Roosevelt, We Need Your Help

Would it be possible to put an end to the extreme capitalism of the United States after having got rid of the Soviet Union’s extreme socialism ?

In 1933, right after the Great Depression, the unemployment rate had reached 25%. The President at the time, Franklin D. Roosevelt, had run by the Congress an ambitious program of reforms to be carried out: the New Deal. Thanks to this legislative program, the unemployed and the farmers were on many levels assisted, a number of infrastructures were implemented, the unemployment insurance and the Social Security were established, the notion of minimum federal salary was introduced, the other work standards were strengthened, the financial sector was rigorously regulated, the real estate sector became much safer and made the tax rate for income that exceeded $100,000 go from 29% (in 1929) to 62% in 1935.

Roosevelt’s New Deal got America out of the Great Depression and was a huge change to both the country’s economical and social situation. It significantly diminished poverty, insecurity and inequalities. During the post-war period, under the rule of the New Deal, the country was very prosperous. Its economical growth was so rapid from 1945 to 1975, that historians nowadays call it the “Thirty Glorious Years”. Roosevelt’s reforms were even later on copied in several countries (including Canada), either as a whole or partly, and led to the same results as in American.

Roosevelt’s leadership during the Great Depression of the 30’s definitely gave him a status of the best president of the United States in the 21st century. He was a genius who turned an economical and social catastrophe into a unique opportunity to reform institutions in order to make the American society more efficient and fairer, both on the short and on the long run.

Unfortunately, the past thirty years were very different. The Congress and presidents Reagan, Bush (father and son), and even Clinton have ruined a large part of Roosevelt’s New Deal. They have considerably weakened the regulations of the financial and real markets. The work standards were neglected, the minimum salary was frozen over long periods of time. On a social level, almost anything which had beforehand been undertaken to help families disappeared. The imposition rate applicable to income shares was lowered by 35%, thus exceeding $360,000.The development of a social health insurance, which would have been a necessary coverage to the 45 millions of Americans who presently need it was refused. There was also a (failed) attempt to suppress Social Security.

The present consequences of the anti-New Deal steps of the American leaders follow such a scheme: an almost constant alternation between speculation and recession, a growing insecurity among citizens as well as extreme income inequalities. In the USA, in 2006, the nation’s richest income shares, usually falling to 1% of the taxpayers, reached 20%. As a comparison, those percentages don’t exceed 7% in Québec. The median income of the poorest families reaches 20%, and is higher in Quebec than in the USA, even though the American nation is globally 28% richer than our little province.

The present crisis could actually be very useful and offers the new President of the United States a chance to bring back to the scene Roosevelt’s New Deal, and even more. A New Deal 2.0 could be born. This would get America’s economy out of its difficulties and a universal health insurance plan could be initiated. The minimum salary could reach a decent level, whereas the work standards should be updated. Reform taxes in a way that it would eliminate a budget deficit (of more than 400 billions of dollars) caused by the irresponsibility of the Bush administration. Fighting the extreme income inequalities could be done by increasing tax rates applicable to high salaries and capital profits.

Rejecting the extreme capitalism of the recent years in America, twenty years after fall of extreme socialism in the Soviet Union’s will mean a positive contribution to the economic and social balance of the world.