Can Obama Stave Off Another Great Depression?
New America Media, Commentary, Jerry Sullivan Posted: Feb 03, 2009
Editor's Note: What if Roosevelt had come to office a few months after the stock market crash of 1929? Timing can be everything, and Obama may have come to the job just in time to ward off another Great Depression, writes NAM commentator Jerry Sullivan. Sullivan is the editor and publisher of the Los Angeles Garment & Citizen, a weekly community newspaper that covers Downtown Los Angeles and surrounding districts.
The coverage of President Barack Obama's first days in office managed to overlook a historical comparison that is worthy of consideration.
Obama took office just a few months after a stock market crash that left no doubt about the turbulent state of our economy. The ensuing decline has been swift and scary, leading some to talk about a possible fall into an outright depression.
Now consider Herbert Hoover, the president who took office just a few months before a stock market crash that signaled the Great Depression in 1929. Hoover remains a figure of historical disfavor to this day because of what he did—and didn't do—after the crash. He served nearly four years in the Oval Office as the Great Depression raged, continuing to view government's role in the economy as largely limited. He offered no enormous economic stimulus plans or social programs. Clusters of tent cities occupied by the dispossessed of our land became known as "Hoovervilles."
Then came Franklin Roosevelt, who immediately put enormous economic stimulus plans into action and launched a host of social programs.
Timing can be everything—in politics, economic matters, and life in general.
Our timing might be just right with Obama because our economy's nosedive came about a month before the presidential election. Obama came to the job at a moment when he has a chance to move on our problems before they settle into another Great Depression. What if Roosevelt had gotten a shot a few months after the stock market crash in 1929, instead of nearly four years into the mess?
Here's another historical comparison worth noting: Hoover won election as a Republican in 1928 in part because of widespread prejudice against Roman Catholics, a sentiment that worked against New York Governor Al Smith, who ran as the Democratic nominee in the race.
There's true irony in this piece of history, because Smith had recognized the shaky nature of the economy well before the crash that signaled the start of the Great Depression. The actions he took in New York during the 1920s could be viewed as a state version of what would become Roosevelt's famous New Deal package of economic stimulus and social programs.
Bigotry ravaged Smith's campaign, though. He might not have won in any case, but the anti-Catholic emotions that took wing in large parts of the populace, media and other parts of the power structure left him without a fighting chance.
Smith's loss spelled a wait of nearly four years before the federal government became fully engaged in putting its might against the Great Depression. It was just a few months ago that Americans could have again allowed prejudice—this time against African Americans— to override a presidential campaign. That might have led to another slow response to an economic crisis. It's not a perfect comparison to match recent Republican nominee John McCain to Hoover, but the Arizona Senator has long favored smaller government, which is nowhere near what we saw from Roosevelt or are seeing from Obama.
Now here's the hard part of this history lesson: There's still plenty of debate among scholars and economists on whether Roosevelt's massive government programs worked. The New Deal brought immediate relief to millions in dire straits, an invaluable record in its own right. But there is data to indicate that the programs ultimately failed to put the economy back on track. Indeed, the Great Depression didn't really end until World War II led factories and farms to crank up production. Some would argue that the New Deal amounted to short-term fixes that did more harm than good over the long haul.
That leaves us to wonder whether the current plans to spend $700 billion to bail out banks and automakers—and hundreds of billions more on roads and bridges—will bring improvements that make such outlays worthwhile.
The effort will be made sooner rather than later, though, and that's because Americans didn't hold a fellow back from the highest office in the land based on prejudice this time around.
That's real progress—even if it's the only progress we can claim for certain as we fight through our tough economy.
This article originally appeared on Newgeography.com.
Who Will Get the 2.5 Million New Jobs?
Will Obama Make the Mistake of Latin American Leaders?
Page 1 of 1