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Johnson’s New(ish) Deal

June 30, 2020 9:32 PM
By Mark Wooding

Why Roosevelt's New Deal was different from Johnson's New(ish) Deal

It is widely acknowledged that President Roosevelt's 'New Deal' (launched in 1933 in response to America's Great Economic Depression) was a huge social and economic success. So it is perhaps unsurprising that Prime Minister Johnson wants to ride on the great man's coattails by inviting comparisons with his own (less ambitious) 'New(ish) Deal'.


But in many ways the two are fundamentally different.

Roosevelt's 'New Deal' focussed on economic revitalisation (it had its fair share of huge infrastructure projects to kick start the economy) but it also focussed on relieving the lot of the poor and the unemployed with social reforms and improvements. And it had one final 'R', reforming the financial system to avoid a repeat of the Great Depression.

Johnson's 'New(ish) Deal' (there's nothing like repackaging things you've already announced and claiming they are new) fails on both of the second two 'Rs'. Whilst the financial support offered to furloughed workers during lockdown has been exemplary, it looks like it will be ended too soon for too many. And there seems to be no plan to reform the system that has made COVID-19 especially devastating in the United Kingdom. No recognition that the NHS had been underfunded during the Tory Austerity Years; no plan to introduce a Universal Social Care System, along the lines of the NHS.

Johnson's plan seems to extend little beyond providing a short-term economic stimulus by 'building, building, building'. There is NO plan to take the opportunity to change the lives of the ordinary woman and man in the street for the better. Indeed it can be argued that the Prime Minister's focus on building homes (whilst in some ways welcome) pours taxpayers' money into non-productive assets, and increases the wealth of those who already 'have' over those who 'have not'.

If you want to see how serious the Conservatives really are about their 'New(ish) Deal' follow the money. Roosevelt spent something like 5% - 7% of GDP https://www.bbc.com/news/53236921 each year on his 'New Deal'. The plans outlined by Mr. Johnson amount to about 0.25% of GDP. £5 billion sounds like a lot of money, but it probably just isn't enough if you want to make a real difference. In addition a number of his 'New(ish)' initiatives are anything but, just money announced previously, and in many case only go some way to replacing the cuts enacted by the Tories over the last 10 years. It's all 'smoke and mirrors'.

If Mr Johnson really wanted an example of what he might achieve there are numerous Roosevelt 'New Deal' projects he could look to for inspiration. But we highlight just one here.

In 1935 Roosevelt launched the 'Pack Horse Library Project'. Its ostensible aim was to take library books into the isolated rural communities of Appalachia to combat illiteracy and so improve both the job opportunities of the rural poor and the quality of the labour force.


But it also put modest amounts of money into the hands of the (largely) women who rode hundreds of miles to deliver the books. And of course it gave those self-same riders a new perspective on their lives and their abilities, and greater social and economic confidence. It boosted the economy and achieved social improvement, all for a very modest investment. The Prime Minister need not look much further for a great example of how a little imagination and creativity can make a real difference. The solution is not always to pour tonnes of concrete!