November’s presidential election will be a re-run of 1932, but with one significant difference. Instead of Franklin Roosevelt challenging Herbert Hoover, 2012 has a Herbert Hoover look-alike against a pale impersonator of FDR. A Mitt Romney victory will give us the same failed policies that muddled us through the Great Depression’s early years. Re-election of Barack Obama only prolongs his liberal version of muddling.
By RALPH SHAFFER
November’s presidential election will be a re-run of 1932, but with one significant difference. Instead of Franklin Roosevelt challenging Herbert Hoover, 2012 has a Herbert Hoover look-alike against a pale impersonator of FDR. A Mitt Romney victory will give us the same failed policies that muddled us through the Great Depression’s early years. Re-election of Barack Obama only prolongs his liberal version of muddling.
Roosevelt won in 1932 because it was obvious that the Republican president was unwilling to take the forceful steps necessary to bring the nation out of the doldrums of massive unemployment and economic stagnation. Romney may win in 2012 because Barack Obama failed to follow the aggressive practices instituted by FDR to reduce unemployment and put private business back to work.
But electing Romney will not initiate the recovery that followed Roosevelt’s inauguration. Instead, the Republicans still believe, despite the evidence of history, that unregulated capitalism is the surest way to recovery and prosperity. They apparently slept through that section of American history that dealt with the 1920s and 30s.
The last three years of Hoover’s only term are an image of what four years of a Romney administration would look like. Hoover, like his modern counterpart, was too committed to conservative ideology to deal effectively with the severe economic crisis facing the nation.
To Hoover, a balanced budget was essential. He managed that only in the early part of his administration. By the end of his term even this advocate of fiscal responsibility had resorted to deficit spending.
Romney talks of a balanced budget but only at some point in the future. For the next four years, regardless of which party controls the presidency, the national debt will increase by a trillion dollars each year. Even Romney will need a constantly rising debt ceiling. If he takes us to war in Syria, Iran or Yemen, his deficits may exceed Obama’s.
A balanced budget in the midst of our economic crisis, unmatched since the Great Depression, is foolhardy. Americans had no qualms about deficits as a means of fighting World War II. The Great Depression and the current Great Recession are the economic equivalents of that war.
Obama’s failure has been his timidity in using deficit finance to fight this economic catastrophe. Romney simply scorns its use.
In support of their balanced budget demand, Republicans enjoy comparing governmental and family budgets. They argue that families have to live within their income, spending no more than they take in. Rot!
A family purchasing a home or car does so on borrowed money. As long as the family meets the mortgage or makes car payments while still maintaining a decent standard of living, there is no problem. But the millions of Americans who in the last four years have lost their homes to foreclosure or had their cars repossessed demonstrate that the government budget isn’t the only one that relies on deficits. But just as most families can manage their debt, so can government.
The Romney plan would emulate Hoover’s initial effort to cope with the depression: cut spending. We have seen what happens when European banks, through the threat of withholding loans, imposed force austerity on Greece first and very likely on several other struggling nations. Massive unemployment followed, caused by dismissing government workers and layoffs in the private sector.
For the next four years, no matter who wins, America faces a prolonged slump that will rival in length the hard times of the 1930s. Missing will be the hope that grew with FDR’s firm handling of the crisis he faced. Instead, the next presidential term will be marked by a growing despair as whichever candidate wins is unable to cope with the task ahead.
Ralph E. Shaffer is professor emeritus of history at Cal Poly Pomona (Calif.) and an occasional contributor to Stephens Media.