A New Deal for a New Depression

Rahm Emanuel has a plan. According to his commentary in today's Wall Street Journal, Clinton and Obama are right to bash NAFTA, but the real problem is "economic anxieties" among American workers and the answer is "a new social contract that Americans can count on -- no matter how stiff the global economic competition turns out to be."

Among his solutions: more education mandated by government, universal health care for at least elderly and kids, and a new government agency to come up with energy technologies ("to be funded at the same level as the National Institutes of Health). Tack on universal savings accounts in addition to social security and you have the congressman's plan in a nutshell.

Basically, by expanding government even further, we can make people less worried about evil free-market competition. Of course, as Amity Shales recently wrote about in her book The Forgotten Man, while the original New Deal "successfully" created large constituencies for federal government programs, the massive expansion of government in everything from retirement to electricity infrastructure drove the economy further into decline and lengthened the pain of the downturn.

It is safe to say Rahm Emanuel's New Deal continues in the tradition of FDR's grand central planning experiment we are staggering under today with a serious need for entitlement reform. The real question here is whether Americans are willing to give up more and more of their paychecks to fund more government interference in the market and possibly lose their jobs as US competitiveness erodes, or whether we'll find another Wendell Willkie to stand against the new New Deal and for economic growth.