- The terrorist attacks on Mumbai.
- The anticipation of the Barack Obama administration (accompanied by speculation that Obama's former rival for the Democratic nomination, Hillary Clinton, might be his secretary of state).
Well, I guess it's only natural for thoughts to turn to FDR. He was elected to deal with the Great Depression, and Obama was elected to deal with the most severe economic downturn since the Great Depression.
For Democrats, there is no president who can match FDR's achievements. He rescued the nation from an economic calamity, and he led the nation to a victory in World War II that he missed seeing by a matter of weeks.
Yesterday, I wrote about an article that found fault with Obama's Thanksgiving proclamation when compared to Roosevelt's.
Today, Stephen Herzenberg writes, in the Pittsburgh Post–Gazette, about the steps FDR might have taken to breathe new life into the economy.
My eyes were drawn to an observation that, because Congress is under pressure with unemployment continuing to rise, "momentum is building for a federal tax credit that would give companies an incentive to hire new employees."
I found this interesting because it is something Obama proposed during the presidential campaign last year — but, as PolitiFact.com points out, it was not included in the stimulus package.
So, what seemed (to me) like a logical and potentially beneficial approach to the problem has never been tried. It remains where it has been since Obama first mentioned it on the campaign trail — on the drawing board, an untried theory.
From what I have been able to gather, the proposal was nixed by Democrats in Congress. But it was Obama's promise so PolitiFact.com regards it as a broken promise. If the tax credit proposal had been part of the stimulus package, would it have made a difference? Herzenberg writes that Harvard economist Kenneth Rogoff says "the real appeal of a job–creation tax credit may be that it 'beats doing nothing.' "
The psychological impact of a tax credit notwithstanding, though, Herzenberg writes that, when compared to the things FDR did to combat joblessness in the 1930s, the proposal "looks like, well, nothing." It didn't look like nothing on the campaign trail, but, admittedly, that was a year ago. Millions of jobs have been lost since then.
The question that can't be answered, though, is whether as many jobs would have been lost if the administration and the Democrats in Congress had been more proactive about unemployment.
As far as the jobless are concerned, Democratic efforts to stem the tide now — whether in the guise of a much–ballyhooed jobs summit or any legislative measure — amount to little more than last–minute scrambling designed to save their jobs. But they may be able to do better than that by learning from what FDR did.
In the 1930s, Herzenberg writes, Roosevelt "championed the 'Big Four' social policies:
- "a minimum wage to lift purchasing power at the bottom;
- "a law strengthening workers' rights to unionize, laying the basis for the emergence of America's middle class through manufacturing unions;
- "unemployment insurance, which enabled jobless workers to feed their families; and
- "Social Security, which enabled the elderly poor to avoid destitution and increase their consumption."
Herzenberg tries to be fair, pointing out that the Democrats have been devoting a lot of time and energy to health care reform, and he concedes that the reform plan will yield benefits to the economy in the decades ahead. But the issue now is reinvigorating the middle class, which has been brutalized by the recession.
"There are some ideas kicking around the margins that can help shape what today's Big Four might look like," he writes, adding that some "would update elements of the New Deal."
The problem, writes Jeanne Sahadi for CNN.com, is that all the strategies that are being considered for encouraging job creation have downsides.
But that may be the inevitable result of the dithering Congress and the administration have done on this subject all year. They've squandered precious time, but time is running out for the Democrats, who have operated on the false assumption that their triumphs in the 2006 and 2008 elections entitled them to congressional majorities indefinitely. No one knows what will happen in the 2010 midterm elections, but poll numbers suggest Democrats are losing the support of independent voters who were so crucial to their successes in the last two elections.
They may be able to regain the support of some of those independents if they pass health care reform, but as long as unemployment continues to go up, any such gains will be temporary. And the electorate is likely to be in a sour mood by November 2010.