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Magazine article review: "Barrack Hoover Obama" and "Labor's last stand" from Harper's 7/09
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Photo: Jesse Butler
Two interesting articles appear back to back in the July, 2009 issue of Harper’s. The first is entitled “Barrack Hoover Obama” by Kevin Baker, the second “Labor’s Last Stand” by Ken Silverstein, and, as is the case with all good magazine editing, they are thematically related (albeit subtly). The thesis of the first article is shocking for anyone who doesn’t remember (or who hasn’t studied) Herbert Hoover’s presidency. The assertion that Barrack Obama is a Hoover-like figure is so disagreeable to how those who are uneducated about pre-Great Depression think about the two men, that the thesis seems prima facie to be a non-starter. To many, Obama seems to be the only man for the current job. He’s capable, confident, intelligent, relaxed under pressure and has the ability for infinitely more abstract reasoning than his predecessor. In contrast, those not in the know think of Herbert Hoover as having been incapable of meeting the challenges posed by the period immediately before the Great Depression. There’s actually some accurate folk wisdom involved in forming this opinion of Hoover: he was incapable of forestalling the worldwide depression of the 1930s because, had he been capable, he would have done so. What hasn’t been understood, much less appreciated, are the eerie similarities between the two men given the circumstances in which each found / finds himself.
It’s shocking, but true, that Herbert Hoover was the most qualified man for the job at the time of the US stock market crash in 1929. Hoover was a self-made man who had extensive business experience abroad and in humanitarian efforts during the First World War. Much like Barrack Obama, Hoover came from humble beginnings and was able to advance because of his tremendous persistence and ability. The Harper’s piece gives a short biography of Hoover that is fascinating because very few people (or at least very few that I know) are aware of his experience, intelligence and expertise.
Of course, as everyone knows now, even with all his preparation, Hoover failed to prevent what came to be known as the Great Depression of the 1930s. If, we believe, as the article urges us to, that he was the best person for the job, we must wonder why he failed and why Franklin Roosevelt (arguably less intelligent and capable than Hoover) was more successful.
There are two reasons for Hoover’s failure. The first is that federal government in those days was only a tiny fraction of its present size relative to its interaction with the economy. The federal government of 1930 just didn’t have the resources for intervention in crises that Barrack Obama’s 2009 federal government does. But this first reason alone doesn’t explain why Hoover failed: Roosevelt began with a government of commensurate power and, if history is to be believed, FDR was able to keep the country’s head above water until 1942, while without his intervention it would have drown.
The second reason, Baker asserts, is that Hoover was incapable of coming to terms with novelty of the situation of the late 1920s and early 1930s, and that he couldn’t completely let go of the prevailing economic orthodoxy of the time. This orthodoxy, then as until fairly recently, was to take no action with regard to business cycles of which booms, busts, panics and depressions were an inevitable part. The rallying call of the day was very similar to that of the mid-00s of the next century: “Let the market work things out.”
Baker asserts that Roosevelt could take the action necessary to keep the economy afloat because he wasn’t as attached to the prevailing economic thought of the time and wasn’t theory-bound as was Hoover. (Of course, some libertarian thinkers of the past and present who believe that Roosevelt’s actions in the early 1930s prolonged the Depression rather than mitigating it. On the views of these thinkers, the appropriate course to shorten the depression may have been Hoover’s rather than Roosevelt’s.)
FDR could make various attempts (involving non-traditional methods) at shoring up the economy, then pursue the ones that worked and abandon those that didn’t help (or which proved politically unworkable). Baker is not among the Libertarians who think that FDR was on the wrong track; on the contrary, he thinks that the only way Hoover could have succeeded was to have been more like FDR. In sum, according to Baker’s thesis, Hoover couldn’t do what was required in part because he was educated, well aware of the immense dimensions and intricacies of the problem the nation faced and determined to solve the problem by using strategies offered by conventional wisdom.
If one has in mind a bit more of Hoover’s biography than is usually available, one can easily see the parallels between the past president and the current one. It’s not clear yet whether Obama has been, is and will be unable to break with the doctrinaire positions advocated by conventional wisdom (as on Baker’s account Hoover was unable to), but there are already troubling signs that such is the case. Larry Summers, one of Obama’s most prominent economic advisers, and Tim Geithner, the Secretary of the Treasury, are figures intimately involved with the economic policy of the ’90s and ’00s that has caused the current mess. It seems unlikely that Summers and Geithner would propose a course of action that is a radical departure from what they’ve prescribed in the past. Certainly, Kevin Baker would wonder whether Summers’ and Geithner’s calls for more of the same are the same sort of advice Hoover followed in his failure to dampen the Great Depression.
If the Arkansas Chamber of Commerce and sundry business luminaries are to be believed, one radical departure from the status quo of the last 35 years that would no doubt make things worse by hobbling free enterprise is the passage of the Employee Free Choice Act (EFCA). According to the US Senate version of the bill, it “amend[s] the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during the organizing efforts, and for other purposes,” (from senate.gov S.560). Among its details that are terrifying to the likes of the Walton Family is the prospect of changing employers’ current choice of either “card check” or secret ballot system for unionizing. If EFCA passed, the National Labor Relations Board could consider a union as the primary bargaining representative for all employees of a certain employer if a majority of those workers signed cards indicating an endorsement of the union (this is the so-called “card check”). Under the current National Labor Relations Act, employers have the right to decide whether to allow a card check system for this recognition or to allow, instead, a secret ballot election among specific subsets of employees. The EFCA essentially makes unionizing easier, but makes unavailable secret ballot decisions for or against unionizing by specific units of employees of a certain employer.
Not surprisingly, among the opponents of the EFCA are those in the upper echelon of big business and the lobbyists they hire. Randy Zook, a member of the Arkansas Chamber of Commerce, offers one version of an argument rehearsed by the opponents of the EFCA. He says, “[w]e have companies in Arkansas selling 25 to 30 percent of their total output abroad. We are in a global environment, and to succeed you have to be better, faster, and cheaper than your competitors. The business community is unanimous on EFCA, and I mean so unanimous that it’s crazy.” (Harper’s July 2009 p. 39)
Even though there are some corporate leaders who want to stop the EFCA, it’s hard to imagine how the passage of such a bill could be bad for the employees of those corporations. The beginning of the American labor movement and the creation of labor unions in America was a necessary condition for the emergence of a middle class in the 1950s, and the enervation of the labor movement is causing a decrease in relative prosperity for it (or at least claims Ken Silverstein). He writes on page 41,
In 1954, there were 17 million union members, which then meant 35 percent of the workforce. This was the high point of unionism in the country and also was, not coincidentally, when the American middle class was created. The decline of the union movement since then has been accompanied by growing social inequality, slashed salaries, and, for the first time in American history, a de-linking of rising productivity from rising wages.
Are we to take this to mean that those corporate leaders opposed to the passage of the EFCA are opposed to the continuing prosperity of the American middle class? One could certainly draw this inference, and reasonably so.
Barrack Obama expressed approval for a version of EFCA during his 2008 campaign, but has since been mute on the issue. I’ll go just a little ways out on a limb and assert that I think Harper’s is making a bald criticism of Obama in the juxtaposition of these two articles in the July 2009 issue. First comes Kevin Baker’s observation that Obama’s biography and situation eerily parallel those of Herbert Hoover and his wondering whether Obama will be able to succeed in a way that Hoover wasn’t. Then comes Ken Silverstein’s report that Obama has (seemingly) abandoned the EFCA. It seems that the conclusion we might be meant to draw is that the direction set by that the passage of the EFCA is the one to take to escape another Great Depression.
In any case, if we’ve learned something from Hoover’s experience, it seems like more of the same isn’t the prudent course. At least since Ronald Regan’s presidency, corporations have been feeding at the trough of excess unhindered by compunction forced on them by effectual unions. Since corporations want nothing more than to continue this feast, it stands to reason that they want very much for a perpetuation of the status quo. Does this mean that Obama and other leaders in government should deny corporate interests in order to save the country from another prolonged period of economic misery? It certainly seems so. Is there enough daylight between the goals set by political leaders and corporate interests for our course to be changed? Difficult to say, but one thing seems sure: if the middle class is destroyed because of corporate business as usual, it will be difficult for politicians (or anyone) to lead well enough to skirt certain disaster.
Assuming that someone who took Randy Zook’s position regarding the pressures faced by corporations in the global marketplace is rational and receptive to argument rather than simply holding blindly to dogma, he might be persuaded to endorse the EFCA by an invitation to imagine and reflect on a presentation of the following situation. Say that the frightening scenario outlined by various authors of books on peak oil and its aftermath is happening or will happen soon. In short, assume that energy resources grow so scarce that global transportation, and hence global trade, becomes prohibitively expensive. Where are corporations on their current trajectory left then? They will have made themselves efficient enough to turn handsome dividends for their shareholders at the expense of their good relations with their employees, but in a time of energy scarcity such efficiency will be of little importance. If, by opposing measures like the EFCA, they have alienated their workforce, there will likely be mass defections, much bad press, and little government help (if the government has any measure of independence from corporations). I submit that long term, given the crucible of peak oil looming on the horizon, corporations must embrace the EFCA and other radical measures or be doomed.
Has Harper’s suggested that Barrack Obama vocally support EFCA and other such measures else his fate be sealed as that of Hoover’s? I believe it has.
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