Obama's Day of Reckoning
It’s been nearly a decade since the country has heard a vibrant, full-throated Democratic speech from a president of the United States. President Obama gave one tonight. In presenting his budget priorities to the Congress and the American people, he provided a clear defense of the federal government’s historic role as a catalyst for economic growth and the nation’s welfare. From the Transcontinental Railroad to the Interstate Highway System, he explained, private wealth has always expanded with the help of the national government. And with that, the president exorcised the political spirit of Ronald Reagan from Capitol Hill.
Energy, health, education—these are at the top of the administration’s agenda. If nothing had happened last September, when Lehman Brothers was allowed to collapse, these policies also would have been at the top. But a great deal has changed since the Democratic convention ratified the party’s platform, with these same priorities. The country and the world have plunged into the greatest economic crisis since the Depression. And that must be the president’s chief preoccupation.
No matter what the White House decides to do, it should have made some decisions by now—and President Obama should have announced them tonight.
When Franklin D. Roosevelt took office on March 4, 1933, the nation had been in a depression for nearly four years. The banking system had virtually collapsed; the credit markets were frozen; and unemployment had exceeded 25 percent. The calamity that President Obama confronts is still in its earliest stages. He faces the challenge of sparing the country the kind of suffering that Roosevelt inherited from Herbert Hoover and that led to the New Deal.
Today, the banking system is near collapse; the credit markets are nearly frozen; and unemployment is rising dangerously. And the system is vastly more complex than it was in the early 1930s. This is the heart of the crisis—and the president lucidly explained much of it in his speech. But he should also have proposed specific solutions because until he does the crisis will continue to deepen.
The White House enjoys great latitude and leverage at this moment to offer dramatic action. Yet since the Treasury Secretary Timothy Geithner appeared before the Congress two weeks ago, the administration has failed to propose any concrete program. The elements remain uncertain. President Obama and his team have told us that the administration is negotiating the terms upon which the government will help stabilize major banks. But the process cannot be allowed to drag on for weeks on end. There are plenty of bold proposals making the rounds, including new public-private partnerships to restore the flow of credit, and a tax holiday on regressive payroll taxes to stimulate the economy from the grassroots up. But no matter what the White House decides to do, it should have made some decisions by now—and President Obama should have announced them tonight.
The longer this uncertainty is prolonged, the greater the damage to the economy—and the greater the potential damage to the extraordinary opportunity presented to the president. We cannot say when it will be too late for the White House to move expeditiously and specifically—but it should have been done already.
Sean Wilentz is a history professor at Princeton University whose books include The Rise of American Democracy: Jefferson to Lincoln and The Age of Reagan: A History, 1974-2008. He is a contributing editor at The New Republic, and historian-in-residence at Bob Dylan's official website.