Blast from the "Past" (Obama's 100)

When observing President Obama’s first hundred days one often sees parallels to the thoughts and actions from the first hundred days in the Franklin Roosevelt and Ronald Reagan presidencies. From the handling of public opinion to the engagement of opposition to the individual legislative acts the first one hundred days of President Obama’s administration likens itself more to Franklin Roosevelt’s administration than to Ronald Reagan‘s.
The first similarity between all three is their predecessors. For Franklin Roosevelt the greatest criticism of Herbert Hoover was the inaction and continuation of laisser-faire economic policy. This policy emphasized the separation of the government from the economy. This led to the economic collapse of the nation with only minimal relief effort placed on restoring the economic sector. Roosevelt was elected to act.
Ronald Reagan followed the disaster that was Jimmy Carter‘s administration. Aside from the gas rationing, declining economy, and massive inflation of the Carter administration the Iran Hostage Crisis showed to Americans that our military was weak and our standing in the world not respected. The hostage crisis lasted over a year at our embassy in Iran and Carter seemed to favor inaction in American’s eyes. Ronald Reagan was elected to act.
President Barack Obama followed George Bush’s presidency. Like Hoover’s and Carter’s presidencies, George Bush was one of the most unpopular in history. He was seen as ineffective for seven years in two wars, and for the last two years of his presidency he was seen as slow acting on the economic downturn that was often compared to the great depression. Barack Obama was elected to act.
These three presidents also had another connection other than the conditions that their predecessors left for them. The policies that they lay down in the first hundred days of their administrations stand out as a fundamental change from the foundation of government policy they each inherited from each other. It is in this way that President Obama is most like Roosevelt.
This is because Roosevelt entered office and immediately extended a bank shutdown holiday after his inauguration. This was not only a prevention of a collapse of the banking system due to the “run on the bank” events but also a successful alteration of a fundamental policy that had minimal government involvement in the economy. This simple act, although only lasting for three days after his inauguration, changed the way government looked at the economy. Now the government policy was to rescue the economy instead of allowing the businesses to recover on their own. The New Deal policy replaced the laisser-faire policy which was in place since the end of the Reconstruction era.
It was the speed with which this action was taken that also set the pace for Roosevelt’s first hundred days. The New Deal, a series of 15 legislative government actions that created new government programs intended to create jobs and end the depression, was passed within the first hundred days. The New Deal created a dizzying number of programs, several of which ended up being declared so interventionist that they violated the Constitution. Many were intended, such as the WPA, TVA, and others, to provide jobs, often temporarily in building infrastructure such as power plants, dams, and bridges. This was one of the first large scale government attempts at government job growth in order to lower overall unemployment rates during peace time. There were also the regulatory agencies such as the FDIC and SEC which were to allow the government to regulate the businesses from causing unintended job losses.
It is this approach that led to the increased debt of the government as it needed to pay for the programs. The resulting policies combined taxes, bonds, and printing money in order to thwart the costs. This policy declared (theoretically) that the recovery of the economy was less important than the easing of personal suffering. This approach to government intervention was in place until Ronald Reagan took office.
Ronald Reagan observed the forty years of Roosevelt’s taxing for spending on government involvement policies resulting in a devastating economic situation during the Carter administration. The inflation rate was over 10% when Reagan took office. In order to limit government involvement Reagan had a different approach to the first hundred days.
Instead of proposing legislation that would have removed the programs created by Roosevelt, Reagan pushed for a major reduction of taxes. Most of his first hundred days was spent trying to get the Economic Recovery Act of 1981 passed. It did not pass until after the hundred days were up. Despite the slow appearance of this action, the negotiation and formation of this policy during his first hundred das would alter government involvement in the economy once again.
The mandatory reduction of federal taxes proposed would cripple the government’s ability to pay for the immense spending programs. It also did something else; it improved the economy in the long run by keeping money in the commercial sector instead of in the welfare and government sector.
Then the programs could not be revived to operational levels without deficit spending or raising taxes. For those who supported the Roosevelt economic government policy the ability to propose increases in taxes or deficit spending was now the topic instead of the possible benefits of such programs. Reagan used that to maintain his reduced taxes during his own deficit spending later in his administration. In addition the recovery of the economy was now seen as the best way to ease personal suffering instead of government action.
This policy was seen as the best way to go for twenty years. It was renewed with the 2001 and 2003 tax cuts by George Bush. While this led to (perhaps coincided with) the longest continuous growth of American jobs in history, many believe it was ineffective at preventing the economic collapse in the last year and a half of the Bush administration. Barack Obama won the election vowing to remedy the economy and end the Reagan economic policies.
Already having the Troubled Asset Relief Program in place, Barack Obama had the door open for government intervention in the economy to begin. The administration had the government become part or full owners of automobile manufacturers, banks, insurance companies, and mortgage lenders in the first hundred days. The proposals for government intervention in airline industries and newspaper companies was not accepted.
The spending had started but now the question was how to pay for it. A proposal to crack down on overseas tax havens for companies was proposed in the last few days of Obama’s hundred days and included was an implementation of taxes on profits earned in other countries for companies and their subsidiaries operating overseas. The expansion of the government into these industries with the tax on business was a clear signpost for the return to the government intervention of the Roosevelt era. In this way Obama had reversed the policy of Reagan. The reversal of policy is not only evident in their first hundred days legislatively. The truth of their intentions is evident in their speeches.
Roosevelt followed a man who infamously said that “[poverty could be gone within our lifetimes.]” Roosevelt approached poverty as a chronic disease. Something that required a long-term government program to solve. Hoover was of the mind set that it was the free market boom known greatly in the 20s that would end poverty; not a government program. Franklin Delano Roosevelt in his first inaugural speech on March 4, 1933 said “This great Nation will endure as it has endured, will revive and will prosper … the rulers of the exchange of mankind's goods have failed …Our greatest primary task is to put people to work … It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war.” In this he made his commitment to involving the government in the nation’s economy and not in the hands of businessmen.
Reagan spoke in his first inaugural address on January 20, 1981 saying “These United States are confronted with an economic affliction of great proportions … Those who do work are denied a fair return for their labor by a tax system which penalizes successful achievement and keeps us from maintaining full productivity … But great as our tax burden is, it has not kept pace with public spending. For decades, we have piled deficit upon deficit, mortgaging our future and our children's future for the temporary convenience of the present … In this present crisis, government is not the solution to our problem.” There is no doubt that, like Roosevelt, Reagan knew the nation’s problem. His plan was to go against the decades of spending, the Roosevelt policy of larger government. It is in this statement that we all see the change. Roosevelt promoted government, Reagan devalued it. Reagan was going directly against Roosevelt. Obama proved to go against Reagan.
Barack Obama in his first inaugural address on January 20, 2009 said “Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some … Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many…The state of our economy calls for action, bold and swift, and we will act—not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age…The question we ask today is not whether our government is too big or too small, but whether it works…this crisis has reminded us that without a watchful eye, the market can spin out of control.” In this way the business is again vilified. Reagan’s policy for limited government programs is denounced as leading to this utter failure of a nation. The government will now have programs to cover everything it seems.
Obama’s speech never mentions the banks, or the car manufacturers, or the insurance companies. As of his first hundred days, the roads and bridges is all that is committed to final proof through stimulus bills. Obama’s New Deal of sorts contains ten major pieces of legislation in his first hundred days. Now the question to ask is how long will it be before another Reagan shifts the nation’s role of government once more?