In what some billed as the most important economic speech of his presidency, President Obama traveled to Osawatomie, Kansas yesterday to deliver a highly publicized address meant to highlight the major themes of his reelection campaign. The site, of course, is where Teddy Roosevelt gave his famous “New Nationalism” speech in 1910 – one that laid out many of the progressive ideals TR would run on as a third-party candidate two years later. In choosing the location of yesterday’s speech, the Obama administration hoped to draw a historical parallel between the themes of Obama’s reelection campaign and Roosevelt’s call for a “square deal” based on economic fairness (a comparison that historian Doris Kearns Goodwin first raised on Meet the Press two weeks ago). In Roosevelt’s words from 101 years ago : “But when I say that I am for the square deal, I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service. “
But while many pundits have noted the thematic parallels between the two addresses, what I found far more telling was what TR’s address contained that Obama’s lacked. Where Roosevelt proposed a number of progressive – radical? – policies for redressing economic inequality, Obama pushed almost none. That difference shows not just a distinction between TR and Obama, but more importantly how dramatically the political context has been transformed in recent decades – a transformation that today makes it less likely that Obama will suggest the more far-reaching policies embraced by TR, never mind try to implement them.
By my count, Obama’s speech contains exactly two substantive policy proposals for achieving economic fairness along with a couple of reminders of what Democrats had already accomplished toward this end and some rhetorical jawboning on related issues. First, he advocated an extension of the payroll tax cut due to expire at the end of the month. This will almost certainly occur, mostly because Republicans do not want to be seen advocating for a tax increase, even if extending the tax cut is of dubious economic benefit. Second, the President recommended restructuring the tax system and implied that this should include raising the top tax rate to the level in place during the Clinton administration. Although Republicans in Congress are dead set against raising the top rate, they have signaled a willingness to work for tax reform so there is a glimmer of a possible compromise here.
Beyond these two measures, however, I didn’t hear much more in the way of substantive policy proposals to actually reduce economic inequity. To be sure, Obama did push other proposals, urging the Senate to confirm Richard Cordray to head the recently created Consumer Financial Protection Bureau, and reminding his audience that he supported the Dodd-Frank legislation (although he didn’t mention it by name) designed to tighten banking regulations. He also urged banks to ease loan restrictions to make borrowing easier although I didn’t see a specific proposal to make this happen. Don’t get me wrong – these are all proposals worth considering, but they are hardly the rhetoric of a trust-buster. Note also that he found time to remind listeners that he supported cutting government programs and that he backed regulatory reforms “that will save businesses billions of dollars.” Match that, TR!
My point is not to criticize these proposals. It is to say they fall far short of the progressive policies TR proposed in his New Nationalism speech from 1910. Consider what TR recommended: the list includes his call to prohibit “the use of corporate funds directly or indirectly for political purposes” which he described as “one of the principal sources of corruption in our political affairs.” Ever the trust-buster, Roosevelt complained that efforts to prohibit “combinations in industry” had completely failed. “The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare. For that purpose the Federal Bureau of Corporations is an agency of first importance. Its powers, and, therefore, its efficiency, as well as that of the Interstate Commerce Commission, should be largely increased.” (The FBC was an investigatory agency within the then-named Department of Commerce and Labor; it was a forerunner to the Federal Trade Commission).
Roosevelt also criticized the power of “special interests” to get Congress to pass tariffs that, through political logrolling, sacrificed the public interest for private gain. The solution, he suggested, “must be an expert tariff commission, wholly removed from the possibility of political pressure or of improper business influence. Such a commission can find the real difference between cost of production, which is mainly the difference of labor cost here and abroad. As fast as its recommendations are made, I believe in revising one schedule at a time.” There would be no more legislative logrolls when it came to passing tariffs.
He also sought higher and more progressive taxes, including an inheritance tax on the very rich: “Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective-a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”
To protect labor, he called for “comprehensive workman’s compensation acts, both State and national laws to regulate child labor and work for women, and, especially, we need in our common schools not merely education in book-learning, but also practical training for daily life and work. We need to enforce better sanitary conditions for our workers and to extend the use of safety appliances for workers in industry…”
But wait, there’s more! Turning toward politics, he advocated the use of the directly primary to loosen party control over the nomination process in order to “make our political representatives more quickly and sensitively responsive to the people whose servants they are. “ He also reiterated his support for campaign finance regulation: “It is particularly important that all moneys received or expended for campaign purposes should be publicly accounted for, not only after election, but before election as well. Political action must be made simpler, easier, and freer from confusion for every citizen.”
Finally, “I believe that every national officer, elected or appointed, should be forbidden to perform any service or receive any compensation, directly or indirectly, from interstate corporations; and a similar provision could not fail to be useful within the States.”
Along with these specific proposals, Roosevelt hinted at even more radical efforts to increase government intervention into the marketplace: “The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise… This, I know, implies a policy of a far more active governmental interference with social and economic conditions in this country than we have yet had, but I think we have got to face the fact that such an increase in governmental control is now necessary.”
This hint of what some commentators at the time described as advocating socialism created such a stir that TR was force to backtrack somewhat in later comments to make clear that was not what he was proposing.
My point here is not to chastise Obama for failing to propose a program that matched TR’s in substance and not just in theme. In fairness, TR held no office in 1910 and thus was much freer to propose a radical program to redress economic inequities. And, many of his proposals are now in place. Moreover, we ought not to forget that when he did run for President in 1912 on the New Nationalism platform, he lost to the Democrat Woodrow Wilson, who advocated a milder form of many of TR’s proposals as part of his New Freedoms campaign.
Nonetheless one cannot helped but be struck by – when one digs beneath the repeated thematic references – just how much milder Obama’s speech was compared to TR’s. Is it tempting to blame the difference on Obama’s more conservative beliefs and pragmatic temperament. But, while I have long argued that Obama was by temperament and training not one to push radical policies, I think the larger reason for his pulling his punches in yesterday’s speech is his realization that he is distinctly limited in terms of the policy options that could actually redress economic equality and get through Congress. Today’s equivalent of the audacious economic platform TR proposed – nationalizing the banks? A public health care system? Forty percent marginal tax rates, or higher? – might play well with the progressive wing of the Democratic party but it would go nowhere in the House or Senate given Republican strength and it’s not even clear it would help in the general election, given the level of public distrust with government and the Tea Party-based opposition to “big government”. Put another way, I’m not sure TR would have proposed much more than Obama did yesterday – not if he was running for reelection.
It is all well and good for historians to urge Obama to channel his inner TR, or FDR, or LBJ. But the reality is that given the current economic and political climate, these transcendent historical figures are perhaps less relevant to Obama than are other presidents – think, alas, of Jimmy Carter. With Carter’s electoral fate in mind Obama, I surmise, would do far better to uncover his own core principles, and fashion a program and strategy for achieving them, than he will searching history for a dubious analogue. Until he channels his inner-Obama, he is in for a rough ride of his own.