Heidi Li's Potpourri

President Obama: no Lyndon Johnson, no Franklin Delano Roosevelt

I am still trying to figure out how a Democrat who won the presidency by a large margin, got into office, with the entire country knowing that we needed action from the Federal government has managed to squander the opportunity to lay the groundwork for a systematic domestic agenda at which social justice and welfare are front and center. I knew President Obama was not the most liberal or progressive of the Democratic contenders for the presidency - and I wondered often as the campaign proceeded just how liberal or progressive he was at all. I did not prefer the content of John McCain's views to whatever I could glean the content of "hope"/"change" was.

I assumed that President Obama had a domestic agenda that he would promote and actually, although I felt that the way the nomination had been rigged in Denver, the Democratic Party did not deserve to have its candidate with the general election, I did assume that the Party establishment's favored son would actually fight for its causes.

But if we examine how President Obama has handled TARP-part 2, it seems like he has no plan and certainly not one that puts domestic justice and welfare front and center. Read this for a good take on the situation. Best quote: "On the domestic issues Mr. Obama ran and won on — health care, education, climate change, rebalancing the distribution of wealth — the legislation does little more than promise there will be more to come."

Tim Geithner; Herbert Hoover - Depression revisited (bumped and updated)

I am not an economist, and do not purport to have expertise in the field. I offer this post based on the claims of Paul Krugman and Barack Obama that the fiscal crisis facing the United States and its citizens today is more comparable to the conditions of the Great Depression than any other crisis faced since then. If that is true, no wonder I find the details of whiz-kid tax evader Tim Geithner's newly renamed Financial Stability Act personally depressing. So, by the way, does Wall Street.

Treasury Secretary Timothy F. Geithner announced a vast new rescue plan for the financial sector. Stocks plunged following the unveiling of the program to use $1.5 trillion or more in public and private funds to bail out banks and financial institutions and thaw frozen credit markets. The plan would create a $500 billion fund to buy up toxic bank assets such as bad real estate loans and commit up to $1 trillion to reopen lending markets for consumer, student, small business, auto and commercial loans.

The Dow Jones industrial average was down 383 points in afternoon trading. The tech-heavy Nasdaq plummeted 63 points, and the Standard & Poor's 500-stock index dropped 43 points.

(source)

Here are the highlights of the Geithner plan, according to The New York Times:

Now, read these excerpts from an overview of the Hoover administration's approach to the Great Depression, which set in 6 to 8 years before Franklin Delano Roosevelt was first elected.

A) "The slump in automobile sales was paralleled by the decline in the construction of new housing, causing unemployment in the building trades. Fewer suburban houses meant fewer markets for appliances, wall coverings, and other activities related to home building."

B) "The economy was in trouble but people, dazzled by a surging stock market, ignored it.
The consumer economy was slowing as incomes skewed to the rich. In 1929, the richest 10% of families received 39% of disposal personal income while the bottom 10% only got 2%."

C) "People seemed to be forgetting that capitalism needs to expand, that demand for housing, clothes, automobiles, stoves, and many other consumer goods generates demand in other sectors of the economy. But mass production necessitates mass consumption. Mass consumption necessitates an income distribution that allows consumers to buy. Without the appropriate income distribution, warehouses will burst at their seams and production lines will clog."

D) "Many of the wealthy, as well as others, joined the speculative stock market sending stock prices to greater and greater without regard to company performance; In October, 1929, the bubble burst. The crash meant the tremendous loss of capital as prices declined $74 billion from 1929 to 1932 and the repatriation of much of US investment abroad."

E) "As historians Peter N. Carroll and David W. Noble note, Hoover feared that the collapse of the large corporations would bring down the entire US capitalist system. After all, one percent of the banks held 50% of banking assets. Three corporations—Ford, Chrysler, General Motors—manufactured 85% of the automobiles sold in the US. Chain stores dominated retail sales and their difficulties had national repercussions.

Business and industry met the crisis as they had always done—they cut production, lowered wages, reduced working hours, and fired workers. Unemployment rose from 1.5 million in 1929 to 13 million in 1933, a figure which represented 25% of the labor force. Even such a high percentage hid the dimensions of the problem because it did not what percentage had been forced the part-time work. Industrial wages fell from $425 a week to $17 a week, a decline of 32%."

F) "To help the situation, the Hoover administration sept close to a billion dollars in public works programs but he would not go further. Nor would he argue for direct relief to the unemployed and starving because he feared that doing so would corrupt them."

G) "Hoover and the Republicans saw aid to corporations as being different. Whereas they believed that helping the individual citizen weather the Depression would corrupt him or her, aiding corporations and other business was different. To many, it appeared that the Republicans were only interested in the rich. The newly-created Reconstruction Finance Corporation aided only the large corporations.

Hoover broke precedent because the national government assumed some responsibility for what happens during an economic depression but he was not willing to go far enough. He believed that the depression was part of the normal business cycle and had been caused by international factors and not US ones. to him, 'prosperity was just around the corner.' The best thing for the country to do would be to wait the crisis out."

I am in no position to know just how deeply or robustly FDR's New Deal reforms have insulated us from a new Great Depression. But with a Nobel Laureate and the President of the United States telling me that we are in a state of disaster, I find it depressing that the Treasury Secretary's plan sounds much more Hooverian than FDR-like.

I know the economy is not going to do an about face on a dime. I do not need Secretary Geithner or President Obama to tell me that. But with trillions of dollars going to banking corporations and relatively little aid going to those who are rapidly falling into more dire straits than they imagined possible, I cannot help but feel as so many of us did when George W. Bush whisked us into war in Iraq. In the words of author Anne Lamott: "I don't know who on the left can lead us away from the craziness and the barbarity: I've very confused now."

Lamott wrote those words when she was criticizing George W. Bush for deceiving the American people. Sauce for Bush should be sauce for Obama. One problem with the Geithner plan is "lack of transparency". Deception: a post-partisan kind of thing.

Wanted: domestic Cabinet Secretaries for Obama's executive branch

It turns out to to be tough for the executive branch to get much accomplished when the cabinet is riddled with vacancies.

When Franklin Delano Roosevelt entered office in 1933, the country was in the midst of the Great Depression, which is generally dated as lasting from 1929 through the early 1940s. One commentator dates 1933, the year of Roosevelt's first Inauguration, as "the worst point in the depression, more than 15 million Americans—one-quarter of the nation’s workforce—were unemployed." Neither Herbert Hoover, Roosevelt's presidential predecessor nor the 1920s-earlier 1930s U.S. Congress had had any success in blunting the effects of the economic catastrophe, let alone getting at its causes.

Given this background, it is practically boring that the moment Roosevelt hit Washington, DC he arrived with domestic cabinet positions filled, and backups for at the ready for those who had to depart unexpectedly. Quite possibly because of his extensive experience in government, federal and state, Roosevelt realized that the executive is a branch of government, not a one-man operation - a multi-faceted wing of the government each part of which requires personpower and leadership. This all sounds obvious, I know.  Obvious, that is, until one realizes that as of February 7, 2009, the President who has taken office under economic circumstances that have been compared to those under which Roosevelt took office has still not filled three major domestic/economic cabinet positions: Labor, Commerce, and Health and Human Services. Furthermore, that President, Barack Obama, apparently had no backups in two cases, Bill Richardson and Tom Daschle where the nominees' problems were on the much vaunted transition team's radar, although apparently not high enough to attract the notice one might have expected.

FDR's first 100 days (which actually date from the time Congress convened after his inauguration) gained momentum from the very quick passage of a bill he had ready to send to Congress immediately,

When Congress met on March 9, F.D.R.’s Emergency Banking Act was introduced in the House with the ink still wet. There were no committee hearings, no debate, no amendments. The measure was whooped through with bipartisan support and no roll call. Most members had not read the bill, and took on faith what the leadership presented. Three hours later the bill passed the Senate (73-7), and an hour later Roosevelt added his signature. The entire legislative process, from the bill’s introduction in the House to the president’s signature, took less than six hours. (source)

The Emergency Banking Act of 1933 tackled one discrete part of the bleak economic situation, in two steps:

• Legalized President Roosevelt's decision to declare a national banking holiday.
• Permitted the Office of the Comptroller of the Currency (OCC) to appoint a conservator with powers of receivership over all national banks threatened with suspension.

It was not an omnibus  attempted cure-all. Perhaps this is why leadership from both parties could digest it  and rally their legislative troops around. When Roosevelt called Congress into Session, passing this Act was his only immediate objective. It was only because this Act passed so swiftly that Roosevelt was able to get more New Deal banking and finance legislation underway. Within the first 100 days, Roosevelt was able to act on the momentum garnered from the quick passage of the Banking Act. He sent numerous stimulus sand relief bills to Congress, going one category or problem at a time, which diminished opportunities for time-consuming logrolling and bickering.

But none of this could have been accomplished so quickly or effectively if Roosevelt had to do all the work of the executive branch alone. Although the number of cabinet positions in 1933 were fewer than today, Roosevelt had all his filled, by people who knew him well. Here is the starting line-up of those who filled domestic positions and were responsible for drafting and implementing the legislation of the first 100 days:

Secretary of the Interior
Harold L. Ickes (1933 - 1945)

Secretary of Commerce
Daniel C. Roper (1933 - 1938)

Secretary of the Treasury
William H. Woodin (1933 - 1933 [resigned due to illness]) • Henry Morgenthau Jr. (1934 - 1945)

Attorney General
Homer S. Cummings (1933 - 1939)

Secretary of Agriculture
Henry A. Wallace (1933 - 1940)

Secretary of Labor
Frances Perkins (1933 - 1945)

In 100 days, this group, working with Congress, accomplished more to restore Americans' confidence in the economy and the government than Herbert Hoover's administration had in the previous 4 years. Not that Hoover made NO effort. He put forth and signed into law one of the original trickle-down (to write anachronistically) pieces of economic fix-it legislation:

Reconstruction Finance Corporation (RFC) Act of 1932

• Provided loans to banks, savings banks, building and loan associations, credit banks, industrial banks, mutual savings banks, and life insurance companies.
• Made loans to railroads, many of which could not meet their bonded indebtedness payments.

"FDR: A Democracy-Builder": Franklin Delano Roosevelt, democracy, and liberalism

I am against the beatification, secular or otherwise of politicians past or present. But some politicians have a record of greatness, some a record of achievement, some no record of anything, others a record of which to be embarrassed.  I believe that Franklin Delano Roosevelt has a record of greatness - not, not perfection, but greatness, that in part stems from his firm footing in the values of liberalism. Democracy, self-government by citizens, is a form of government that can further liberalism, so long as citizens and elected leaders appreciate the connection between each individual's  autonomy, the need to permit others their autonomy, and the need to collaborate in the grand experiment of self-government. Franklin Delano Roosevelt appreciated these connections, recognizing the value and dignity of the individual. Roosevelt appreciated the state's affirmative obligation to do more than simply stave off threats to individual autonomy. He understood the state's role in ensuring a social safety network that enabled the exercise of autonomy. While he experimented with the means to keep American democracy liberal, his programs were consistently aimed against absolutism and in favor of individual self-determination.

The selections below come from an article printed originally in 1995 (emphases mine, the link takes you to the full article). I find them as apt today as they were then.

FDR:A Democracy-Builder, Eager to Try
Kevin Baker

What did Franklin D. Roosevelt accomplish? It is vital to understand it now, as we Americans consider making fundamental alterations in his legacy. Essentially, he preserved and enlarged the promise of human freedom in our time. Or, as Joseph Alsop put it, "On a very wide front and in the truest possible sense, Franklin Delano Roosevelt included the excluded."
...
The America of 1933, racked by four years of depression, was all but exhausted with democracy. Every bank in the country was in the process of closing its doors. Thousands of square miles of farmland had become a desert. Between one-quarter and one-third of the work force was unemployed, and millions were being evicted from their homes and their land every year.

Depression was neither a natural catastrophe nor an isolated event. Things had never been quite so bad, but every 5 to 10 years, for the better part of a century, the country had suffered a wrenching economic collapse, much worse than any recession Americans have endured since World War II. Bank failures and Wall Street panics were common, and usually led to nationwide meltdowns.

Most elderly Americans lived in abject poverty. Working men and women worked six days a week, 12 to 16 hours a day. They were routinely joined at the job by their children; few people ever finished high school, let alone college.

A system of apartheid, rationalized by bad science and enforced by lynching, ruled in the South. Another system of quotas routinely kept blacks, women, Jews and ethnic whites out of the best jobs and schools.

Farmers could rarely make a living; more and more were reduced to the serfdom of share-cropping. Nine-tenths of rural Americans did not even have electricity.

The root causes of these conditions were basic, long-standing flaws in American democracy. More shocking than the conditions in which Americans of 1933 lived was how little say they had in anything that mattered. Banking and investment were dominated by a small circle of self-interested, often dishonest men. Politics in every large city was usually controlled by corrupt political machines. In the South, millions of blacks and poor whites were kept from the ballot box by poll taxes, literacy tests and force of arms.

The power of landlords and large corporations was rarely contained. Unions were small and powerless. The courts repeatedly struck down the most basic minimum wage, child labor, consumer protection and worker safety laws.

The Depression only brought these ongoing social crises to a head, yet few at the time saw more democracy as an answer. The very idea of democracy seemed to be outmoded in the swift and steely industrial world. Hard new nostrums abounded in the 1930s and '40s: communism, fascism, socialism, technocracy, corporatism.

... What Roosevelt possessed was the essential flexibility of mind for a democracy. It was indicative that during his first presidential campaign he promised above all "bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something."

Not everything he tried worked well, and some things did not work at all, and many of the New Deal's innovations have required revision. Roosevelt himself would have been baffled by the notion that they would not, for he was not erecting a Marxist utopia but a viable, modern democracy. What he did was to turn his entire administration into an ongoing debate on democracy.  ....

Best of all, he extended this debate into the living rooms of every home in America. FDR gave the press unprecedented access to the White House, and there were the "fireside chats."
....

Yet for all [Roosevelt's] democratic pragmatism, we look for something more. The life of Richard Nixon provides an example of what can come from expediency ungrounded in any deeper principle. Was there any guiding spirit, anything more to Franklin Delano Roosevelt than tactics and timing, to account for the great outpouring of grief 50 years ago? [note from Heidi Li: The original article was published on the anniversary of FDR's death]

There are at least two stories from his life that I think are telling. One was the account that he was unimpressed by the Grand Canyon: "It looks dead. I like my green trees at Hyde Park better. They are alive and growing."

"He responded to what was vital, not to what was lifeless; to what was coming, to what was passing away," wrote Mr. Schlesinger. "He lived by his exaltation in distant horizons and uncharted seas."

The other story is from when he was first trying to win back some use of his legs after the attack of polio that crippled him. He would try, every day, to make it the quarter of a mile from his Hyde Park home to the post office on his crutches.

It was a torturous journey for a man with no working muscles from his hips down. Sometimes he would fall - and have to wait, lying face down in the road, for someone to come along and help him back up. "For better or worse, I believe that the Roosevelt who could not walk was in most respects very like the one who could," writes Geoffrey Ward, and most current biographers would concur. It was Roosevelt's strong, optimistic - and deceptive - character that got him through the loss of his legs to polio, and not the polio that built the character.

Yet what better training has any president had - in patience, in humility, in building a basic sympathy for the human condition? Franklin Roosevelt understood the clumsy, halting progress of us all, and nurtured it, and the American people loved him for it as they have loved few men since.

Inaugaral addresses worth revisiting: another occasional series

We shall see whether Mr. Favreau can write Mr. Obama an inaugural address worthy of those delivered at other times of great concern for our country. Meanwhile, below are selections, with some emphases added, from Franklin Delano Roosevelt's First Inaugural Address:

President Hoover, Mr. Chief Justice, my friends. This is a day of national consecration.

And I am certain that on this day my fellow Americans expect that on my induction into the Presidency, I will address them with a candor and a decision which the present situation of our people impels. This is preeminently the time to speak the truth, the whole truth, frankly and boldly. Nor need we shrink from honestly facing conditions in our country today.  ... So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance. In every dark hour of our national life, a leadership of frankness and of vigor has met with that understanding and support of the people themselves which is essential to victory. And I am convinced that you will again give that support to leadership in these critical days. In such a spirit on my part and on yours we face our common difficulties. They concern, thank God, only material things. Values have shrunk to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; and the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.

And yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered, because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily, this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and have abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True, they have tried. But their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They only know the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

...

These dark days, my friends, will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves, to our fellow men. Recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live.

Hillary Rodham Clinton: a progressive and somebody who certainly saw the current fiscal crisis coming

In the postcript to an earlier entry, I wrote that if Senator Clinton does join Senator Obama's cabinet (she has not been officially offered nor officially accepted the position of Secretary of State as I write now), she will be the most progressive member of an Obama cabinet.

The reason I consider Senator Clinton an exemplar of genuine progressivism is that she has consistently believed in government's ability and responsibility maintain equality of economic opportunity - a constant shared baseline chance for all to achieve economic gains during their lifetimes. Thus, it made sense that as soon as Senator Clinton noticed the subprime mortgage problem brewing, she started expecting the government to get involved to protect individuals from a systemic disaster.

To review this aspect of Senator Clinton's economic progressivism from March 2007 until now, go here for her views on subprime mortgage lending.  See here for Senator Clinton's call on President Bush, which she issued in March 2008, to name a foreclosure working group to focus on the housing crisis. Or here, for her discussion, in Nevada in January 2008 of the stimulus package she was talking about implementing, were she elected President.

The reason I would like to see her as Senate Majority Leader is because I believe she could marshall votes to pass progressive proposals focused on maintaining the baseline equaliy of economic opportunity President Franklin Delano Roosevelt's New Deal originally envisioned: a New Deal for laborers was Roosevelt's promise in 1932. It is not clear to me that equality of opportunity for the working or middle class is a priority for the new executive administration or the current Democratic Party leadership. This is a signature issue for Senator Clinton and having her available to take the lead on it in the Senate might restore, at least to some measure, Americans' deeply diminished confidence in the U.S. Congress.

At this point, it would take nothing less than Senator Harry Reid renouncing his the Majority Leadership specifically in favor of her becoming Senate Majority Leader for her to assume the role I think she could play in reviving a Congress that Speaker Pelosi and Senator Reid have led to record lows in approval rating. I do not anticipate this happening. But I take this opportunity to open the door to a discussion of what makes an American politician progressive (as opposed to right or left; Democrat or Republican): that fundamental commitment to government's ability and responsibility to maintain equality of economic opportunity for all of the governed.

True American progressives include, off the top of my head, Abraham Lincoln, Theodore Roosevelt, Robert La Follete, Franklin Roosevelt, Harry Truman, Lyndon Johnson, Mario Cuomo, Stephanie Tubbs Jones, and Hillary Rodham Clinton.

Introducing FDR

When you get to the end of your rope, tie a knot and hang on.

--attributed to Franklin D. Roosevelt
in Evan Esar, the Dictionary of Humorous Quotations (1949)

In the past few weeks a number of Clinton Democrats have banded together to create a new organization:

FDR - For Democratic Reform

The FDR founders are starting now, in order to be ready to hit the deck running on our Day One, November 5. Whatever the election returns on November 4, November 5 is the day the long haul fight for the soul, the future, and the success of the Democratic Party begins.  FDR is a fledgling organization today, but by November 5 it will have laid the groundwork to take back our Party from corrupt so-called leaders, people who cheated and lied to put their preferred candidate at the top of the ticket, people who refused to acknowledge and often perpetuated the sexism and misogyny on display this campaign season, people who tolerated and thereby abetted intimidation at primaries, caucuses, and the Convention itself - in short people who call themselves Democrats but who have acted without regard for democratic or Democratic traditions, values, and principles. The Democratic Party includes many  and diverse politicians and rank-and-file voters who do in fact understand and appreciate these traditions, values, and principles. FDR will work to support these Democratic politicians and to provide a focal point for rank-and-file voters who now find themselves at the end of their ropes. FDR has tied its first knot. Join us in hanging on and hanging in at:

www.fordemocraticreform.com