For the ‘FDR’

For the ‘FDR’

The Bush Administration’s solutions for the subprime mortgage crisis are too little, too late. Americans need a New Deal-style agency to manage domestic reconstruction.


In August 1996, I spoke at the Democratic National Convention, reminding delegates that progressive public policy change in America requires at least two key ingredients–an enlightened President and an energized electorate:

In 1932, Roosevelt did not run on a New Deal platform. He was the best option. The workers at the plant gates, they were the answer. A combination of an enlightened President, an energized electorate–that’s the coalition.

In 1960, Dr. King chose Kennedy over Nixon. Neither ran on a public accommodations platform. That came from Birmingham. In 1964, neither Johnson nor Goldwater ran on a Voting Rights Act platform. That came from Selma.

When we, the people, coalesce with an enlightened President, we can change America, from the bottom up, from the grassroots to the treetops, for the better.

An enlightened President. An energized electorate. As we approach the historic 2008 election–with the subprime, subcrime crisis taking the entire economy down–we need these two elements more than ever.

Solutions to the subprime mortgage crisis must take a cue from the New Deal and let the needs of the people push our new public policies beyond the limits of the current campaign. The Bush Administration’s plans are too little, too late, help too few and leave most people out in the rain. They don’t correspond to the immensity of the problem: 15 million homes at risk of going underwater by the end of the year. An estimated $1.2 trillion in lost equity for America’s homeowners. Blacks and Latinos targeted and steered through discriminatory practices into subprime loans, while government agencies turned their backs and failed to enforce antidiscrimination and fair-housing laws. And now entire states, cities and neighborhoods are drowning in the spillover budget impact.

Since we’re celebrating the seventy-fifth anniversary of Franklin Delano Roosevelt’s New Deal, let’s call our new domestic agency the Fund for Domestic Reconstruction–the FDR.

And let’s use the FDR to meet the crying needs of poor and working families, the way the New Deal used the Reconstruction Finance Corporation to try to meet the needs of the American people during the Great Depression. Because the people demanded that the New Deal’s response be commensurate with existing needs.

We need the FDR, like a Marshall Plan, to save America’s homeowners and stabilize our economy. We can use existing agencies like the FHA or Fannie Mae and Freddie Mac, at a negligible cost to the government. If we could fund the reconstruction of Europe after World War II, save the farmers and bail out savings and loans in the 1990s, certainly we can stop the foreclosures and repossession of homes and restructure loans on a massive scale today. We should focus on rebuilding our neighborhoods, restoring homeowners’ dreams and re-inspiring investors’ confidence.

The FDR should focus on our neighborhoods, saving people’s homes and life savings. It should focus on rebuilding America–restoring our bridges, levees, sewers, schools, highways and railroads. It should focus on providing access to broadband to close the “digital divide” so all can share the high-tech revolution. Let’s focus on Equanomics–addressing structural inequalities and advancing a real program for racial and economic equality. It’s a way of reinvesting in America and putting America back to work. Unless we act, the crisis will continue to snowball.

What will it take to make an FDR work? Good ideas, of which we have plenty. Getting serious about funding a new war on poverty and stopping the war on the poor, which we can do when we end the war in Iraq and roll back the tax cuts that Bush and Cheney gave to the wealthy. An enlightened President, which we will have if we register and mobilize new voters, work together as a rainbow across lines of race and ethnicity, and don’t fall for the old politics of fear. And an energized electorate.

I feel it, don’t you? We want change, and we can have it if we keep hope alive.

Other contributions to the forum:

Bill McKibben: A Green Corps

Michael J. Copps: Not Your Father’s FCC

Andrea Batista Schlesinger: A Chaos of Experimentation

Eric Schlosser: The Bare Minimum

Frances Moore Lappé: The Only Fitting Tribute

Adolph Reed Jr.: Race and the New Deal Coalition

Andy Stern: Labor’s New Deal

Anna Deavere Smith: Potent Publics

Sherle R. Schwenninger: Democratizing Capita

Stephen Duncombe: FDR’s Democratic Propaganda

Howard Zinn: Beyond the New Deal

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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