Reading the book “The Forgotten Man: A New History of the Great Depression” by Amity Shlaes made me realize that there are similarities between the policies of FDR and the Obama administration.
Here is goes:
Under New Deal policies, FDR experimented with nationalizing utilities using the Tennessee Valley Authority. In 2009, the Obama administration in essence nationalized the car companies by buying stakes in both General Motors and Chrysler using bailout funds. Different methods, same effect of partial nationalization. In both cases, the administrations targeted industries vitally important to the economy.
In 1933, FDR signed into law the Agricultural Adjustment Act. The act, passed in an attempt to raise farm prices, took several thousand acres of productive farm land out of production . In effect, it raised food prices at a time when many were already having a difficult time purchasing food. In 2009, Obama signed into law the cash for clunkers program attempting to bolster demand in the failing auto industry. As part of the program, the federal government forced dealers to destroy vehicles turned in as part of the program thereby driving up prices on used vehicles. The program also distorted demand for new vehicles. As a result, good quality used vehicles became less affordable for those who need them most.
In 1935, FDR signed the Social Security Act into law. In 2009, President Barak Obama signed the Universal Healthcare Bill into law. Both require participation of everyone involved in the U.S. economy. While the social goals of both are enviable, the longterm funding issues of both are clear in the current debate surrounding social security.
One of the strongest parallels I find between both administrations is their reliance on “intellectual” elites. FDR had his famed brain trust, and today, the Obama administration consists almost entirely of academics and lifelong politicians. In fact, according to many sources (this is but one), the Obama administration has the least amount of public sector experience of any administration in recent memory.
In fact, I believe this is the most dangerous similarity of all. If one is continually listening to people used to dealing with theories but whom aren’t accustomed to actually thinking about real life consequences in the private sector, one will see no issue with endless experimentation. As result, the uncertainty created by such actions stunt business growth and job creation, keeping the economy broken for many people.
I’ve often heard the expression that the Great Depression wasn’t so bad, as long as you had a job. Obviously I can’t verify that claim, but as a woman who has been both employed and unemployed during this great recession, it rings true. Unfortunately, it is all about the economy.