The Hoover administration and the
Federal Reserve did all the wrong things in 1930, which is now a part of US
Economic History 101. Motivated by
business and financial interests (that had caused the birth of the Great Depression)
Hoover’s policies vacillated between meager Federal programs in an attempt to
spur growth and attempted policies to stabilize the currency for the
financially powerful. What ended up happening
by the end of 1932 was a devastating contraction of the economy so deep that it
resulted in deflation, the only such
time that occurred in modern US history.
Once Roosevelt took office in
1933 the unemployment rate continued to rise during his first year as
President, spiking to as much as 25%.
After his third year in office the unemployment rate had dropped in the
16% range, but by the time of the 1936 election it was creeping back up near
20%. That was the economic backdrop that
Roosevelt took to his bid for re-election against the two term governor from
Kansas, Alf Landon. In that election of
1936, where little the Federal Government had done showed dramatic improvement,
Roosevelt won every state in the Union except Vermont and Maine and won the
popular vote by almost 25 percentage points.
How did this happen and why under strikingly similar circumstances is
Barack Obama just barely staying even with a truly hapless challenger?
The complexities of 1936 and 2012
are not identical. The Nation
economically was far worse off after 3 years of FDR than after three years of
Obama. Taking over the Nation at the
beginning of the financial meltdown in 2008, the Bush and Obama Administrations,
and the Fed did not make the same mistakes that Hoover had. The Emergency
Economic Stabilization Act of 2008 and TARP the following year dedicated about
$1.3 trillion to stop the financial collapse then bolster the American
economy. What it did at the very least
was to halt the slide of unemployment and avoid the kind of financial quagmire
that Roosevelt found himself in. At best it brought a full recovery to equity
markets and helped major corporations to begin operating in the black almost
immediately.
Both FDR and Obama had to operate
under fierce opposition from Conservatives.
In the 1930’s (also before and after for a time) Southern Democrats were
generally more Conservative than Northern Republicans, so partisanship of
political parties was less defined. Both
Presidents used the leverage of the popular desire for change to advance major
social programs. They were/are both
extraordinarily articulate men and master communicators. So what did Roosevelt do that Obama has not?
Roosevelt was willing to powerfully
engage his opposition. However, he did
so as a declared champion for the people.
He willingly took on the risk of confrontation, but made the average
American believe he was taking that risk for them. He famously said; “I ask you to judge me by the enemies I have made”. At the time it was a conflict between the
haves and the have-nots, no surprise there, although he himself had substantial
family wealth. As a result he became a Populist
President, won two more re-election bids with little opposition, changed the
course of American society, and was the leader America needed as it engaged in
global war.
Barack Obama’s failure to become
a truly populist President has not been due to his policies and in spite of his
numerous accomplishments; it is rather due to his misunderstanding of just what
is a Populist leader. In his book The Audacity of Hope, Obama essentially
described a populist leader as someone who brings all people and divergent ideas
together based on a belief that there is enough commonality among all Americans
to bridge conflict. Nice idea…wrong
universe. That Republicans chose to
block his Administration for three years by simply saying no to virtually everything,
only confirms that they read his book.
Franklin Roosevelt was not afraid
to admit that the loyal opposition wanted him out, and that their desire to
depose him was not a failure on his part.
In 1936 while campaigning for re-election he said; “Never before in all our history have these forces been so united
against one candidate as they stand today. They are unanimous in their hate for
me—and I welcome their hatred”. He
rallied such incredible support from a Nation wallowing in economic despair
because he conveyed a sense that his fight was their fight even as he failed,
while Obama is struggling to dissuade the Nation from feeling like his failures
are their failures, even as he succeeds.
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