Obama or FDR: Whose Strategy Will Work Better?

Jonathan Alter's engaging and often startling book about the first hundred days of Franklin Roosevelt's presidency, The Defining Moment, is chock full of parallels to Barack Obama's transition and possibly Obama's first hundred days. The obvious similarity is the deep economic crisis that faced Roosevelt and now confronts Obama. Both were elected, in large part, because of the public's fear of economic collapse and their repudiation of the policies of the outgoing Republican administrations.

Herbert Hoover had been slow to act in response to the 1929 Crash, insisting on pursuing a laissez-faire, free market approach to the crisis when most economists had realized that those policies would only worsen the crisis. George Bush, while he was quicker to act when confronted with the dangers of the downturn, was not only slow to recognize the seriousness of the overheated housing market, but also was complicit, along with his fellow Republicans, in the lax oversight of financial institutions and markets.

One significant difference between the Roosevelt transition and that of Barack Obama is the swiftness with which the Obama transition team has moved to address the nation's economic crisis. After the November, 1932 election, when the economic downturn was already in full force and the nation was faced with widespread bank closing, FDR refused to take an active role in economic policy until the day of his inauguration in March, 1933. (The inauguration occurred in March until it was later changed to January, partly because of the lengthy FDR interregnum).

While Hoover dithered with free market solutions, occasionally reaching out half-heartedly to FDR, President-elect Roosevelt refused to take a strong stand, or even send specific signals about what actions he might take. In fact, on the night before the inauguration, Hoover was still negotiating with Roosevelt, who had assiduously avoided most of his entreaties, for a joint statement on a "bank holiday," which would give banks across the nation a breather from relentless depositor demands.

On the day of his inauguration, FDR finally revealed his hand, dramatically announcing a nationwide bank holiday that was almost joyously received by both the banks and the American public, and which initiated a fervid hundred days of legislation, proclamations and executive actions to address the crisis. Historian Alter believes that the cagey Roosevelt carefully hid his hand until Inauguration Day -- as the economy sank deeper into crisis -- in order to have the maximum impact during his first hundred days.

Alter argues that if the crisis had been less severe, or if FDR had revealed his plans earlier, there would have been time for opposition to his plans to crystallize on Capitol Hill and in the public mind. By waiting until he was sworn in to unveil his prescription for the crisis, FDR succeeded in neutralizing any opposition and swiftly enacting most of his policies. While it may be seen as a cynical move, Alter makes the case that it ultimately bolstered FDR's effectiveness.

Obama has taken a different tack by coming out swinging early with his proposals and seizing the initiative even before he has been sworn in. Certainly there are significant differences between both the economic and political situation in 1933 and 2009 that are guiding the strategy of the Obama transition. And while there are some signs that opposition is developing on Capitol Hill and in some segments of the public to his $825 billion rescue package, the Obama team seems to be betting that an early attack on the problem will not only prove to be the most effective strategy, but will also lessen the economic turmoil and suffering. The next hundred days will likely establish whether the FDR strategy or the Obama strategy will work better.