Ruminations, September 15, 2013
Obama: Another FDR?
Sometimes it appears that Barack Hussein Obama (BHO) thinks of himself as another Franklin Delano Roosevelt (FDR). While there are some similarities there are also differences. Let’s look at how they compare on domestic and foreign policies.
Domestic policy. Both inherited economies in deep distress. Both took active roles in trying to turn the economy around. And after eight years (for FDR) and five years (for BHO), both had economies still in distress. So far, they compare favorably. And both initiated safety nets to aid those in need; FDR established Social Security and unemployment insurance and BHO established the Affordable Health Act.
The economy has been better under BHO’s two terms than under FDR’s first two terms. Under FDR unemployment averaged 18 percent, while under Obama it has averaged a tad under 9 percent. But there are mitigating factors in BHO’s numbers. One is that BHO had as Federal Reserve Chairman, Ben Bernanke. Bernanke, who studied and has written several articles on the Federal Reserve and the Great Depression, did not repeat the mistakes of Roy Young and Eugene Meyer, Fed chairmen from 1927 to 1933. These chairmen tightened the money supply and reduced the availability of credit -- which had the effect of turning the economic downturn into the Great Depression according to Bernanke and economist Milton Friedman. Furthermore, Social Security and unemployment insurance has softened the effects of the downturn.
But the recession/depression under both has been long lasting and their efforts to break out of an economic trough ineffective for the same reason: they have seeded businesses with doubt and uncertainty. Roosevelt’s tax programs punished risk-taking and permitted little reward. He discussed a perceived plan to nationalize utilities, initiated labor laws that increased costs of production and had a generally hostile attitude toward businesses, at times accusing them of immoral conduct. In fact, it got to the point where economist John Maynard Keynes, in a 1938 letter to Roosevelt, admonished that, “It is a mistake to think businessmen are more immoral than politicians.”
Unfortunately, Obama is following Roosevelt’s lead in displaying hostility toward business. He has proposed taxes that punish risk-taking and permit little reward. He has increased government control of the insurance, banking, automobile and investment industries. His cap-and-trade proposals threatened the profitability of heavy industry and utilities. The Dodd-Frank Act and Obamacare are thousands of pages long and are not yet fully defined. This has contributed to the strategy of businesses to sit on their cash ($1.8 trillion) and not reinvest. And, if businesses don’t reinvest, that may cause the Obama Administration to assume a larger role in economy.
But the United States did get out of the Great Depression. Some say it was World War II that pulled the U.S. out. But it was more than that. In 1940, FDR appointed Bill Knudsen as chairman of the office of production management. FDR told Knudsen, the former president of General Motors, that the Federal government would need to take over the means of production for the coming war. Knudsen differed and persuaded FDR that private industry could do the job better and faster. Not only was this approach successful, but it carried over into the post-war era and kept the U.S. dynamic and growing ever since.
“Dynamic and growing” -- until the Great Recession. Not needing all-out mobilization as did FDR, BHO will probably continue to founder in policies similar to FDR’s of the 1930s.
Foreign policy. As the United States geared up for WWII, FDR had a problem with allies: aside from Great Britain, there weren’t any in Europe. If there had been a UN on whom the United States depended for approval, it never would have gone to war. When it came to supplying weapons to other nations, FDR had a problem similar to BHO’s; what if the weapons fell into the wrong hands such as the communists? But FDR handled that situation and led by example. With shifting alliances, the United States emerged victorious and those nations who had been our enemies changed sides and became allies -- not because FDR made better speeches but because they respected the strength of the United States and its word.
BHO also has virtually no allies in his pending battle with Syria and his word (a red line has been crossed) means nothing. While one can debate the wisdom of BHO’s original “red line” threat, he made it and evidently didn’t mean it.
As FDR showed strength, enemies shifted into neutral or allied camps. While BHO shows vacillation, enemies get braver. While FDR stated, in response to the attack of Pearl Harbor, “the American people in their righteous might will win through to absolute victory.” BHO said, in response Syria’s use of chemical weapons, “I was elected to end wars, not start them.”
Through this entire Syrian fiasco, Russia’s Vladimir Putin has emerged as the leader of the free world. What? How can this be? Did BHO, consciously or unconsciously, abdicate the leadership role that FDR fashioned in 1941?
In Iraq, al Qaeda continues to gain strength and the death toll this year is higher than at any time since President George W. Bush and General David Petraeus launched the troop surge in 2007 (incidentally, it was opposed by BHO). We are losing an ally in Iraq.
In Afghanistan, 75 percent of U.S. casualties have occurred under BHO’s leadership, although the battle under GWB has, so far, lasted two years longer. Attacks, especially on Afghani troops have increased as the Taliban positions itself to reassert leadership once the United States meets its self imposed withdrawal date in 2014. In contrast, when FDR asked for a declaration of war, he said that United States would prevail “…no matter how long it may take us.”
Israel has BHO’s word that the America will defend Israel and that Israel should not initiate any unilateral actions. But really now, given BHO’s empty red line threat and Putin’s leadership, how much, if you were Israel, would you trust the United States? It probably does not take much imagination to assume that Israel is making contingency plans to function without the United States.
The North Koreans have been playing the United States on nuclear weapons through two administrations. And now, looking at BHO’s unwillingness to use the strength of the United States in Syria, how willing do you think he is to use the strength of the United States in Korea? It’s probably time for the North Koreans to escalate their nuclear and delivery programs.
Iran is being pressured to reduce its nuclear stockpiles. This is the same Iran that is seeking to undermine the Iraqi government, support Syria and Hezbollah. Iranian President Hassan Rowhani last Friday said: "As far as the Iranian nuclear problem is concerned, we would like this problem to be solved as soon as possible within the framework of international norms." So to whom did he make these remarks? To whom is he turning for help to resolve the nuclear issue? Vladimir Putin. And to seal the deal, Russia is going to offer Iran help with a second nuclear reactor and a sophisticated air defense missile system
Is Obama another FDR? In some respect he is. BHO has emulated all FDR’s weaknesses and ignored FDR’s strengths.
Quote without comment
President Barack Obama, appearing on ABC’s This Week, today: “My suspicion is the Iranians recognize they shouldn’t draw a lesson that we won’t strike Iran.”