On 2010-09-18, at 6:39 PM, Somebody Somebody wrote:
> You say the current recession hasn't plumbed the depths of the Great Depression. But, isn't that the point? It was the massive federal intervention initiated by Henry Paulson and the Democratic Congress in the waning days of the Bush administration and greatly expanded under President Obama that prevented a new depression.
Surely that's not the whole point, nor even half the point. In fact, you could argue that China deserves more of the credit for arresting the slide into a new global depression than the TARP, Recovery Act, or the Fed.
Be that as it may, Obama's legion of liberal supporters - publicly represented by such as Krugman, Stiglitz, Galbraith, Baker, Reich, Maddow, Olbermann, Rich, Huffington and Moulitsas - were expecting rather more; as a minimum, that the unemployment, poverty, and foreclosure rates by now would have begun falling rather than continuing to rise, that the economy would be no longer be tottering on the edge, and that confidence would have been restored under his leadership.
They did not expect the administration to capitulate to the Republicans and the bankers, and they were not - from a bourgeois standpoint, and despite the verities of many on the left - ridiculously utopian to expect it to be otherwise. Wall Street and the Republicans were as widely discredited and on the defensive as they had been in the early days of the Great Depression, the House and Senate had returned overwhelming Democratic majorities, and a vast "netroots" of new and mainly younger supporters had been added to the DP's traditional constituencies, all primed to mobilize behind the administration if it had the political will to call on them.
The appointments of Summers and Emanuel were the first early indication it was not going to emulate the New Deal. Even more conservative economists like Martin Feldstein, Willem Buiter, and Simon Johnson soon became sharply critical of the adminstration for not directing more stimulus money at job creation and for refusing to break up the too big to fail banks or, short of that, to restore stricter financial regulation.
And we haven't even discussed the administration's equal failure, within the parameters of the system, to adequately respond to the health care, environmental, and foreign policy crises facing the country, much less to deliver immigration, labour, and civil liberties reforms to its base.
The Lazarus-like rise of the Republicans, fuelled by a right-wing movement with fascist potential, is mainly attributible to a weak DP administration which has been unwilling and unable in a crisis to harness and direct public anger against its rightful enemies as the prior Roosevelt administration was able to do in the 30s.
> The American public didn't see several years of conservative policies play out amid a stagnant economy after the fall of Lehman Brothers. Martin Wolf was right: if FDR had been elected at the start of the Great Depression, it seems possible there wouldn't have been as substantial a New Deal.
Many would say, for the reasons outlined above, that the American public has seen "several years of conservative policies play out amid a stagnant economy after the fall of Lehman brothers."
I think it can be exaggerated how much differently Roosevelt would have reacted at the start of the Depression to prevent it from deepening. Hoover and FDR were not that far apart at its outset in their support for a balanced budget, a sound currency linked to the gold standard, and a minimum of government relief, based on the conventional assumption that it was a normal cyclical downturn and that the markets would soon self-correct. It was only when this did not happen that Hoover at first gingerly, and then Roosevelt with much greater urgency in 1933, began to intervene in the economy.
You would think the Obama administration would have taken these lessons to heart. Which is why Martin Wolf, the astute Financial Times columnist, as you must know, is another mainstream critic who has consistently excoriated Obama - precisely for not being FDR.
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