Michael Hirsh: We wanted FDR. But halfway through his first 100 days, it's clear the 44th president's job is actually harder.
[Michael Hirsh covers international affairs for Newsweek, reporting on a range of topics from Homeland Security to postwar Iraq. He co-authored the November 3, 2003 cover story, 'Bush's $87 Billion Mess,' about the Iraq reconstruction plan. ]
As the financial markets pause at the edge of the abyss, deciding whether to back away, we should take a moment to mull over all the Blame Obama rhetoric that's been building in recent weeks. Even some who were the president's most fervent supporters on Inauguration Day are now saying plainly that, halfway through his first 100 days, Obama hasn't delivered on the biggest thing that he promised. He and Treasury Secretary Tim Geithner pledged an overwhelming and powerful response to the crisis—an economic Powell doctrine that would restore confidence in the markets. Instead, we've had a hesitant if steady dribbling-out of new programs. What Obama has done is impressive in many ways, but it's hardly a New Deal.
The mood is summed up by Robert Johnson, former chief economist of the Senate Banking Committee and a former managing director of George Soros's firm. Johnson, who is well connected both on Wall Street and in Democratic Party circles, says some top banking types who knew Geithner and Larry Summers beforehand were so confident of that dynamic duo's ability to get on top of the crisis that they actually bet on a market turnaround when Obama took office. Many of these more sophisticated financiers, Johnson says, are "sorely disappointed" today. Also much poorer, given that the Dow has plunged about 20 percent since Obama's inauguration.
The New Deal is shrouded in myth—and considerable controversy—but there is little doubt that FDR swiftly restored confidence after he took office on March 4, 1933. He immediately announced a "bank holiday" and began a series of fireside chats. As Liaquat Ahamed writes in his wonderful new history, "Lords of Finance," the nation's mood shifted almost overnight: People were still lined up outside the banks, but they'd gone from running to returning as depositors. When the banks opened a week later, the Dow Jones average rose 15 percent in the first day of trading. It soared 75 percent (granted, from rock bottom) in the first 100 days of FDR's presidency. The problem today, 50 days into the Obama administration, is that despite the fitful market jumps this week, no dramatic change of mood has occurred. The bottom-line issue across the landscape—on Wall Street, on Main Street, in boardrooms and households—remains a lack of confidence. The entire financial system has failed, and until people start believing in the system again, credit will only dribble out, not flow freely.
That may be changing, slowly....
Read entire article at Newsweek
As the financial markets pause at the edge of the abyss, deciding whether to back away, we should take a moment to mull over all the Blame Obama rhetoric that's been building in recent weeks. Even some who were the president's most fervent supporters on Inauguration Day are now saying plainly that, halfway through his first 100 days, Obama hasn't delivered on the biggest thing that he promised. He and Treasury Secretary Tim Geithner pledged an overwhelming and powerful response to the crisis—an economic Powell doctrine that would restore confidence in the markets. Instead, we've had a hesitant if steady dribbling-out of new programs. What Obama has done is impressive in many ways, but it's hardly a New Deal.
The mood is summed up by Robert Johnson, former chief economist of the Senate Banking Committee and a former managing director of George Soros's firm. Johnson, who is well connected both on Wall Street and in Democratic Party circles, says some top banking types who knew Geithner and Larry Summers beforehand were so confident of that dynamic duo's ability to get on top of the crisis that they actually bet on a market turnaround when Obama took office. Many of these more sophisticated financiers, Johnson says, are "sorely disappointed" today. Also much poorer, given that the Dow has plunged about 20 percent since Obama's inauguration.
The New Deal is shrouded in myth—and considerable controversy—but there is little doubt that FDR swiftly restored confidence after he took office on March 4, 1933. He immediately announced a "bank holiday" and began a series of fireside chats. As Liaquat Ahamed writes in his wonderful new history, "Lords of Finance," the nation's mood shifted almost overnight: People were still lined up outside the banks, but they'd gone from running to returning as depositors. When the banks opened a week later, the Dow Jones average rose 15 percent in the first day of trading. It soared 75 percent (granted, from rock bottom) in the first 100 days of FDR's presidency. The problem today, 50 days into the Obama administration, is that despite the fitful market jumps this week, no dramatic change of mood has occurred. The bottom-line issue across the landscape—on Wall Street, on Main Street, in boardrooms and households—remains a lack of confidence. The entire financial system has failed, and until people start believing in the system again, credit will only dribble out, not flow freely.
That may be changing, slowly....