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For all of the talk, we know nothing of true 'free markets'-and what we know should be a caution

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One of the challenges to governance today is finding the happy medium between regulation and a free market economy.  Too free a market creates an uncontrollable environment of piracy, predation and anarchy.  On the other hand, too much regulation stifles creativity, hampers businesses’ ability to compete, and creates a fertile breeding ground for self-serving government bureaucracies.

For all of the talk coming from Washington these days about deregulation, getting government off our backs and letting the ‘free market’ reign, we know very little about the ‘free market’ today.  That is because most Americans today were born after 1933, after the Great Depression light a fire under President Franklin Delano Roosevelt (FDR) and inspired today’s massive federal bureaucracy.  

The majority of Americans alive today were born after FDR and his successors created the safety net, or strangle hold, depending on your perspective on regulation, on the economy. We have no idea what would happen if this safety net should fall or fail.  A world without it is not within our mind’s ability to imagine, although many of the system’s detractors, of the conservative persuasion, have been working for that very event for decades.

And, while they rail and rant about the stranglehold the federal regulatory system has on business and the economy, truth is, few of us know, or can even imagine, what a non-regulated American economy is like. We know nothing of an economy without the Federal Reserve Banking system (a consortium of private banks), which was created in 1913, nor do most of understand exactly how “hands on” the federal bureaucracy is when it comes to our economy.  

Our entire way of life is based on a safety net, which has so seamlessly integrated with our economy, that many of us paradoxically, are not aware of the extent our economy depends on its existence. And still, we continually complain about “big government” and “crippling regulation” as generations of politicians make careers out of “downsizing government” and “killing the beast.”

Our WWW II veteran fathers and grandfathers went to college on the GI Bill and bought their homes with VA Loans. Their children attended college using a combination of government-guaranteed student loans and grants and many purchased their homes through government home loan programs operated by the Federal Housing Administration (FHA).  

Their grandchildren’s lives are less cushioned, but they are still able to take advantage of government-backed student loans, government healthcare for low income children, free pre-school for the ‘income eligible’, subsidized housing, price-supported farm crops which regulate food prices, government backed insurance for bank accounts, clean air and water—thanks to federal legislation.

Three generations have become proud  college grads and homeowners thanks to federal programs, which have become so ubiquitous, that their recipients fail to realize how much of their current lifestyle is dependent on their continued existence.  We are so oblivious to the intricacy of the safety net, that we jump on conservative bandwagons to disassemble it, not comprehending how much of who we are and how we got here came to be because of those programs.  

Let’s start with housing.  The post-WWII housing boom was fueled by a combination of returning GI’s and federally funded education and housing benefits.  Entire towns, such as Levittown, were created by prefab techniques, which were perfected by combat engineers on the battlefield, combined with low cost, and low, if any down payment.  Hence, the returning soldiers in the mid’1940s, fueled a housing and education boom, which lasted for a good three generations, advances in lifestyle, education and employment that served as a foundation for millions of upwardly mobile Americans between 1945 and 2005.

The primary feature of this early Levittown house was its low, low cost-- under $8,000 to purchase. With FHA-VA housing loans available, this meant home ownership with no down payment, or a tiny one, and a relatively low monthly mortgage "nut." (Peter Bacon Hales, University of Illinois at Chicago, Building Levittown: A  Rudimentary Primer.)

These new building techniques, combined with the availability of millions of VHA loan-eligible soldiers, provided a growing population of potential homeowners who changed the landscape of America.  The mass assembly techniques used in the new sub-divisions, combined with the new mobility of the average American, thanks to plentiful loans and automobiles, led the way for urban construction, the likes of which had never been seen.  And Bill Levitt led the way.

Levitt was able to offer these houses so cheaply because he was applying construction methods perfected in the deployment of prefab housing in the armed services during World War II. Bill Levitt had served as a Seabee during the war, and he learned the techniques of rapid construction using standardized parts, tightly controlled suppliers of goods and services, and a workforce with highly specialized skills. Like the Army's builders, like the Seabees, Levitt took the mass-production assembly line and converted it so that workers moved from site to site doing their specific targeted tasks. Life, Newsweek, Time, and many other magazines delighted in the story of the painter whose sole job was to paint the window sills of each house; but the example was an apt one, for by moving crews of workers sequentially from house to house, Levitt avoided the necessity of craft workers, unions, and the rest. In addition, his program could tolerate high labor turnover, a dreaded feature of the new prosperity after the end of the war. If one worker left, another could be quickly hired and trained as a replacement. (Ibid)

For many Americans, Levitt’s techniques gave them an unheard of opportunity to move out of the crowded, dirty cities into a suburban setting, all with little or no money down, if you were a veteran.
The houses cost from just under $ 9,000 to $ 17,990, fully equipped and landscaped. Levittown houses were easy to buy, requiring only $100 down. For veterans, a Levittowner was offered for no money down. Homeowners paid around $60 a month in VA or FHA mortgage payment. (Levittowners.com)

So far, we have government funding seeding homeownership and also providing money for veterans to go to college. Let’s take a look at that VA college revolution, for a moment.

Officially, it was known as the Servicemen's Readjustment Act of 1944, PL345.  We call it the GI Bill.  According to the VA’s own website, the original GI Bill almost didn’t make it off the ground.  It seemed that Congress dug its heels in at the idea of paying unemployed vets to study—and others thought putting a bunch of war vets on the same campuses as the nation’s rich and pampered students was a recipe for disaster.  

Some shunned the idea of paying unemployed veterans $20 a week because they thought it diminished their incentive to look for work. Others questioned the concept of sending battle-hardened veterans to colleges and universities, a privilege then reserved for the rich. (Perhaps they remembered Depression Era Bonus Riots, when millions of unemployed WWI veterans camped outside Washington DC in 1932, demanding early payment of a bonus slated to be paid in 1945.  
According to historical record and eyewitnesses:

June 17 was described by a local newspaper as "the tensest day in the capital since the war." The Senate was voting on the bill already passed by the House to immediately give the vets their bonus money. By dusk, 10,000 marchers crowded the Capitol grounds expectantly awaiting the outcome. Walter Waters, leader of the Bonus Expeditionary Force, appeared with bad news. The Senate had defeated the bill by a vote of 62 to 18. The crowd reacted with stunned silence. "Sing America and go back to your billets" he commanded, and they did. A silent "Death March" began in front of the Capitol and lasted until July 17, when Congress adjourned.  (Eyewitnesstohistory.com)

Not content to let the ragged army of homeless veterans camp out in the nation’s capital forever, the government put its foot down and sent in troops.

A month later, on July 28, Attorney General Mitchell ordered the evacuation of the veterans from all government property. Entrusted with the job, the Washington police met with resistance, shots were fired and two marchers killed. Learning of the shooting at lunch, President Hoover ordered the army to clear out the veterans. Infantry and cavalry supported by six tanks were dispatched with Chief of Staff General Douglas MacArthur in command. Major Dwight D. Eisenhower served as his liaison with Washington police and Major George Patton led the cavalry.  (Ibid)

The rag tag camps consisted of former soldiers, their wives and children—destitute people with no jobs, no homes, and no where to go.  
Approximately 10,000 veterans, women and children lived in the shelters built from materials dragged out of a junk pile nearby – old lumber, packing boxes and scrap tin covered with roofs of thatched straw. (Ibid)
Oral testimony tells us that when the army first rolled up, the protestors thought they were there to greet them.  That all changed in the blink of an eye when the army fired on the veterans, with tragic consequences. When it  was all over, and after the army cleared the former soldiers out, several babies had been killed.  (Ibid)

When the shooting stopped, after the soldiers had run the rag tag Bonus Army out of town, all that was left were the smoldering embers of what had been an encampment of thousands.
By early morning the 10,000 inhabitants were routed and the camp in flames. Two babies died and nearby hospitals overwhelmed with casualties. Eisenhower later wrote, "the whole scene was pitiful. The veterans were ragged, ill-fed, and felt themselves badly abused. To suddenly see the whole encampment going up in flames just added to the pity." (Ibid)

While some historians believe the Bonus Army disaster drove President Hoover out of office, others say the Bonus Riots were a factor in Hoover’s loss to FDR, but were not the complete reason for his defeat.  Hoover had more millstones around his neck than the Bonus Army fiasco—first among them was his inability to get a handle on the Depression and his seeming “let them eat cake” attitude about possible solutions. (Donald J. Lisio, The President and Protest: Hoover, MacArthur, and the Bonus Riot.)

No way FDR and company wanted a repeat of that disaster.  President Roosevelt hit the ground running when he assumed office, with his “New Deal”--an alphabet soup of new federal programs and agencies, which continue too be praised and vilified more than 70 years after their creation.
Immediately after his election, Roosevelt began to formulate policies to bring about relief from the economic hardships the American people were experiencing. These programs became known as the New Deal, a reference taken from a campaign speech in which he promised a "new deal for the American people." The New Deal focused on three general goals: relief for the needy, economic recovery, and financial reform. (National Archives)
The new deal included programs in art, finance, employment.  One of the first programs was called the Public Works Art Project.  According to the National Archives:

PWAP was part of the Civil Works Administration (CWA), an experimental program in federal work relief, providing the unemployed with public service jobs during the bitter winter of 1933-34. PWAP employed artists to create works to embellish public buildings -- including one painting for each member of Congress as well as for public schools, orphanages, libraries, museums and practically every other type of public building. PWAP exhibitions in many cities were well-attended: 33,000 people showed up in a single day for an opening in Los Angeles. PWAP ended in April, 1934, along with the rest of the CWA. (Ibid)

Under FDR’s New Deal, artists, construction workers, photographers, and laborers went to work on the most ambitious works program in recorded history.  

Under the auspices of the Works Progress Administration alone, Americans built 125,000 public buildings, 75,000 bridges, 8,000 parks, 800 airports, and more than 650,000 miles of roads, creating a modern American infrastructure and earning a paycheck all the while. (click here addition to the construction, arts and public works projects, FDRs New Deal version of a public pension for the elderly was and is his most controversial and influential piece of legislation.

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Wanna be member of the anti-word police, author, columnist, activist and muckraker extraordinaire. Author of:

Land, Legacy and Lynching: Building the Future for Black America

Urban Asylum: Politics, Lunatics and the Refrigerator (more...)
 

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