Saturday, February 13, 2010

Why Obama isn't FDR

A year ago, the press was full of comparisons of President Obama to FDR. It seemed natural enough. Both men came to power in the midst of a national economic crisis, with large ambitions--not just to solve the immediate crisis but to bring about historic change.

A year later, few observers would compare Obama's first year favorably to Roosevelt's. We are deluged with stories of a presidency on the ropes, repudiated by the voters, etc. In part, this is simply a product of our news culture's obsessive, minute-by-minute microscopic analysis of what has changed politically in the last 24 hours. But there is no doubt that to some extent, the bloom is off the rose. What happened?

I would argue that the most important factor is one little appreciated a year ago. In the midst of all of the New Deal talk in early 2009, a friend asked me what I thought about the comparison. My reply was that there was one major difference. It was as if FDR took over not in early 1933, as he did, but in early 1930. At that point, the crash had occurred several months earlier, and the economy was certainly on a downward trajectory, but no one knew that what was coming would soon be known as the Great Depression.

In other words, things just weren't bad enough when Obama came into office for the comparison to be valid. No, I'm not suggesting that it would have been somehow better if things had been worse--I'm simply pointing out that, in strictly political terms, FDR had more room to maneuver than Obama did in his first year because the economy was in such a shambles in 1933 and most Americans blamed his Republican opposition for that state of affairs.

In retrospect, most historians and economists agree that the winter of 1932-33 was the absolute low point of the depression, so when FDR actually took over, there was no doubt that the country was suffering the worst economic calamity in its history. Not only that, but for three long years, the previous administration's attempts to grapple with the disaster had shown no results. The bankruptcy of Republican policies was manifest and undeniable, and as a result, Democrats would successfully run against Herbert Hoover and his political ghost for the next 20-30 years.

In that environment, FDR came into office with as close to a blank check from Congress as any president has ever had. It passed the Emergency Banking Act a mere five days after FDR's inauguration and within several hours of it being presented to Congress, with few members even knowing what was in it, much less having read it.

Roosevelt's party also had greater margins in both Houses. Democrats had a 312-117 majority in the House, 60-35 in the Senate (it would grow to 69-25 after the 1934 elections). Not only that, but both parties were more ideologically diverse then than they are today. Many of the Congressional Republicans who had survived politically were old progressives like senators William Borah of Idaho and Hiram Johnson of California, men who were in the mold of FDR's cousin Theodore and supported many of the younger Roosevelt's initiatives, regardless of the fact that they were members of the other party.

But imagine if FDR had moved into the White House in early 1930. Before it was clear that the nation was entering a severe, historic depression. Before the bankruptcy of Republican policies of the last ten years became clear. And while the depression deepened inexorably.

This is effectively the situation Obama walked into--with one major difference. In the fall of 2008, as the financial system threatened to implode, all informed observers, of all political stripes, knew effective action had to be taken, and quickly. And Obama wisely made common cause with the Bush administration in approving the now universally unpopular TARP bill.

There is no exact parallel with FDR, but the one that comes closest is illuminating. In the months between the 1932 election and the inauguration in March 1933, the banking system effectively collapsed. In that period, Hoover tried repeatedly to enlist FDR in some kind of joint action, and the president-elect resisted. His critics, with some justification, have charged FDR with putting politics ahead of the national good. But as FDR and his people saw it, in the words of biographer Ted Morgan, "Why should he risk the contamination of a discredited administration?"

In contrast, that, in effect, is what Obama did--he risked the contamination of the discredited Bush administration on TARP. He put the national interest first. His personal political interest has not been well served. By supporting TARP, and then getting Congress to enact the stimulus bill, Obama has helped prevent the panic of 2008 from turning into another great depression.

But he gets no political credit for preventing what did not happen, and arguably has prevented the public from seeing (and suffering) the full consequences of the reckless policies of the Republican president and Congress that preceded him. Instead of getting credit, he endures carping from the right that the stimulus didn't work because unemployment went up. He gets blamed by the left for an ineffectual leadership's failure to pass health care reform.

Yes, it would have been better for Obama politically to have come into office in today's equivalent of 1933. But it would not have been better for the rest of us.

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