The New Deal’s probity wasn’t an accident. New Deal officials made almost a fetish out of policing their programs against potential corruption. In particular FDR created a powerful “division of progress investigation” to investigate complaints of malfeasance in the WPA. This division proved so effective that a later congressional investigation couldn’t find a single serious irregularity it had overlooked.[3]
This dedication to honest government wasn’t a sign of Roosevelt’s personal virtue; rather it reflected a political imperative. FDR’s mission in office was to show that government activism works. To maintain that mission’s credibility he needed to keep his administration’s record clean. And he did.
One more thing: although the U.S. entry into World War II wasn’t planned as a gigantic demonstration of government effectiveness, it nonetheless had that effect. It became very difficult for conservatives to claim that government can’t do anything well after the U.S. government demonstrated its ability not just to fight a global war but also to oversee a vast mobilization of national resources.
By 1948, then, the idea of an active government role in the economy—a role that, in practice, had the effect of greatly reducing inequality—had become respectable. Meanwhile the old view that the government should keep its hands off, which FDR ridiculed in his 1936 Madison Square Garden speech as “the doctrine that that Government is best which is most indifferent,” had been relegated to crank status.
Winning the battle of ideas isn’t enough, however, if that victory isn’t supported by an effective political coalition. As it happened, though, the political landscape had changed in a way that shifted the center of political gravity downward, empowering those who gained from the Great Compression and had a stake in maintaining a relatively equal distribution of income.
During the Long Gilded Age one major barrier to an effective political movement on behalf of working Americans was the simple fact that many workers, especially low-wage workers, were denied the vote, either by law or in practice.
The biggest group of disenfranchised workers was the African American population of the South—a group that continued to be denied the vote for a generation after the Great Compression, and is still partly disenfranchised today. For reasons we’ll get to shortly, however, the South was a partner, albeit a troublesome one, in the coalition that supported economic equality until the 1970s.
But there was another disenfranchised population during the Long Gilded Age that had effectively disappeared by the 1950s—nonnaturalized immigrants. In 1920, 20 percent of American adults were foreign born, and half of them weren’t citizens. So only about 90 percent of adult residents of the United States were citizens, with the legal right to vote. Once the disenfranchised African Americans of the South are taken into account, in 1920 only about 80 percent of adults residing in the United States had the de facto right to vote. This disenfranchisement wasn’t politically neutraclass="underline" those who lacked the right to vote were generally poor compared with the average. As we’ll see shortly relatively poor voters today tend to support Democrats in general and a strong welfare state in particular. The same would presumably have been true in the 1920s. So disenfranchisement removed part of the left side of the political spectrum, pushing American politics to the right of where they would have been if all adult residents had been able to vote.
After severe immigration restrictions were imposed in 1924, however, the fraction of adults without the right to vote steadily dropped. By 1940 immigrants were only 13 percent of the adult population, and more than 60 percent of those immigrants had been naturalized, so by 1940 some 95 percent of adult residents of the United States were citizens. By 1950 the immigrant share was down to 10 percent, three-quarters of whom had been nationalized; noncitizen adult residents of the country were down to a trivial 3 percent of the adult population.
Between 1924 and the 1950s, then, immigrants without citizenship basically disappeared from the American scene. The result was a country in which the vast majority of white blue-collar workers were enfranchised. Moreover by the fifties relatively poor whites were much more likely to actually avail themselves of their right to vote than they had been in the twenties, because they were union members or had friends or family members in unions, which raised their political awareness and motivation. The result was an electorate considerably more disposed to support the welfare state, broadly defined, than the electorate of 1920—or the electorate today.
The South is still different in many ways from the rest of the United States. But in the 1950s it was truly another country—a place of overt segregation and discrimination, with the inferior status of blacks enshrined in law and public policy and enforced with violence. Brown v. Board of Education, the Supreme Court decision that required an end to segregated school systems, didn’t come until 1954. Rosa Parks refused to move to the back of a Montgomery bus in 1955, and the Supreme Court decision ending segregation on public transportation wasn’t handed down until late 1956. Voting rights for blacks were an even longer time coming: The Voting Rights Act was enacted in 1964, the year in which three civil rights workers were murdered in Philadelphia, Mississippi, the place where Ronald Reagan would later choose to start his 1980 presidential campaign—with a speech on states’ rights.
The brutal racial politics of the South, together with its general backwardness, made it in many ways a deeply conservative region—even more so than it is today. Yet the South was also, for a long time, a key part of the New Deal coalition.
Electoral maps tell the story. On today’s maps the South is solid red. Aside from Maryland and Delaware, John Kerry carried not a single state south of the Mason-Dixon line. But in 1948 not a single Southern state went for Dewey, although several did back the segregationist candidacy of Strom Thurmond.
Why did the South support the Democrats? There’s an obvious, ugly reason why Southern whites could support Democrats in the 1950s: Although the Democratic Party had become the party of economic equality, it tacitly accepted Jim Crow. It was only when Democrats became the party of racial equality as well that the Republicans, who began as opponents of slavery but became the defenders of wealth, moved into the gap. I’ll have more to say about that exchange of places later in the book, especially when I look at how Ronald Reagan triumphed in 1980.
But why was the South Democratic in the first place? The enduring bitterness left by the Civil War was part of the story; you could say that for generations Southern Democrats won by running against Abraham Lincoln.
But the fact that the South was much poorer than the rest of the country meant that it also received a disproportionate share of benefits generated by the New Deal. Southern states are still somewhat poorer than the national average, but in the fifties the South was desperately poor. As late as 1959 per capita income in Mississippi was less than one thousand dollars a year (about five thousand dollars in today’s prices), giving it an average standard of living barely 40 percent as high as that of wealthy states like Connecticut, New York, and New Jersey. The South was also still a rural, farming region, long after the rest of America had become an urban nation. By 1950 the United States outside the South had three urban residents for every rural inhabitant—but the South was still more rural than urban.
As a result the New Deal was almost pure gain for the South. On one side, the high taxes FDR levied on the wealthy and on corporations placed little burden on the South, where there were few rich people and the corporations were mainly owned by Northerners. On the other side New Deal programs, from Social Security to unemployment insurance to rural power, were especially important for the low-wage workers who made up most of the South’s population. Even now, the fact that the South depends a lot on the welfare state makes an occasional impact on our politics: When George W. Bush tried to privatize Social Security in 2005, his handlers discovered that opposition was, if anything, more intense in the “red states” that supported him in 2004, especially in the South, than in the rest of the country.
3.
J. J. Wallis, P. Fishback, and S. Kantor, “Politics, Relief, and Reform: The Transformation of America’s Social Welfare System during the New Deal” (National Bureau of Economic Research Working Paper no. 11080, January 2005).