We are very excited to introduce our newest contributing RP, Nick Paleologos. Nick was a Member of the Massachusetts House of Representatives for 16 years, and has since become a Tony and Emmy award winning theatre and film producer. We hope you enjoy his first piece, and many more in the weeks to come.

When I was a kid, I was blissfully unaware of the bone-crushing depression my dad lived through. He grew up on the hardscrabble streets of Lowell, Massachusetts—the son of Greek immigrant parents who were living in a cold-water flat known then (and now) as “The Acre.”

My dad (at far right in photo) was nine years old when Franklin Roosevelt beat Herbert Hoover for president in 1932. Hoover was a handsome guy who made a ton of money in the mining industry. By 1914, Hoover was so wealthy he was actually quoted as saying “If a man has not made a million dollars by the time he is forty, he is not worth much.”

The country clearly agreed. Between 1921 and 1929 (the first year of Hoover’s presidency) the top income tax rate for worthy millionaires like himself was slashed from 73% to 24%. Result? The Great Depression. By the time Roosevelt took over from Hoover, unemployment was at 25%, two million Americans were flat-out homeless, and all the banks in 32 of the 48 states (including the NY Federal Reserve) had slammed the doors shut on their depositors.

On Saturday afternoon March 4, 1933 Roosevelt gave his first inaugural address. Everybody in America (including my dad) was huddled around the radio waiting to hear what the new president had to say:

“This is the time to speak the truth, the whole truth, frankly and boldly…This great Nation… will revive and will prosper. So…let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

You’re right. I am afraid.

“Values have shrunken to fantastic levels; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.”

How did this happen?

“Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence…Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”

What can we do?

“…there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency. Through this program of action we address ourselves to putting our own national house in order and making income balance outgo.”

Does that mean we all might have to pay a little more?

“If I read the temper of our people correctly, we now realize—as we have never realized before—our interdependence on each other; that we can not merely take but we must give as well; that if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good.”

That’s what Franklin Delano Roosevelt told my father and millions of others in 1933. Within a hundred days of that speech, the Civilian Conservation Corps (CCC) was formed. For the next decade, millions of unemployed young Americans found jobs in national forests and state parks all over America. My dad went to Vermont. It was dependable, physical labor from which the country greatly benefited. For his part, dad earned $30 a month, of which $25 was required to be sent back home to his family.

So when FDR sounded the call to arms in December of 1941, my father was only too happy to return the favor. He signed up to fight for his country in the Pacific. At the end of World War II, when dad stepped off his PT Boat—proud, penniless, and newly unemployed—the president wanted him to go to college. Even though dad could not afford to, FDR believed that going to college was so important for America’s future that he insisted upon the country paying for dad’s education.

Under the GI Bill, dad went to college and became a lawyer. In addition, eight million other veterans went to college, or to vocational training schools, or received low cost mortgages and loans to start businesses. And what a difference they made.

NBC’s Tom Brokaw dubbed them the “Greatest Generation.” But they were really Roosevelt’s Kids. Because the country FDR gave them was built upon his conviction that freedom from fear of destitution was crucial to unleashing America’s limitless potential–a belief that largely prevailed…until 1980.

That was the year that another affable, popular president was elected. In Ronald Reagan’s first inaugural address he took the country in a profoundly different direction.

“In this present crisis” Reagan famously declared, “government is not the solution to our problem; government is the problem.”

In the three plus decades since that assertion (except for a brief interlude in the 90’s) America returned with a vengeance to the philosophy that characterized the Roaring Twenties: tax cuts for the wealthy, Wall Street run amok, and banks acting more like casinos than caretakers—with the same catastrophic result.

Baby boomers–who grew up in Roosevelt’s America where the cumulative income growth of the bottom 90% outpaced the top 1% by more than four to one—have only recently realized that during the past three decades in Reagan’s America (our working lifetime) the American economy has gone ass over tea kettle in the opposite direction. The top 1% outpaced the bottom 90% by a staggering 25 to 1.

In other words, during the Roosevelt decades (1945 to 1980) as the country got richer, the biggest winner was a rapidly growing middle class. During the Reagan decades (1980 till now) practically all of the wealth created in America ended up in the hands of the top 1%. But don’t take my word for it. Nobel Prize winning economist Paul Krugman stated flatly, “There’s no measure I can think of by which the U.S. economy has done better since 1980 than it did over an equivalent time span before 1980.”

So when the Great Recession ravaged our country between 2008 and 2010 (according to the Federal Reserve) what little wealth left for the middle class during the Reagan decades (mostly home equity) was all but wiped out.

Read the rest of…
Nick Paleologos: “The only thing we have to fear…”