"We didn't actually, I think, do what Franklin Delano Roosevelt did, which was basically wait for six months until the thing had gotten so bad that it became an easier sell politically because we thought that was irresponsible. We had to act quickly." - President Obama
Sometimes a chance remark trains a searchlight on aspects of the historical record that would otherwise be shrouded in Stygian blackness for a generation. So I think it was yesterday when in the Huffington Post, Leo J. Hindery, Jr. quoted from a transcript of President Obama's remarks to a group of liberal bloggers who were querying his handling of the financial crisis.
Many readers responded in shocked disbelief: The president can't mean what he said. He must have misspoken -- he can't really be claiming that Roosevelt sat on his hands, deliberately letting the Depression get worse and worse.
Perhaps it was just a slip. But in 2010, even slips can be revealing -- and this one comes from a definite part of the political spectrum. The president was repeating a canard that goes back to the circle of die hards around President Herbert Hoover as he exited the White House in a cloud of bitterness in 1933. In recent years, as a vast campaign against the memory of the New Deal has gathered steam, such claims have gone mainstream. For example, take the carefully hedged version recently put forward by Amity Shlaes in her study of the New Deal, "The Forgotten Man": "But Roosevelt was not interested in cooperation. We will never know all his motives, but it was clear that a crisis now could only strengthen his mandate for action come inauguration in March."
We are unlikely ever to know for sure. But as President Obama took office, the Council on Foreign Relations was cranking up a remarkably one-sided conference purporting to be a "Second Look at the Great Depression and the New Deal." Ms. Shlaes was a prominent participant, as was the Council's co-chair, one Robert Rubin, whose myriad protégés thronged the Obama Treasury and economic councils.
Whether our highly intellectual president picked up the idea by reading it or hearing somebody else say it, it was, and is, in the air. And you can be sure that his words will now be rattling around for years to come and likely cited as proof of Franklin D. Roosevelt's "irresponsibility."
So it makes sense to look more closely at what really happened between Roosevelt and Hoover. This is not too easy to do, though one or two studies, notably Elliot Rosen's "Hoover, Roosevelt, and the Brains Trust", have written with insight on the subject.
I often joke that North America is the true "Dark Continent." We probably know more about tribes in the Amazon jungle than we do about the real nature of power in the United States. Neither political science, nor history, nor economics do very well on this. If you want to understand what really happened between Hoover and Roosevelt between November 1932, when FDR won the election by a landslide, and March 1933, the old inauguration day before passage of the 20th Amendment to the Constitution, you need to comb through the papers of private bankers and the material in more easily available public sources such as the splendid Roosevelt Library in Hyde Park, New York. I have been engaged in this over more decades than I now care to admit. The bottom line is this: Hoover and a substantial bloc of New York bankers wanted Roosevelt to commit to staying on the gold standard and US participation in the upcoming London Economic Conference. These commitments would have meant continued austerity and completely destroyed any chance of fundamental reform -- which was why the banks and Hoover were so insistent. In effect, they were hoping to continue with Hoover's policies, if not Hoover himself.
Roosevelt exchanged some messages with them, but finally refused the whole package. He and his advisers correctly concluded that the idea was to suck them into a foolish set of commitments. FDR was simply not willing to make the kind of arrangements with bankers that President Obama was. That's the heart of the matter.
Cross-posted from New Deal 2.0.
Your point was well made and to the point. Enjoyed reading this. "
For future commenters, who may have been sidetracked by tangential arguments, I'd like to quote your concluding statement:
"FDR was simply not willing to make the kind of arrangements with bankers that President Obama was. That's the heart of the matter."
http://www.amazon.com/Golden-Rule-Investment-Competition-Money-Driven/dp/0226243176
Golden Rule: The Investment Theory of Party Competition and the
Logic of Money-Driven Political Systems (American Politics and Political Economy Series
"To discover who rules, follow the gold." This is the argument of Golden Rule, a provocative, pungent history of modern American politics. Although the role big money plays in defining political..."
1. The world during FDR was small. Banks didn't have the global reach and riches they have today 2010.
2. The USA after WWII became a super power. We were the ONLY nation with money, heck we helped rebuild Europe, Japan and South Korea a few years later. We were the world manufacturing machine. We had the most in any thing and used that to our advantage.
3. Today, China, Brazil, India, Europe, Germany, Russia, Chile, and other emerging nations including the OPEC cartel are no longer waiting for USA to survive. There is a global economy that didn't exist during FDR.
4. Internet and 24/7 news cycle and pure partisanship and less party control have contributed to cynicism that is corroding our political discourse that has made governing harder.
ETC, ETC. ETC.
1932, the year of the presidential elections was possibly the year of the deepest depression of that era in our country. When J. M. Keynes was asked whether there had been anything like this before he answered:"yes, it was called the Dark Ages and they lasted 400 years".
On February 17, 1933 Hoover had a Secret Service agent hand-carry a ten-page handwritten letter of his to president-elect Roosevelt in which he demanded, as Hoover himself later admitted, that Roosevelt abandon 90 pecent of his "New Deal" program. That was at the core of Roosevelt's refusal to act before he was inaugurated. He would have betrayed his voters and his ardent collaborators (check these out to discover that they are standing head-and-shoulders above any one in the Obama administration) had he given in.
Mr. Obama's falsification of history is obviously wretchedly self-serving and self-congratulating.
Another thing people forget was that FDR was a Blue Blood. He was more a part of the establishment elite than his cousin Theodore Roosevelt. Far from being a traitor to his class, FDR's approach to addressing the Great Depression actually preserved the American Aristocracy. The General Strike in San Francisco, the Bonus Army incident in Washington, and the distrust Americans had towards business and Government as a result of the war profiteering issue of WWI created a period of great instability and potential peril for America's Elite. Being that FDR was of the rarefied class he could walk into their private salons and confront them directly. The elite may have not liked what they heard from Roosevelt but they couldn't ignore what was occurring in the country and their survival demanded giving back something to the population.
Whether or not Obama understands FDR is really neither here nor there, for despite the endless comments about the economy recovering the TARP and Stimulus programs have only put the nation in a holding pattern. Obama will likely still find himself in the same position in 2011 as FDR did ... then we will really see what kind of President he is.
FDR was a doer, Obama is a hopeless full of audacity.
Obama can kiss 2012 goodbye if i dont see these suckers in Jail..
So it's hardly surprising that he's repeating the lies conservatives chant.
Mike
Mike
What a choice we have-one inexperienced politician and a pack of snarling wolves on the other side. No use to anyone, if you get eaten alive.
Christ-like martyrdom is not a path I want Mr. Obama to follow--the "Christians" on the other side have no interest in turning the other cheek. Fight for us, dammit!!!
"In late 1932, as large numbers of banks began to fail, there was a five month pause between Election Day and the inauguration of the new president, which was then held in March. It was the worst possible time for a long interregnum. Banks were failing, by the hundreds. One American in four was unemployed.
Herbert Hoover, now the lame-duck president, repeatedly tried to enlist Franklin Roosevelt's support for some form of emergency bank closure proclamation, relying on emergency wartime legislation enacted in World War I. But Roosevelt did not want to be tainted by the failed Hoover, and Hoover would not act on his own authority without Roosevelt's concurrence.
As late as 1 a.m. on the eve of Roosevelt's inauguration, top aides to the incoming and outgoing chief executives were sparring over possible plans, and Roosevelt was still resisting Hoover's pleas that the two issue some kind of joint order. When Roosevelt did act as president, his first week in office, to declare a "bank holiday" while federal officials sorted out the mess and re-opened sound banks, the plan looked much like Hoover's."
Don't give credibility to the people who created the mess. FDR allowed Hoover to own his failures.