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Frank A. Weil

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A Fork in the Road: Prosperity or Depression

Posted: 09/04/2012 11:43 am

The presidential election of 2012 looks to be the most important since 1932. While there are some differences between then and now, the choice is just as crucial.

After the boom years in the 1920s, driven in large part by the advent of automobiles, the crash of 1929, which occurred under Herbert Hoover, led to government policies which, as it clearly turned out, were perverse and unleashed what we now call the Great Depression. Those sadly wrongheaded policies included Smoot-Hawley protectionism, cutting government expenditures and clinging to the gold standard.

The 1932 election was between the incumbent Herbert Hoover, who had become a proven executive/administrator with exceptional character and temperament, and Franklin Roosevelt, who was in many ways Hoover's polar opposite. Hoover's view of the world around him was less political than technocratic. He apparently believed he could simply "manage" the country out of the crisis. Does that sound familiar today? (Imagine "W" causing the crash and then saying "I know how to fix it.")

FDR, by contrast, had been struck by polio and his whole life perspective changed. His love of people expanded and he came to feel and appreciate the pain of everyone in the country as if it were his very own. His political instincts were grounded in his experiences as the Assistant Secretary of the Navy during WWI, as the VP candidate in 1920 and as a doted-upon nephew of his brilliant Uncle, President Teddy Roosevelt. FDR seemed to know instinctively that the old ways could not work and he organized his famous brain trust to come up with new approaches to solving the nation's rampant ills.

OK. So what on earth does that history tells us now? More than most people might realize, even though the situation is reversed and there are a number of other differences.

The incumbent today did not preside over the crash. He followed it and immediately took the crucial first steps to stem the consequences and start a recovery. And, he is still the person who evidently appears to most Americans to understand and feel their pain. And he seemed to know from the outset that he had to try to change Washington's way of gridlocking everything solely for political advantage.

The challenger today is the technocrat who believes he can simply be counted on to bring his manifest management skills to solve today's problems.

The incumbent, despite his cool aloofness and apparent disdain for personal politics, has shown interesting skill as a strategic politician.

The challenger, with similar coolness and aloofness, appears to be both doctrinaire about simplistic and polemic conservative economic policies as well as strangely ungrounded, with "excessive flexibility" that troubles even his ardent supporters.

The economic and political outlook today demands that the American people look deeply into these two men and ask which one has the "right stuff" to pull wisdom, together with politics, out of the hat. The answers do not lie in where they were born; what taxes they personally pay; what religion they practice and believe; or, importantly, what they say from time to time in the heat of battle.

The answer, instead, lies in their willingness to listen with an open mind to all the experience that can be brought to bear on the issues that need to be addressed; in their deep appreciation of the full and broad effect of their policies on all Americans; in their ability to take principled stands on the basic policy directions essential to economic recovery and at the same time negotiate with opposing views with a practical yet open mind.

Therein lie the elements of a wise decision-making model, which hopefully all centrist, undecided voters will utilize in making their choice in November.

The reason this choice is so critical is because the economy today, quite like the economy in 1932, is teetering on the brink of a cliff. On January 1, 2013 there are several tax and fiscal laws that require serious attention. If the attention is wise, such as a reasonable version of the Simpson-Bowles plans, which are now in nearly final legislative form, there is an excellent chance that the country can embark on a wonderful new period of expansion and prosperity.

If the solutions are simple-minded, draconian and doctrinaire, and attempt to put the bulk of the burden of budget cuts on the back of the American people too severely and too quickly, the result could be much more than a double dip recession; most likely it would become a full-blown depression again like the 1930s.

Romney's choice of Ryan as VP strongly signals his approach to the cliff problem in 2013. Ryan was on the Simpson-Bowles Commission and he voted against the plan, which led to its being shelved at that time. Obama has long favored the Simpson-Bowles approach and can surely be counted on using a reelection mandate to ensure that it becomes the basic framework for a solution to the cliff problem.

People who are, or become, aware of the historical context, the dangers of the economic/fiscal cliff and the core values of the two men who are seeking the presidency this year (whatever other reservations they may have about both candidates) should cast their vote for what all Americans truly yearn for: prosperity versus depression.

 
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