Anthony J. Badger: Can Obama lead another New Deal?

Roundup: Historians' Take

[Anthony J. Badger is Paul Mellon Professor of American History at Cambridge University and Master of Clare College. He is the author of "FDR: The First Hundred Days," "North Carolina and the New Deal" and "The New Deal: The Depression Years, 1933 --1940."]

... The situations in 1933 and 2009 do have similarities. In both cases, there is a discredited outgoing administration, a financial crisis, a lame-duck Congress which finds it difficult to act, a new President who is a talented communicator and has a popular election victory and large congressional majorities.

But 1933 was also very different from the situation that will face Obama in January. The Depression had been going on for four years. Between a quarter and a third of the industrial workforce was out of work. Farmers, who were a third of the workforce then, were desperate.

There were none of the stabilizers that exist now to protect ordinary Americans: no bank deposit insurance, no social security and the welfare and relief resources of private charities and local and state governments were exhausted.

The day FDR took office, the banks in New York and Chicago closed. The whole U.S. banking system ground to a halt.

The result was that Congress was desperate for bold leadership. Constituents let their representatives know that they expected them to support the president as if the country was at war.

When FDR proclaimed a national bank holiday and worked to reopen the banks, Republicans and Democrats supported him. The House passed the banking bill -- and they only had one copy of it -- in 43 minutes.

When Roosevelt addressed the nation on Sunday, March 12, it was a tremendous gamble. He told Americans it was safer to put their money back in the banks reopening the next day than to hide it under the mattress.

They believed him and the next day the money flowed back into the banks that had been allowed to open. There was no Plan B: If people had continued taking money out, absolute disaster would have followed.

Despite four months to prepare -- FDR was the last president to be inaugurated in March -- Roosevelt had no great template to put into effect when he took office. He seized opportunities. He used the banking proposals of holdover Republican officials at the Treasury and the Federal Reserve.

He proposed the National Recovery Act only after Congress threatened to pass share-the-work legislation that would have mandated a maximum 30- hour work week.

He only brought Harry Hopkins to Washington to set up a national relief program after existing appropriations relief allocation to the states ran out. He did not favor bank deposit insurance but accepted it. He accepted large public works spending reluctantly....

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