Long Range Public Investment: The Forgotten Legacy of the New Deal

Long Range Public Investment: The Forgotten Legacy of the New Deal
We often think of the New Deal as the birth of the welfare state, however, Robert D. Leighninger Jr.’s book, Long Range Public Investment: The Forgotten Legacy of the New Deal, reminds us that the New Deal bought us much more, and much of it is still here today. Picnic tables in national forests, tennis court at the city park, auditoriums, schools, hospitals, even botanical gardens, zoos, fairgrounds, city halls and fire departments, these were all things that were built as part the jobs programs of the New Deal that are still in use today. But we got more than just physical infrastructure from the New Deal, the economic policies of the New Deal laid the groundwork for our parents and grandparents to have a middle class life style.

With bridges and levies failing, we sometimes forget that Americans used to take pride in their infrastructure, that they didn’t mind that their tax dollars were being spent to invest in America. Leighninger reminds us that, “John Quincy Adams and other early leaders saw ‘internal improvements’ such as roads, canals, harbors, and lighthouses as a means of aiding commerce and uniting the widely separate colonies. If these efforts were paid for by taxes, they were also symbolic of this unity: the contributions of the many to support the whole. If they were paid for by deficit spending, according to Alexander Hamilton, this had other benefits. Those who financed the debt now had a stake in the well being of the government.” The rising unemployment of the 1920’s would turn into a tidal wave with the stock market crash of 1929. Soon private charities and state government would be swamped and it would be left to the federal government to throw a lifeline, providing jobs for the unemployed.

The most popular job program was The Civilian Conservation Corps (CCC). At the time the CCC was created we had two wasted resources in this country. Half of our youth, ages fifteen to twenty five, were employed half time or not at all. Our forests were disappearing and our farmland was ruined. The CCC bought together both of these resources, our land and our youth, in an attempt to save both. They made physical investment in our country, with structural improvements to bridges, fire towers, park buildings and museums. They improved transportation, including roads, trails, and airport landing strips. Erosion and flood control included terracing and planting, irrigation and drainage, dams, ditches, channels and riprap. They developed forest protection and culture with tree and shrub planting, timber stand improvements, seed collection and nursery work, firefighting, fire prevention, and insect control. Landscape, recreation and range improvements included developing camp and picnic grounds, clearing lakes and ponds, improving grazing lands and eliminating predators. In addition, they stocked fish, improved streams, provided forest animals with cover and food; they did mosquito control, surveying, search and rescue, and responded to local emergencies.

But we didn’t just invest in physical infrastructure, we also invested in these young men. Many of the young men coming to the program were illiterate and had not graduated from high school. So after a five and half hour work day, the boys would attend night school, classes taught by educational advisor, usually a local teacher or college professor. By 1937, the CCC would teach thirty five hundred young men to read, over one thousand would earn high school diplomas, and thirty-nine would receive college degrees. It hard to know the long-term economic benefits of a program like this; the improved lives of young men, their ability to earn more and contribute for a lifetime to the tax base. Even the infrastructure they built is hard to measure in economic terms. Leighninger observes that, “The parks and forests that the CCC built or improved has provided for decades of benefits of outdoor recreation, most of which, despite their undeniable importance, are immeasurable. But some of the effects of the CCC toil and sweat can be measured. Stowe, Vermont, was already a summer resort area when the boys cut the first ski trails on the slopes of Mount Mansfield and built the base lodge from which the ski tows would soon embark. Their efforts turned Stowe into a year round tourist magnet. Now a million people visit Stowe each year and in 2000 spent an estimated $61.5 million on food, drinks, and lodging, a tidy return on this investment.”

Roosevelt created the Public Works Administration (PWA) with the intent of revitalizing industry. The first goal was to stimulate the economy and put money into the hands of workers who would spend it. The PWA did not require that those hired be currently unemployed and the jobs paid prevailing wages. It would have been cheaper, just to provide a relief check, to put unemployed workers on the ‘dole,’ but it was feared that unemployed workers would loose both their self-respect and their skills. Unions were given the first call on the jobs, but if they did not fill them within twenty-four hours then the U.S. Employment Service would provide workers. Local workers were given preference over out-of-towners, veterans over non-veterans, and union members over non-union members. The PWA would engage in both federal projects, like improving military bases, and non-federal projects. Non-federal project were in partnership with state and local governments. The projects would be a thirty percent grant from the program and a seventy percent loan to the applicant. This allowed cities, already too over extended to borrow from private sources, to build and repair the public works they needed to protect the health and safety of their communities. Roosevelt would also create the Civil Works Administration (CWA), which arose basically as a relief program. Its workers would come from the unemployed. But unlike typical relief programs of the day, it would not require a social worker visit to the home, workers would be paid in cash—not vouchers, and it paid prevailing wages---not wages calculated to meet the minimum subsistence requirements of the worker’s family. The projects done by the CWA are harder to notice today, they built 44,000 miles of new roads, repaired 200,000 miles of existing roads, built 9,000 mile of drainage ditches, 2,000 miles of levies, 7,000 bridges, 2,000 playgrounds, 4,000 schools and built new or improved 1,000 airports. Leighninger observes that, “In its extremely brief life, the Civil Works Administration showed that public works projects conducted on a large scale could be beneficial to both the well-being of individuals and the health of the economy. Even more important, from a perspective seventy years later, CWA demonstrated that public works projects could make enduring contributions to the nations physical and cultural infrastructure, The CWA was clearly more than temporary work relief; it was long term public investment.”

The Works Progress Administration (WPA) is probably the best known of the New Deal works programs, in part because they were in almost every community. As unemployment climbed, it became clear that more would be required of the government. But Roosevelt was not looking for another temporary program he saw the WPA as part of larger package granting Americans security. He felt that anyone who could work should have a job and if the market could not provide the jobs then the government should. But he also felt that “That there were those who could not or should not work: people with disabilities like blindness, elders who had already put in a full work life and were entitled to some rest in their final years, and widows with young children who should be supported while they raised their families. For them a system of ‘social security’ was necessary, a national system not determined by local circumstances or prejudices.” Both would come into being as a package in the National Industrial Recovery Act. In order to stretch the funds as far as possible, the WPA looked for projects that were labor intensive with low material costs. Leighninger concedes that, “To a certain extent, an association with patronage was unavoidable. Since most of the people on relief were in urban areas, most WPA projects were also. And since many cities were controlled by Democratic machines, WPA projects were most helpful to the Democratic Party. This may be as it should be, since the Democratic Party made the programs possible. As long as the work was offered to everyone regardless of party it is hard to see anything wrong with the Democratic Party reaping the rewards for its programs.” The original legislation was aimed at improving physical infrastructure, roads, rural electrification, water conservation, sanitation, and flood control, but subsequent funding provided for public buildings, parks, schools, public utilities, airports, and transit facilities, each year the funding would expand until it included almost anything.

Often confused with the WPA was the Public Works Administration (PWA), but unlike the WPA, the PWA was designed not to provide the masses of unskilled workers with jobs, it was designed to build projects that would employ the already skilled labor. The early years of the program were concentrated on physical infrastructure, like bridges and water works, but the latter years would see more cultural infrastructure, like schools, universities, courthouses, museums, and recreation facilities. Leighninger recounts that, “In New Orleans, PWA reconstructed and modernized the historic French Market, making it a world-famous tourist magnet while still a place to get fruits, vegetables, and prepared foods. Not far from the French quarter rises the twenty-story hospital known as ‘Big Charity,’ a monument to public health and an engineering curiosity as well. Erecting such a giant on the mud and sand of this city below sea level was a considerable risk. It stopped sinking at eighteen inches below grade but not before anxious owners arranged for an inspection by high-paid, Ivy League consultants. Outside the city, the rumor circulated that one could now enter the building at the second floor.” Other well known WPA projects include the Citadel’s chapel, barracks, and officer quarters, the Outer Drive Bridge of Chicago’s waterfront, the Orange Bowl in Miami, the gold bouillon depository for Fort Knox, the Tennessee Supreme court building, the University of Texas tower, the stadium and track at Williams and Mary College, the Will Rodgers Coliseum in Fort Worth, the city hall in Kansas City, the municipal auditorium in Okalahoma City, the Oregon State Capital building, and the Key West Overseas Highway.

The Tennessee Valley Authority (TVA) was far more than a jobs program. Leighninger describes it as, “an experiment in regional planning, a conservation effort, an assertion of the public right to provide electrical power, a flood control project, an extension of river navigation, an attempt to stimulate the economy by improving agricultural practices and attracting industry, a novel form of bureaucratic organization, and a promotion of grassroots democracy. Along the way, it ventured into town planning, revival of traditional crafts, and archeological excavation…One of the fascinations of the TVA is that it was conceived as a package, one so stunning that it stood out even in the context of the many creative improvisations of the early New Deal.” The development of the Tennessee Valley did not develop out of the New Deal; its roots were older. The National Defense Act of 1916 mandated a domestic source of nitrates for the manufacture of explosives, Muscle Shoals Alabama was chosen for the site. The act recognized that the plant could produce nitrates for fertilizer as well as for explosives. In 1921, Henry Ford offered to buy the land, complete the dam complex and lease it to the government. But Sen. George W. Norris of Nebraska had studied the Muscle Shoals project, and he opposed Fords purchase of the land. He was an advocate for the public ownership of the capacity to generate electrical power. Norris saw that there was, “an irreconcilable conflict between those who believe the natural wealth of the United States best can be developed by private capital and enterprise, and those who believe that in certain activities related to natural resources, only the great strength of the Federal Government itself can perform the most necessary task in the spirit of unselfishness, for the greatest good to the greatest number.” Roosevelt would take Norris’s vision even further, with erosion control, teaching farmers how to gain a living without destroying the land. He wanted to reclaim not only the land, but the people in some sustainable balance. The TVA would be created as an independent government corporation, governed by a three-person board appointed by the president. The Dams built to control the river all bore the inscription “Built for the People of the United States.” The first dam was named after Sen. Norris. But it was more than just a dam, a power generator, it was a series of parks and community of homes, with a school, shops and other amenities. It was a low-density community, with just 2.7 families per acre and connected to the world with the twenty-five mile Norris Freeway. Again like most of Roosevelt’s program, he did not forget these were real people, Workers put in a five and half hour day and were encouraged to take classes at night in academic study or training in such fields as electrical work, automobile repair, pipe fitting, and dairy technology. In the transitional economy, with high tech coming to the valley, care was given that the traditional valley culture was not lost. Locals were encouraged to teach and produce traditional crafts; these items were placed for sale in the visitor’s center and in shops in Chattanooga and Rockefeller Center in New York. Of course, not all welcomed the changes coming to the Valley. Leighninger recounts that, “An elderly woman known as Aunt Rachel, refused to sell her land. She said she would just sit on her porch and let the water rise around her. The TWA agent described all the wonderful things that the dam and power plant would bring to the valley and implored her to cooperate in this monumental effort. ‘Cooperate?’ she cried. ‘I’m going to die for the government. What more do you want?”

One of the primary reasons for the New Deal programs was to stimulate the economy. Attempts to stimulate producers were not successful; after all, why should anyone use their savings to produce when no one had any money to buy the things they were producing? So the New Deal would begin with consumers rather than producers. With the government employing willing workers for public works projects, who would then go out and spend their paychecks, creating a demand for products. As Leighninger notes, “The only sure way of getting money on the demand-side multiplier is for the government to spend it itself, preferably on useful public works projects. Some materials are bought, which stimulates some parts of the economy. Some money gets into the hands of ordinary consumers. If they are low-income citizens, they are likely to spend it. If they are middle-income citizens, they might not. But the country is no worse off than it would be using tax rebates. And it is assured of having something to show for the effort, a contribution to our physical and cultural infrastructure that can be used this year, and next year, and for decades to come.” One universal feature of all the New Deal programs was that they created new public sector jobs. Unemployment had become a problem for the entire society, anyone could find himself unemployed. Roosevelt asserted in his 1944 State of the Union address an ‘economic bill of rights,’ that included the right to a useful and remunerative job and protection from the economic fears of old age, sickness, accident and unemployment. Leighninger observes that, “When unemployment is seen as everyone’s problem, its economic aspects take prominence even though it remains a social problem as well. The widespread concern that unemployment would destroy self-confidence, erode work habits, increase family conflict, and encourage excessive drinking was behind the preference among New Deal planners for work relief over the dole. These were social problems but people saw their solution as economic. When unemployment is seen as a problem for certain groups only, and when those groups seem different from the rest of us in race, class, or gender, the economic aspect gets submerged in the social. Individual behavior, education, and ‘debilitating’ environments gain prominence; the economy is not seen as part of the solution.”

During the New Deal, there were four criticisms of public jobs as a solution. First, they are inefficient, but as Leighninger points out it is “disingenuous to charge a project with doing something inefficiently if it is something that needs doing and the alternative is not doing it as all.” Second, they would displace public workers already employed. For the most part this was not an issue during the depression, but could be an issue in jobs programs today. Third, they compete with private jobs, this too was for the most part not an issue as there were no private jobs to compete with. When permanent jobs did become available, WPA workers left the program for permanent jobs. Fourth, they are make-work, work that would not other wise be done. The make-work nature of public sector jobs programs is so they don’t compete with current public sector jobs or private sector jobs. But as Leighninger observes, the conservation of the CCC was enormously useful and no threat to public or private sector jobs, because no one was doing it at the time. “There are similar tasks today in conservation, education, public health, and the arts that might seem to some as unnecessary or useless and therefore no threat to private enterprise or normal government…the question of make-work boils down to beliefs about what normal government operations should consist of…Planting trees, building sidewalks, cleaning up parks and playgrounds, weatherizing homes, painting murals in public buildings, repairing leaky school roofs, supervising playgrounds, performing Shakespeare in the park, making picnic tables, or teaching art and music may be make-work for some.” Times of high unemployment provide government with the opportunity to provide for its citizens while following Herbert Hoover’s maxim that it is better to engage in public works during depressions because material and labor will cost less. Leighninger declares that, “It is an example of true long-range public investment…The New Deal, in a very short period of time, contributed a tremendous amount to the nation’s public life in the form of physical and cultural infrastructure. That investment paid back dividends for many decades thereafter and in many cases is still paying back. That should be remembered in times when commitment to public life ebbs and belief rises that we simply cannot afford to invest. There was a time in our history when people found ways to combat despair by building for the future.”

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