Politics & Law

Why Obama should learn the lesson of 1936, not 1996

Robert Reich

Which lesson will the President learn — that of Clinton in 1996, or FDR in 1936? The choice will determine his strategy over the next two years. Hopefully, he’ll find 1936 more relevant.

Obama shouldn’t be fooled into thinking Bill Clinton was reelected in 1996 because he moved to the center. I was there. Clinton was reelected because by then the economy had come roaring back to life.

The 1996 election was about little else. Dick Morris, Clinton’s pollster and chief political advisor (who effectively took over the White House policymaking apparatus shortly after Newt Gingrich and the Republicans took over Congress in 1995), instructed the President to say only “the economy’s booming and you ain’t seen anything yet.”

President Obama won’t have that luxury in 2012. In all likelihood, the economy will still be anemic. It’s now growing at the rate of no more than 2 percent a year – far too slow to bring down the jobless rate. Even now, sales are slowing. Business revenues are slowing. Home sales are down. Home prices are down. Foreclosures are increasing.

For the next two years Republicans will try to paint Obama as a big-government liberal out of touch with America, who’s responsible for the continuing bad economy.

Obama won’t be able to win this argument by moving to the center — seeking to paint himself as a smaller-government moderate. This only confirms the Republican’s views that the central issue is size of government, that it’s been too large, and the economy can improve only if it’s smaller.

On the Republican playing field, Republicans always win.

Obama’s best hope of reelection will be to reframe the debate, making the central issue the power of big businesses and Wall Street to gain economic advantage at the expense of the rest of us. This is the Democratic playing field, and it’s more relevant today than at any time since the 1930s.

The top 1 percent of Americans, by income, is now taking home almost a quarter of all income, and accounting for almost 40 percent of all wealth. Meanwhile, large numbers of Americans are losing their homes because banks won’t let them reorganize their mortgages under bankruptcy. And corporations continue to lay off (and not rehire) even larger numbers.

With Republicans controlling more of Congress, their pending votes against extended unemployment benefits, jobs bills, and work programs will more sharply reveal whose side they’re on. Their attempt to extort extended tax cuts for the wealthy by threatening tax increases on the middle class will offer even more evidence. As will their refusal to disclose their sources of campaign funding.

The relevant political lesson isn’t Bill Clinton in 1996. It’s Franklin D. Roosevelt in 1936.

By the election of 1936 the Great Depression was entering its eighth year. Roosevelt had already been President for four of them. Yet he won the biggest electoral victory since the start of the two-party system in the 1850s. How?

FDR shifted the debate from what he failed to accomplish to the irresponsibility of his opponents. Again and again he let the public know whose side he was on, and whose side they were on. Republicans stood for “business and financial monopoly, speculation, and reckless banking,” he said over and over.

And he made it clear they wanted to prevent him from helping ordinary Americans. “Never before have these forces been so united against one candidate as they stand today,” he thundered. “They are unanimous in their hate for me – and I welcome their hatred.”

The 2012 economy won’t be as bad as the 1936 economy, hopefully. But it won’t be nearly as good as the 1996 economy. For a president running in 2012, 1936 is the more relevant.

Cross-posted from Robert Reich’s blog.

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Comments to "Why Obama should learn the lesson of 1936, not 1996":
    • Ana Penteado

      Dear Robert –
      Fantastic, indeed. I reckon Obama’s strategy is better placed if it gets on the political side of weak opposition. One cannot think that the Tea party would be a solution to the economic problems, God forbidden.

      That is our preoccupation in our neck of the woods. In UK, we have a coalotion of forces from the Frankenstein proportions – Conservatives and Liberal Democrats is almost like Republicans right with Nader’s independent thinking, if that makes sense. Here they did the opposite of USA – Osbourne’s budget dried out public money from the UK market and left the broken English private sector to deal with the recession. Old fashion interpretation of Smith – the market will correct itself. One wonder if Smith would have been alive and well, when the market became sophisticated with derivatives and so on, he would think that a government intervention was not desirable in times of despair. As a result, we are about to hit 15 per cent of unemployment in UK not publishable but touchable.

      I reckon if the Labour party wishes to come back to terms with the English electorate they will resort to the same strategy you suggested – punch on the weak aspects of the coalition and politics, which are raising to a fair amount weekly.

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    • Carl Williams

      Roger Simpson:
      You get it,and the points you make are so cleverly masked to avoid treasonous sedition,never the less on the Back of those that struggle in Afghanistan,and Iraq who make their way Day to Day so,Wall Street can continue to feed the top 25% who make up 1% of the population you are the future,let your outrage roll with such elegant pro’s please continue here to spark debate.

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    • Carl Williams

      Gary I am impressed, you made good points and,blasted many of the problems,if we cut taxes in a depression should it be on the rich or, the middle.If we don,t raise taxes were does the money come from to fund all the entitlements,were does the money come from, the Federal Reserve,15% of the American work force is unemployed.I think thats around 45,750,000 not paying taxes.Fire up the printing presses,debase the dollar more?. I like your youthful enthusiasm.Their are forces here at work in our fading Republic that would steal,whats left of the savings of the Baby Boomers.The same ones that that took the bailout.You have a bright and nimble mind,it will be your generation that will inherit the wind.If I were you I would chose the course that explains things,without double speak,align my self with problem solvers,seek out the group that is in search of solutions without the use of propaganda.Beware thoughts are things,chose wisely when your persuading direction because many are impressionable and need to hope,more the need for balanced thinking,be able to cross the aisle,flexibility,moderation,reason without frustration a winning combination.

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    • roger simpson

      i took 2 semesters of economics at a community college. i think you should give the old college try and see if you can pass the class.
      your -tape-recorder rendition exibits , rather smacks of insecurity that results from accepting as Gospel, of results from being told what to think, and who to say it to, is, um– er- uh somewhat lacking any substance of critical thinking but just conglomerating already previously hash and re-hash of blurbs ,warn-out platitudes and fails to present neither compelling nor convincing logical deductive or inductive reasoning, given no quarters for concession of even existance itself of mature, adult dialog , with neither rebuttal nor refutation, again, of any key position in a statement of policy of your own device
      , merely shadowing a possible fortress of respite from normal people
      who think, cogitate, deliberate and assume responsiblity for healing a broken economy,a hurt society, a hurting world, and, with those of your ilk, accelerating and targeting your “contribution” for the betterment of mankind?- beware, these are treacherous waters for the un-learned who look no further than their own selfish dreams of glory creating wealth off the backs, sweat, blood and, yes, intrepid soldier, of workers.
      well, nigh on midnight, my candle grows short , and i have miles to go in the morning. faire thee well, and recall to memory, this brief admonition-Beware the Bear…Go Bears!! roo-rroff -roo !!!

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    • Carl Williams

      Gary you could not tell me what the tea Baggers are all about.Your rational was, this is not the right place to talk about what you Neocon’s are for or against, however we should all join your multi- directional group because you are like Moses you know the way to the promise land.Some of your recent elected members to the HOUSE can’t tell anyone how many amendments their are to the constitution.Very encouraging,perhaps they don’t need to because they are going to rewrite the Constitution,and when they do they will surely know how many their are.Critical linear thinking is a lost art.To quote I think your most recent post,you urge use to join the tea party to change things.However this is not the right place join this debate.Amusing!

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    • Carl Williams

      What will cheap labor do for you?You are a Republican,Republicans want cheap labor so America can compete with,third world countries.Want to know why our borders leek like a screen door in a submarine.Competition.

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    • Gary Lehrer '77

      Carl, Republicans do not want cheap labor. Democrats want cheap labor. Jobs supported Obama and then used Chinese labor to build his products. Woody Allen wanted to make Obama king and he makes his movies in foreign countries. I don’t have the luxury of being able to support Obama and then conduct my business in a foreign country the way the Silicon Valley millionaires do who supported Obama. Republicans want to have productive labor right so we can pay a fair wage and still be competitive all over the world. The declared policy of Democrats is to make sure that manufacturing is off shored. Republicans are grieved over the loss of jobs that produce concrete products for sale. If you go into WalMart virtually everything is made in China. Policies of the Democrats have done more to promote cheap labor than anything Republicans have done. Carl, frankly, I am so tired of all the distortions, character assassination and mean spirited attacks on Republicans. We want to cut taxes, limit the size of government, reform the IRS code and reward people for being productive and entrepreneurial. We would like to have an environment where competition is free and fair and no one has the upper hand by making deals with the government. These principles are what created the most prosperous country in the world with the highest standard of living for all. Centralized planning has always failed and government bureaucratic rule is the worst form of management. Let’s just take Social Security for example. It is the largest legalized Ponzi scheme in the world and for the last two years government has defined the CPI in a way that excludes Social Security recipients from getting a deserved cost of living increase. Most people will get about 1% return for their investment. I’ve also read that when the law was passed the retirement age was set at 65, which was about the average life expectancy anyway. Now when anyone dares suggest there might be a better way we get accused of being mean, against elderly people or worse. Let’s take another example. the Federal Reserve was formed in part to make sure that we don’t have boom and bust cycles. Many economists blame the Great Depression on the exact actions of the Federal Reserve. Recently we have seen with Obamacare that in order to get it passed he had to bribe legislators with special deals and he made special exemptions for friends of the administration. Now that it has passed Obama has provided waivers to corporations, premiums continue to rise and I heard on the radio today that even more people are without health care coverage. Our positions as Republicans are taken to increase economic freedom, increase productivity and raise the standard of living. All I can that our government is doing will cause the exact opposite to happen. The recent $600 billion acquisition of Treasuries will only further debase the currency and widen the gap between the rich and poor. Carl, if you are really against social injustice and the against concentration of wealth and power you should join me in the Tea Party.

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    • Gary Lehrer '77

      Basically what you are saying is that the Democrats need to frame the debate. What about campaigning on principles, specific legislation and accomplishments? You are more about style than substance. You leave out that there was really no opposition to extending the unemployment benefits, what Republicans object to is just printing even more money. Also, let’s just dispense right now that the Democrats are the champions of the average person. The average person wants to work, have economic freedom and be entitled to the rewards of their hard work. Running a huge deficit, printing money and borrowing money just serve to debase the currency and causes inflation. The Democrats will never put an to that. This in effect becomes a regressive tax that hurts the poor and middle class. And if the Democrats ever manage to pass Cap and Trade energy costs will skyrocket, hurting the average person even more. The Democrats get plenty of money from Wall Street, Trial Lawyers, Environmentalists and Labor Unions. They totally failed to reform Freddie Mac and Fannie and fought every attempt to reign them in. The economic collapse that resulted you’d love to blame on Wall Street but it originated in Congress and it was helped along by Democrats who got plenty of campaign contributions by people who should be in jail. It’s a lot easier to frame the debate than come to grips with facts. If you really want transformational change, end corporate influence in government and have a just society then you need to join the Tea Party.

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    • Gene C

      Obama is no FDR. He has tried to reframe himself as a populist, but he lacks credibility. You can’t spend two years giving out $Trillions to Wall Street, corporate bailouts, with sweetheart deals for unions, health care providers, and other special interest groups, with a “stimulus plan” that was a slush fund for every liberal special interest group, and then claim you are on the side of “the people”.

      People are waking up to the fact that Big Government, Big Labor, and Big Business are in control, and when the chips are down, they’ll get Theirs at your expense. Like it or not, Obama has become the poster boy for Special Interest Government. He clearly does NOT represent the best interests of the average citizen, and the Tea Party opposition clearly demonstrates that.

      Obama will turn out to be more like Jimmy Carter, a failed President who lost touch with the people and lacked the competence to do anything more than serve the interests that elected him.

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    • James R

      In ’12, Republicans need only point to California and say,”Here is a wholly owned Democrat-run state, operating on Obamaesque principals of big government. Since California turned from Red to Blue, mainly through illegal immigration driven demographic transformation, it has economically and socially imploded. The things we need to do seem harsh, but they are necessary if we are to avoid the dismal fate of the Golden State. At this critical time in our nation’s history, ask not what your country can do for you, but what you can do for your country — in order to preserve it for your posterity.”

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    • Status Quo Not Exactly Optimal

      Now that the tyranny of the Republican minority — the ability of 1/3 of the California legislature to hold any action hostage – has ended with voter approval of majority rule, now that Democrat Jerry Brown has been elected governor, watch California roll.

      Even throughout the era of minority tyranny — the use of any means necessary to prevent a state budget from passing, to make sure that government fails — California has been an engine of the new economy. No? Think Internet and biotech and energy not derived from foreign oil.

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      • James R

        Watch your taxes soooaaar….

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        • Status Quo Not Exactly Optimal

          No Taxes: A secular belief system that has trumped traditional religious values, including the Bible’s plea to care about those less fortunate than you.

          Pandering: Running for office on a campaign to oppose taxes no matter what. Sort of like giving candy away.

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          • James R

            From Steven Greenhut at City Journal:

            “California is said to be a national trendsetter, but Tuesday night, it lagged behind the rest of the country. The state continues to move toward the financial precipice. It’s becoming more likely that California is, as former state librarian Kevin Starr put it, a “failed state.” For this, Golden State voters have no one to blame but themselves. I can only take comfort in H. L. Mencken’s words: “Democracy is the theory that the common people know what they want and deserve to get it good and hard.””

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      • Steve Shackley

        The comment: “Now that the tyranny of the Republican minority — the ability of 1/3 of the California legislature to hold any action hostage – has ended with voter approval of majority rule, now that Democrat Jerry Brown has been elected governor, watch California roll.” is typical of the ignorance of government by California electorate. The “tyranny of the Republican minority” may be over (it is not), but the tyranny of the California voter is alive and well.

        While Californian’s sanely elected Democrats to State government, they at the same time tied their hands to be able to govern. While it will now only take a simple majority to pass a budget, that budget can have no revenue generation, since it still takes 66.6+% to pass any revenue generating policy, and the Republicans still control over 34% of the Legislature. So, what will the budgets look like? The “budget” will be just as contentious and late as always, and/or will be a skeleton of what a decent budget should look like to provide decent public services.

        Most typical for California, they have taken away the very mechanisms that the Legislature and Governor have used to actually obtain a budget – you know that pesky instrument that pays for state services, education, higher education, roads, DMV etc. Now not only can California not raise taxes without a supermajority, it cannot raise fees to pay for the services Californians say they want – education, higher education, roads, DMV, etc. The California “I want everything for nothing” mantra may finally drive the last nail in the coffin of California. How long before it will be a third world country instead of the seventh largest economy in the world, and are Californians bright enough to notice?

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    • Bsmiles

      Ah yes – california’s problems have nothing to do with little things like propostion 13, where those forunate like my in-laws who purchased a home in marin county for less then $70,000 in the 60’s, watched it soar well past a million, yet only pay taxes at the $70,000 rate. Like many of their neighbors, spent all the equity and yet qualify for the tax break for the wealthy.

      In the 1880’s my family as Irish immigrants followed the procedures of legal immigration, their recorded stories of Ellis island indicate how difficult it was. It is my belief all nationalities are accountable, which means no short cuts or cutting in line.

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      • James R

        I own a home and pay $9000 a year in taxes. My city just raised its sales tax to the maximum amount legally allowed, 10.25%. My school district has sold so many bonds it needs special permission from the legislature to sell all the bonds passed by the dizzy voters; after it has, my taxes will skyrocket another $2000. And what are the services I get? I have a fire department big enough to put out the Chicago fire who scramble to one, maybe two real fires a year. I have an overstaffed police department which spends its days filling out dumb reports on property crime, while the BART police do most of the real policing. All in all there are 275 public employees in my town or 25K people, 60 of whom make over $100K. I pay more than my fair share in federal, state, and local taxes. Keeping government offices overstaffed and overpaid isn’t one of my priorities. When Prop 13 gets repealed, I leave, because it means California has now reached a stage where it is cannibalizing what is left of its middle class and senior citizen homeowners.

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        • Ella

          Yes, this is another middle class and senior citizen’s perspective but as mentioned earlier some middle class senior citizens wonder what will be left for the rest of us?

          Just because we were sleeping at the wheel and ran into the ditch does not mean that future generations must pick up the tab.

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    • TAO

      Thx bsmiles,
      I have a feeling David would like Obama to celebrate Halloween every 2 years and just “change” his core values along with his costume. Oh well….we’ll see what happens in the next election….more of the same, but I have some hope…..less politics :-)

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    • Bsmiles

      David comments make me smile, obviously he knows how everything works and supports the republicans stragey for governing our country.
      Now, we can rest assured that our country is in capable hands, because remember what great shape our country was in when Obama took office.

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    • Janis (CA)

      Not only does President Obama need to speak out the above message, but all committed democrats should be doing the same thing. Having campaigned for the first time, I couldn’t believe the apathy I found amongst democratic voters, and the reluctance of incumbents to find a common voice- we need to stand together and unite both regionally and nationally in order to keep the White House in 2012! Does anyone have a similar opinion? Can we make a start?

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    • david

      Obama’s problem,and potentially the reason why he won’t win re-election, is that he lacks the populists sensibility of either Roosevelt or Clinton. His message in 2008 was not “there is nothing to fear but fear itself” or “I feel your pain”, but rather. enigmatic manta–“Yes We Can.”

      Credit where credit is due. It was a clever/brilliant campaign strategy. Unfortunately Democrats and the country, the strategy for governing wasn’t as well conceived. I see no evidence that Obama is capable, or even interest interested in reinventing himself.

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    • James R

      It doesn’t matter if Obama gets reelected. He was a Manchurian Candidate on a mission to destroy free market capitalism and accelerate demographic change, and he has probably taken our country past the tipping point. What we are seeing in this sudden shift to Republicans isn’t a salubrious course correction, it’s just a sign that we have entered a period of extreme political instability, which can only end in a violent break up of the nation in 20 years or so. Our immigration policy has turned our country into a tower of Babel. Our nation has no common purpose or identity — the individual’s future is to compete for ever smaller amounts of space and dwindling government handouts in a grim diversitopia.

      [Report abuse]

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