FDR realized that, "People who are hungry and out of a job are the stuff of which dictatorships are made." Why do most economic policies run counter to this basic point?
Faith in markets leads economists to believe that full-employment is impossible, government intervention is destructive, deficits are bad, and planning is futile. That is nonsense.
Remember Galileo? His heresy was challenging the belief that the earth was the center of the universe. It's as heretical today to enact policies that don't place markets at the center of the economy. Excommunicating Galileo didn't change planetary orbits, but misguided fealty to markets does affect our future.
To fight unemployment and reduce unnecessary suffering the Social Security Act of 1935 established a joint Federal-State system of unemployment insurance (UI). Today, state unemployment programs set benefits so low that few households dependent upon UI can make ends meet.
We are the skinflint states.
The stingiest state is Arkansas where the average weekly benefit ($207) contributes only 29 cents of each dollar a family needs to cover the bare minimum for food, rent and utilities, transportation, child care, clothing and household expenses. Arkansas' average weekly unemployment benefit works out to $1.36 per hour less than the federal minimum wage. The least stingy state is Wyoming where the average weekly benefit ($328.34) delivers 53 cents of each dollar needed to meet basic needs.
Consider this simple math: hire 10 million people at $25 thousand per year (about $12 per hour). The cost? $250 billion dollars — a fraction of what we've handed the nation's bankers who neither lend nor spend. The federal government should step in as the employer of last resort.
During the New Deal, federal employees built schools, hospitals and libraries; brought electricity to millions of rural households; preserved thousands of acres of forest; and produced art that is now a treasured part of our heritage.
FDR knew that "Necessitous men are not free men." We have a choice: America — the land of the free or the home of the broke?
Susan Feiner is the director of women and gender studies and a professor of economics at the University of Southern Maine.