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