In his address Thursday to a joint session of Congress on Capitol Hill, President… (Larry Downing, Reuters )
Is Barack Obama finally channeling his inner FDR?
To many commentators, the president's jobs speech last week evoked Harry "Give 'em Hell" Truman's 1948 reelection campaign. But there were stronger reminders of the politics of the '30s than the '40s.
Obama spoke up for public works construction as both stimulus for now and investment in the future, proposing $90 billion to renovate schools, repair bridges and roads, and fund an infrastructure bank — echoing such New Deal work-relief programs as the Works Progress Administration.
Like Franklin Delano Roosevelt, he drew a bright line between the benefits flowing to the privileged and the struggles of ordinary Americans.
Obama: "While most people in this country struggle to make ends meet, a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes."
Roosevelt: "Our revenue laws have operated … to the unfair advantage of the very few, and they have done little to prevent an unjust concentration of wealth and economic power."
And Obama defended the principle of government action: "This larger notion that the only thing we can do to restore prosperity is just dismantle government … and tell everyone they're on their own — that's not who we are."
Roosevelt: "Those who do not like democracy want to keep legislators at home. [But] democratic government can never be considered an intruder into the affairs of a democratic nation."
Obama's jobs program even exhibited one of the same glaring flaws as FDR's — a failure to address the collapse in the housing market, which bedeviled Roosevelt just as it casts a shadow over Obama's economy.
Last week's speech made glancing reference to the possibility of government-assisted home refinancings at today's rock-bottom rates, but no reference at all to the necessity of restructuring millions of underwater mortgages to keep people in their homes, which would go to the core of our current economic underperformance.
Obama's rhetorical commitment to having his program "paid for" in the near term even parallels Roosevelt's personal distaste for deficit spending. FDR tried to balance his relief programs with government cutbacks elsewhere, as in his Economy Act of 1933, much to the disadvantage of his recovery program.
Of course, the test of Obama's $447-billion jobs plan (or whichever parts of it survive the congressional wringer) will come not from oratory but from the plan's effectiveness at spurring economic demand and reducing unemployment.
The proposal has something for everybody, including infrastructure spending, an extension of working-class tax cuts through the payroll tax and direct incentives for hiring by small businesses.
Some economy watchers have praised Obama for focusing on the roots of the economic crisis a bit better than in his original $787-billion stimulus (which did bring the economy out of recession, but not far enough).
Mohamed El-Erian, chief executive of Newport Beach bond fund giant Pimco, observed in an essay for CNBC: "The administration is finally shifting from an ineffectual series of ad hoc measures to a comprehensive program that targets key impediments to job creation."
Yet El-Erian may be too charitable. Much of the program is aimed, as it must be, at putting more money in consumers' pockets and supporting the unemployed (about $175 billion from the payroll tax cut and a $49-billion extension of unemployment benefits into next year). But it may still do too little to create lasting sustainable demand by upgrading the nation's physical plant. Instead, it provides about $73 billion in payroll tax relief, especially for small businesses that increase employment.
To see how this balance looks from the front lines, I called a front-line soldier: Joe Laws, chief operating officer of Wilbur Curtis Co., which was founded in 1940 and now manufactures commercial coffee brewing equipment from a factory in Montebello. The company has been doing quite well lately, thank you, and has been hiring. But there's a long way to go.
For Laws, Job One in crafting effective stimulus is infrastructure construction and repair — solving the Southland's transportation crisis means huge savings in shipping times for a manufacturer such as Wilbur Curtis, and time is money. Just as important — Job One-A, you might say — is creating economic demand, which trumps the sort of marginal tax breaks Obama is offering to spur hiring.
"I hire people because of demand," Laws told me, "not because the government gives me a subsidy. You want to pay me a credit so I hire 50 people on Monday? Now tell me what I'm going to do with them."
As we'll undoubtedly witness over the next weeks and months, Obama intends through his jobs program to reestablish a distinction between his and his Republican opponents' fundamental approaches to economic policy.