Giving America The Business

President Obama recently noted:

"Gov. Romney's main calling card for why he thinks he should be president is his business experience. He's not going out there touting his experience in Massachusetts. He's saying, 'I'm a business guy. I know how to fix it.' And this is his business.

And when you're president, as opposed to the head of a private equity firm, then your job is simply not to maximize profits. Your job is to figure out how everybody in the country has a fair shot.  If your main argument for how to grow the economy is 'I knew how to make a lot of money for investors,' then you're missing what this job is about."

I have been reading "Freedom From Fear", historian David M. Kennedy' volume about the era between 1929 and 1945. He begins with the almost tragic figure of Herbert Hoover, who by his résumé as miner, engineer, millionaire, philanthropist, administrator of post WW I relief that was credited with saving many thousands of Europeans from starvation, as well as respected tenure as Secretary of Commerce, should have been a lock to deal with the economic crisis that eventually cost him his reelection in 1932. Hoover's failure was due in no small measure to his stubborn faith that the "free market" would self-correct. Businessmen knew best. As his predecessor, Calvin Coolidge, confidently said, the business of America is business. But by November, 1932 the country was nearly out of business. And so was the Republican party. 

For the next eight years, FDR fought to reignite the economy, reduce the disastrous unemployment which ran higher than 25% at the beginning and remained high despite the increasing optimism that caused his sturdy popularity. 

In 1940, FDR sought an unprecedented third term. He was thought to be politically vulnerable, not just for arrogantly challenging George Washington's two term limit precedent, but also because the New Deal had lost much of its glamour. The unemployment rate, though almost cut in half from its disastrous high in March, 1933, was still a horrible 14.5% having risen again midway through FDR's second term during the double dip known as the Roosevelt Recession. 

In foreign affairs, things were, if possible, even worse for FDR's prospects. Public opinion was still solidly isolationist, most Americans  reacting to the rise of Fascist Dictators in Europe with studied indifference. (Polls showed apathy or actual opposition to proposals to allow increased immigration from Europe - especially German Jews who were in grave danger from the Nazis). 

For years as Germany became overtly aggressive, FDR had made feeble attempts to educate the public to the threat, but had failed miserably. The issue tore apart his famous coalition that had carried him to his great wins. Progressives had turned so far inward after the disillusionment of WW I that they allied with the nationalistic Right to tie FDR's hands and prevent any attempts to join with other democracies to challenge Germany or Italy. A series of Neutrality Acts prevented the Government or private businesses from selling arms to any warring party.

But by the summer of 1940, The public was shifting. Poland had fallen, blitzkrieg in the west had lost Norway, Holland, Belgium, then France, and it looked like Britain would be next. The Atlantic suddenly didn't look wide enough after all. And the Pacific, too, was shrinking. Japan controlled most of China, and the newsreels vividly showed "the rape of Nanking" which was not a metaphor, but literally, reports of widespread vicious rapes and slaughter of civilians by Japanese troops. 

The leading Republican candidates, Robert Taft and Arthur Vandenberg, were rigid isolationists. The powerful king makers of the party, who in those days were mostly eastern establishment types, worried that the times had passed them by. Sensing a real chance to finally get rid of FDR and to halt the New Deal, they turned to Wendell Willkie. 

Willkie, educated as a corporate lawyer, had been president of Commonwealth & Southern, a holding company that controlled electric power utilities around the country. He had fought the TVA, the government power project that directly affected his investors, arguing strenuously, and to many, convincingly that private enterprise was preferable to government involvement. He was pushed by powerful publishers, including Henry Luce, whose Time magazine was influential. In those days, the national and local media was definitely not "liberal". Hearst, McCormick, and other media moguls (they owned radio stations too) were ardent anti-New Dealers, isolationist, Republican in editorials and biased reporting. The movie moguls, led by the most powerful, Louis B. Meyer of MGM, were also conservative Republicans. 

Willkie had his own problems that may sound familiar in 2012. In his past he had supported many New Deal programs, had been a vocal "internationalist" and was therefore viewed skeptically by the right wing of his party. 

In the campaign, Willkie moved to the right, accepting an isolationist stance forced by radicals of his party  FDR also denied any desire for involvement in the European war, promising never to send American boys overseas (neglecting to add the reasonable condition: "unless we are attacked"). Willkie did not oppose the conscription law that instituted a draft, for "preparedness". 

Both candidates suffered from an enthusiasm gap from traditional supporters. FDR pulled out the victory, but by a much smaller margin  than his wins in '32 and '36.  Political observers ascribed the vote to Willkie's weakness as a candidate and the tendency of voters to stick with the experienced avuncular leader with a probable world war looming. 

In his third term, FDR was able to persuade the country to prepare for the war, to provide aid to the allies, to activate American industry.  It was the federal government that financed and regulated the greatest economy the world had ever seen, won the war, secured the peace with the Marshall Plan, and produced the longest period of sustained prosperity ever. 

This year the Republican Party wants to reverse history, to bring us back into the Dark Ages.