When FDR became President in March 1933, he was confronted by the worst crisis the nation had experienced since the Civil War.
The economy was in utter ruins. Despair was universal. Political turmoil pervaded the country. Outbreaks of disorder and violence were widespread. A totally breakdown in the American democratic system seemed possible. Demagogues exploiting economic inequality and xenophobia — like Huey Long on the left and Father Coughlin on the right — were hugely popular.
But FDR was an extraordinary political magician; and, by pulling tricks out of his (apparently) bottomless bag, he managed to restore and maintain political stability. Indeed, many historians consider Roosevelt’s single greatest achievement as President to be his resuscitation of American democracy from its near-death in the Great Depression.
Perhaps the most profound and effective of Roosevelt’s domestic reforms was the creation of Social Security. For the first time, the Federal government took on responsibility for combating such problems as old age, poverty, unemployment, and the burdens of widows and fatherless children.
The benefits were manifold. Many Americans were then literally destitute, especially people too old to work. Social Security provided these people with an income — money which they then rushed out to spend on the consumer goods they desperately needed. This stimulus in turn gave a boost to the depressed overall economy.
Now, 85 years later, Social Security is probably the most popular program ever established by the Federal government.
What Joe Biden can learn from FDR
Now, in January 2021, as President, Joe Biden is confronted by the worst crisis the nation has experienced since the Great Depression. How should he respond? I propose that he follow in FDR’s footsteps. The path has been laid out.
In the 2020 campaign for the Democratic Presidential nomination, Andrew Yang, an entrepreneur and political novice, made a big splash by insisting that automation’s mass destruction of America jobs should be a central focus of the debate. Yang argued that this issue — lurking dimly in the background — was actually a gnawing economic grievance that helped explain Donald Trump’s surprising victory in 2016.
To mitigate this grievance, Yang proposed what he called a “Freedom Dividend.” This would provide a $1,000-per-month universal basic income to all US citizens age 18 or older, regardless of employment status.
(How would the “Freedom Dividend” work? What would it cost? How would it be paid for? Yang’s proposal provides good answers to these questions.)
It must be said that the idea of a universal basic income (UBI) has been around for a long time; and, while highly controversial, the concept has won strong support from many notable advocates on both sides of the aisle, including Martin Luther King and Richard Nixon.
Conservative economists Milton Friedman and Friedrich Hayek have endorsed UBI but so have liberal economists James Tobin, Paul Samuelson, and John Kenneth Galbraith.
Other UBI supporters include widely respected statesmen such as Democrat Robert Reich, former Secretary of Labor, and James Baker and George P. Shultz, both former Treasury Secretaries and Secretaries of State in Republican administrations.
Andrew Stern, the former president of the Service Employees International Union, has written a book advocating UBI. Entrepreneurs Richard Branson, Elon Musk, and Mark Zuckerberg have come out in support of it.
This broad support speaks volumes about the appeal of the UBI concept. It’s not some nutty, half-assed notion but a practical, viable political option. UBI advocates seem to agree on one key premise: our economic system does a great job of creating wealth but a poor job of distributing it. UBI addresses this inequality. Income inequality has been and is a growing threat to social order.
Mr. Yang has made this eminently practical assertion: “The government is not capable of a lot of things, but it is capable of sending large numbers of checks to large numbers of people promptly and reliably.” (Millions of old folks on Society Security know this assertion is 100 percent true.)
Assuming that Yang was right about economic grievances giving Donald Trump the edge in 2016, wouldn’t that be the case ten times over in 2020 when a raging pandemic is wrecking the economy? There is evidence that this is indeed the case.
In 2020, the Edison exit poll asked voters which of two approaches in dealing with the pandemic was “more important.” Fifty-two percent of voters said that “containing the virus now even if it hurts the economy” was more important. But forty-two percent of voters said that “rebuilding the economy now even if it hurts efforts to contain the virus” was more important. These people are worried about their jobs, their houses, and their incomes, and over 75% of them supported Donald Trump.
Here’s the dreadful outcome. In 2020, Donald Trump got 11 million more votes than he did in 2016. This may be the most shocking outcome of the election. Alleviating this mass disaffection is now the most urgent political task before us. And the best way to alleviate it is to adopt and implement Yang’s “Freedom Dividend.”
It is said that Trump voters feel victimized by the deep state. It would be hard, wouldn’t it, to feel victimized by a state that sends you a thousand dollars every month just for being alive?
And here’s the icing on the political cake —
Today, the most steadfast supporters of Social Security (and its largest class of beneficiaries) are white working class people without a college degree — Donald Trump’s base. Wouldn’t they form a similar attachment to UBI if it were enacted? And they can thank Joe Biden for their increased sense of economic security.
If you haven’t already, please consider checking out my two recent books available on Amazon. I’m writing another now.