Liberals who hoped that Obama would be the second coming of Franklin Roosevelt, delivering a new New Deal, were ironically right all along. As we know from the increasing volume of revisionist research like Amity Shlaes’s book The Forgotten Man or Jim Powell’s FDR’s Folly or Burt Folsom’s New Deal or Raw Deal? (just to name three book-length treatments of the subject), the New Deal helped put the “great” in the Great Depression. And Obama seems to be trying to emulate most of FDR’s same mistakes.
One of them concerns the uncertainty the economy faces right now with regard to regulations, tax rates, trade policy, and the nation’s fiscal future. At the most recent meeting of Obama’s private sector jobs council (the one chaired by GE CEO Jeff Immelt), at least one member mentioned business uncertainty to Obama, and he waved it off, mentioning a recent New York Times article he’d read saying this factor was badly exaggerated. (Irwin Stelzer has a great takedown of Obama’s jobs council up at the Weekly Standard.)
FDR reacted much the same way when people told him his class warfare and punitive tax policies undermined business confidence. You don’t need to read the revisionist works of Shlaes, Powell, and others to notice this. One of the best FDR critiques ever written was Raymond Moley’s 1939 memoir After Seven Years. Moley had been a top aide and speechwriter for FDR from 1932 on, and it records Moley’s growing disillusionment with both FDR and the New Deal that culminated in Moley leaving the White House in 1938. (FDR’s court-packing scheme and attempted purge of the Democratic Party in 1938 were the final straws for Moley.) The book is long out of print, but well worth finding second-hand.
There are numerous passages that will remind the contemporary reader of Obama’s narcissistic presidency. One passage in particular recounts how FDR bristled at the suggestion that his policies impaired business confidence and were therefore a drag on economic recovery:
It was Roosevelt’s insistence upon the essential unity of his policies that inevitably brought into question his understanding of economics. . . The first centered in a failure to understand what is called, for lack of a better term, business confidence. Confidence consists, on the one side, of belief in the prospect of profits and, on the other, in the willingness to take risks, to venture money. . . This Roosevelt refused to recognize. In fact, the term “confidence” became, as time went on, the most irritating of all symbols to him. He had the habit of repelling the suggestion that he was impairing business confidence by answering that he was restoring the confidence the public had lost in business leadership. . .
But, what had been done? For one thing, the confusion of the administration’s utility, shipping, railroad, and housing policies had discouraged the small individual investor. For another, the administration’s taxes on corporate surpluses and capital gains, suggesting, as they did, the belief in a recovery based upon capital investment is unsound, discouraged the expansion of producers’ capital equipment. For another, the calling of names in political speeches and the vague, veiled threats of punitive action all tore the fragile texture of credit and confidence upon which the very existence of business depends.
All sounds rather familiar. Especially the “irritating” part. Moley thought FDR’s fatal flaw was he became “overwhelmed by the illusion of his own rectitude.” Too bad Moley didn’t live long enough to witness Obama. Putting Moley’s critique of FDR next to Obama recalls one of Harry Truman’s personal axioms: “The only thing new in the world is the history you don’t know.”