But if today's tea-infused GOP were even one-tenth as sane as they were under the speakership of Newt Gingrich, the rank-and-file Democrats would have been stuck with a raw deal that would have included cuts to Social Security and Medicare benefits and even a flattening of the progressively graduated income tax?a deal that a Democratic president put on the table. Whether such a deal arose through desire or necessity is irrelevant; it would have likely demoralized Democrats while allowing the right wing to blame Obama for the very cuts that it was insisting on. And once massive spending cuts and immediate deficit reduction had been accepted in all relevant quarters as the consensus path toward financial health and fiscal responsibility, the only question left was how far Obama was willing to accede to the adamantine rigidity of the grand old tea party before deciding that a deal that was getting worse all the time was in the end not worth making.
The only recent president who has faced an economic crisis more prolonged or more severe than the one our economy faces was the progressive legend Franklin Delano Roosevelt, who faced down both the Great Depression and the Nazis with equal aplomb and bested them both, and the contrast between how Obama is handling his economic showdowns with Republicans entering his reelection and how Roosevelt handled a similar time in his presidency could not be more clear. Obama has wanted to bring the nation above politics and create a grand bargain that incorporates ideas from both parties in an attempt to prove that our country is not as divided as our politics suggests, and he has, in his own words, been repeatedly left at the altar by Republicans with no conscience who want nothing more than to destroy him and his presidency. President Roosevelt, by contrast, was ideological: he was convinced that his way of managing the economy?the Keynesian approach of government as the spender of last resort?was right, and the austerity methods of the Republicans were wrong.
Unlike Obama, Roosevelt did not accept the conservative meme that macroeconomics and microeconomics have the same fundamental principles and that government has to "live within its means like families do." Instead, Roosevelt understood that economic downturns reduce national income and that reduced national income leads to further downturn, creating a deflationary cycle that can only be broken when government steps in to put people back to work and break the cycle?a consideration that came second to balancing the budget. At a campaign speech on Oct. 1, 1936, in Pittsburgh, Roosevelt outlined exactly this case:
To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.No one lightly lays a burden on the income of a Nation. But this vicious tightening circle of our declining national income simply had to be broken. The bankers and the industrialists of the Nation cried aloud that private business was powerless to break it. They turned, as they had a right to turn, to the Government. We accepted the final responsibility of Government, after all else had failed, to spend money when no one else had money left to spend.
I adopted, therefore, the other alternative. I cast aside a do nothing or a wait-and-see policy.
Even where Obama and Roosevelt could be seen to agree on economic principles, the selling of those principles has been far different. Obama's stimulus bill was a resounding success by any measure, as was the billions spent to prop up the American auto industry at its nadir. In both of these cases, the public sector?the federal government, in other words?stepped in to create demand and infuse capital when the private sector was incapable of doing so, saving millions of jobs and an entire American institution in the process. And now, as in Roosevelt's time, the Republicans advocated a do-nothing and a wait-and-see policy, which both Obama and Roosevelt rightly cast aside.
The difference, however, has been that Roosevelt seemed more willing to own the policy and defend its principles, whereas Obama has let the notion that the stimulus failed become conventional wisdom in spite of the facts. Again, from Roosevelt's 1936 speech:
As for the other six and a half billions of the deficit we did not just spend money; we spent it for something. America got something for what we spent?conservation of human resources through C.C.C. camps and through work relief; conservation of natural resources of water, soil and forest; billions for security and a better life. While many who criticize today were selling America short, we were investing in the future of America.
It is certainly true that Roosevelt did not have to contend with the same reckless ideologues who currently control the House of Representatives, and there is no delusion that were Roosevelt president today, he could force Boehner to bring to the floor, much less pass, any legislation that increased the government's role in the economy or provided more badly needed stimulus. But it is a fair bet to say that the conversation surrounding the deadlock would have been quite different from what it is today: Roosevelt had no hesitancy about using the bully pulpit to make a passionate defense of what government can and should do for people and the economy. And while Obama did not explicitly rule out using the 14th Amendment as a pretext for unilateral action, Roosevelt's history would seem to indicate that he would have no problem whatsoever taking any action he deemed necessary and daring the same House Republicans who had been advocating against his popular policies to impeach him for taking action to save the credit of the United States.
Not that Roosevelt was perfect: In 1937, in the belief that the economy was sound again, he engaged in belt-tightening and reduced the deficit to practically zero?a move that contracted the economy and sent it back into recession. Obama would do well to heed both the successes and the failures of Roosevelt's first two terms in office, not just in terms of the implications of certain policy prescriptions, but just as much in terms of the narrative shaped by the war of words between those whose selfishness and greed causes them to hate the government, and those who understand the role that government can and must play in being the spender and employer of last resort. The government, after all, is the only entity that can ensure that every American who wants to can make an honest day's wages for an honest day's work when the perfidy of the financial markets causes the private sector to fall down on the job.
A tip of my hat to Robert Cruickshank for sharing the speech that served as the inspiration for this essay.
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