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The Lessons Of History

In my post below, I highlighted FDR's famous 1932 speech at Oglethorpe University. I choose to highlight portions of it again here:

No, our basic trouble was not an insufficiency of capital. It was an insufficient distribution of buying power coupled with an over-sufficient speculation in production. While wages rose in many of our industries, they did not as a whole rise proportionately to the reward to capital, and at the same time the purchasing power of other great groups of our population was permitted to shrink. We accumulated such a superabundance of capital that our great bankers were vying with each other, some of them employing questionable methods, in their efforts to lend this capital at home and abroad.

(Emphasis supplied.) Sound familiar? More . . .

I believe that we are at the threshold of a fundamental change in our popular economic thought, that in the future we are going to think less about the producer and more about the consumer. Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.

The original "Redistributionist in Chief?"

It is toward that objective that we must move if we are to profit by our recent experiences. Probably few will disagree that the goal is desirable. Yet many, of faint heart, fearful of change, sitting tightly on the roof-tops in the flood, will sternly resist striking out for it, lest they fail to attain it. Even among those who are ready to attempt the journey there will be violent differences of opinion as to how it should be made. So complex, so widely distributed over our whole society are the problems which confront us that men and women of common aim do not agree upon the method of attacking them. Such disagreement leads to doing nothing, to drifting. Agreement may come too late.

It is this description that leads FDR to his famous statement:

Let us not confuse objectives with methods. Too many so-called leaders of the Nation fail to see the forest because of the trees. Too many of them fail to recognize the vital necessity of planning for definite objectives. True leadership calls for the setting forth of the objectives and the rallying of public opinion in support of these objectives.

Do not confuse objectives with methods. When the Nation becomes substantially united in favor of planning the broad objectives of civilization, then true leadership must unite thought behind definite methods.

The country needs and, unless I mistake its temper, the country demands bold, persistent experimentation. It is common sense to take a method and try it: If it fails, admit it frankly and try another. But above all, try something. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach.

We need enthusiasm, imagination and the ability to face facts, even unpleasant ones, bravely. We need to correct, by drastic means if necessary, the faults in our economic system from which we now suffer. We need the courage of the young. Yours is not the task of making your way in the world, but the task of remaking the world which you will find before you. May every one of us be granted the courage, the faith and the vision to give the best that is in us to that remaking!

(Emphasis supplied.) More lessons for Obama from FDR. I feel more confident than ever that he has learned them.

Speaking for me only

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    Thank You (5.00 / 1) (#1)
    by kaleidescope on Tue Dec 02, 2008 at 10:02:55 AM EST
    I wasn't aware of FDR's speech, which pretty much hits today's problem on the head.  Changing the distribution of reward as between capital and consumer will be a daunting task.  I'm convinced that's something Obama never contemplated during the campaign.  To say that it would be a political battle royale would be the depth of understatement.

    Still, FDR's point is a good one and to actually address the current economic problems we must redress the imbalance in distribution.  That means taking on the captains of industry and the people who live high off the hog on unearned income.  They will fight with all they have to win that battle.  And by "they" I mean, not just the Carl Icahns and Henry Kravises of the world, but also the owners of all of the major media outlets and almost all the people who manage and report for those organizations.

    Who knows if Obama is up for that kind of battle?  What would be the signs that he is?  What can we do to help?

    One thing that struck me as odd... (none / 0) (#4)
    by Salo on Tue Dec 02, 2008 at 10:40:44 AM EST
    ...today on the radio was that Diane Reim was chatting about centralized (electronic?) medical records.  I tended to think on the campaign trail that this idea floated by Obama was technocratic micro-policy initiative.

    One commenter pointed ouut that salaried Doctors (as opposed to indie practitioners) use more electronic resources and that in Europe most records are electronic and centralized to some extent. It then occurred to me that electronic records are similar to  William Wilberforce's rather clever plan to attack neutral shipping known to previously carry slaves or to trade with the French. A Trojan horse in other words.

    If it means that there is a national insurance number is tagged to that record, something like social security numbers will be generated.

    Parent

    Another lesson... (5.00 / 1) (#3)
    by Salo on Tue Dec 02, 2008 at 10:34:04 AM EST
    ...it is all too easy to hire one half of the poor to kill off the other half.

    In today's governers meeting (5.00 / 1) (#5)
    by ai002h on Tue Dec 02, 2008 at 10:41:52 AM EST
    Obama ended his prepared statement by basically saying we need bold experimentation, so you know he's been studying FDR.

    You really surprise me (5.00 / 1) (#7)
    by koshembos on Tue Dec 02, 2008 at 11:34:05 AM EST
    Where exactly have we seen any indication that Obama is not our centrist in chief? We now have Gated, Jones, Holder, Daschle and may be Napolitanpo that are all centrists or highly inept. Obama's health care system wasn't and isn't universal.

    He still talks mainly about the middle class. We have yet to see an Hispanic or Asian in the new administration and please don't mention Richardson; very few Hispanics will agree with you.

    Legends are fine, after the fact. Now we are dealing with an evolving situation and Obama already made many mistakes. And I didn't mention the 250 economist he needs for CYA.

    Let's hope that he'll improve, but let's not drink Kool Aid in the winter.

    I have listened to him (5.00 / 1) (#8)
    by Big Tent Democrat on Tue Dec 02, 2008 at 11:37:26 AM EST
    Have you?

    Parent
    I reckon... (none / 0) (#11)
    by Salo on Tue Dec 02, 2008 at 12:10:08 PM EST
    ...that Obama's not got enough lefties in cabinet on Foreign policy.  There's basically no representation

    When they do a war council  it's:

    Biden (eeek!)
    Clinton (hohumfefifofum)
    Gates (the man who has been running the show anyway)
    Obama (Tabula Rasa?)
    Jones (A Marine)

    You also have hair trigger humanitarian interventionists like Rice and an a.g. like Holder.  I don't see any pacifistic voice in that group.

    If you wanted peace from this assembly of wise men  you wont find it.

    Parent

    Rice is worrisome. Luckily, (none / 0) (#13)
    by oculus on Tue Dec 02, 2008 at 12:39:56 PM EST
    the U.N. Security Council isn't so quick on the draw as she is.  

    Parent
    They don't really need to be though. (none / 0) (#14)
    by Salo on Tue Dec 02, 2008 at 12:48:38 PM EST
    She'll make lots of noise about impending catastrophes or ongoing massacres and either be ignored (she'll resign in disgust in that case) or Obama will listen and send troops. Not a bad thing per se but  but she's likely to be the spokesperson for various humanitarian cover stories.   I would not be surprised one bit if Iraq is re-branded as a humanitarian effort in a few months.

    Parent
    Only actions count (none / 0) (#15)
    by koshembos on Tue Dec 02, 2008 at 01:25:16 PM EST
    fragment of out of context sentences are considerably less important.

    Did you hear him say that he will eliminate terrorism? On which which side of the scale do you place that nonsense?

    Parent

    My sense is that (none / 0) (#2)
    by KeysDan on Tue Dec 02, 2008 at 10:24:24 AM EST
    the lesson Mr. Obama has taken from history is to cautiously roll-out changes; more evolutionary than abrupt. Or at least, allow the changes occurring and contemplated to appear so.  This tactic may be politically astute with respect to the congress, but the strategy sure needs to involve a stout and new direction on all fronts, a massive fiscal program being its foundation.

    And when "class warfare!" is shouted... (none / 0) (#6)
    by Dadler on Tue Dec 02, 2008 at 11:04:40 AM EST
    ...we need a response akin to "You're damn right it's class warfare, we're at war against folks like you who have no class, whose mothers never taught them the meanings of the words 'share" and 'enough'."

    As if sending (5.00 / 1) (#16)
    by jondee on Tue Dec 02, 2008 at 01:34:23 PM EST
    all those jobs and investment capital to China, Mexico and India weren't ALREADY "class warfare".

    Parent
    We are not getting class warfare from Obama (none / 0) (#10)
    by Manuel on Tue Dec 02, 2008 at 11:46:39 AM EST
    I think his response will be more along the libes of "We are all in this together".

    Parent
    Risk (none / 0) (#9)
    by Manuel on Tue Dec 02, 2008 at 11:43:49 AM EST
    One area where the Bush administration and our country/leaders have been lacking is in assesing risk.  This is a common thread from Iraq to the economy.  Risk has been severely discounted.  I bring this up not as a counter to being bold, for sometimes the risk of inaction is far greater.  I bring it up as a reminder that while experimentation is good, serious risk assesment before the fact is essential.  In the case of inmediate priorities like the stimulus package and health care, the risks are fairly well understood.  It's not like we are experimenting with totally untried concepts.  Nevertheless, in presenting these plans to the country at large, the administration would be well advised to acknowledge risks.  I am reassured by Obama's temperament and his cabinet choices.  Obama understands instinctively the need to be cautious while being bold.

    Some hyperbole in the FDR comparisons (none / 0) (#12)
    by wurman on Tue Dec 02, 2008 at 12:16:19 PM EST
    Unemployment:
    1932 = 23.6 percent
    2008 =  6.5 percent

    Bank failures:
    1932 = 1,453 for calendar year
    2008 =    15 through October

    Dow Jones Industrial Average
    1932 = 89 percent value loss from 1929 to Jul 1932
    2008 = 40 percent value loss from 10/09/07--14,164 down to 8,300 today


    Maybe we're still in 1929 (none / 0) (#17)
    by Coral on Tue Dec 02, 2008 at 03:11:55 PM EST
    Robert Reich has a good post on the Great Crash of 2008.

    Parent