Epstein Asks if the New Deal Will Revive Itself in 2012

Franklin Delano Obama
Richard A. Epstein
Defining Ideas
August 21, 2012

Eighty years ago, Franklin Roosevelt rode into office at the height of the depression. In many ways, the election of 1932 has much in common with the current campaign. The economic record from 1929 to 1933 was grim. Unemployment rates spiked to close to 25 percent from a pre-1929 figure of about 4 percent. World trade was down by about a third, partly in response to the ill-advised Smoot-Hawley tariffs of 1930, which sparked retaliation from around the globe. And a persistent deflation in the order of 20 percent meant many debtors could not repay their debt with these new expensive dollars.

Today’s situation is nowhere near as desperate as it was then, but there is little doubt that the nation has become stagnant and uneasy. Real economic growth has slowed and the future likely holds higher levels of insecurity and lower rates of growth. Today’s parents are no longer confident that their children will lead lives as fulfilling and as prosperous as their own. Falling expectations lead to rising discontent, and discontent leads to clarion calls for action.

The question is, what can we learn about the current election from the not-quite-parallel set of events of Roosevelt’s New Deal days? In one sense, comparisons come quickly to mind, given the conscious efforts of Obama’s supporters to hearken back to Roosevelt’s most powerful rhetoric, most notably his 1944 State of the Union address calling for a “Second Bill of Rights.” AFL-CIO president Richard Trumka used similar language at “the Workers Stand for America rally” held recently in Philadelphia.

Faculty: 
Richard A. Epstein