Obama's New Deal? The Politics of Economic Crisis

“We are in the worst financial crisis since the Great Depression,” Barack Obama declared in his presidential campaign. This statement begins to indicate the depth and range of economic problems that confronted the new president as he took office. It also serves to alert us to the political opportunities that have been presented to Obama, as well as suggesting some of the ways in which he might grapple with them. In my remarks for this roundtable session, I will address how President Obama is (and is not) drawing upon the history of Franklin Roosevelt's New Deal. As the January 2010 meeting of the AHA grows closer, the nature of this comparison should become clearer. The broad outlines of this historical analogy, however, are evident in one major respect: like FDR's New Deal, Obama's administration is turning directly to robust public investment in infrastructure in order to stimulate the economy. I will examine the strengths and weaknesses of the New Deal's use of public works policy in confronting the Great Depression, suggesting how Obama might be drawing upon this historical example. New Dealers used federal power to build socially useful infrastructure and to create jobs, but these efforts also led to political backlash. Harry Hopkins, the head of the Works Progress Administration, helped to activate this conservative opposition when he declared that the secret to the New Deal's success was that it could “tax and tax, spend and spend, and elect and elect.” Today we only know this phrase's descendant—the derisive criticism from the Right of “tax and spend” liberalism. I will argue, however, that recovering this phrase's full meaning within its historical context helps us to grasp the powerful appeal of New Deal liberalism, as well as indicating how Obama might draw upon this realization in our present moment.