Time for an FDR moment
We established its basic contours in 1789, half forgot about it until the Civil War and Reconstruction, practically abolished it during the Gilded Age, remembered it again during the Depression and then, during the reign of Reagan the Great Communicator, forgot about it once more.
The government, I mean. It comes in handy in times of crisis, but somehow we just keep misplacing it.
And now, with our economy teetering, we’re frantically searching for it again, finally hauling it out from the basement along with some dried-out duct tape and leaky batteries. But after all those years on the shelf, don’t be too surprised if it’s a little rusty.
On Monday, the House voted down the proposed $700-billion financial bailout. The Dow plummeted, and congressional negotiations collapsed. Though no one liked the bailout plan, no one appeared able to offer a viable Plan B.
But what did you expect? Liberals and conservatives alike suddenly want the government to fix our broken economy by doing something big and fast -- but Congress long ago lost the habit of thinking big and moving fast. Since the Reagan era, prevailing leadership ideologies have encouraged members of Congress to think small, slow and stupid -- to forget about regulating, to forget about governing and occupy themselves instead with trivia: debates about constitutional amendments to ban flag burning, for instance.
So even as many outside economists began to argue that there were dramatically different rescue packages that could be cheaper and better, congressional leaders of both parties seemed unable to do more than tweak the original package.
That’s a shame, because this is a time for thinking big.
Some sort of bailout package will pass, but that should be only the beginning. A bailout is an emergency system save, designed to prevent a catastrophic freeze. But after hitting “save,” it’s time for the United States to do a complete system reset.
If we’re willing to reexamine our history, we might get some good ideas about what a reset might look like. Democratic vice presidential nominee Joe Biden recently generated bipartisan giggles when he urged political leaders to learn from Franklin D. Roosevelt. (“When the stock market crashed, Franklin D. Roosevelt got on the television and didn’t just talk about the, you know, the princes of greed,” Biden told CBS News anchor Katie Couric, apparently forgetting that Herbert Hoover was still president during the Crash of 1929 and that Americans had no TVs then.) But Biden’s basic point is well taken: We could learn a lot from FDR.
Taking office during the depths of the Depression, FDR didn’t just talk, and he didn’t just tinker. He launched the New Deal, the ambitious package of relief, reform and recovery programs that most economists credit with helping steer the nation back to prosperity.
FDR wasn’t afraid to experiment, and some programs ended up on the scrapheap. But many proved to be crucial investments in America’s future. Tighter New Deal-era regulations helped keep our financial system stable for decades. The Federal Deposit Insurance Corp., which guarantees the safety of our deposits when banks fail, was created. So was the Social Security Administration. (And hasn’t this week made you glad the GOP didn’t succeed in privatizing Social Security?) Programs such as the Civilian Conservation Corps and the Works Progress Administration helped stabilize wages and stimulate employment. They also left us a long-term legacy of roads, dams, parks, schools and electricity grids.
But over the last 30 years, that legacy has been badly neglected. Our infrastructure is decaying, our educational system is in disarray and our healthcare system is scandalously poor. Today, we can throw as many billions as we want at Wall Street, but in the long run, if we don’t push the reset button and get serious about spending on the true fundamentals of our economy -- people, infrastructure and knowledge -- the bailout can’t save us.
FDR knew what most small-business owners instinctively understand: If you want to make money, sometimes you have to spend money first. Yes, we should cut wasteful government programs -- but this is no time for a spending freeze, as John McCain has proposed. This is a time for renewed public investment in infrastructure, technology and education.
That’s the choice: We can bail out Wall Street but then put the government back on a shelf. Or we can tell our leaders we want our government back.
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