The president gave a speech today that was supposed to be reminiscent of a speech Teddy Roosevelt gave in 1910. I’ll probably have something to say about the speech tomorrow. But I want to introduce parts of Franklin Roosevelt’s acceptance speech from 1932. Let’s remember that the stock market had crashed almost three years earlier and that the Republicans had been unable to repair the damage. It’s as if the stock market had crashed in 2008 but we had to live with four more years of Republican rule. In that sense, FDR’s 1932 speech is similar to Obama’s speech today. It’s similar because three years have passed. It’s dissimilar because Obama has been in charge for the last three years and so he has to take a measure of responsibility for the state of the economy. On the other hand, unprecedented Republican obstruction has limited his options. The Republicans created the mess and then resisted all efforts to fix things. And they’ve largely reverted to making the same flawed arguments that led us into a ditch. Let’s see if any of this seems shockingly familiar.
I cannot take up all the problems today. I want to touch on a few that are vital. Let us look a little at the recent history and the simple economics, the kind of economics that you and I and the average man and woman talk.
In the years before 1929 we know that this country had completed a vast cycle of building and inflation; for ten years we expanded on the theory of repairing the wastes of the War, but actually expanding far beyond that, and also beyond our natural and normal growth. Now it is worth remembering, and the cold figures of finance prove it, that during that time there was little or no drop in the prices that the consumer had to pay, although those same figures proved that the cost of production fell very greatly; corporate profit resulting from this period was enormous; at the same time little of that profit was devoted to the reduction of prices. The consumer was forgotten. Very little of it went into increased wages; the worker was forgotten, and by no means an adequate proportion was even paid out in dividends–the stockholder was forgotten.
And, incidentally, very little of it was taken by taxation to the beneficent Government of those years.
What was the result? Enormous corporate surpluses piled up– the most stupendous in history. Where, under the spell of delirious speculation, did those surpluses go? Let us talk economics that the figures prove and that we can understand. Why, they went chiefly in two directions: first, into new and unnecessary plants which now stand stark and idle; and second, into the call-money market of Wall Street, either directly by the corporations, or indirectly through the banks. Those are the facts. Why blink at them?
Then came the crash. You know the story. Surpluses invested in unnecessary plants became idle. Men lost their jobs; purchasing power dried up; banks became frightened and started calling loans. Those who had money were afraid to part with it. Credit contracted. Industry stopped. Commerce declined, and unemployment mounted.
And there we are today.
The stock market crash of 1929 caused the Great Depression, but not because the prices of stocks fell. What happened is that banks had begun to loan people money to invest in stocks while, at the same time, accepting stock portfolios as collateral for the loans. So, when the stock market crashed, people couldn’t pay back their loans and their collateral was worth a small fraction of what had been expected. This caused the banks to fail. Credit seized up. Jobs were destroyed. And life’s savings were wiped out. Similarly, in 2008, when the housing bubble burst, the securities people had invested in as a hedge turned out to be worth a small fraction of what had been expected. And the cycle of destruction repeated itself. Things didn’t get quite as bad as they had in the 1930’s, largely because we had mechanisms in place to stop the bleeding. But I don’t think you can read the above cited portion of FDR’s speech and not hear a remarkable loud echo. They thought the stock market would always go up; we thought the housing market would always go up. They overbuilt; we overbuilt. They engaged in irresponsible lending; we engaged in irresponsible lending. It’s all the same. As they say, history doesn’t repeat, but it rhymes.
Now, let’s go to another part of FDR’s speech and see if it calls to mind the Too Big to Fail problem, and the problem of bailing out the rich while everyone else suffers.
Never in history have the interests of all the people been so united in a single economic problem. Picture to yourself, for instance, the great groups of property owned by millions of our citizens, represented by credits issued in the form of bonds and mortgages–Government bonds of all kinds, Federal, State, county, municipal; bonds of industrial companies, of utility companies; mortgages on real estate in farms and cities, and finally the vast investments of the Nation in the railroads. What is the measure of the security of each of those groups? We know well that in our complicated, interrelated credit structure if any one of these credit groups collapses they may all collapse. Danger to one is danger to all.
How, I ask, has the present Administration in Washington treated the interrelationship of these credit groups? The answer is clear: It has not recognized that interrelationship existed at all. Why, the Nation asks, has Washington failed to understand that all of these groups, each and every one, the top of the pyramid and the bottom of the pyramid, must be considered together, that each and every one of them is dependent on every other; each and every one of them affecting the whole financial fabric?
Statesmanship and vision, my friends, require relief to all at the same time.
FDR was elected. We won the argument. But thirty-one years ago we lost the argument and now we are back where we started. We’ve made some good progress over the last three years, but we have’t broken the back of the idiots who led us here.
Today, the president evoked the legacy and example of Teddy Roosevelt. It was an excellent speech. But I want to evoke the legacy and example of Franklin Roosevelt. We need to remember both Roosevelts if we’re going to break out of this impasse and build the kind of country our parents enjoyed.
I prefer Teddy to FDR, personally. He’s defined our legacy, and he’s under great attack by libertarian historical revisionists who say the progressives — funded by JP Morgan — were actually a thorn in the general populaces’ side.
Teddy’s a mixed bag. A lot of great progressive achievements, but his rampant warmongering puts Cheney to shame. FDR was more consistent in living up to modern progressive values.
FDR sent hundreds of thousands of American citizens to internment camps by executive order. I don’t think that was remotely in line with modern progressive values.
I get really bothered at the uncritical reverence that modern progressives, ones who are anti-war and rightly fear the ascendancy of the national secuirty state, offer past presidents on account of their domestic accomplishmenta, especially FDR and LBJ. Hell, I’ve seen some folks on the left uncritically praise Richard Nixon on account of his (usually meager and half-assed) support of some progressive policy goals, which is so far beyond a parody of political tunnel vision I don’t even know what to say.
I didn’t say FDR was perfect. Nor do I think my comment indicated “uncritical reverence” of him. I just think that when compared to Teddy, overall, FDR was the more consistently progressive figure. FDR made some really bad calls, no question. Does that surprise you given that he was President for 13 straight years?
Also, progressives don’t just think highly of FDR because of his domestic accomplishments. He also managed to get the US and the world through a little thing called WWII, remember?
On the other hand, Teddy, unlike FDR, literally loved war. He was from that school of 19th century thinking that believed war was good for the spirit, like it “builds character” or something. He supported the American occupation of the Philipines, which led to many atrocities against civilians. Not to mention the deaths of thousands of American soldiers and hundreds of thousands of Filipino soldiers. He was a major instigator behind the totally unnecessary and destabilizing Spanish-American War, although in his defense he did at least personally participate in it. He advocated early American involvement in WWI, and then spoke against Wilson’s 14 Points and could only be convinced to support a very weak version of the League of Nations.
If Teddy had been elected in 2008, we’d be at war in Iraq, Afghanistan, Iran, probably Russia, and god knows where else. Both he and his cousin Franklin are obviously figures of major accomplishment, and both have serious flaws too. But FDR has the better record in the end by a wide margin.
I think the appeal of TR for the President in this case is that he was a Republican. He can use him as an example to potentially widen fissures already splitting his opposition. Not demonizing one’s opposition allows the possibility of dividing it.
That’s true. But party platforms warp and shift so much over time that what “Republican” means now is very different from what it meant 100 years ago. I know you know that. But my sense was that Obama was really channeling Teddy’s progressive values, not to be seen as reaching across the aisle.
As is true for many things Obama does, it’s not necessarily an either/or situation.
Given Obama’s track record, I’d venture to guess that from his perspective, Teddy Roosevelt being both an economic progressive and a Republican is a feature, not a bug.
Yeah.
It’s uncritical to reject Nixon’s better policies because of his worse ones. If we hold politicians to that standard in a majoritarian system we’ll never pass anything.
The shout-out to TR reinforces a feeling I’ve had for a long time: The United States flunked the final exam on the 20th century, and we will have to repeat it.
was TR actually tried to break up the trusts.
The excellent reporting on 60 minutes about the lack of prosecutions on Wall Street has left me profoundly depressed.
NOT ONE INDICTMENT of the people who sold these mortgages.
I am a former prosecutor and a securities lawyer – I know the difficulty in prosecuting these cases.
But not one indictment?
The bottom line is the President simply has not understand the fundemental lack of fairness that has surrounded the Wall Street bailouts. He has done nothing to hold those who created this mess accountable. That lack of accountability has struck at who Americans thought we were, and I don’t think Obama gets the depths of the anger.
I wrote on Open Left in 2009 that I was worried that the failure to distance himself from Wall Street might be Obama’s Katrina. It hasn’t proven to be. Obama is unpopular, but the GOP is even less popular and if the economy recovers he still might win. I hope he does.
But when he gives speeches like the one today I cannot help but think that this Administration had a real opportunity to restore a sense of fairness that so many Americans see missing.
And it let the opportunity slip away.
And the Statute of Limitations will one day toll, and Wall Street will have gotten away with it all.
That happened on Obama’s watch.
This line to me is deeply problematic. I am quite sure he understands the lack of fairness. What may be an issue is what he did or did not do to respond to it. What precisely in what the President has said gave you this insight into his thought process? His actions are what we can read.
Exactly; actions speak louder than words.
fladem is correct; the Obama administration has done nothing tangible regarding those responsible for the financial train wreck we’re in the middle of.
In addition, there’s a pattern here– the Obama administration did nothing regarding those responible for torture, GITMO is still open for business, and it’s taking way too long to end the two wars of choice.
I’ve more or less stopped paying attention to what Obama says about anything; the truth is in what is actually happening with major U.S. policies.
Like any politician (or any of us, for that matter), Obama is a mixed bag.
Regarding Obama’s actions on the issues you raise:
*you’re right about the Obama administration’s failure to uphold its responsibilities under international law to investigate and prosecute those who may be guilty of torture and other war crimes;
*Gitmo is open because Congress explicitly mandated it remain open and barred the administration from its preferred actions of transferring prisoners to the mainland, and closing Gitmo;
*the Iraq War is ending this month, as Obama had said it would;
*troop withdrawals have begun from Afghanistan.
If you look just at Obama’s action, not his words, you’ll find many progressive accomplishments, and many promises kept. You’ll also find some failures—both of action and of inaction.
The pattern here, as best I can see, is that Obama is a center-left politician who aims to build a 60-40 coalition that will advance (even if slowly at times) a progressive agenda; and that he’s a political counterpuncher—willing to work with opponents if they’ll work with him, willing (and able) to counterattack and defeat them if they’re not.
Nice try, but Obama is not center-left; oh that he were. His actions (massive money raising being one glaring example) and accomplishments just don’t add up to center-left.
But to suggest he doesn’t understand the unfairness is to suggest he’s a total idiot. I don’t see that at all. I see that he made a strategic decision not to prosecute people who got us into the mess we’re in. That applies to the Bush Admin war criminals as well. I would think that the idea was that he could spend x amount of time doing things, and that to prosecute said criminals would take focus away from pushing through legislation. Everything about his actions shouts that passing legislation is his top priority. When one assumes the lack of prosecutions or charges brought is a lack of understanding of the unfairness involved shows a predeliction to assume incompetence rather than a judgement which one may or may not disagree.
Hellooooooooooooo? You may recall we have a Dept. of Justice? Mr. Holder?
I’m not suggesting Obama do anything personally. He has literally thousands of government people working under him- he delegates the work that needs to be done.
You write:
Once again we have a progressive overestimating Barack Obama’s real goals and intent. It is not that he does not “understand” the whole bailout thing; the fact of the matter is that he was almost certainly permitted to win the nomination because he made promises to Wall Street and other areas of the PermaGov that he would not prosecute the criminals that were responsible for the wars and financial sector thefts that have driven this country to the brink of collapse. The only question about this arises when one examines the possible motives for taking such a position.
Giving him the benefit of the doubt, one might say that the risk of danger to the country would have been too great, that a sudden series of prosecutions would have torn this nation apart. I sincerely hope that this is the case although I believe that it is a mistaken position. The other alternatives are too disturbing. He could be just another conniving, callous, power-hungry pol, out for nothing but personal success. And simultaneously he could be in the pay…eventual monetary pay and/or accession-to-power pay…of the immensely wealthy forces who made the mistakes that we all consider criminal in nature and in scope as well.
I have been backing Ron Paul here…to almost unanimous opposition…for months. Whether Barack Obama sincerely believes that his course has been correct in terms of the benefit that it offers to the nation or whether he is indeed just another political jerkoff with a highly superior rap, the policies themselves are simply not working. We are headed ever closer to the edges of a number of cliffs…surveillance state, financial and military cliffs being the most dangerous of them as far as I am concerned…and of all the national political figures only Ron Paul offers us any hope of pulling back from those cliffs. Would it be a difficult several years if he was elected? OH yes!!! In any number of ways. Would it be worse than an escalated war in the middle east and North Africa? Worse than a total meltdown of the economy? Worse than a so-called “anti-terrorist” crackdown here in the U.S. that put put thousands if not more in prison (or worse) for their opposition to the policies of the PermaGov? I don’t think so, myself. On the contrary, I believe that it would be a grand experiment in democratic revolution, our own “Arab Spring.”
Will it happen?
As I have been saying here recently, the odds are improving that it will. They are still long…I put his chances at about 5 to 1 against now and I may be quite fairly accused of excessive optimism in that regard…but as Republican fool after Republican fool falls by the political wayside due totally to lack of merit, Ron Paul’s odds become progressively more favorable.
Could he win as a Republican? I have no doubt. I think that his consistent honesty over the course of his political career and the failure of Obama’s policies and tactics to move the country into a more positive position coupled with his very strong abilities as a campaigner…check him out in the RatPub debates for all you need to know on that subject… would prevail over Obama in a general election. Obama would be seen as last week’s news no matter how hard the media tried to pump him up and only the possibility of violence (to which Booman recently made veiled allusions [see below]) would stop his rise.
Could he win as a 3rd Party candidate? Maybe. 30% Dem vote, 30% Ratpub vote, 40% independent vote? Could happen. Probably not, though. The simplest tactic to oppose that possibility would be the floating of a 4th party…something that Mike Bloomberg is quite capable of doing in the service of his own masters.
So here we are, at a crossroads.
More of the same or something totally different?
And now for something totally different:
Yup.
Let us pray.
Later…
AG
P.S. “Veiled threats?” Booman wrote:
and
Veiled threats, indeed.
Bet on it.
Thinking of both the virtues and flaws of the two Roosevelts reminds me that the heroes of US history have not been Presidents. That said, I get teary every time I watch that footage of FDR’s Second Bill of Rights talk, thinking of what might have been.
There are layers of historical meaning in Osawatomie. http://www.osawatomieks.org/index.aspx?nid=127
I don’t know what the conversations were held in the White House leading to the decision by Obama to give yesterday’s speech in Osawatomie, Kansas. But it’s hard for me to imagine Obama’s knowledge of Osawatomie’s role in American history doesn’t extend back to the mid-19th century.
If so, then this was a “dog whistle” speech to the left, just as surely as Ronald Reagan’s “state’s rights” speech in Philadelphia, MS was to the right back in 1980. http://www.youtube.com/watch?v=eX_eTDP-CSg
Here’s hoping today’s left can “hear” as well as the right could a generation ago.
I think it’s more or less pointless to pay homage to Franklin Roosevelt; Obama is no Franklin Roosevelt. Not even close.
If you look at the one famous speech by FDR where he stated he welcomed the hate of the wealthy class regarding his efforts to help the poor– we see nothing of that sort of boldness/honesty from Obama.
Regarding the Great Depression, what caused it– also pointless to go into that without also going into regulations put into place to prevent future financial recklessness/malfeasance, namely the Glass Steagall Act.
Glass Steagall was repealed in 1999, during the Clinton administration, with support from “democrats” in congress. That and an asleep-at-the-wheel SEC helped set the stage for the disaster we face now.
Has Obama ever mentioned bringing back similar legislation to keep the banksters in reign?
With the recent meltdown of MF Global, led by financial “master of the universe” Jon Corzine, it appears nothing much has changed on Wall St.
It’s not just that MF Global “made a bad bet”, it appears they used client funds to cover this bet. If this turns out to be true, Corzine and others are looking at some serious prison time.
http://latimesblogs.latimes.com/money_co/2011/12/mf-global-bankruptcy-jon-corzine.html
Not only is Obama no FDR, but neither would Franklin Roosevelt be. I would suggest that the Franklin Roosevelt wasn’t even the FDR we imagine at the time.
Well, imagine what Obama’s record/options would be if Sens. Cornyn, Hutchison, Coburn, Inhofe, Bond, Vitter, Boozman, Wicker, Cochran, Sessions, Shelby, Corker, Alexander, Burr, Chambliss, Isakson, and Rubio were all Democrats willing to vote for most of the president’s agenda.
Imagine if the president had 81 members of his caucus and the Republicans had 19 in theirs. Because that’s the kind of nominal majority FDR enjoyed at the height of his powers.
If Obama had that much power, we’d still be fighting over abortion but Wall Street would be on a leash.
Precisely!
“Gee, the POTUS just doesn’t have a super majority in congress; that’s why nothing gets done”.
You’re correct if your ultimate point is the real power lies in what I call our House of Lords – the Senate.
Looks like most of the senators you list are from the South, and I’m aware of at least one (Shelby) who started his political career as a democrat. The fact the democratic party was once dominant in the South- but lost that with the passage of the Civil Rights Act-is another topic, but it does matter in terms of what you are getting at:
With the toxic political climate now in DC, it’s sort of pointless to have a “democratic” president without a super majority in congress– needed to override the filibuster and actually get things done.
The kicker is the people running the “democratic” party have no real plan to get additional democrats elected to congress– particularly in the South. Thus your (and many other Obama supporters) fallback position is a red herring. Democrats are never going to have a super majority.
In fact, the opposite appears to be happening- Ted Kennedy’s “solid democratic” senate seat in MA was lost to a republican in 2010. I have to wonder if Barny Frank’s congressional seat will end up the same.
Depending how things play out next November- the GOP may win control of the senate, which means more gridlock, more failure to address the massive problems we face.
Partisans can attempt to blame the GOP all they want- but outside of Bloggo world, nobody cares about partisanship, or “scoring political points”. Current congressional approval rating is barely above 10 percent– I don’t see any polls indicating the public approval rating of “democrats” in congress is higher than republicans. The public says they ALL stink.