The next FDR or the next Hoover?

June 29, 2009

It would be hard to imagine Barack Obama acting like FDR did at the height of the New Deal. But then again, Obama doesn't face a mobilized and militant working class.

AS THE Obama administration has settled into Washington, some of its most ardent supporters have become unsettled with its failure to seize the opportunity to push through a bold agenda for reform.

Perhaps the most cutting commentary so far was Kevin Baker's article, titled "Barack Hoover Obama: The Best and Brightest Blow It Again," which appeared in the July issue of the liberal magazine Harper's. Noting that many writers have compared Obama's arrival in the White House at a time of economic crisis with Franklin Roosevelt's inauguration in 1933, Baker turns the historical analogy on its head.

To him, Obama represents less the 21st century equivalent of FDR and more a repeat of Roosevelt's ill-fated predecessor, Republican Herbert Hoover. "Much like Herbert Hoover," Baker writes, "Barack Obama is a man attempting to realize a stirring new vision of his society without cutting himself free from the dogmas of the past--without accepting the inevitable conflict. Like Hoover, he is bound to fail."

This rather heretical statement published in a major liberal magazine may grate on the ears of many Obama supporters. After all, one of the Obama campaign's chief themes, especially after the September 15 collapse of Lehman Brothers, was to compare George Bush, John McCain and the Republicans to Hoover.

Nevertheless, there is a logic to Baker's comparison of Obama and Hoover. It lies in the fact that Hoover and Obama represent "the best and the brightest" of the political establishment of their times--and both, in Baker's reading, seem to believe they can confront a crisis by devising the "best" technocratic solution, borrowed from conventional wisdom, and winning reasonable people to support it.

If taken literally, the analogy is overdrawn. But Baker wants to highlight the idea that Obama's first actions in office--and we might add, the Democrats' actions in Congress, too--don't rise to the challenges or the opportunities that the current crisis presents.

Right off the bat, Obama made a strong public case for a massive stimulus package to put millions to work building necessary infrastructure projects, creating an energy efficient economy and so on. However, supposedly to win Republican support and show he wasn't just a "tax and spend liberal," Obama gave away billions in tax cuts that will be useless in stimulating economic growth and jobs.

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Obama's bank bailout plans took over where the Bush administration left off, without changing much of the substance of the Bush program. And Obama is already signaling that he is willing to retreat from more wide-scale reforms of the finance industry that he promised during the campaign.

In health care, Obama appears to be supporting a plan that--rather than break with the private insurance-based system that is at the root of the health care crisis--will throw more taxpayers' money into the failed system. Until now, the administration has shown little stomach to take on the vested interests that benefit from the current system--treating them instead as "stakeholders." The end result of this, as Baker would predict, is likely to be failure.

To the technocratic Hoover approach--and by analogy, Obama's approach--Baker contrasts the bolder actions of Franklin Roosevelt:

Roosevelt also endorsed reforms, from regulating Wall Street to saving the farmers to backing labor unions in their organizing wars, that required conflict--the only way in which a political and economic system can be fundamentally remade. When the NRA [a New Deal program that built on Hoover's attempts to restart the economy] quickly proved to be a bust, FDR discarded it, and replaced his failure with the Second New Deal...a fundamental power shift that enabled advances in both prosperity and democracy unmatched in human history.

Despite his rather lofty rhetoric, Baker grasps a key point: genuine reform that makes gains for workers has to involve confronting and politically defeating capitalist interests that stand in the way. For a brief period in the 1930s, Roosevelt appeared to follow this course. Obama clearly hasn't. Until Obama and the Democrats show some willingness to take on Wall Street or the health care bosses, genuine reforms will be defeated, stillborn or in name only.

ALTHOUGH BAKER'S provocative comparison of Obama and Hoover provides a worthwhile framework to understand today's dynamics, it falls short in explaining why Roosevelt acted the way he did.

To truly understand the analogy of today with the 1930s, one has to understand that the 1935-1937 high tide of New Deal reform wasn't just a product of Roosevelt's political acumen or audacity. It was the culmination of a mass movement in the factories and streets.

Roosevelt responded to the pressure of the rising class struggle by signing the Wagner Act, which legalized collective bargaining rights for workers. But he didn't do so enthusiastically--he was responding to pressure from workers who were using the strike weapon to demand this.

Initially, industry opposition to the bill led FDR to withhold his support, causing Wagner's bill to stall in Congress. But the 1934 strike wave convinced Wagner that the new labor policy was needed. He reintroduced the bill, and it won overwhelming support in Congress in 1935.

Roosevelt only belatedly threw his support behind the Wagner Act because he saw it as a way to boost workers' consuming power, and because he thought it would rein in strikes like those of 1934. But Roosevelt's support for this and other reforms, like the Social Security Act, drove business into opposition to what they called the "socialist" New Deal.

Faced with a loss of business support and a restive working class that was open to a number of alternatives to his left--from the mainstream populism of Louisiana Sen. Huey Long to the ideas of communists and socialists--FDR made a shrewd tactical move to run a re-election campaign that made him into a champion of working people against what he called the "economic royalists" of big business.

We're so accustomed today to hearing politicians' empty rhetoric that it's shocking to recall what FDR said in his final rally before election day in 1936: "[Big business is] unanimous in their hatred for me--and I welcome their hatred."

It would be hard to conceive of Barack Obama saying something similar. But then again, Obama doesn't face a mass working-class movement that he is trying to defuse.

Roosevelt had certainly not become a socialist or opponent of capitalism. But he grasped (consciously or not) that his intention of stabilizing the system couldn't be accomplished without striking a new social compact with the working-class majority that was demanding it.

If we take any lesson from that past for today, it should be that what happens in the streets, communities and workplaces is the ultimate factor that determines what reforms the working class can win.

Thanks to Brenda Coughlin for calling my attention to Kevin Baker's article.

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