakness in a world where we are stronger together.

The economic policies in place since the Reagan era also negatively impacted public health.

The erosion of social programs and the rise in economic inequality contributed to disparities in health outcomes and deregulation contributed to corporate greed that drove up pharmaceutical costs.

Reduced funding for healthcare services and social programs meant that many Americans faced barriers to accessing necessary care, exacerbating health inequalities and leading to poorer overall public health.

The era of the New Deal and the Great Society represented a commitment to shared prosperity, equity, and democratic values. These policies built a strong, healthy, and inclusive society.

In stark contrast, the nearly 50 years of Reaganomics, with its reliance on discredited trickle-down theories, have led to profound economic inequality, widespread despair, and a weakened social fabric.

Consistent with that class war mentality, Trump packed his cabinet with billionaire robber barons, cut taxes on the wealthy, and left Americans to fend for themselves when a global pandemic hit.

It is clear that the New Deal and Great Society not only enriched the nation but also laid the groundwork for a more just and prosperous America.

On January 6th, 1941, President Franklin Delano Roosevelt’s eighth State of the Union address inspired the American people with his Four Freedoms. The freedoms of speech and worship, with the right to live without fear and want, were said to be as inalienable as the rights to life, liberty, and the pursuit of happiness laid out by Thomas Jefferson.

Between 1979 and 2013, according to the UC Berkeley Labor Center, worker productivity was up 89 percent but median hourly compensation grew by just 3 percent during that same period. That’s a long way of saying — the rich got richer, but the workers didn’t.

A first-of-its-kind analysis of app passenger and delivery drivers’ wages in five major metropolitan areas finds that most gig workers make significantly less than minimum wage when all work time, gas, and vehicle wear and tear are factored in. Meanwhile, stock prices and corporate earnings are setting new record highs. 

At the end of 2021, the chaos of the economy’s reopening disrupted the job market and supply chains, leading to increased prices and subsequently, profits. However, throughout 2022, following Russia’s invasion of Ukraine, and into 2023, there were growing suspicions that companies were maintaining high prices simply because they were able to do so.

America’s economy is growing, but millions of workers are being left behind or even kicked into the dirt, largely due to greed among those at the top.  Donald Trump opposed overtime pay for more people, he did nothing to increase the minimum wage, and he instigated chaos, pandemic lockdowns, and inflation.

Although Kamala Harris is not the raving Socialist that her political opponents claim she is, the Democrat believes that the economy should work for everyone, diversity is our strength, and democracy is worth defending.

Harris embraced a platform that calls for raising the federal minimum wage to $15 an hour by 2026 and repealing so-called “right to work” laws that undermine the power of employees and labor unions. She is also willing to crack down on employers who steal workers’ wages, violate labor laws, engage in union-busting, or exploit immigrants to depress working conditions for all Americans. 

As FDR said in his Inaugural Address, on January 20, 1937, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” At every turn, Trump and his appointees made increasing the power of corporations over working people their top priority.

As we look to the future, the lessons of these past policies should guide our efforts to rebuild an economy that works for all, rather than a few.