Commentary Magazine

Topic: Herbert Hoover

Only FDR Could Sell Obama’s Reset

06.14.2012 - 4:51 PM

As we noted yesterday and earlier today, President Obama’s attempt to make the election a referendum on George W. Bush is a rather slender reed to use as the foundation for his re-election campaign. As expected, the president’s speech in Ohio today on the economy pushed the idea that the choice this year was between his policies and those of the preceding decade, for which he blamed all of the nation’s problems. Obama’s call for a “reset” may have satisfied panicked liberals who want him to be nastier about his opponents. In a nearly hour-long rant, the president sought to refute criticisms of his administration as being too dependent on government intervention to save the economy, but at the same time claimed the way forward was to spend a lot more on public sector jobs. Predictably, he also threw in a red herring about Mitt Romney ending Medicare without reference to any ideas of his own about reforming the entitlement spending that is dragging the country into insolvency.

But the attacks on Romney and his personal wealth and branding Republicans in Congress as heartless wretches who want to throw grandma under the bus is still secondary to persuading the nation that even though he has been president for three and a half years, he should be held blameless for a bad economy. Gaining re-election by avoiding discussion of his failures and focusing solely on those of his predecessor is a difficult task, but it is not impossible. Franklin D. Roosevelt did exactly that in 1936 when, despite the fact that his policies hadn’t been enough to pull the country out of the Great Depression, the overwhelming majority of Americans were still prepared to blame Herbert Hoover for their woes. But this notable precedent shouldn’t provide much reassurance for Democrats who worry about the prospects of a president who thinks a troubled private sector is doing “just fine” and (as he showed again today) has no new ideas to present about the economy.

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RE: A Significant Letter

11.15.2010 - 4:22 PM

I agree with both Pete and Jen that this is a significant development. Along with Senator McConnell’s admission today that earmarks are unacceptable to the American electorate, we’re off to a good post-election start.

The letter from the group of distinguished economists, writers, and investors reminds me of another letter, written in 1930, regarding the Smoot-Hawley Tariff. What came to be known as the Smoot-Hawley Tariff (after its Congressional sponsors, Sen. Reed Smoot and Rep.Willis Hawley) started out as a campaign promise to American farmers by Herbert Hoover to provide relief from foreign competition because of a deep and persistent drop in food prices. (Blame Henry Ford: the disappearance of horses and mules from farms and roadways caused vast area of land once devoted to fodder crops to be turned over to human food production.)

But the passage through Congress went badly out of control. Hoover had wanted reductions in industrial tariffs to offset any increase in agricultural ones. Instead, a lobbyists’ feeding frenzy erupted, and tariffs went up across the board. Even tombstone manufacturers got increased tariff protection. No fewer than 1028 economists, including many of great distinction such as Irving Fischer, wrote a letter to Hoover pleading with him to veto the bill. Thomas Lamont of J. P. Morgan & Co. wrote later that “I almost went down on my knees to beg Herbert Hoover to veto the asinine Hawley-Smoot tariff. That act intensified nationalism all over the world.” Henry Ford personally went to the White House to urge a veto of what he called “an economic stupidity.”

Hoover hated the bill as it was presented to him, calling it (in private) “vicious, extortionate, and obnoxious.” But heavily pressed by his fellow Republicans and the party’s industrial base, he signed it regardless. The result was disaster. American exports declined by 78 percent in the next two years, and the tariff was one of the major government mistakes that converted an ordinary recession into the Great Depression.

Will Bernanke be a latter-day Herbert Hoover? Let’s hope not, but I wouldn’t bet against it, alas.

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Americans’ Own Experiences vs. Obama’s Rhetoric

10.13.2010 - 8:53 AM

The Obama recovery bears an uncanny resemblance to a recession. That’s the New York Times‘s take:

Less than a month before November elections, the United States is mired in a grim New Normal that could last for years. . . Call it recession or recovery, for tens of millions of Americans, there’s little difference.

Born of a record financial collapse, this recession has been more severe than any since the Great Depression and has left an enormous oversupply of houses and office buildings and crippling debt. The decision last week by leading mortgage lenders to freeze foreclosures, and calls for a national moratorium, could cast a long shadow of uncertainty over banks and the housing market. Put simply, the national economy has fallen so far that it could take years to climb back.

Or put differently, Obama’s economic policies have been entirely ineffective in addressing historically high unemployment and underemployment. The Times notes:

At the current rate of job creation, the nation would need nine more years to recapture the jobs lost during the recession. And that doesn’t even account for five million or six million jobs needed in that time to keep pace with an expanding population. Even top Obama officials concede the unemployment rate could climb higher still.

But Obama insists on a massive tax increase on the “rich” and a bevy of new regulations and mandates on employers. Certainly, nine more years of Obama-like policies aren’t going to bring unemployment down. As the Times examines the dreary economic conditions across the country, one is struck by the disconnect between the White House’s rhetoric and the economic predicament faced by Americans, as well as the equally vast disconnect between the administration’s anti-growth, anti-business policies and the economic challenges these people are facing.

In this economic climate, Obama’s hyper-partisan, desperate rhetoric seems particularly jarring. He’s talking about phony foreign donors to the Chamber of Commerce; in suburban Arizona, “subdivisions sit in the desert, some half-built and some dreamy wisps, like the emerald green putting green sitting amid acres of scrub and cacti. Signs offer discounts, distress sales and rent with the first and second month free. Discounts do not help if your income is cut in half.” Obama rails at Wall Street; in Cherry Hill, New Jersey, meanwhile, “home prices have fallen by 16 percent since 2006, and houses now take twice as long to sell as they did five years ago. That’s enough to inflict pain on homeowners who need to sell because of a job loss or drop in income. Some are being forced to get rid of their houses in short sales, asking less than they owe on a mortgage. As of last week, 10 percent of all listings in this well-tended suburb were being offered as short sales.” Obama is obsessed with George Bush and Citizens United; in Atlanta, “small banks are a particular disaster, 43 having gone under in Georgia since 2008. (Federal regulators closed 129 nationally this year, up from 25 last year.) Real estate was the beginning, the middle and the end of the troubles.”

No wonder Obama’s ratings are diving. He is talking about things that bear no relation to voters’ concerns. He insists his policies have worked, but voters’ own experiences tell them otherwise. Obama’s rhetoric against a growing list of political adversaries only reinforces the impression that he is focused on the wrong things. The analogy is not Jimmy Carter. It is Herbert Hoover by way of Richard Nixon.

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Now Liberal Women Are Mad at Him Too

09.13.2010 - 9:07 AM

Young people, old people, Hispanics, and independents have all grown weary of Obama. His base is grouchy, sensing that a deluge is coming. And now the self-appointed feminist bean counters are in a snit:

President Obama is facing new criticism from women’s rights groups for failing to nominate a woman to his core group of economic advisers.

Obama on Friday named longtime adviser Austan Goolsbee to head the Council of Economic Advisers after Christina Romer left to return to the University of California at Berkeley.

Women’s rights groups — including the National Organization for Women (NOW) and The New Agenda — have sharply criticized the White House for not including more women in prominent positions overseeing the economy and financial policy.

Not enough for them to have the secretary of state, the secretary of health and human services, the labor secretary, two new Supreme Court justices, and a potential chief of staff (Valerie Jarrett). You can almost sympathize with the White House. Almost – because it, along with every other Democratic administration in recent history, has played the diversity game, proudly showing off its women and minorities as evidence of its anti-bias credentials. Apparently, one of the rules now in this tiresome game is that a woman has to substitute for a woman, or a woman has to be named in the same policy area.

Good golly. If anything, women’s groups should be pleased that their sisters haven’t been sullied by association with possibly the worst economic team since Herbert Hoover. All those men will have a blot on their records, but not the liberal sisterhood.

This sure does seem badly out of date, a creaky remnant of the 1970s: “‘The problem with the president insulating himself with the old boys around him is that he is really not getting information about how people are struggling, how women are struggling,’ Terry O’Neill, head of NOW, said earlier last week.” Do people believe this claptrap anymore?

The real motive, however, may be to pressure the Obami into appointing a left-wing zealot (Elizabeth Warren) to head up the new consumer financial protection office. Maybe if they guilt-trip him, they’ll get their gal in the spot. Well, if Obama is willing to use yet another recess appointment, it’s possible, but there’s little chance she’ll get through the Senate. The current Senate (not to mention the next one) will be reluctant to rubber-stamp another extremist.

You wonder how much longer NOW will be in business. Perhaps NOW and the NAACP should get together for a going-out-of-business sale. Really, the rest of us have moved on. Isn’t it time they did too?

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Is Obama’s Middle Name Hoover?

09.08.2010 - 6:17 PM

In Cleveland today, in a remarkably bitter and partisan speech, President Obama ruled out allowing the Bush tax cuts for those earning more than $250,000 a year to continue because of the recession. Even his former budget director, Peter Orzsag, recommended continuing them in a New York Times op-ed article. If the president gets his way, there will be a sharp increase in taxation on the affluent and on small businesses, many of which are sub-chapter-S corporations, which are taxed via the personal income tax rather than the corporate one.

The president argues that we simply cannot afford the $700 billion that extending the tax cuts for all would cost the government in foregone revenue. That estimate is based, I assume, on the static models that both the OMB and the CBO rely on to forecast revenues and which are always wrong, because the economy is highly dynamic, not static.

We tried raising taxes, especially on the rich, in the teeth of a recession once before in order to narrow the gap between federal revenues and expenditures. That was in 1932. The results were not pretty, to put it mildly. Both houses of Congress passed Hoover’s proposed tax increases by wide margins, and John Nance Gardner, the speaker of the House (and FDR’s first vice president), even wanted to add on a national sales tax, which would have impacted the poor far more than the rich, in order to balance the budget. It didn’t work and the economic decline sharply accelerated. Government revenues in 1932 were $1.9 billion, despite the tax increases. Expenditures that year were $4.6 billion. The deficit, in other words, was 132 percent of revenues, by far the worst peacetime deficit in the nation’s history. Ever since, the idea that taxes should be raised in a recession has been an off-the-table idea. That, after all, was what Herbert Hoover did, not a model later presidents have chosen to emulate. At least until President Obama, that is.

Of course, what Obama wants and what he will get are not necessarily the same thing right now. All the Bush tax cuts will expire on January 1, 2011, not just those on higher incomes. So legislation will be needed. With the politicians in a hurry to go home and campaign, and Democrats in a gathering panic about losing their majorities, who knows what will happen?

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What a Difference a Year Makes

03.05.2010 - 11:57 AM

It was a year ago today that President Obama launched his drive to reform health care. He was confident that he could do what Bill Clinton had failed to do 16 years earlier. As the New York Times reported on March 6, 2009:

Mr. Obama insisted that ”this time is different” because ”the call for reform is coming from the bottom up, from all across the spectrum — from doctors, nurses and patients, unions and businesses, hospitals, health care providers and community groups,” as well as state and local officials.

The Times was reporting on ”a day-long meeting on health care that brought together a diverse group of people, in and out of government.”

“I just want to figure out what works,” Obama told them.

Too bad he didn’t do that. Instead he turned everything over to the ultraliberal Pooh-Bahs of Congress, who produced a bill (or rather two bills, one in the House the other in the Senate) the unpopularity of which has only grown with time. That Obama wanted everything wrapped up by last year’s August recess now seems a long-ago bad joke.

Today there is certainly still a call coming from the bottom up. Unfortunately for the Democrats, it’s an ever-rising groundswell of opposition to ObamaCare, one that threatens to become a political hurricane that could sweep the Democrats out of the majority in both houses of Congress and render the president politically impotent for the rest of his term.

And it isn’t just at the federal level that politicians are feeling the hot wind of public anger rising. Politico reports that state legislatures have approval ratings that in some cases are even worse than Congress’s. Only 16 percent of New Yorkers think their state Senate is doing a good or excellent job. (I guess 16 percent of New Yorkers live on the back of the moon.) Of course, New York is a poster child for legislative dysfunction, but even in Connecticut, only 30 percent approve. In Pennsylvania, it’s 29 percent.

So 2010, thanks in large part to ObamaCare, is shaping up as the most interesting political year since 1980. That was the year that the American electorate began trying to get the political establishment’s attention. They denied a second term to an elected president for the first time since Herbert Hoover and gave the Republicans a majority in the Senate for the first time in 26 years. In 1994 they tried again, ending the Democrat’s majority in the House after 40 years, and even defeating a sitting speaker for the first time since the Civil War.

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RE: Why Isn’t He Better at Being President?

11.17.2009 - 10:07 AM

Jennifer asks a good question that is more and more on the minds of citizens and the punditocracy alike. Obama is so smart and so eloquent, and yet he has not, at least yet, succeeded as president domestically or in foreign affairs.

One answer, perhaps, is that being a successful president requires skills and attributes that Obama simply does not possess. Being “smart” is not among those attributes. Everyone who gets elected president is smart, for anyone who wasn’t could never make it through the world’s longest and most difficult political obstacle course. George Romney — no dummy by a long shot — came a cropper with a single ill-considered remark about having been brainwashed regarding Vietnam.

But being “supersmart” is not only no help; it is, I think, often a hindrance. Six future presidents were elected to Phi Beta Kappa as college undergraduates: John Quincy Adams, Chester Arthur, Theodore Roosevelt, William Howard Taft, George H.W. Bush, and Bill Clinton. Of those six, only Roosevelt could be considered a great president. Three of them, Adams, Taft, and Bush, were defeated for re-election, and Arthur couldn’t even get nominated for a second term. (His presidential reputation has been improving of late, however.)

And intellectuals, of course, are all too capable of thinking themselves into disaster. Remember George Orwell’s famous crack about “an idea so stupid only an intellectual could have conceived it.”

One might think that engineers, trained to deal with real-world forces, might make better presidents. But the only two engineers to reach the White House were Herbert Hoover and Jimmy Carter, both terrible presidents.

So what makes for successful presidencies? It might be fruitful to compare what the two greatest presidents of the 20th century, Franklin Roosevelt and Ronald Reagan, had in common. Neither were intellectuals (Roosevelt hardly ever read a book as an adult), but both were very “savvy,” not the same thing as smart. Both were master politicians, able to assemble and maintain coalitions. Both had immense charm. Both were first-class orators. Both had a great sense of humor and loved to tell jokes. Both were comfortable in their own skins and not given to introspection. Both had an abundance of self-confidence but no trace of arrogance. In both, the inner man was inaccessible, and no one felt he really knew what made either man tick. And both had that indispensable handmaiden of greatness — luck.

How many of those attributes does Barack Obama have?

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