Recalling Franklin Roosevelt

Latest. As Americans start their day, it’s increasingly clear that the House Republicans are holding out against the Republican President’s bail-out. If Bush and the majority Democrats do a deal over their heads and McCain continues to share Rep qualms, and the deal works, Bush hands the presidency on a plate to Obama. Will tonight’s debate go on? There’s plenty to talk about.

In the middle of the bailout deadlock I searched for lines on: “What would FDR do?” And sure enough up they popped. But first, where are we now? Politically in chaos, the Republicans are split over the amazing phenomenon of an “unAmerican” state takeover of a large chunk of the US financial industry by a Republican administration. Bush sucks, Paulson kneels down before Speaker Pelosi and Pelosi replies: “ I didn’t know you were a Catholic”. McCain seems to have flunked it, sitting silent at the big round table and then siding with the Republican no-dealers. Obama has waffled “for more time.” Arianna Queen of the Democratic blogs raps him to show leadership. True to form and status the New York Times sonorously bemoans The Absence of Leadership. Echoing the great phrase from Roosevelt’s first inaugural, the NYT intones: “ It took President Bush until Wednesday night to address the American people about the nation’s financial crisis, and pretty much all he had to offer was fear itself…. Given Mr. Bush’s shockingly weak performance, the only ones who could provide that are the two men battling to succeed him. So far, neither John McCain nor Barack Obama is offering that leadership.”Two pieces even question whether the presidency is worth having now.

The Times’ Gerard Baker gives all sorts of reasons for calling it “The Presidency you wouldn’t want to win”, goes on to suggest that Hillary might pick up the following term and ends by hedging his bets: “….history suggests an unsettlingly binary possibility. Either the next president is destined for the cruel obscurity of one-term failure. Or he is set to join the pantheon.” (Thanks for the firm line Gerry.)

Ted Widmer of the Washington Post asks “Why on Earth would anyone want to be president right now?” But at least going on to offer an answer.

“After Lincoln’s, no presidency began under darker clouds than Franklin D. Roosevelt’s. The U.S. financial system was in vastly worse shape than it is even today, totalitarianism was looming abroad, and the New York Stock Exchange had actually shut down. But Roosevelt knew that Herbert Hoover had given him, in FDR’s own words, “an easy act to follow.” On that dark inaugural day in 1933, the new president was only five sentences into his maiden speech when the sonorous attack on “fear itself” came; nothing was the same after that. Roosevelt launched a sustained attack on Hoover’s laissez-faire policies; there’s a reason he called the New Deal new.”

So what would FDR have done? He certainly didn’t go about moaning he’d be a one-term President. He projected more optimism than he had any right to feel and set a cracking pace for the legendary first 100 days and beyond. It didn’t solved much but it improved morale and started to build the magic ingredient of confidence. The Last Chance Democracy café (who they?) offers Obama sage advice, but too late. Do what FDR did in response to lame duck President Hoover ( read across Bush). ” President Herbert Hoover contacted Franklin Roosevelt, who was then the president-elect, asking him to endorse Hoover’s proposed responses to the crisis and to enter into a joint proclamation….The two men needed to show solidarity, Hoover insisted, in order to calm the panic. But FDR turned him down cold. He didn’t want to waste his political capital.”

Richard Reeves political scientist and biographer of Reagan declares: “whoever is in charge of the government looks for a bracelet with the letters “WWRD.” “What Would Roosevelt Do?” “Paulson was appointed by a president, administration and party that has spent the past 70 years attacking most of what the New Deal did or tried to do.” So the era of Big Government pursued until Lyndon Johnson’s Great Society eschewed ever after even by Clinton, is back in business. No wonder there’s deadlock. While you wasit for news browse in the extracts from J Kenneth Galbraith’s “The Great Crash: 1929.”

  • kensei_loves_fdr

    But he had some advantages. By the time he ran for election, the Depression had been raging and there was a decisive shift in opinion regarding laissez-faire economics. That has not happened this time, and given a successful intervention, may not.

    He also had the advantage that some other populist politicians had blazed a trail, like Huey Long.

    http://en.wikipedia.org/wiki/Huey_Long

    As Americans start their day, it’s increasingly clear that the House Republicans are holding out against the Republican President’s bail-out. If Bush and the majority Democrats do a deal over their heads and McCain continues to share Rep qualms, and the deal works, Bush hands the presidency on a plate to Obama. Will tonight’s debate go on? There’s plenty to talk about.

    The flipside is that is they back it and it fails, then they will be left horrible exposed. The problem is that the Democrats do not want to back it with the political cover of Republican support. I think you nail it in what needs to be done. If the Democrats truly believe this is urgent and that the deal they have negotiated is the best available, they have all they need to push it through. If they have their courage of their convictions, they’ll be able to hammer the Republicans enough to withstand the Populist backlash.

    On FDR, Roy Jenkins biography is a short but decent read: http://www.amazon.co.uk/Roosevelt-Roy-Jenkins/dp/0330432060/ref=sr_1_2?ie=UTF8&s=books&qid=1222435605&sr=8-2

  • Funny that it should be the most right-wing American president in living memory who imposes socialism on Wall Street…

  • Alan

    An alternative reading is that McCain and co have realised that the Paulson buy out with no strings or accountability is the only way to save their own bandit version of american capitalism.

    They also realise that there is no appetite across the great american public or the house democrat majority to swallow such an hypocritical and brazen theft from the pockets of ordinary decent americans – there has to be accountability.

    They can only confuse the issue, they can only throw their own ball up in the air and try to get everyone to play their game involving insurances. But it’s all a con.

    Now, if never before, is the time for Obama to seize the day and force a settlement with accountability. The result will change the US for ever. The myth of the big bad state will be overtaken by the memory of big bad corporate america. It would be an epoch defining event.

  • Rory

    I must say that I am most reluctant to get into a debate on this issue of the latest economic collapse. That is mainly because I really don’t know precisely how it happened, nor why it was allowed to happen and I do not have any immediate solution to hand that might fix it. So in that regard I suppose that I am in much the same boat as the US president, the US presidential candidates, the members of the US Congress and all and any commentators that I have read so far.

    I do believe that it is important that whatever strategy is undertaken for a way out, a way forward, it will need to command public confidence in the first instance. Happily I am able and willing to propose a measure that is almost sure-fire guaranteed to inspire public confidence that the government is really trying to get to grips with this demanding problem. This proposal is to take out a considerable selection of main actors within the banking and investment sectors and stand them up against a wall (on Wall Street, preferably) and shoot them.

    I know that this is a bit Benthamite (“greatest happiness for greatest number…”) and all that but if we are in danger of replicating the events of 1929 why not go just a little more retro while we are at it?

  • Greenflag

    FDR ‘bailed out ‘ the banking system – but did not lose sight of his New Deal committment and push through Social Security and Medicare for the aged as well as other critical reforms . These reforms eventually led to the ‘creation’ of a strong american middle class. This ‘middle class’ has lost out over the past almost 30 years through a succession of administrations . The Republicans have at several critical ‘junctures’ over the past 30 years used issues such as race, immigration , taxation , big government , abortion , fundamentalist christianity , to disguise or gloss over the fundamental issue which has been eating at the innards of American democracy namely the increasing gap between the top 10% of the population and in particular the top 1% , and the remaining 90% of Americans . The Wall St moguls and bankers belong to the 1% and Main St america knows it .

    Obama needs to do what he has to to get through this crisis but he also needs to reiterate his determination to reform the out of control health care fiasco as a first priority. During a second term he can probably do more .

    Bush remeber carried on with his neo con republican agenda despite waging the Iraqi War and upending the american economy . He even tried at a point when Iraq was in meltdown to ‘privatise ‘ social security . Obama needs to wage his ‘change /reform agenda while waging the aftermath of this Wall St ‘war’.

    And in the midst of the greatest economic crisis that the USA has ever had to face there are now Republicans who want to see ‘capital gains tax ‘ ‘reduced’ as a ‘solution ‘ to the present impasse . If Wall St has lost touch with the reality of Main St America so too have some of these Republicans . Is there no end to their Gekkoesque greed ?

    Washington DC is beginning to be reminiscent of Buenos Aires during the last days of the Generals or Jakarta as Suharto was driven from office .

    Somebody described the current american situation as being like ‘Argentina with nukes’ . Whether we like it or not what happens or does’nt happen in Washington DC today will affect the entire world .

    Where is Dave’s ‘sovereignty’ now that we need it ? Barely alive apparently and in intensive care in Washington DC 🙁 the capital of the ‘free market ‘ ? and a soon to be pauperised electorate who will have an opportunity to vote in four weeks time !

  • joeCanuck

    If this situation were occurring almost anywhere else in the world, there would be mass demonstrations and rioting in the streets. Is this a good thing or a bad thing?

  • Greenflag

    ‘This proposal is to take out a considerable selection of main actors within the banking and investment sectors and stand them up against a wall (on Wall Street, preferably) and shoot them.’

    good one rory 🙂

    As what’s happening on Wall St has been described by messrs Dave and his droolong sock puppet Bfb as the fault of ‘socialism ‘ then how could they disagree with the ahem ‘socialist’ solution – i.e Chinese style firing squad ? An actual Chinese firing squad would lend a certain air of real time economic reality to the shootings given that the USA is now in hock to the Chinese for hundreds of billions ? Unless of course Dave Libertas and his bootboy from Boston hold the millions of Americans caught in foreclosure hell ‘responsible ‘ in which case the ahem wall in Wall St would not be long enough for the executions to be executed in a suitably free market efficient fashion ?

  • Ulster McNulty

    If Bush and the majority Democrats do a deal over their heads and McCain continues to share Rep qualms, and the deal works…”

    If the deal works, which it probably won’t, it won’t be apparent for a considerable time (nobody is going to fix a decade of financial nonsense in 6 or 7 weeks). Therefore McCain “sitting silent at the big table” isn’t running any more of a risk than Obama, possibly less of a one.

  • Greenflag

    ulster mcnulty ,

    ‘nobody is going to fix a decade of financial nonsense in 6 or 7 weeks).’

    Indeed . The choice seems to be and I say seem guardedly , between a two year hopeful quickie ‘solution’ or a decade long Japanese style stagnation . Not sure if the American’s could ‘survive ‘ politically intact the ten year deal? Americans are not a united ‘community’ in the same sense as the Japanese are .

  • susan

    AP wires are reporting McCain WILL debate tonight.

  • Greenflag

    ‘AP wires are reporting McCain WILL debate tonight. ‘

    So there’s been a solution behind the closed doors ? Stunt ‘mission ‘ accomplished ? or could he not afford to have the TV’s focused on his empty dais ?

    Failing to debate this issue at this time would have been ‘fatal ‘ to whatever chance he has left of winning imo.

  • CincinnatiDave

    All you need to know about the finance crisis:
    http://hotair.com/archives/2008/09/26/video-financial-crisis-in-10-minutes-or-less/

    We bought our first home here 11 years ago & needed to show our work history, references, financial statements from our banks as well as a 5% down payment. Thankfully houses in NKY are still reasonable & our 3 bedroom bungalow on 1/2 acre (called a”ranch” style here) can be bought for around $100k.
    In the time since we bought, sub-prime became the flavour of the day & ANYONE could walk in & get a mortgage.
    No job history. No problem.
    Low credit rating. Thats OK.
    Bankruptcy a few years back? We can handle that.
    You need a 125% loan. Good choice. You can spend the extra money & get it all back when you sell for a higher price in a couple of years.

    It was & is barking mad. The mortgage companies knew. The home builders knew. Congress & especially Fannie & Freddie knew. The companies resold the mortgages immediately & soon Wall St repackaged the now bundled mortgages into lovely new high-interest bearing investment vehicles which were basically cans of excrement.

    The Bush administration for all its many faults can’t be landed with the blame here. In 2003 they called for reform.
    http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&scp=1&sq;=“barney+frank”&st=nyt
    Nor can John McCain who in 2005 & 2006 co-sponsored a reform bill on Fannie & Freddie.
    http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

    No-one has clean hands in DC but asking the Democrats to help bring reform is asking the foxes to restore order in the chicken house. Simply unbelievable.

    Cheers
    David

  • Comrade Stalin

    Cincinnati Dave :

    Nor can John McCain who in 2005 & 2006 co-sponsored a reform bill on Fannie & Freddie.
    http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

    So why didn’t the then-Republican-controlled congress pass it ?

  • Greenflag

    ‘So why didn’t the then-Republican-controlled congress pass it ? ‘

    Because too many of their supporters were making money hand over fist and their Wall St buddies in Goldman Sachs , Lehman Bros , Bear Stearns, Merril Lynch etc etc etc were coining it .

    ‘but asking the Democrats to help bring reform is asking the foxes to restore order in the chicken house. Simply unbelievable.’

    Just as unbelievable as asking Paulson to bring in a bail out package that would not help his former Goldman Sachs friends and the rest of his pals on Wall St .

    ‘ The Bush administration for all its many faults can’t be landed with the blame here.’

    Because they did’nt know what every dog in the street knew ?

    ‘In 2003 they called for reform.’

    Most voters will remember 2003 as the year when Bush and his Republicans went completely ape shit and went on an unnecessary war which has also cost the American taxpayer dearly not to mention the loss of lives in Iraq and the USA.

    And in between times they (Bush’s neo con republicans have learnt nothing)

    Complete and utter excuse me, f**k up merchants of the highest order . This shower of shite’s could’nt be trusted to manage a pizza shop never mind a country 🙁

  • Ann

    Greenflag, this was a f**k up extraordinaire, laying the blame on one party is nonsense, they all had their part to play in this…

    The US is in a terrible state of chasis…:)

  • cincinnatidave

    Nor can John McCain who in 2005 & 2006 co-sponsored a reform bill on Fannie & Freddie.
    http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

    So why didn’t the then-Republican-controlled congress pass it ?
    Posted by Comrade Stalin on Sep 26, 2008 @ 06:41 PM

    I don’t know. I can only presume that it was for the same reason a lot of conservatives stayed home in the 2006 mid-terms. The republicans had become a corrupt, big-govt party & the rank & file conservatives were & are completely sick of the leadership in congress. I am not a republican or even a US citizen, just giving my viewpoint from the Cincy area on what I see & hear from my friends here.

    Cheers
    David

  • ciaran

    The country that boasted about forcing the soviet union into bankruptcy by out spending it on defence is now on the verge of bankruptcy itself. Ronnie regan must be spinning in his grave. So much for capatilism-next please.

  • Comrade Stalin

    I can only presume that it was for the same reason a lot of conservatives stayed home in the 2006 mid-terms. The republicans had become a corrupt, big-govt party & the rank & file conservatives were & are completely sick of the leadership in congress.

    What do you say to this story ?

  • NP

    Did anyone else come across the report that Paulson literally was on his knees begging the Democratic leader of Congress to support these measures ?

    And they always say theres no money for health care, but helping their mates in Wall St. is a different matter.

  • Greenflag

    Ann,

    ‘laying the blame on one party is nonsense, they all had their part to play in this’

    Some have had a bigger part to play than others . As I’ve said before the ‘problem ‘ began some 25 to 30 years ago and is the inevitable outcome of the extreme right wing neo cons in the Republican party coming dominating US politics since Reagan’s time despite the short Clinton interegnum and even he was hamstrung by the Republican dominated House from 1994.

    ‘The US is in a terrible state of chasis.’

    That it is . However we should all be mindful that when the chassis goes there’s nothing left to support the body economic or politic.

    Hopefully the ‘dust ‘ will have cleared by Monday .

  • Dave

    The question should be “What did FDR do?” He founded Fannie Mae in 1938, giving it a monopoly on the supply of mortgage loans. And it is this model of de facto state capitalism that has now effectively bankrupted the US and gridlocked its financial industry. When this state-owned business was ‘privatised’ 40 years ago, it was done with the state issuing a private shareholder-owned corporation a line of credit from the US treasury, a bailout guarantee, status as a GSE, and the US President directly appointing five directors to its board. Unsurprisingly, the government-sponsored entity’s claim that it was not underwritten by the US government was regarded as it has since been shown to be: a convenient fiction which claimed that the US taxpayer was not exposed to risk from this hybrid half-private, half-government business. The US government has now assumed liability for its debt and the debt of its sister, Freddie Mac – all 5 trillion dollars worth of it. State capitalism doesn’t work, nor does its hybrid spawn: GSEs. The Americans need to reacquaint themselves with Milton Friedman, not quasi-socialists like FDR who are ultimately responsible for the mess that the US now finds itself in. Less government, kids, not more of it.

  • Ann

    Will tonight’s debate go on? There’s plenty to talk about.

    The topic is security not the financial crisis, unless they muscle that in somehow. They may think its safer to stick rigidly to topic, now that a plan is forming on paper. It starts at 2am this side of the pond…

  • RepublicanStones

    Anyone know if we can watch the debate tonight on TV here. If so what channel?

  • Ann

    Its on sky at 2am, as I said RS.

  • RepublicanStones

    There is about 300 channels on Sky, Ann.
    Sky News, Sky One, Sky Two…..?

  • Ann

    Sky news channel, where they are always on, most likely on BBC news 24 also.

  • RepublicanStones

    Cheers !

  • 6countyprod

    Hey, I got a bracelet too!

  • Rory

    What a wonderful debate. For years I have been searching for an alternative drug-free remedy for insomnia and now at last it arrives.

    And such eloquence of analysis:

    McCain: Iraq has a lousy government and therefore has a lousy economy.

  • Comrade Stalin

    Unsurprisingly, the government-sponsored entity’s claim that it was not underwritten by the US government was regarded as it has since been shown to be: a convenient fiction which claimed that the US taxpayer was not exposed to risk from this hybrid half-private, half-government business.

    Is the idea that the US taxpayer is not exposed to the risks taken by the market not then also a lie, given that the US government now owns 80% of AIG ?

    The Americans need to reacquaint themselves with Milton Friedman, not quasi-socialists like FDR who are ultimately responsible for the mess that the US now finds itself in.

    FDR’s been dead for over 60 years, during that time there have been many booms and recessions, and this particular one is somehow all his fault ? The low-interest policies of the Fed and the lack of regulation in the mortgage market and investment banking industries are nothing to do with it ? You really are stretching this shit.

  • Greenflag

    Dave ,

    ‘The question should be “What did FDR do?”

    FDR coming to power in 1932 probably prevented the USA from sliding into an even worse depression and the USA would have ended up as a totalitarian State of the right or left – but most probably the right . Had the USA been such a State they would never have gone to war against Germany and Italy . Britain would have has no recourse except to accomodate to the Axis powers .

    ‘The Americans need to reacquaint themselves with Milton Friedman’

    Trickle down economics is wonderful in theory and no doubt and mathematically coherent economics . Unfortunately in the real world as it’s dwelt in by human beings and not just economists a reliance on trickle down economics alone could be the straw which breaks the backs of our democracies . The USA makes it’s ‘red claw capitalism ‘ work by incarcerating 3 million of it’s people and by ‘importing ‘ some 12 million illegal aliens who occupy the bottom layers of American society and who don’t have a vote and who help to depress the wages and salaries of Americans .

    ‘not quasi-socialists like FDR’

    FDR was regarded as a ‘traitor ‘ to his class . Ultimately however he proved a saviour for them . His policies helped to create a broader middle class and a higher waged working class which provided America with it’s great age of prosperity 1941 through 1976 approx.

    ‘Less government, not more of it. ‘

    The USA needs more focused government in areas were a real difference can be affected in the lives of ordinary Americans . As the Government is elected by the people -it’s focus needs to be directed to the interests of what is called Main St America . The american people know that Wall St cares not a jot for anything else but the bottom line and it’s next quarterly report ! As that is the business of Wall St -fine . Wall St is an essential part of the market economy and it’s member companies have to be allowed to fail and succeed based on the ‘free market ‘

    But not at the expense of American democracy .

    .

  • Nor can John McCain who in 2005 & 2006 co-sponsored a reform bill on Fannie & Freddie.

    I wouldn’t trust McCain on this issue – he has ‘form’ going back to the S&L;crisis of the 1980s.

  • CincinnatiDave

    Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
    http://ca.youtube.com/watch?v=_MGT_cSi7Rs

    There is plenty of blame to go around but these guys were right in the middle of this mess – for years.