Tom Ferguson Interview at New Deal, Investment Theory of Politics

This interview, Money and the Midterms: Are the Parties Over?, between New Deal 2.0 editor Lynn Parramore and Roosevelt Institute Senior Fellow Tom Ferguson is worth your time (Yglesias has further comments).

There’s a lot of fun stuff about his investment theory of politics (“But in fact, American political parties are mostly bank accounts…The policy choices political parties present to the public on Social Security, macroeconomic policy, campaign finance reform, and indeed nearly every other policy area save a handful of hot-button ‘social issues’ are basically dominated by big money”) which, as people try to parse our current political environment, I hope they’ll give it a go.

Because that kind of analysis is so suppressed among the discourse that once you turn it on it’s hard to turn it back down. For instance, there was an editorial over the weekend about how the Tea Party isn’t a big fan of free trade. I knew that there was a long tradition of of this from Ferguson’s 1987 book, Right Turn:

Two new developments began to attract attention that had major implications for Democratic Party elites.

First the always tenuous position of the liberal Republicans within the GOP was disintegrating completely. With the growing boom, imports exploded, threatening many traditional, labor-intensive Republican manufacturers, as well as some primary producers and national oil concerns. Joined by the many agricultural interests and smaller businesses who received little or no benefit from [Kennedy’s 1962] investment-orientated tax cuts and who often feared the effects of rising social spending on their supply of low-wage, unskilled labor, copper companies, whose prices were collapsing, some defense contractors; and many leftover opponents of the New Deal-these groups went on the offensive. Though at the time they represented a minority of Americans, they constituted a majority of Republicans. After a series of bitter primaries, this coalition seized complete control of the party. Party elites wrote an import-restrction clause right into the party platform. They also denounced the U.N., internationalism, and (memorably) the Rockefellers, as they nominated Barry Goldwater for President. (p. 53)

And sure enough, if you look at the 1964 Republican Party Platform there it is (search for “import” in the document, it’s hidden but a nice dogwhistle to elites).

Committee Work

Also if you want to see what a mid-century bi-partisan committee to advise the President looks like, check this out from the same book.  It’s during the part that chronicles how certain types of elites understood that growth for themselves required investing in the population and in its infrastructure, and how that influenced their move from the GOP to the “New Frontier” policies of Kennedy:

[In the late 1950s] dissatisfaction with the Republicans’ austere fiscal policy and stop-go management of the economy ran rife among American multinational buinesses. In 1957-58, as what struck observers then as a particularly disastrous recession commenced, that discontent boiled over.

Led, not by women, blacks, unions, or even Lyndon B. Johnson, but by the Rockefeller brothers, a powerful group of multinational business figures began a public campaign to raise the American economy’s rate of growith. First in Nelson Rockefeller’s political speeches during the late 1950s and then in a series of Rockefeller Brothers Fund studies that involved leading Democrats, this bloc argued that a more consistent application of Keynesian economic principles and strategic reduction in taxes could raise the American economy’s growth rate…They also argued explicitly that higher growth rates would permit an expansion of public-sector spending.[16]

Echoed in other studies of the period by the multinationally oriented Committee for Economic Development and much research sponsored by the Ford and other foundations, these proposals found scant favor among Republicans. But after Rockefeller lost the first of his several tries for the GOP nomination, the Democrats happily appropriated them. Attracted by the promise “to get America moving again,” many multinational business figures turned once again to the Democrats as John F. Kennedy was elected….

[Endnotes] 16….Here is how [The Rockefeller Panel Reports, 1961] described what the conclusion of the book referred to as their “New Frontiers”:

As set forth in other sections of this report, we shall need, in the next decade, a greatly expanded school system to broaden and improve education. We shall need urban redevelopment on a vast scale to life the living standards and the social and cultural content of metropolitan life. We shall need more and better highways and improved modes of transportation to spur commerce, communications, and travel. We shall need better water supply and pollution control systems to meet domestic, industrial and agricultural requirements. We shall need more health and hospital facilities, more basic and applied research, more recreation areas. The list is extensive and, as the final section of this report sets forth, estimates indicate an increase of almost 50 percent in government purchases of goods and services by 1967.

I’m not one for nostalgia for the midcentury Protestant elite so-called responsibility ethic, but watching our infrastructural apparatus collapse at a time when the world is desperate to lend to the United States and seeing our version of this report call for austerity a go-go, I’m getting a little bit nostalgic.

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