Sistema Logístico Urbana Regional en Europa

In the minds of most Americans, World War II brought America out of the Great Depression. Many previously idle persons were put to work in war production or enlisted in military service. Necessity forced the government into deficit financing of the war, and the resulting effects on the American economy validated the idea of public investment and compensatory spending. Many economists and policymakers converted to Keynesian thinking in response to the performance of the wartime economy.

The NRPB in 1941 circulated a draft of a proposal for postwar planning that proved to be seminal. This report, published as After the War—Full Employment in January 1942, was written by Alvin H. Han-sen. Hansen had received his doctorate in economics from the Univer-sity of Wisconsin in 1918 and was critical of Keynes during his early academic career. But by the time he became president of the American Economic Association in 1938, Hansen had embraced Keynes’ analy-sis of the Great Depression and compensatory spending. Hansen now wholeheartedly advocated the vital role of the federal government in the maintenance of full employment (Barber 1987).

In After the War—Full Employment, Hansen (1942, pp. 1–7) voices fears of a postwar depression or inflationary boom, yet is optimistic that the nation can maintain business prosperity and full employment by

Federal Role in Employment Stimulation 23

means of an expansionist economic program. “Private business can and will do the job of production. It is the responsibility of Government to do its part to insure a sustained demand,” he writes (p. 3). He dismisses the opinion that the United States cannot finance its own production:

“Costs and income are just opposite sides of the same shield. We can afford as high a standard of living as we are able to produce . . . But we cannot afford idleness” (p. 5).

Hansen describes how the public debt differs from an individual’s personal debt and how retiring the public debt could cause deflation, depression, and unemployment by lowering the national income. He adds, however, that it would be likewise irresponsible to raise expen-ditures, lower taxes, and increase the public debt if there is a ten-dency toward an inflationary boom. Hansen (1942, p. 7) summarizes his thoughts by saying that the public debt is an “instrument of public policy” because it is a “means to control the magnitude of the national income and, in conjunction with the tax structure, to affect income distribution.”

Hansen (1942, pp. 15–19) goes beyond a discussion of economic theory to offer pragmatic policy options. He outlines a model of output potential to deal with the expected postwar gap between potential and performance and, in turn, proposes six wartime measures to narrow this gap:

1) High corporate-income and excess-profits taxes 2) Sharply progressive estate taxes

3) Broadening the individual income-tax base together with steeply graduated surtax rates

4) Sharp increases in excise taxes on commodities competing with the war program

5) Partial payment of wages and salaries in defense bonds 6) Qualitative shifts in the components of consumption

Recognizing that the postwar economy would function differently from the wartime economy, Hansen (1942, pp. 18–19) also proposes six policy measures to ensure full employment during the reconversion.

The suggestions can be summarized as follows:

1) Retention of a progressive (graduated) tax structure and a broadened tax base, with a major emphasis on the individual income tax and less reliance on the corporate income tax 2) A sharp reduction in defense consumption taxes

3) Adequate plans by private enterprise for private investment projects in manufacturing plants and equipment, in railroads, and in public utilities and housing

4) Adequate programs of public improvement projects, including nationwide development of national resources, express high-ways, urban redevelopment (involving, among other things, outlays in terminal facilities and reorganization of urban trans-portation), and a reorganized public housing program (includ-ing the sett(includ-ing up of a hous(includ-ing research laboratory designed to reduce construction costs and thus enlarge the scope of private housing construction)

5) Expansion of public welfare expenditures such as federal aid to education, public health, old-age pensions, and family allow-ances (This proposal would expand federal social service pro-grams and, in turn, provide a means of reducing state and local property and consumption taxes, thereby stimulating private consumption expenditures.)

6) International collaboration to pursue internal policies designed to promote active employment, to explore developmental projects in backward countries, and to implement ways and means of opening outlets for foreign investment, of promoting world trade, and for the effective worldwide use of productive resources

With this report, Hansen had spelled out the economic elements and programmatic features of full employment policy. Some of Hansen’s ideas, most notably on tax policy, were woven into President Roos-evelt’s 1944 State of the Union address.

The president delivered the speech in a live radio broadcast to the nation, as well as in a written message to Congress, and in doing so introduced what was to become the most contentious element in the debate over full employment—the right to employment. Roosevelt’s

Federal Role in Employment Stimulation 25

“Second Bill of Rights,” later called the “Economic Bill of Rights,”

contained the following (Roosevelt 1950):

• The right to a useful and remunerative job in the industries or shops or farms or mines of the nation

• The right to earn enough to provide adequate food and clothing and recreation

• The right of every farmer to raise and sell his products at a return which will give him and his family a decent living

• The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domina-tion by monopolies at home or abroad

• The right of every family to a decent home

• The right to adequate medical care and the opportunity to achieve and enjoy good health

• The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment

• The right to a good education

Before he concluded, Roosevelt drew a patriotic illustration to emphasize these rights. “Our fighting men abroad—and their families at home—expect such a program and have the right to insist upon it. It is to their demands that this Government should pay heed rather than to the whining demands of selfish pressure groups who seek to feather their nests while young Americans are dying.” President Roosevelt chose to read the Economic Bill of Rights as the excerpt of his speech filmed for the newsreels that were shown in movie theaters across the country.⁶

The President echoed this famous Economic Bill of Rights speech as he campaigned for reelection in 1944, making the right to employment an integral part of the rhetoric of the postwar employment policy. Roos-evelt’s Economic Bill of Rights offered an antidote to the disgust many Americans felt over charges that the “dollar-a-year” executives—who were volunteering for government service in a show of patriotism—

were also ensuring that their businesses were profiting from the war.

Some of these businessmen who were volunteering as executives to oversee war mobilization were accused of redirecting scarce

commodi-ties to their civilian industries.⁷ With this emphasis on working people, Roosevelt was returning to the roots that fed his early campaigns.