The release of Robert Kuttner's book, Obama's Challenge, couldn't be more timely. The worst financial crisis in a century, according to Alan Greenspan, while frightening, represents an opportunity to make major changes in the way the US economy operates.
We'll be talking to Robert Kuttner in Second Life, this Thursday at 6pm Pacific.
Kuttner refers to three presidents who recognized an opportunity in crisis, a challenge, to make major, progressive changes: Lincoln, FDR and LBJ. He writes that Obama faces a similar challenge.
Let's start, as he does, with FDR.
The YouTube above is the first part of his first Fireside chat (full text here). Having just assumed office, having seen the banking crisis growing worse and worse in the interim between his election and his inauguration, Roosevelt grew to understand that his campaign promises of a balanced budget and a 25 percent cut in the Federal budget would not serve a nation that had lost faith with its banks.
Kuttner,
Roosevelt also saved the banking sysem, first with an emergency closure of all the nation's banks (which FDR prettified with the label "bank holiday," followed by a quick sorting out of which ones were strong enough to reopen, and then with his most important confidence-restoring departure--federal deposit insurance. The idea of government insuring private bank savings was opposed by fiscal conservatives. But few Americans recall that its fiercest opponents included Roosevelt himself.
Roosevelt had fought against the omnibus banking bill, called the Glass-Steagall Act. But at a time when Americans were pulling money out of the banks, and "hoarding" it, stuffing it into mattresses, the banking system ran the risk of complete collapse.
So Roosevelt's first fireside chat, plainspoken, direct didn't ask for sacrifice. He didn't pull punches. He explained that the banking system had failed, why it had failed, and how he promised that its recovery depended on the end of hoarding. In return for this expression of confidence in the nation's future from the citizens, he promised the Federal Government would keep American savings safe.
The speech was a tremendous success. Money poured into banks the following Monday. Mail and telegrams supporting the President also came pouring it; Hoover's single assistant in charge of processing mail was replace by 50 assistants dealing with 8000 pieces a day. You can see some samples, from Republican merchants to young schoolteachers at theFirst 100 Days Exhibit at Hyde Park.
This fireside marked the beginning of an incredibly energetic, experimental explosion of Federal programs that bolstered American confidence that this crisis could be overcome, and in the process, revolutionized the role of government in the lives of ordinary Americans.
So what does this have to do with Obama? Well, since Reagan, the Republicans have been steadily developing and promoting a narrative, and, under W, reversing the innovations that began with the New Deal, and continued through the Johnson Administration.
Obama's Challenge is to recognize that this moment in history demands a great president, someone who will seize the opportunity that crises invariably represent. Some people (I among them) fear that Obama will look to the Beltway, and centrism, and triangulation, instead of embarking on the bold initiatives that we need to recover from decades of Republican incompetence, mismanagement and bad faith. The American People's response to Roosevelt's plea for support and for confidence is a lesson for an Obama presidency.
Do stop by at the Virtually Speaking auditorium to see Robert Kuttner talk about Obama's Challenge. Or listen in on BlogTalkRadio at 6pm Pacific on Thursday, 18 September.
UPDATE
Kuttner with Hannity ht daq3405 and AntKat: