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Wednesday, November 3, 2010

Setback to the future.

Despite disagreements over the role and importance of New Deal programs, there is a general consensus among economists that World War II finally brought a decisive end to the Depression.  This view is borne out by unemployment, which was at about 22% in 1932 when FDR first ran and still almost 15% six years later in 1940, before dropping dramatically to 4.7% in 1942.  That the country took more than a decade to recover from the aftermath of the 1929 Crash should serve as a stark reminder to us that this road is both long and can be frustratingly circuitous.  Let’s remember that despite Roosevelt’s laser-like, even obsessive, focus on job creation during his first term; unemployment was still at an alarming 17% at its end.  Presidents do have limited power in that regard.  Equally significant, is that what is credited with decisively ending the bad times, a war, was the mother of all government spending programs — costing billions in 1940s dollars.  Not only were millions of Americans put on the public payroll in armed services and related wartime government jobs, private enterprise (especially manufacturing) benefited directly from massive spending that energized factories and ultimately provided jobs.  It also enriched individual executives and stockholders.  Our parents and grandparents tax dollars and borrowing paid the bill.


History doesn’t necessarily repeat itself.  Wars of today are more likely to drain an economy than save it, to produce huge deficits not jobs.  Nevertheless, the experiences of the Roosevelt years are worth remembering the day after yet another reactive election.  The results of the vote only underscore our modern lack of patience — we want it now — not to mention how much we have lost sight of reality.  We can add to that a kind of perverse national optimism, a na├»ve belief in white knights who will wave their magic wand and make things all better.  So we voted for change in 2008 in the person of a heroic savior to whom we attributed almost mythical, and most certainly unrealistic, powers.  People say he disappointed us. I’d argue we’ve set ourselves up in 2010 for much of the same with yet another wave election where the political pendulum gyrates for one direction to another accompanied by overblown expectations, most of them hugely out of sync with reality.


The electorate is said to be angry, not the least frustrated by the polarization of the past years.  Interestingly, among the casualties of their vote this time around were legislators in the center, particularly Democrats but also the Republicans displaced earlier by Tea Party backed candidates in the primaries.  The result is that the incoming Congress is likely to be even more polarized than before — Democrats more liberal, Republicans more conservative.  That of course goes against the conventional wisdom that the electorate is in the center not at the extreme.  Perhaps that’s true for eligible voters but in my book the electorate are those who actually vote and there is little evidence that they are anything but fickle and extremely partisan, albeit for the moment.


One of the intriguing questions about this election, and more so the last decades, is why we have taken such a decidedly conservative turn in this country.  Indeed so-called centrists like the defeated Blanche Lincoln are, by liberal standards, quite conservative.  We have Bill Clinton to thank for pragmatically moving his party as far away from that of FDR as possible and for centrists like Ms. Lincoln.  President Obama’s healthcare bill, reviled by Republicans as a socialist-style government takeover, was equally criticized as a sellout by the remaining liberals in his own party.  What resulted was probably the only bill that could pass, one whose modesty — the absence of a public option — only underscores how far the country has shifted to the right.


Some, including myself, have argued that one of the fundamental problems faced by the Obama administration is that Americans, indeed humans, are change-resistant.  But something more profound is afoot here.  Perhaps we can’t all agree that America is in decline, but even the most enthusiastic we are the greatest folks know it is unlikely to occupy center stage without company in the days ahead.   China and India will surely be sharing the spotlight.


It is with this perspective that we might want to view yet another volatile election.   Admit it or not, we feel threatened by both the reality of change and the realization that it isn’t only political change represented by Obama’s election two years ago, but the kind that suggests our future will be different from our past.  It isn’t that our children may not be financially better off, but that their lives will play out in a much-altered context.  That makes us uneasy.  We can’t quite picture the future that will be with any clarity and even more so are loathe to let go of the past that was with its long established rules and norms, ones that made us feel more in control.  The idea that others may share leadership, or worse take command, makes us want to pull back.  That’s what conservatism is all about, pulling back.


President Obama took full responsibility for Tuesday’s losses in an hour-long press conference.  He cited the economy; specifically frustration that so many remain unemployed and that whatever progress has been made is yet to touch ordinary citizen’s lives.  I totally agree with that assessment.  In their less than three minute session with reporters, the Republican House leaders spoke of voter dissatisfaction over jobs but also about their mandate to cut spending and reduce government, including a repeal of healthcare legislation.  They offered no specifics.  Perhaps the expected Speaker Mr. Boehner has learned that shutting down the government is a no-win proposition, but rest assured he and his associates, among them Tea Party victors, are likely to overreach.  Cutting spending and programs sounds good and prudent, but real people do work in those places and would lose jobs.  With unemployment stuck near 10%, good luck with that.  So too with repealing what they like to call, Obamacare.  Just try to take back protecting citizens from losing insurance over pre-existing conditions or the right to keep their kids under twenty-six on their plan.   The devil is in the…, you bet it is.


The GOP does have one advantage this time around.  Obama and the Democrats have done all the heavy (and unpopular) lifting and much more is known about the extent of the problem than was the case in January 2009.  But it’s a shared advantage with the potential of the President saying, I told you so as he campaigns for reelection in 2012.  Enjoy the gains guys and gals, but don’t count the man from Illinois out just yet.



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