Readers of a certain age will recognize today's title, but few if any will anticipate where I am going with it. A couple of years ago, in a critical post, I speculated whether Obama was going to turn out like Hoover or Harman Muller and heinrich Bruning, the last democratically chosen German chancellors under the Weimar Republic, rather than like FDR. I'm afraid there is still a chance that he will, although at the moment the odds still favor his re-election. Even if he is re-elected, however, he will never be the new FDR--and the brief research I've been doing on the Hoover Administration shows why.
Franklin Roosevelt was an extraordinary President, but like the other progressive icons of our century, including Wilson, Kennedy, and LBJ, he could hardly have done what he did alone. Our whole twentieth century tradition began with the Progressive era, the climax, it appears in retrospect, of the era that began with the Enlightenment, in which two generations--the aging Progressives (born about 1842-1862) and the Missionaries (about 1863-1884) decided that social science and reason could solve social problems, increase economic justice, and build a healthier and more equitable society. They also concluded that money should not be allowed an unlimited influence over politics, and that enormous fortunes were inevitably destructive to democracy. Such views appear to have become stronger and stronger within universities during the first half of the twentieth century. (They became much weaker in the second half, but that's a story for another day.) Granted, believers in unfettered capitalism still remained strong, and they took over the reins of government during the 1920s. But Herbert Hoover--at that time--was not one of them. He had risen to fame under the Wilson Administration as a genuine progressive. And thus, it is interesting to look at the requests he made of the last Congress that met while he was fully in power, in December 1931, and at what the Congress did with his proposals.
Although economic distress was much worse then than it is right now and no recovery was as yet in progress, the federal budget was a source of enormous concern. By today's standards it was paltry: receipts for fiscal 1932 (ending in July of 1932) were forecast at $4.4 billion, less than 10% of the GDP of about $58 billion, and thus at least 50% smaller in GDP terms than it is today. But revenues were only about $2.2 billion, meaning that the government was nearly 50% a year in deficit, a much higher figure than today's. The budget had already been cut. What was to be done? Hoover decided to raise taxes, including taxes on the highest brackets, as an emergency measure. In particular, he wanted to double the surtax on incomes over $100,000 (in the neighborhood of $1 million today) from 20% to 40%. He also proposed a new lending agency similar to the First World War War Finance Corporation--one which became the Reconstruction Finance Corporation, a powerful institution all through the New Deal and the Second World War.
The debate on Hoover's proposals was long and difficult, all the more so since the Democrats, having won almost 60 new House seats in the 1930 elections and subsequently, now controlled the lower chamber. They rejected a federal sales tax in the spring of 1932. When the House finally passed a bill in April, it adopted Hoover's top 40% income tax rate--one substantially higher, of course, than the top rate today. But in Senate hearings, a progressive Republican from Michigan names James Couzens argued that the nation, in the midst of an emergency, should return to the wartime tax rates of 1918, with a top marginal rate of 60%. This initially failed along with Hoover's sales tax proposals in the Senate, but a conference committee adopted an income tax schedule with marginal rates rising to 55% for incomes over $1 million--that is, about $10 million today. It also set the corporate profits tax at 14%--much less nominally than today's theoretical rate of 34% that Republicans constantly complain about, but considerably higher than what today's corporations actually pay.
Please think about that for a moment. In the midst of an economic crisis and a Presidential election year, the Congress, faced with a huge deficit and having already cut expenditures, passed a large tax increase, including a 55% marginal tax rate on the highest incomes. Today the Republican Party unanimously, without exception, opposes any tax increase of any kind and, indeed, refuses to cooperate with President Obama on anything at all.
Thus it is not the difference between Obama and FDR--real though it is--that differentiates our time from 1932; it is the almost complete lack of civic virtue throughout our political class, reflected in an almost universal inability to state problems clearly, face them, and propose adequate solutions. Our irresponsible political class, like that of the Progressive era and the New Deal, has taken two generations to grow. Unfortunately it will probably take at least two more to replace, as well. To anyone curious about today's Congress's failure to function I cannot recommend too highly this episode of the NPR radio program, This American Life, which gave me a new look into the world of Congressional fund-raising. We have not only created huge fortunes in our time, but we have now allowed them to buy our political system, and they are taking full advantage of the opportunity. Meanwhile, we have suffered a general erosion of any common values, sense of common purpose, or obligation to one another. If Obama wins, he will do so largely by mobilizing the aspirations and fears of certain demographic groups, not by creating a real sense of national purpose. (That I and many of my friends belong to those groups does not change that fact.) If he loses, we shall sink much lower. So far, only the strength of the edifice erected by our parents and grandparents has saved us from complete collapse.