FDR's New Deal Blueprint For Obama

The economic crisis of late has some people looking back to a set of old initials ... WPA. And they're thinking perhaps that New Deal program will serve as a model for our times. Our Cover Story is reported by Chip Reid:

"We need action, and action now," said President-elect Barack Obama. "That is why I have asked my economic team to develop an economic recovery plan for both Wall Street and Main Street that will help save or create two million jobs."

In 1933, another new president faced a collapsing economy, and rallied the nation with similar words:

"This nation is asking for action, and action now," said Franklin Delano Roosevelt in his first inaugural address.

Seventy-five years ago, FDR began the New Deal. What was truly new - in fact revolutionary - was his conviction that the federal government had a direct responsibility to create jobs, and to pay for them with tax dollars.

"Our greatest task is to put people back to work," he said.

"When Franklin Roosevelt was inaugurated, 13 to 15 million people were out of work," said Nick Taylor, author of a new book called "American-Made: The Enduring Legacy of the WPA" (Bantam). "People standing in line, often rags for shoes, shuffling along in the snow to get a cup of soup or a piece of bread."

The book examines the Works Progress Administration. It was a complete break from Herbert Hoover and past presidents who believed that only corporations create jobs, and only private charities should take care of the poor.

"I mean, Hoover said, 'If only somebody could write a song or poem or tell a joke that would make people forget the Depression.' He wasn't doing anything about it in terms of the government's force.

"Okay, so in comes FDR. The first thing he did was to provide relief, direct relief. Chits. Some people got checks. Some people got surplus food stuffs. But eventually the idea was to provide jobs, to allow people the dignity of work."

The WPA lasted 8 years, from 1935 to 1943, and left a mark on America that is still visible today. It spent $11 billion dollars, employed eight and a half million people.

New roads were built - 650,000 miles of them. And new airports, including New York City's Laguardia Airport.

But it wasn't just about things. The public school lunch program got its start with WPA dollars.

"Attendance increased," Taylor said. "It was something that raised the health of the country."

FDR thought people needed places for recreation. So, the WPA repaired and enlarged the national park system, but Roosevelt and Harry Hopkins, the man who headed the WPA, knew there was more to life than bricks and mortar.

"The great thing that Roosevelt and Harry Hopkins recognized was that it made no sense whatsoever to take an excellent violin player and put him to work building a road," Taylor said. "He could provide, or she could provide, entertainment to people. And enlightenment! And that's why the WPA had an umbrella over arts projects as well as construction."

In 1941, Woody Guthrie was paid to write songs for a month as he visited the new dams under construction along the Columbia River in Washington State.

The WPA financed 225,000 concerts, with audiences of 150 million Americans. Actors appeared in stage productions all over the country. Artists painted murals on countless public buildings, like those at Lguardia's Marine Air Terminal in New York.

The WPA financed almost a half-million pieces of art. Some are on display at the Smithsonian American Art Museum in Washington.

George Gurney, the deputy chief curator at the museum, said the WPA arts program was a godsend for many artists in the 1930s. "It allowed them to continue to work where they would not have been able to do so otherwise."

Gurney says many of the WPA works show the strength and promise of the country, such as Ray Strong's painting of the Golden Gate Bridge under construction.

"Here was an artist showing what we were going to be able to do, what we can do. We are a nation that 'can do,'" said Gurney.

Earle Richardson, who was African American, painted this scene of southern workers in the field.

"He was trying to convey that blacks in America contribute like everyone else," Gurney said.

Taylor says in the end-the very definition of the American worker was transformed by the WPA: "To envision the worker not as a commodity but as a resource."

And now President-elect Obama is talking about his own jobs program that could cost half a trillion dollars.

Economic analyst Jeff Madrick believes Obama is also sending a very clear message.

"Well, I think the government is back and we're all the better for it," Madrick said. "In fact, the government has been away at least since Ronald Reagan."

Madrick recently published a book, Reid. "I think down the road higher taxes, even on the middle class, and I know this is anathema right now, will be necessary to pay for the social programs we need."Like all government programs, the WPA was not without critics. The term "boondoggle" was coined to describe some of its projects. WPA , they said, stood for "we putter around." And today, as back in Roosevelt's time, some question whether government stimulus programs really work.Alan Viard, an economist with the American Enterprise Institute in Washington, said, "I think it's a bad idea to be doing a large multi-hundred-billion dollar program of infrastructure spending on short notice.

"I really have two concerns," Viard said. "One is that spending is not going to be quick enough to stimulate the economy. And the second is that it's not going to be good investments for the long run."

"And if they're not good investments, what happens?" Reid asked.

"Then it means we have wasted hundreds of billions of dollars, piling up additional debt for us and our children."

History shows that Roosevelt's WPA lifted millions out of poverty, though author Nick Taylor does not believe the New Deal ended the Depression.

"Obviously the Depression ended with World War II and the humming factories that were producing munitions and tanks and planes and uniforms and everything else that funded the war effort," he said.

Yet in a time of serious economic stress and fear, Taylor writes that FDR had some advice the new president could use. Roosevelt said: "The country demands bold, persistent experimentation. If it fails, admit it frankly and try another. But above all, try something!"