FDR Redux?

The Financial Crisis So Far

The country -- and world's -- biggest financial crisis since the 1930's has reopened a long dormant debate regarding 1930's economic policy.

Democrats today subscribe to the notion that FDR did too little during The Great Depression, unnecessarily prolonging it. Had he used even more fiscal stimulus (public works, capital spending, etc.), they believe, the economy would have recovered faster.

Republicans today subscribe to the notion that FDR did too much during The Great Depression, unnecessarily prolonging it. According to them, government overreacted to the 1929 Stock Market Crash and subsequent downturn, greatly exacerbating it.

In retrospect, about the only thing that everyone agrees on is that FDR didn't end the Great Depression -- World War II did.

That said, it seems unassailable that FDR was a beloved figure to many, many Americans. If voters thought he was doing a poor job, their actions belie it: they re-elected him a record three times (of course, future generations may wonder how George W. got elected twice!)

Fast forward to today.

Given an incoming Democratic President and continued deterioration in the banking system and broader economy, you'd certainly bet on more intervention -- and more aggressive intervention -- rather than less. As Americans, we can only hope (and pray) that whatever course of action President Obama chooses is effective.

To paraphrase what Santayana (not to mention Nietzsche) would say of our current predicament: those who disagree about history's big lessons . . . get to repeat them.