Over the past couple of weeks, as President-elect Obama has proceeded with “deliberate haste” in preparing his transition, a lot of speculation in the media has focused on Doris Kearns Goodwin’s “Team of Rivals,” a book that Obama has described as one of his favorites. “Team of Rivals” details Abraham Lincoln’s appointment of several of his major political rivals — Samuel Chase, William Seward and Edward Bates among them — to his Cabinet and his masterful ability to command the talents and egos of that formidable group. It is no secret that the next president looks to Lincoln for inspiration. Indeed, Obama sees himself as the man to heal the scars of the 1960s “culture wars” that have never fully healed. While the culture wars have been considerably less bloody than the one Lincoln had on his hands (though there may be something to be said for giving hippies and Christian fundamentalists rifles and Minie balls and having them duke it out at Gettysburg), recent elections have shown that battles fought over Vietnam and Roe v. Wade continue to have emotive and divisive power. If Obama can, to paraphrase Lincoln, help to “bind up the nation’s wounds” in this long-running political feud, that would be very salutary.
However, as the voters so clearly demonstrated on Nov. 4, Obama is not going to the White House to make Americans forget the 1960s. He rode to victory on a wave of economic uncertainty, which, though it may have benefited his campaign, will have to be addressed in governing. If Obama can steer the economy through the current crisis and get the country on stable ground to face the challenges of the rest of the 21st century, he will be remembered among the greatest presidents. In doing so, the legendary president that he will primarily want to emulate is not Lincoln, but Franklin Delano Roosevelt.
Clearly, the crisis of 2008 is hardly of the scope that FDR faced in 1932. We have not been in recession for four years, and our unemployment rate is a far cry from that of the year Roosevelt took over, when a quarter of the workforce was out of a job. And of course, it will be argued that FDR’s Keynesian spending policies did not fully jump-start the economy to full employment levels — it took World War II to do that. But even FDR’s detractors recognize that his ambitious New Deal programs, like the Works Projects Administration, the Tennessee Valley Authority and the Social Security Act, revived the economy in important ways and provided a crucial safety net for our society’s vulnerable members. Even more than his legacy of legislation, however, FDR’s greatness lay in the aura he projected to the American people. He demonstrated to the citizenry that the government was concerned with its well-being and was taking decisive action towards ameliorating economic conditions. He was irrepressibly optimistic and communicated his confidence that, with the necessary changes, American capitalism and democracy could survive even the stiffest of economic tests.
Adopting those two elements of FDR’s governing style — decisive action and persistent optimism — will be crucial to Obama’s success. For, while our economic straits are surely bad, the crisis of confidence in economic institutions is equally important to confront because it exacerbates the other problems. Unsurprisingly, as Bear Stearns, Washington Mutual and AIG have gone down the tubes, and companies that held sub-prime mortgage assets have gone belly-up, Americans (and people throughout the world) have lost trust in borrowing and lending institutions, without which the global economy simply cannot function. Financial institutions’ plummeting credibility and indecisive responses from governments (especially our own) have caused mass sales of stocks and certain currencies. The resulting global decline in consumer sales raises the prospects that countries and companies will default on their debt in the near future. To keep matters from getting much worse, Obama, like FDR, will have to take firm action to prevent further collapses, while convincing Americans (and economic actors worldwide) that the structural issues of regulation and accountability that led to the collapse are being addressed, making it safe to buy, borrow and lend in large quantities again.
The situation in Detroit will be a crucial early challenge confronting the Obama administration. If GM, Ford, or Chrysler go under, as Thomas Friedman points out in his New York Times Op-Ed “How to Fix a Flat,” the effects on other industries, millions of workers and the economy in general would be devastating. Obviously, these companies (GM especially) need to be salvaged, and for Republicans in Congress and the Bush administration to be taking no steps toward doing so is criminal negligence. However, I would echo the arguments of Friedman and Paul Ingrassia of the Wall Street Journal that the Obama administration should use the leverage it will have over the auto industry to force it to change fundamentally. As they suggest, that means new leadership, new operating principles, and a commitment to building fuel-efficient vehicles that run on renewable energy. The appointment of a centralizing auto czar by Washington would not be a bad idea either. Conservatives might holler about socialism, but I think Americans would view such drastic action as mandating much-needed accountability. It would also demonstrate that the Obama administration’s vision of corporate responsibility involves more than giving a check and a wag of the finger to the guys who screwed the business up in the first place (see how well that worked with AIG). While a bit of nationalization might be controversial, it’s the sort of dramatic measure FDR might have used, and could just work.
As for inspiring confidence in his administration’s ability to cope with the tasks allotted to it, Obama has done well so far. His victory speech was masterful, and his transition operation has, thus far, proven to be organized, disciplined and competent, a welcome contrast to the disarray of the Bush White House. Obama’s selection of Rahm Emmanuel as Chief of Staff and his flirting with the idea of Hillary Clinton as Secretary of State show that, like Lincoln and FDR, he is comfortable presiding over a team of major political figures. Crucially, he has demonstrated a cool head in confronting the prospect of the crushing responsibilities he will soon assume. He has been stalwartly confident in public that the US will weather this economic storm, and emerge from it stronger. The American people have responded, showing considerable approval of how Obama is handling the pressure, and confidence that he will perform well in office.
Ultimately, assuming Obama continues to make exemplary appointments (especially to economic posts), crafts an ambitious legislative agenda to combat the crisis and displays FDR-like purposeful optimism in speaking to the citizenry, Americans will react with increasing faith in the economy, and patience if real improvements are slow in coming. They understand that the challenges confronting the new administration are vast, because the current one’s failures have been so monumental. It helps the Democrats, of course, that the GOP is responding to its repudiation by forming a circular firing squad, failing to brainstorm new ideas — not banishing Sarah Palin to her igloo, never to be seen or heard from again. However, the onus remains on Obama. He has already gone a long way toward convincing the American people that, after eight years of puerile permanent campaigning and cultish adherence to free-market mantras, the grown-ups are back to govern creatively and competently. If he can manage the economy and steer the ship of state as clear-headedly and ably as he has directed his campaign and transition, he will carve a place for himself in history.