Looking Forward: What Comes After the New Deal and the Raw Deal?


After a sweeping electoral victory, Democrats today have much to rejoice. So do middle class Americans, who made clear with their votes that they could not afford another four years of a government asleep at the wheel that cost them a fifth of the equity in their homes and a third of their retirement savings and their children's college funds.

More than anything right now, voters want a pragmatic, solution-focused government. They want leaders who will put policies into place that restore confidence in our financial institutions and address the host of problems facing the struggling middle class--stagnating wages coupled with skyrocketing prices, health insurance that seems to evaporate when you need it, pension plans written in disappearing ink, and a global race to the bottom for jobs in which the most highly sought worker is the most poorly paid worker with least benefits and workplace protections.

But at another level, the task facing the new president is to redefine the role of government itself. In 60 years we've gone from the New Deal to the Raw Deal, and the question is what kind of deal the new president is going to offer the country. In many respects, as a nation, we have just re-learned the lessons our grandparents learned during the Great Depression: that unfettered greed is not good public policy. Nothing in the nature of the market guarantees that businesses that write their own rules will build the protection of homeowners, consumers, or taxpayers into the rulebook. Nothing in the nature of the market guarantees that the people who go to work every day to produce the nation's wealth will share fairly in it. In the last few weeks of the election John McCain described Barack Obama as a socialist who would "redistribute the wealth," but what voters understood was that in the last eight years the wealth had already been redistributed--from middle class Americans to CEOs, oil companies, and companies that outsourced their jobs.

In the 1930s, Roosevelt carved out a sweeping new role for government. If the market couldn't find jobs for people who wanted to work, government would put them to work building our infrastructure. (That's why we have the system of highways we have today.) If the market couldn't protect people's assets, government would insure their savings and regulate banking and financial markets. If the market couldn't guarantee retirement with dignity, government would create a pooled savings plan to make sure our seniors had security in their twilight years.

The New Deal was the right deal for its time, but by the time of the Reagan Revolution, voters resonated with the idea that "government is the problem, not the solution." Part of the selling of that sentiment played on people's prejudices: An essential component of the language of the right was that it pitted "us"--hard-working (white) Americans--against "them"--able-bodied (black) welfare loafers. But part of the Reagan critique of the vestiges of the New Deal spoke to voters' legitimate frustrations with programs that never seemed to disappear even after they had outlived their usefulness as well as the inevitable limits of bureaucracy (whether public or private).

The Bush years have demonstrated the bankruptcy of radical free-market economic ideology that denies any legitimate role for government. In this election, voters made clear that they were tired of ideological bankruptcy leading to financial bankruptcy. Americans were rightly afraid of a McCain health care plan that would have done to our health what radical deregulation had just done to our housing and financial markets.

The task facing President-elect Obama is to articulate the role of government in the 21st century just as FDR articulated its role in the 20th. How do we steer a path between expanding our markets in a global world while protecting the wages and benefits of American workers? How can government and business partner to invest in energy solutions that rebuild our economy, create jobs, and eliminate our dangerous dependence on foreign oil?

If the new president can not only offer Americans practical solutions but a new understanding of what government and business can and cannot do--and how they can best work together to insure the twin goals of prosperity and fairness--he may be able to achieve the kind of political realignment that Roosevelt and Reagan both achieved. In the Electoral College, Obama broke through barriers in the South and the West, while, remarkably, breaking through boundaries of race, winning percentages of the white vote Democrats have not typically won over the last 40 years. He also turned young voters onto politics in large numbers--something characteristic not only of only charismatic leaders but also of political realignments, as political affiliations developed during the late teens and early 20s tend to last a lifetime. We can only hope that one of the most thoughtful and inspiring leaders we have seen in decades can put together a vision for the future and a way of talking with the American people about it that captures both the moment and the imagination.

Drew Westen, Ph.D., is Professor of Psychology and Psychiatry at Emory University, founder of Westen Strategies, and author of "The Political Brain: The Role of Emotion in Deciding the Fate of the Nation."