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View Diary: Mr. Roosevelt's Social Insurance (197 comments)

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  •  Obama's disdain for FDR's economic approach (6+ / 0-)

    has become increasingly apparent over the past 2 years.   I didn't fully buy the Harper's cover story "Barack Hoover Obama" then, but I've undergone a painful reassessment since that time.  Back when the Dems, flush w/ consecutive electoral trimuphs, dominated both houses, Baker wrote:

    Speeches almost as powerful have followed, always linking these ideas together. But, like Hoover, Obama has been unable to make his actions live up to his words. Health care is being gummed to death on Capitol Hill. Obama has done nothing to pass “card check” provisions that would facilitate union organization and quietly announced that he would not seek stronger labor and environmental protections in NAFTA. He has capitulated on cap-and-trade in the budget outline and never even bothered to push for an actual carbon tax. Only minuscule portions of the stimulus bill or his budget proposals were dedicated to mass transit, and his indifference to the issue—what must be a major component of any serious effort to go green—was reflected in his appointment of a mediocre Republican time-server, Ray LaHood, as his transportation secretary.

    Still worse is Obama’s decision to leave the reordering of the financial world solely to Larry Summers and Timothy Geithner, both of whom played such a major role in deregulating Wall Street and bringing on the disaster in the first place. It’s as if, after winning election in 1932, FDR had brought Andrew Mellon back to the Treasury. Just as Herbert Hoover could not, in the end, break away from the best economic advice of the 1920s, Barack Obama is sticking with the “key men” of the 1990s. The predictable result is that, even as he claims to recognize the interlocking nature of the problems facing us and vows to solve them as a whole, the president is in fact abandoning most of his program, at least for the time being.

    No doubt, President Obama and his chief of staff, Rahm Emanuel, would claim that by practicing “the art of the possible,” they are ensuring that “the perfect does not become the enemy of the good.” But by not even proposing the relevant legislation, Obama has ceded a key part of the process—so much so that his retreat seems not so much tactical as a reversion to his core political beliefs.

    In terms of domestic economic policy in response to an historic systemic trauma, there is no comparison between FDR and Obama.  The former consciously chose Keynes, while the latter has visibly leaned towards Friedman.  I guess that you can take the POTUS out of U Chicago, but you can't take the U Chicago out of the POTUS.

    Some men see things as they are and ask why. I dream of things that never were and ask why not?

    by RFK Lives on Sun Aug 28, 2011 at 09:55:18 AM PDT

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    •  Obama follows Reaganomics (3+ / 0-)
      Recommended by:
      RFK Lives, Tyree, happymisanthropy

      he doesn't follow FDR's policies. In fact, one would be hard pressed to find any instance where he's promoted economic policy anywhere close to FDR's.

      Perhaps the defenders of Obama's alleged FDR-like policies can provide us with some examples.  I can't think of any to date.

      I still believe in redemption, though. Its still possible for Obama to learn some substantive lessons and change course to support more evidence based economic policy.  Let's hope he does.

      "My father always told me that all businessmen were sons of bitches, but I never believed it until now." - JFK during the 1962 Steel Crisis

      by Betty Pinson on Sun Aug 28, 2011 at 10:00:46 AM PDT

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    •  Roosevelt didn't "consciously" choose Keynes (2+ / 0-)
      Recommended by:
      JC from IA, Sybil Liberty

      In fact, as historian William Leuchtenberg writes, even after the Roosevelt Recession:

      While Roosevelt had broken with the budget-balancers and resumed spending, he still had not embarked on the kind of massive spending which the Keynseians called for.  He seems to have been even less impressed with Keynes than the British economist was with the President’s grasp of economics, and at no point did he, in fact, embrace Keynesianism.  “It is not clear,” reflected Keynes’s official biographer, “that he acted on the principle that it was the deficit, rather than the public works themselves, that was the potent agency in reducing unemployment.”  Roosevelt trusted in common sense and in finding a middle way between extremes.  (Leuchtenberg, Roosevelt and the New Deal, 1932-1940, 264)

      Not only that, Paul Krugman concurs with this view:

      Now, you might say that the incomplete recovery shows that “pump-priming”, Keynesian fiscal policy doesn’t work. Except that the New Deal didn’t pursue Keynesian policies. Properly measured, that is, by using the cyclically adjusted deficit, fiscal policy was only modestly expansionary, at least compared with the depth of the slump.

      "In the long run, Americans will always do the right thing — after exploring all other alternatives." - Winston Churchill

      by puakev on Sun Aug 28, 2011 at 11:40:33 AM PDT

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      •  FDR was making it up as he went along (1+ / 0-)
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        Glass-Steagall, SS, Wagner Act, WPA, PWA, CCC, and TVA were all radical departures from anything that had ever been previously considered, much less tried.  Obama as I noted above, is more akin to Hoover, a point that I don't see anyone disputing here.  Over 2.5 years into the worst slump since the 1930's, this WH is just now just considering a paltry few hundred million in EPA funding fo direct job creation while spending $700bn on the Pentagon and after throwing >$1tn at Wall Street.

        Some men see things as they are and ask why. I dream of things that never were and ask why not?

        by RFK Lives on Sun Aug 28, 2011 at 12:15:36 PM PDT

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        •  I don't dispute (1+ / 0-)
          Recommended by:
          Sybil Liberty

          that what FDR did was much bigger than anything Obama has done or anything that came before him.  But your own words were that Roosevelt "consciously chose Keynes" when he did no such thing.

          "In the long run, Americans will always do the right thing — after exploring all other alternatives." - Winston Churchill

          by puakev on Sun Aug 28, 2011 at 12:33:49 PM PDT

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