A Democrat is swept into the Presidency by huge margins in a period of great financial turmoil. While his Republican opponent insists on letting the market work out the problems itself, he offers a more activist government with greater intervention in the economy and is accused of Socialist tendencies.
Meanwhile, on the international front a defeated power is re-asserting itself on the world stage. They are rearming and eventually invade a neighboring country on the grounds of protecting it's own citizens (after distributing passports in disputed ethnic areas) citizens. The year is 1932 or 2008?
The Stock market crashed in 1929 and millions were losing their homes to foreclosure (one big difference here was that in 2008 the housing crisis preceded the market crisis).
What FDR did:
- Greater regulation:
SEC: He created the SEC in order to oversee financial markets. They were previously unregulated.
FDIC: He created deposit insurance to prevent runs on banks (This was part of the famous Glass Steagal act that was repealed in 1999.
Social Insurance: Social Security was the first time that the US government offered pensions to citizens.
Relief to homeowners: He greatly expanded the Reconstruction Finance Administration in order to help people keep their homes.
- Investment in infrastructure:
Based on the work of John Maynard Keynes (which was new and revolutionary at the time) FDR embarked on a series of huge infrastructure projects in order to put people back to work. The programs included the WPA, TVA and the CCC.
- Foreign Affairs
After World War I ended in 1917, the US had again turned isolationalist. FDR favored a more internationalist view, culminating in the Lend Lease act and to the America's eventual entrance into WWII.
Another interesting parallel here is that Weimar Germany between the wars was very similar to Russia now. They did not feel that they lost, but simply gave up and were obsessed with recapturing their former glory. They began re-arming themselves in the 30's like Russia has begun to re-arm themselves now.
What Obama says he will do:
- Greater Regulation:
Obama says that the US needs to re-regulate the financial markets. He feels that the main cause of the current financial meltdown is that the outdated Glass-Steagal Act wasn't replaced with updated regulation - it was simply dismantled. Like FDR, he also wants to expand social insurance by creating Government- run health insurance and extending unemplyment benefits.
- Investment in Infrastructure:
Obama wants to stimulate the economy by investing heavily in infrastucture (i.e. roads, schools, etc) and by investing in alternative energy.
- Foreign Affairs:
While McCain has a strong foreign policy background, Bush had barely been outside the US before he was president. Obama promises to be more internationalist.
While not as outwardly militant as McCain, Obama clearly wants to rebuild the Atlantic Alliance and hopes to squeeze Russia through better relations with allies. He has also said that he would be willing to meet "rogue nations" such as Iran without preconditions.
Another thing that is actively talked about is the fact that America seems to go through liberal cycles and conservative cycles. FDR launched a liberal cycle in 1932. Between 1932 and 1968, a period of 36 years, the Democrats controlled the presidency for 28 years (Eisenhower was in office for 8 years). After Nixon was elected in 1968, Republicans controlled the presidency for 28 years out of the next 40 (Carter - 4 years; Clinton- 8 years). Most people expect an Obama presidency to be the start of another liberal cycle. It certainly looks like the conditions are ripe for it.
FDR is considered one of our greatest Presidents. He took large majorities in congress and a bi-partisan cabinet and changed the country. However, he also fell victim to hubris (i..e the stunt he pulled with the supreme court) and overestimated his powers of persuasion with Stalin.
We never know what someone will do until they actually get the job. I have big hopes for Obama, but George Bush came in talking about "Compassionate Conservativism" and and a "humble" foreign policy.
We'll have to wait and see...