Earlier this week, Congressional Democrats gathered in Berryville, VA where they announced their new economic agenda, “A Better Deal”. Senate Minority Leader Chuck Schumer (D-NY) and House Minority Leader Nancy Pelosi (D-CA) where among those in attendance for the press conference to pitch an blatantly “populist” agenda, attempting to hijack the populist wave responsible for electing President Donald Trump.
“President Trump campaigned on a populist platform, talking to working people, that’s why he won. But as he soon as he got into office he abandoned it. […] We Democrats are going to fill that vacuum.” -Chuck Schumer (July 24, 2017)
To accuse President Trump of “abandon[ing]” his populist platform is a pretty bold move by Schumer. I suppose the Senate Minority Leader has convienently forgotten that his party, along with the mainstream media, has been relentlessly criticizing the President for doing exactly the opposite for the past six months. Love em or hate em… it is hard to deny that President Trump has been at least trying to do what he said he would on the campaign trail.
In an NY Times Op-Ed, Schumer attempts to sell this so-called “Better Deal” to working class Americans by using rhetoric that sounds a whole lot like (you guessed it) President Donald J. Trump himself. As they say… if you can’t beat em, join em! While this move is certainly not surprising, it is more than a tad desperate, for several reasons… the name itself, for one. And secondly… ECONOMICS?!?
“And for far too long, government has gone along, tilting the economic playing field in favor of the wealthy and powerful while putting new burdens on the backs of hard-working Americans.” – Chuck Schumer (July 24, 2017)
I mean, COME ON…
“Democrats have too often hesitated from taking on those misguided policies directly and unflinchingly — so much so that many Americans don’t know what we stand for. Not after today. Democrats will show the country that we’re the party on the side of working people — and that we stand for three simple things. First, we’re going to increase people’s pay. Second, we’re going to reduce their everyday expenses. And third, we’re going to provide workers with the tools they need for the 21st-century economy.” – Chuck Schumer (July 24, 2017)
Honestly, I don’t even know where to begin because the fallacies are endless. After he basically plagiarizes Donald Trump’s populist talking points, Schumer admits that Democrats have failed to directly address failed economic policies. But instead of explain what the failed policies really are, Schumer instead focuses on their symptoms only.
Over the next several months, Democrats will lay out a series of policies that, if enacted, will make these three things a reality. We’ve already proposed creating jobs with a $1 trillion infrastructure plan; increasing workers’ incomes by lifting the minimum wage to $15; and lowering household costs by providing paid family and sick leave.” – Chuck Schumer (July 24, 2017)
First off, none of these policy proposals are new. President Trump himself called for investing $1 trillion in infrastructure investment on the campaign trail, many Democrats have called for raising the minimum wage for years, and the Democrats first introduced the Family and Medical Insurance Leave (FAMILY Act) back in 2013. But honestly, why does anyone (President Trump included) think that spending an additional $1 trillion dollars is a good idea when our country is $20 trillion in debt already? (Hasn’t Obamacare has already burdened small businesses enough?)
And how exactly are small businesses going to stay in business if we hike the minimum wage up to $15? While larger companies will be better positioned to absorb the higher personnel costs, many smaller businesses will be force to either raise prices on customers or cut the size of their staff. While yes, Democrats could increase the income of some workers by hiking the minimum wage to $15, but in doing so they would actually also cost others their jobs entirely.
And we haven’t even gotten to paid family and sick leave, yet… so let’s get this straight. The Democrats say want to increase workers’ incomes, but they also want to take more money out of their paychecks in order to finance yet another entitlement? A bit counterproductive, don’t you think?
History Lesson: The New Deal
Good intentions do not make good policy. This so-called “Better Deal” is a thinly veiled attempt to use the legacy of Franklin D. Roosevelt’s infamous New Deal to help their own PR. But despite public misconceptions, Roosevelt’s New Deal actually failed to end the Great Depression. Only once the end of WWII brought about an era of austerity did the Great Depression end.
The New Deal was the costliest government initiative in history. In 1932, during the Hoover administration, the groundwork was laid for FDR’s signature agenda as Congress approved the largest tax increase in American history. The Revenue Act of 1932 raised income tax across the board, doubled the estate tax, and increased the corporate tax by 15%. It also created new excise taxes, such as the ones on gasoline, electricity, and gifts. And in the midst of the Great Depression (caused in part by the failures of the Federal Reserve), struggling Americans faced an even heavier tax burden as President Roosevelt’s administration championed another round of tax hikes in 1935. And again in 1936. Then again in 1937. This series of tax hikes affected higher income earners most significantly.
Throughout the Great Depression, federal spending skyrocketed as FDR’s New Deal agenda created new government programs. In 1938, FDR signed legislation that enacted the first minimum wage. And you know what? Unemployment remained alarmingly high, averaging at 18% during Roosevelt’s presidency.
Things only began to change once the U.S. entered WWII. The wartime economy created jobs instantly and 10.5 million Americans entered the workforce. Unemployment dropped below double-digits for the first time in a decade. As WWII took priority over FDR’s social initiatives, Congress killed many of his New Deal programs (WPA, CCC, NYA, etc) in order to proritize wartime expenses. But federal spending still skyrocketed.
By the end of WWII, the federal debt was 5x higher than pre-war levels, having risen from $49 billion in 1941 to $260 billion in 1945. It because of this massive debt, that Congress finally began embracing austerity measures hoping to spur economic growth. In 1945, Congress passed the first tax cuts since the 1920’s, cutting the corporate tax, excess-profits tax, and income tax. In 1946, unemployment was down to 3.9%. The Great Depression was finally over, thanks to spending reductions, tax cuts, and a freer market.
Despite the common misconception, FDR’s economic programs did not end the Great Depression… quite the opposite really. So if the New Deal didn’t work, what makes Democrats think that their so-called “Better Deal” will be any different? Perhaps Schumer & Co. ought to read up on their history before deciding to draw historical parallels between their current agenda and failed agendas of days past. Just they say… “Those who fail to learn from history are doomed to repeat it.”