Obama's stimulus has yet to measure up to the New Deal

Merced Sun-StarMay 1, 2010 

MERCED, Calif. — When President Barack Obama took office in early 2009, the nation's economy was on its knees. More than 11 million Americans were without work — and the number would only climb. The financial system was on the brink of collapse. The housing market was in turmoil. Banks were failing every week.

In Merced, a growing homeless camp on the edge of town, an unemployment rate hovering around 20 percent and soaring foreclosures were signs of the times.

Things were not looking good.

Almost 80 years earlier, another president, Franklin Delano Roosevelt, took office in early 1933 at the height of a depression far more dire than today's. Like now, the Roosevelt administration faced an uphill battle to restore a very sick economy. At the time, 14 million Americans were without work, and the nation's population was half what it is today. Banks were failing at an alarming rate. Soup kitchens and "Hoovervilles" were common sites.

Even the local similarities to today are striking.

For instance, in 1938, the Merced City Council debated whether or not to ban a homeless camp on the edge of town.

Many have compared the Great Recession of today with the Great Depression of the 1930s: a speculative and greedy Wall Street caused a financial crisis which brought the economy to the edge of collapse. Historic unemployment levels thrust millions into poverty and foreclosures, and bank failures sent an ailing economy reeling.

But the government reacted to these two crises — then and now — with a drastically dissimilar style, scope and philosophy.

The Obama administration's main push to staunch the economic bloodletting caused by the 2008 financial crisis was the stimulus project passed in 2009, now projected to cost $862 billion. The money, much of it still unspent, was meant to stimulate the troubled economy. It has already created more than 600,000 jobs — almost all in the private sector. The funds went to loans and grants to repair roads, fix bridges and other infrastructure. The stimulus paid for increased unemployment insurance and for middle class tax cuts and incentives for businesses.

The Great Depression was attacked by the Roosevelt administration with a fervor that eclipses today's efforts.

President Roosevelt's New Deal, which was meant to end the economic troubles caused by the Depression, was perhaps one of the most ambitious programs of the federal government in U.S. history.

Through the National Recovery Act of 1933 and the 1935 creation of the Works Progress Administration, which oversaw the work of a series of agencies, more than 8.5 million people were hired through direct government employment, which sustained more than 30 million Americans. From 1933 to 1943, these workers built schools, roads, bridges and dams. They painted murals, planted forests, performed theater and played music, among other things.

From the Civilian Conservation Corps to the Public Works Administration, and similar programs, an army of civilians helped spread culture and modernize the country.

Not only were millions put to work, but the government created social security and unemployment insurance and financial and banking regulations still in use today, among other reforms.

While the reactions to the Great Recession and the Great Depression have some similarities, in many ways they are night and day, said Gray Brechin, a visiting scholar at the UC Berkeley School of Geography and the founder of the Living New Deal Project, which is cataloging the legacy of the New Deal in California.

The current stimulus is far less ambitious and creative than the New Deal, said Brechin. "The main thing that I see is that the New Deal attacked the Depression in a variety of ways and with a lot of ingenuity. I don't see much ingenuity and I see they're only attacking it in one way," he said of today's stimulus.

In the New Deal, the government directly employed millions and built a lasting body of public structures — a civilization, said Brechin — from buildings and bridges to sculptures and murals. Now all the stimulus money is trickling down through contracts, grants and loans, said Brechin. The New Deal had an ethic of communal action aimed at defeating an economic catastrophe that is missing today, he said.

That communal effort in Merced County meant concrete action. New Deal agencies build sidewalks, fixed roads and put in sewer lines. They improved the airport, Applegate Park and John Muir School. WPA workers built Hilmar's Merquin School, the Lander Gym and Elim Elementary School. WPA workers completed street improvements in Los Banos and Dos Palos and cleaned Merced Irrigation District canals. And those are just some of the projects of the New Deal in Merced.

At one point in 1936 WPA projects were halted for a brief time in Merced County because local farmers complained they couldn't find anyone to pick their crops. New Deal work started up again in less than a week.

While Mercedians may know about some of the projects paid for by the current stimulus — the repaving of 16th Street and school improvements, for example — much of the legacy of the New Deal in Merced County is still standing, yet unnoticed. From recreational facilities and the beach at Lake Yosemite, to the murals in Merced's downtown post office, much that was built during the 70-year-old New Deal is still standing strong.

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