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The Return of the Fireside Chat

President Obama's Address to the Nation on 24 February was a conscious attempt to evoke Franklin D Roosevelt's fireside chats during the Great Depression. The rhetoric was similar, the concept of expanding the reach of the Federal government was the same but are we left wondering if Obama is trying to do too much, too soon and all in the wrong way?

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President Obama's Address to the Nation on 24 February was a conscious attempt to evoke Franklin D Roosevelt's fireside chats during the Great Depression. The rhetoric was similar, the concept of expanding the reach of the Federal government was the same but are we left wondering if Obama is trying to do too much, too soon and all in the wrong way?

During his election campaign, he advocated bipartisanism. His first 100 days in office have demonstrated something different. His Tuesday night plan involved raising taxes on the wealthy, revamping health care and reversing climate change. While, in fairness, this shouldn't come as a shock to the Republican leadership, the effects of an ideological rather than pragmatic President are beginning to ripple across Capitol Hill.

There is no doubt that America needs to be proactive about their economy. Obama's $787bn stimulus package, including a housing program and a bank rescue operation, was designed as a quick-fix for the economy. However, with consumer confidence at an all-time low and Ben S. Bernake, the Federal Reserve Chairman, announcing that the recession may continue into 2010, the future looks increasingly grim. Already, Obama has enlarged the country's economic output by 5%. His treasury department is about to enact the second phase of a program that will increase government control and ownership of some of the biggest banks. Taxpayers are about to become some of the auto-makers biggest creditors. Partisan rhetoric aside, this sits uneasily with Mr Obama's plans to revamp the health-care system, balance the budget, reform public schools and rewrite the tax-code.

The problem is that, already, we are seeing signs that Obama's ambitious agenda is overwhelming the White House Economic Team, the Treasury and other federal agencies. Congressional aides are in a state of panic as they struggle to deal with such a wealth of information so quickly. Congressmen don't know what they're voting on until they are informed in the cloakroom, minutes before the roll-call bell goes - hardly democracy at its best. While a Democrat President cannot be criticised for dealing with economic crisis like a Democrat, it does seem that Obama's current political agenda is on the path to provoking Republican filibuster and potentially even gridlock.

Already, Obama he is throwing his considerable political capital around an attempt to bend the system to his will. As he turns to emergency powers, Obama's strategy is one of an increasingly desperate President. As his disapproval rates climb, one has to wonder how long his ideological reign will last as the economy worsens.

Roosevelt became President in March 1933 after the Stock Market had collapsed and the country was firmly entrenched in a depression. There was little he could do to make things worse. However, Obama arrived on the scene as the average American was still reasonably confident in the banks and private sector as a whole. Most economists agree that we have not yet hit rock-bottom; things will get worse before they get better.

Obama is setting himself up for failure. For the first time in most students' living history, a President has the mandate and ideology to really change the state of American politics. But by throwing money at the situation, Obama risks alienating those on the Right and the substantial block of moderate representatives lost in the purple sea of the United States Congress. At the moment, the public is desperate for a solution but Obama and his Economic Team must consider the long term affects of their decisions. He can't balance the budget and increase spending, he can't blame the banks and teach people personal responsibility; it's impossible to renounce Congress for their lack of oversight and expect their support. Obama must pick a side before the Republicans force him to.

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2 Comment

Raf Sanchez Posted on Saturday 16 Nov 2019

Camilla,

Interesting and thought provoking article. As you might expect I have a couple of issues with it.

Let's start with bipartisanship. I'm consistently amazed that people use the fact that not a single House Republican, and only three Repubican senators, voted for the stimulus as evidence that Obama is behaving in a partisan, or an ideological, way. The American economy is gasping for oxygen. Any credible economist will tell you that a fiscal injection is necessary to avert full-on economic collapse. And yet the GOP were perfectly happy to dig in and try to grind proceedings to a halt on the grounds of an outdated ideology of 'government-is-bad-always'. When they did deem it worthy of their time to get involved in the debate all they could was bang on endlessly about the need for ever greater tax cuts. 1) The single largest portion of the $787bn is in tax cuts, roughly $282bn or over a third 2) the Republican created deficit is not going to be shrunk, let alone solved, nor any sort of stimulus package paid for, by tax cuts 3) tax cuts for the wealthy, as advocated by the Republicans don't stimulate the economy. Rich people spend a much higher proportion of their money on foreign goods and they are also more likely to just put in the bank. Refusing to vote for the bill until there's nothing in it but tax cuts? That's partisan.

Obama expended a huge amount of political capital on trying to woo Republicans over and they threw it back in his face. He made regular consultation visits to the Hill, upped the proportion of tax cuts, shaved nearly $100bn off the original level of spending and ignored extremely credible voices, like economist and Nobel Prize Laureate Paul Krugman, who called for a much higher level of spending. All of this in an attempt to reach a compromise. He nominated Republican Senator Judd to the position of Secretary of Commerce, again only to have it thrown back in his face.

If you can give me even one example of the GOP leadership being prepared to act in a bipartisan way, I'll be impressed.

All of which is a (very) long way of saying: I don't agree with you that it's Obama who is being partisan, nor that it's his policies that are likely to lead to grid lock. The Republicans aren't interested in helping.

Much more briefly:

"His Tuesday night plan involved raising taxes on the wealthy, revamping health care and reversing climate change." I would hope we can agree the last two are hardly ideological. As for raising taxes - he said he would during the campaign, he has a mandate to do it, taxes are no higher now than they were under Clinton. That the Republicans are unhappy with it is unsurprising but hardly a sign that he's a raging partisan.

Disapproval ratings: they're on 24%. I think we can live with that and I hardly think it's a sign of a desperate president. 67% approve in general and 57% of those who watched his speech feel more confident in his ability to manage the economic crisis http://www.gallup.com/poll/116125/Obama-Speech-Bolsters-Confidence-Americans.aspx Next question.

"However, Obama arrived on the scene as the average American was still reasonably confident in the banks and private sector as a whole." Really? If you're worried that 24% disapprove of Obama, I can promise you it's a lot worse for bankers. Economic confidence is at zero, let's not pretend otherwise.

Balancing the budget: I'm sceptical also, but cutting taxes, as the Republicans want, is absolutely not going to do it.

Long-term: I think there are few governments in the world who are taking as long-term a view as the Obama administration. Investing in green technologies, education to help Americans compete in a globalised economy, upgrading infrastructure, beginning to reform Medicare and Medicaid (something that no previous administration has been brave enough to do even though the cost explosion that is coming with the Baby-Boomers has been there for everyone to see since the 1950s) that is the long-term. And it's going to cost money.

Will the stimulus package work? I have no idea. But if, as you seem to be advocating, Obama did nothing until he had the GOP on board for fear of being called 'ideological' or 'partisan', we'd be nowhere at all.

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terry_freeman Posted on Saturday 16 Nov 2019

The parallels with Hoover/FDR are eerie, aren't they? We were told that Hoover's "laissez faire" policies "caused" the Depression, and FDR's "bold leadership" somehow "helped" America. Today, it's a repeat - Bush's "laissez faire" and Obama's "bipartisan leadership."

Trouble is, it's all false. Hoover was the most interventionist peacetime President America ever had. FDR's policies were continuations of the same themes. Those interventions upset entrepreneurs and delayed recovery for years.

Bush's $700 bailout and other programs were anything but Laissez Faire. Obama's "stimulus" programs continue the same failed policies. Obama rightly faults Bush for doubling the federal deficit, but then proposes to double it again.

I hope the American people are too smart to fall for the same trick twice.

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