Friday, January 29, 2010

FDR and Obama: Two Peas In A Pod

There are parallels between FDR and the Obama administration that are frighteningly similar.

The financial crisis of the 30’s in many respects is similar to today's, and the actions of both presidents mirror the other; if not their predecessors. Herbert Hoover in response to the financial crisis started the Reconstruction Finance Corporation to help the failing banks and industries that were under duress. George W. Bush did the same with TARP.

Barack Obama didn't have the luxury of time to criticize Bush for the dispensation of TARP money; yet he did vote for it. But his rhetoric was similar to FDR’s in the condemnation of big business, Wall Street and government spending by the existing administration.

FDR attacked Hoover for the, “most reckless spending and extravagant past that I have been able to discover in the statistical record of any peacetime government anywhere, any time.” Obama did the same with Bush and by extension his opponent John McCain; particularly on the amount of money that was spent on the war effort.

Once FDR was sworn in, he established the Emergency Banking Act which gave considerable discretion to the treasury without congressional oversight. This happened under Bush and continues under Obama.

FDR promised to balance the budget. Obama promised to cut the deficit. The former never met that pledge, and the later is exploding the deficit.

Roosevelt used the Reconstruction and Finance Corporation for political purposes. The RFC was used to fund newspapers, businesses, and causes that were favorable to the New Deal. Today’s democrats are talking about bailing out certain newspapers, and they used the stimulus bill to fund their personal pet projects and causes.

The policies of Roosevelt exasperated and prolonged the depression. His hostility towards businesses created a sense of uncertainty that stymied investment, expansion and the hiring of employees. He didn’t change his attitude until the outbreak of WWII when he realized he needed them. Many debate when the depression ended. A compelling case has been made that it didn’t end until after the war.

Obama seems to emulate the demagoguery of FDR. His demonization of businesses, industries, and the past administration has propelled him to the presidency. It seems he has more in common with FDR than we thought, right down to the radicals and communist sympathizers that infest their respective administrations.

If history has taught us anything, we are in for a wild ride. I guess we can expect the IRS and other federal agencies to harass political opponents. After all, that is what FDR did.

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