The Ruins of an American Party System: From 1920 Onward

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EWA Blackmail

Now that the Republicans have been forced to pass the EWA, what will their response be to the Progressive's blackmail? Would Watson just hope this will all go away or plan on counter-measures?
 
Now that the Republicans have been forced to pass the EWA, what will their response be to the Progressive's blackmail? Would Watson just hope this will all go away or plan on counter-measures?
Watson is trusting that he was actually given the only copies of the documents, and that now the blackmail will all go away. If Long breaks his side of the bargain and tries to blackmail him again, then Watson will try and take him down with him. The Republicans are doing their best to dig up dirt on the administration, but are being hindered by the power of the executive branch.
 
While the fear of companies working in California is totally unjustified, Olson is going through a bad road, if he tries to find excuses for blackmailing/nationalizing companies.
 
Considering the massive improvement in the economy, I'm surprised that the Progressives aren't doing far better politically. The U.S. has gone from an unemployment rate of 32% in 1932 to only 15% in 1934 - an incredible 17% drop, and one that must have happened in only a year and a half at most (given the time for the new Congress to be sworn in, pass legislation, have it take effect, etc.) I'm not sure of any counterpart from our world where the unemployment rate dropped so quickly. The two New Deals took 7 years to get from unemployment of 25% in 1933 to 15% in 1940. Even if we discount the 1937-38 crash, the First New Deal managed a 10% reduction in 4 years. The ramp up to wartime spending from 1940 to 1942 managed a 10% reduction in 2 years.

Then again, there's never been so large of a policy shift from balanced-budget austerity to massive fiscal/monetary stimulus in history before. The closest we get is the economic reforms under Nazi Germany (which I unfortunately can't find exact numbers on), which I'd guesstimate managed a 5% yearly reduction in unemployment over 5 years. (30% unemployment in 1933; I'd guess a 5% unemployment in 1938.)

My surprise is that Olsen and the Progressives aren't viewed more popularly given this massive achievement. It'd be all the adulation that FDR received multiplied ten times over; Olsen would be seen as the savior of the country, the saint of the working man. Never before has there been such a clear dichotomy between policies - voters have a clear distinction between Republican management of the economy and Progressive management of the economy. Republican policies have been tried for decades, and shown to have conclusively failed - what even are they campaigning on at this point?

I base my assessments partly off the massive political shift that occurred in Nazi Germany IOTL. Something often forgotten is that Hitler was *popular* and widely so thanks to the economic reforms. Exiled SPD leaders hoping to maintain a stay-behind union network lamented that all their old members were flocking to the Nazis, thanks to the belief that the SPD had done little to nothing concrete for them, while the Nazis had resurrected the economy. Even in post-war Germany, Hitler was still seen favorably until the 1950s at least, when Germans finally began to become convinced that Nazi rule was not necessary for economic success.

IOTL's 1934, Democrats picked up 9 Senate seats, sweeping the Midwest. I can't see Progressives losing the Midwest Senate contests at all ITTL, or the mid-Atlantic ones. Who exactly is voting for Republican Senators, and what's their rationale? Progressives have a clear message to campaign on (look how much we've succeeded! If you get rid of the pesky Republicans, the country will be even better!), while Republicans are.... saying what exactly? Abuse of powers and authoritarian tendencies tend to sound far less relevant when you were just saved from starvation.
 

bguy

Donor
Never before has there been such a clear dichotomy between policies - voters have a clear distinction between Republican management of the economy and Progressive management of the economy. Republican policies have been tried for decades, and shown to have conclusively failed - what even are they campaigning on at this point?

Inflation maybe? Olson has already spent more on public works in 2 years than the WPA and PWA did in their entire existance IOTL. He's got to be running the printing presses full blast to be creating the necessary money, and he doesn't seem inclined to slow down any, so inflation might soon start to be a problem.
 
Inflation maybe? Olson has already spent more on public works in 2 years than the WPA and PWA did in their entire existance IOTL. He's got to be running the printing presses full blast to be creating the necessary money, and he doesn't seem inclined to slow down any, so inflation might soon start to be a problem.

There's still a ton of slack left in the economy, though, with 15% unemployment, and deflation was historically the real issue at this point (10% deflation in 1932, 5% deflation in 1933, 3% inflation in 1934.) Olsen has also raised taxes, and there was historically massive demand for governmental bonds during the depression, so I don't think there'd be as much direct money printing as you think.

Worst case, inflation averages something like high single digits, but in comparison to the economic improvement, most people wouldn't really care. Even for the wealthy, the vast economic turnaround has most likely been a net improvement for their fortunes.
 
Im curious what kind of projects are being built. Will we see the TVA and the Hoover dam still being built. As well as some unfinished or scrapped programs such as the Cincinnati subway or the 1929 New York subway expansion
 

FDW

Banned
Im curious what kind of projects are being built. Will we see the TVA and the Hoover dam still being built. As well as some unfinished or scrapped programs such as the Cincinnati subway or the 1929 New York subway expansion

Or other Rapid Transit proposals elsewhere, like Chicago's plan for Subways under downtown (that got built OTL), and Subway plans for San Francisco, Seattle, Los Angeles, Philadelphia, and Detroit. I could see a lot of plans getting dusted off and rebooted during this time.
 
Considering the massive improvement in the economy, I'm surprised that the Progressives aren't doing far better politically. The U.S. has gone from an unemployment rate of 32% in 1932 to only 15% in 1934 - an incredible 17% drop, and one that must have happened in only a year and a half at most (given the time for the new Congress to be sworn in, pass legislation, have it take effect, etc.) I'm not sure of any counterpart from our world where the unemployment rate dropped so quickly. The two New Deals took 7 years to get from unemployment of 25% in 1933 to 15% in 1940. Even if we discount the 1937-38 crash, the First New Deal managed a 10% reduction in 4 years. The ramp up to wartime spending from 1940 to 1942 managed a 10% reduction in 2 years.

Then again, there's never been so large of a policy shift from balanced-budget austerity to massive fiscal/monetary stimulus in history before. The closest we get is the economic reforms under Nazi Germany (which I unfortunately can't find exact numbers on), which I'd guesstimate managed a 5% yearly reduction in unemployment over 5 years. (30% unemployment in 1933; I'd guess a 5% unemployment in 1938.)

My surprise is that Olsen and the Progressives aren't viewed more popularly given this massive achievement. It'd be all the adulation that FDR received multiplied ten times over; Olsen would be seen as the savior of the country, the saint of the working man. Never before has there been such a clear dichotomy between policies - voters have a clear distinction between Republican management of the economy and Progressive management of the economy. Republican policies have been tried for decades, and shown to have conclusively failed - what even are they campaigning on at this point?

I base my assessments partly off the massive political shift that occurred in Nazi Germany IOTL. Something often forgotten is that Hitler was *popular* and widely so thanks to the economic reforms. Exiled SPD leaders hoping to maintain a stay-behind union network lamented that all their old members were flocking to the Nazis, thanks to the belief that the SPD had done little to nothing concrete for them, while the Nazis had resurrected the economy. Even in post-war Germany, Hitler was still seen favorably until the 1950s at least, when Germans finally began to become convinced that Nazi rule was not necessary for economic success.

IOTL's 1934, Democrats picked up 9 Senate seats, sweeping the Midwest. I can't see Progressives losing the Midwest Senate contests at all ITTL, or the mid-Atlantic ones. Who exactly is voting for Republican Senators, and what's their rationale? Progressives have a clear message to campaign on (look how much we've succeeded! If you get rid of the pesky Republicans, the country will be even better!), while Republicans are.... saying what exactly? Abuse of powers and authoritarian tendencies tend to sound far less relevant when you were just saved from starvation.


All very good points, I wondered about that too.

Though I trust Emperor Julian knows what he's doing.
 

bguy

Donor
There's still a ton of slack left in the economy, though, with 15% unemployment, and deflation was historically the real issue at this point (10% deflation in 1932, 5% deflation in 1933, 3% inflation in 1934.)

For the time being, but if the unemployment rate continues to fall then that slack will disappear. I wouldn't expect inflation to be a serious factor in the 1936 presidential election (which is hopeless for the Republicans anyway), but it could be significant for the 1940 election. (Assuming the Progressives are still allowing elections by then of course. :()

Olsen has also raised taxes, and there was historically massive demand for governmental bonds during the depression, so I don't think there'd be as much direct money printing as you think.

Raising taxes probably won't generate much revenue though. OTL Hoover's 1932 tax hike did nothing but further damage the economy. (Income tax receipts actually declined after his tax hike.) Olson's tax hikes are likely to have a similar result.

As for bonds, that might help a little, but again Olson is spending at an enormous rate. He allocated over $20 billion dollars for public works spending. OTL the US GDP in 1934 was $66 billion dollars. And it's probably much lower than that ITL given the worse Depression. Even assuming that $20 billion was part of a 2 year allocation that is still $10 billion a year, an enormous chunk of the economy. And its not like public works programs are the only thing Olson is going to be spending on either. (I don't recall if it was mentioned whether Olson has passed farm support programs or a veteran bonus bill, but such legislation seems very likely.)

At the same time, it is probably much more difficult for Olson to sell bonds to the wealthy (the main people who have spare money to spend on government bonds) than it would have been for FDR OTL. Olson is a radical who has been openly flirting with nationalizing the banks. Who is going to buy bonds from a government that might decide tomorrow to start confiscating fortunes? Wealthy people and the banks are probably trying to figure out how to get their money shipped overseas (or to otherwise hide it) not to loan it to Olson.

As such its hard to believe Olson could get enough from bonds to cover much of his increased spending. And since a large portion of his base wants the currency inflated anyway, there really isn't any reason for him not to turn on the printing presses.

Worst case, inflation averages something like high single digits, but in comparison to the economic improvement, most people wouldn't really care. Even for the wealthy, the vast economic turnaround has most likely been a net improvement for their fortunes.

The thing is though that Olson and LaGuardia don't seem like the types that will just passively accept inflation. They will want to do something about it once it starts to become a real problem, which most likely means some kind of system of price controls which will in turn lead to shortages of goods. People might not notice inflation (which tends to be something of an invisible tax), but they will notice shortages in consumer goods, and that will lead to discontent. It won't help the Republicans in the short run, but by 1940 it might give them an issue to at least be competitive again.

For the 1936 election though all the Republicans really have to run on is Olson's increasing authoritarianism and probably also on his administration's corruption. (With the sheer amount of money being spent, and Huey Long of all people guarding the hen house, graft must be occurring at an absolutely staggering rate.) I agree with you that those issues won't move the needle in 1936, but its really all the Republicans have for that year.
 
The current Progressive government could use the opportunity to build besides good, proper public transportation system, dams, highways, perhaps improve railways, and maybe some mega-project with long term benefits for the population, that would otherwise be delayed to reticence in allocating funds.
other options, can also be an improvement in the education system.
 
Olson is incredibly popular among the majority of the population. However, Olson is more concerned presently with purging the party of the moderates. He's willing to see congressional and senate seats thrown away by primarying moderate incumbents and running no-name, little-skill Radicals instead, or by encouraging third-party left-wing challengers even if they just divide the vote. Furthermore, the Republicans have an immense financial advantage, considering that the average supporter of the Progressive Party is poor, while the upper class and almost all of the middle class is terrified of him, and they have the disposable income to donate to campaigns.

The current Progressive government could use the opportunity to build besides good, proper public transportation system, dams, highways, perhaps improve railways, and maybe some mega-project with long term benefits for the population, that would otherwise be delayed to reticence in allocating funds.
other options, can also be an improvement in the education system.
Most of the public works projects are improving transportation, primarily road building. Other projects such as dams and other infrastructure are also underway.
 

FDW

Banned
Most of the public works projects are improving transportation, primarily road building. Other projects such as dams and other infrastructure are also underway.

I would imagine that a significant chunk is also going towards creating Rapid Transit in cities, and that there just much to show yet, right?
 
Furthermore, the Republicans have an immense financial advantage, considering that the average supporter of the Progressive Party is poor, while the upper class and almost all of the middle class is terrified of him, and they have the disposable income to donate to campaigns.

Interesting point. Though tbf, with the power of the purse and a majority of the population already in his pocket... seems like he's sitting pretty.

The possible rise of a more viable Socialist party should be interesting to say the least...
 
Interesting point. Though tbf, with the power of the purse and a majority of the population already in his pocket... seems like he's sitting pretty.

The possible rise of a more viable Socialist party should be interesting to say the least...
The majority of the population thing is one thing hindering the Progressives. Olson knows he'll have a supermajority in the House for everything but civil rights for the foreseeable future. He knows that in the next Senate cycle his supermajority will grow even more. Therefore, he sees no reason to appeal to the minority opposition whatsoever. Enthusiasm for his success is balanced out by the alienation of moderates.

Olson at least will keep the Socialist Party around as a pressure group to help him radicalize the Progressives.
 
On the issues in which the Radical and Moderate Progressives were united, nothing could stop them now that the filibuster-proof majority had been attained. The Workers' Rights Act established the right for unions to engage in collective bargaining and closed shop, and led to a massive increase in union power and membership. It also mandated a legally-required 40 hour maximum workweek, with anyone working over that having to voluntarily agree to do so with no threat to their job, and being paid extra. The Progressives did not only increase the rights of workers, they also altered the laws to decide who could work. Throughout the state legislatures, the Child Labor Amendment, which passed Congress in 1924, was finally ratified:

23rd Amendment to the United States Constitution said:
Section 1. The Congress shall have power to limit, regulate, and prohibit the labor of persons under eighteen years of age.

Section 2. The power of the several States is unimpaired by this article except that the operation of State laws shall be suspended to the extent necessary to give effect to legislation enacted by the Congress.

Congress immediately passed a law outlawing labor by individuals under the age of 16 except at their own parent's company, farm, or shop. Tacked onto the Child Labor Act was an expansion of the American Employment Agency, and a raise to the salary of the employees thereof, in hopes of offsetting any economic trouble by families who depended on children working.

Perhaps the crowning glory of the 74th United States Congress's laws passed in 1935 was the Social Security Act. Many questioned the scale and feasibility of the act, with moderate Progressives balking at first. However, Vice President La Guardia convinced all of the moderate Progressive Senators to at least vote for cloture, and the bill passed and was signed into law by Floyd Olson. Post-master General Frances Perkins was made the first Secretary of Welfare, which included the Social Security Administration, as well as the newly established Maternity Insurance Administration and Unemployment Insurance Commission. Perkins would go down in history, not only as the first female cabinet secretary, but as the woman responsible for establishing the American Welfare State.

However, not all was well in Congress. The Moderate Progressives were fine with establishing a government-subsidized health system for the retired and the poor. However, they balked at the idea of establishing universal health insurance. The Republicans railed against the idea as "Socialist medicine" and pointed to similarities with the German system (with it being even more expansive), claiming it was also a "fascist health service". The moderates, already concerned with the dramatically rising national debt and deficit, and concerned about the effect of massive tax increases, grew upset over the idea of implementing another massive, expansive program, especially in the same year as the Social Security Administration. Some, in their attempts to appease the Progressive voters, criticized the system as "giving money to those who can afford to pay on their own" and said that it should be restricted to those who could not afford it. Olson refused to back down, telling the Radical Progressives that if they passed a limited Health system, it would break the inertia and ruin any chance for universal healthcare.

However, even if the Progressives in the Senate were willing to end the filibuster (they weren't), they still did not have a bill to pass. Even the Radicals were divided as to what sort of health system should be created. Some advocated for a system similar to the German one, but expanded. Others, perhaps Germanphobic due to the Great War and the Civil War which so recently was concluded with an Imperial victory, refused to back such a system. Some wanted National Health Insurance to simply provide costs, the most Radical along with the Socialists wanted a completely nationalized Healthcare system with private Healthcare outlawed. The inability of the Progressives to unite on a single healthcare model doomed hope of anything getting passed in the Spring of 1935. Olson was infuriated by it, and planned to make it his chief issue for the next two years, and failing that, his reelection campaign.

But in the summer of 1935, an even greater issue eclipsed the Healthcare debate. For a drought unlike any ever experienced hit the American plains. The farmers had failed to use the techniques necessary to prevent massive dryland erosion. So began the series of dust storms known as the Dust Bowl...

800px-Dust-storm-Texas-1935.png



Notes:
  • The 23rd Amendment was retconned from the Ballot Fusion Amendment to the Child Labor Amendment, the Ballot Fusion one, ratified in 1937, will be the 24th
  • A replacement for Perkins for the position of Post-master General is needed, another woman would be nice if anyone has ideas
  • Unique ideas about the future of the American Healthcare system are appreciated
 
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