We Have Nothing to Fear But Fear Itself

When FDR took the oath of office,25% of America was unemployed and every bank in the country was closed. The nation was well-primed for his first 100 days of reform, having already lived through part of the Great Depression. My grandfather McColm lost everything he had and lived out his days as a piano-tuner. My wife's grandfather lost his farm. FDR was part of the wealthly WASP elite and seen as possessing the authority to deal with the situation. Although he was considered a traitor to his class, there was an underlying weight he was granted because of his class and wealth. Even so Koch industries, America's largest private oil company, created various citizens' group to denounce him as a socialist. Today, the heirs of Koch Industries have funded new grassroots organizations to denouce Barack Obama as a socialist.

President George W. Bush was told in March of 2008 by the Federal Reserve that the economy would vaporize but did nothing. By September 2008, Secretary of the Treasury Paulson went to the Hill and said that the banks had be bailed out immediately to the tune of $700 billion without conditions. He told the Senators and House members the situation was so serious that if they didn't act immediately, martial law would be declared. Republican candidate McCain kept claiming that the economy was on a sound footing. His economic adviser Phil Gramm had been instrumental in the 1990s for repealing the Glass-Steagall laws, which led to the disasterous speculations in derivatives. He was noted for saying that Americans just whined too much.

The economy, which was already in a recession, plunged in the months just prior and after the presidential elections. The true weight of the collapse has only begun to be felt in the last six months,putting pressure on President Obama because the full blame of the present economic woes has not been firmly placedon the past Administration. FDR could howl about Hoover because the American public felt the full brunt of the economic collapse. FDR also had larger majorities in Congress and his Senate did have to fear the threat of a filibuster.

Just image what would have happened if there was no FDIC to guarantee the money in your bank? Or the impact on senior citizens if there were no social security or medicare? Today's problems would have been worse by several magnitudes.

As we head to the State of the Union address, President Obama is supposed to be focusing on jobs,healthcare reform and a series of initiatives to help the middle class. From what I have read about the initiatives to help the middle class he sounds almost as policy-wonkie as Bill Clinton used to with his series of small initiatives. President Obama faces fierce headwinds for his banks reform and a backlash of confused populism. The stimulus bill, which economists from both parties claimed brought us back from the brink, is opposed now by a majority of Americans. Lost in the noise is how the stimulus bill saved the jobs of teachers, firefighters, and also gave the middle-class the largest tax cut in history. There are other saving graces for the bill like extending unemployment benefits, COBRA and covering another 2 million children with health insurance.

The democratic left is impatient for more and Republicans maintain their obstructionist stance. The Republicans actually believe they will reap large rewards in the November 2010 elections if they continue to oppose everything the President does. Perhaps, they will but at what cost to the country and fellow Americans.

Newsweek blames Barack Obama for leading with his brains and not his heart. Story after story is written about how he is not in in touch with the American people even though if you actually listen to what he has to say nothing could be further from the truth. They go on to say that this type of presidency will lead to Sarah Palin becoming President. And that my friends will be the end --just pull down the curtains.

But there is something else here. The late Douglas Brinkley wrote a book on how Washington was before WWII, a sleepy southern town. Ralph Nader wrote a piece today about how corporate interests put in several billion in buying over 1,500 lobbyists to push their plans for deregulation. It's interesting to consider what FDR could have done if an army of lobbyists and corporations opposed his efforts.

By the way I am delighted by the brains of our President. I find them refreshing. I also have a crush on Elizabeth Warren, who also has brains and makes the most sense of anyone on banking reforms.

What is re-emerging is a clear distinction between worldviews in our political system. One recognizes the requirements of a modern political economy that must transform itself for the challenges of the 21st century. The other mired in a pugnacious nationalism with a total contempt for the idea of government. I'm not sure you can square that circle.