The New Deal –> Raw Deal

In the 1930s and 40s we had the New Deal. In 1938, Congress passed the Fair Labor Standards Act, setting legal limits on the maximum number of hours worked and the minimum wages allowed.

Republicans fought it then, claiming it would be essentially socialist, and an economic enemy to business and growth. However, it was the very opposite of that — the war and post-ware years were ones of productivity and prosperity, widely and broadly. A strong middle class was formed, changing the life and culture of America forever.

In the mid-1970s this growth engine finally began to falter, and since the 80s, we’ve instead had the Raw Deal. An ever-escalating version of a Libertarian’s wet dream: deregulation of numerous industries including finance (leading to the housing crash of 2007-8) and energy (leading to Enron), a steadily less progressive tax system (down from a whopping 94% in 1944 down to 28% under Reagan), and endless waves of cuts to social programs designed to level the opportunity playing field.

The thing is, when people feel hopeful, they work harder.

When there is hopelessness, there is less urgency to work hard to maintain the conditions and systems that make one feel so hopeless. If you know the game is rigged, how futile does it seem to keep playing?

Libertarians lament about the size of the pie, which is as good a modern version of “let them eat cake” while the plebes swill McD’s and pay through the nose for health care as any.