MCViewPoint

Opinion from a Libertarian ViewPoint

Ocasio-Cortez’s Selective Memory on the New Deal | Mises Wire

Posted by M. C. on April 12, 2019

https://mises.org/wire/ocasio-cortezs-selective-memory-new-deal

Alexandria Ocasio-Cortez never misses the opportunity to bash capitalism.

At the 2019 South by Southwest festival, the Congresswoman derided capitalism, describing it as “irredeemable.” She says that the U.S. is currently facing the consequences of “putting profits over everything else in our society.” Curiously, the freshmen congresswoman pivoted her rant towards a critique of the New Deal.

How could such a staunch leftist like Ocasio-Cortez — who fashioned her pet legislation as the “Green New Deal” — criticize its 20th-century predecessor? She was able to do so by turning this discussion into a matter of race.

In her view, Roosevelt’s New Deal cut African Americans a raw deal:

“The New Deal was an extremely economically racist policy that drew little red lines around black and brown communities and it invested in white America.”

Ocasio-Cortez continued expanding on the New Deal’s harmful effects: “It allowed white Americans access to home loans that black Americans didn’t have access to, giving them access to the greatest source of intergenerational wealth.”

Misinterpreting the New Deal’s Racist History

The congresswoman is correct about the New Deal’s racist policies, albeit from an observational standpoint. I wrote about this previously, detailing how the federal government promoted segregated housing during the New Deal at the African-American community’s expense.

However, Ocasio-Cortez’s talk about the New Deal flagrantly omits other government interventions that clearly affected racial minorities in a negative way. The Wagner Act of 1935 — which established labor-union monopolies — gave incumbent unions tremendous power to exclude low-wage workers. During this period, union heavyweights discriminated against black workers in order to keep wages artificially high for white workers.

Similarly, the National Industrial Recovery Act of 1933 allowed the executive branch to create industrial cartels to restrict output and enact minimum-wage policies. This resulted in approximately 500,000 blacks being pushed out of the labor market thanks to high, non-market wages.

Despite these overlooked aspects of the New Deal, Ocasio-Cortez continues to race hustle and thinks that more government intervention will somehow “correct” past injustices that the government itself created.

How Limited Government Made African Americans Prosperous

In contrast to the New Deal, markets have historically helped racial minorities. It was during the Gilded Age that the African-American community was able to first establish itself as an economic force. This was an era when there was no welfare state, no federal tax maze, nor an alphabet soup of bureaucracy to impede capital accumulation and business creation.

During this time, African American civil society was at its peak. David Beito’s From Mutual Aid to Welfare State was a seminal work in demonstrating how the African-American community thrived without any form of government assistance before the New Deal. Civic organizations like the Independent Order of Saint Luke and the United Order of True Reformers “specialized initially in sickness and burial insurance,” and became leading institutions in African-American civil society.

The Independent Order of Saint Luke stood out for its entrepreneurial endeavors and ended up establishing the Saint Luke Penny Savings Bank of Richmond, which had the honor of having Maggie L. Walker as the first, black female bank president in American history…

Be seeing youmlk

 

 

 

 

 

 

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