While nearly everyone recognizes that the current financial crisis is the worst since the Great Depression, the economic challenges and the changes in the political landscape hearken back more to 1980 than to 1932. The distinction matters, because a misplaced metaphor or inapt historical analogy that takes hold of the political imagination can produce serious missteps.
In 1932 and 1980 â€” and again less than two weeks ago â€” the country strongly rejected an incumbent presidential party, with the White House and substantial majorities in both houses shifting, respectively, to Democrats, then the Republicans, and now the Democrats again. In retrospect, itâ€™s clear that the political realignment of 1980 and the years following was not the political upheaval of 1932 and the decades which followed it. 1932 began a revolution in the federal governmentâ€™s role in economic and national life that persists today, while 1980 jumpstarted a continuing shift in political preferences from center left to mainstream right, with policy evolving within a familiar framework.
If our times were truly most like the turmoil of the early 1930s, the basic character of government, the basic path for the economy, and the countryâ€™s role in the world would all be at stake. Times like that require deep and fundamental changes in both policy and politics, with a realigned electorate eager to back seismic shifts. And thatâ€™s what we hear from some members of Congress, urging President-elect Obama to make deep and fundamental changes in the economy, the health care system, the way we use energy, and the Middle East â€” and do as much of it as possible as soon as he takes office. If this were 1932, we would need such basic changes to head off profound social divisions and political upheaval â€” and a president like Franklin D. Roosevelt who could recognize that need and take it on.
1980 provides a different model which seems much closer to the countryâ€™s present predicament. Thereâ€™s no popular demand to change the governmentâ€™s essential role in national life and the nationâ€™s basic role in the world. Instead, much as in 1980, the public demands major improvements in the quality of the Presidentâ€™s economic performance and the success of his foreign policies. Yes, the economic crisis almost certainly will be the most damaging since the 1930s. But still thereâ€™s a profound difference between unemployment rates of 7 percent or even 10 percent, and the 25 percent jobless rates of the 1930s. One reason is that today we understand much of the sources of our economic failures â€” which we didnâ€™t in 1932 â€” and so we can reasonably expect to be able to address them without fundamentally changing the governmentâ€™s role in our lives. Similarly, we know that we face profound problems with our health care system, especially with the financing to ensure its universality and sustain its quality.
If this time were a political and economic reprise of the 1930s, the health care debate would revolve around a government-run, single-payer system with comprehensive price and wage controls. Instead, President-elect Obama â€” and every other serious presidential candidate this year â€” could and did promise to address these problems in a serious way without fundamentally changing the governmentâ€™s role there, too.
If our economic and political conditions recall 1980 and not 1932, whatâ€™s the best course for the new administration? The President-elect should be able to draw on an extraordinary level of public and congressional support for some time; and he has said, so many times and in so many ways, that his presidency will tackle the countryâ€™s problems from inside the policy discussions the two parties have carried on for the last decade. If thatâ€™s the path, the new Presidentâ€™s best strategy is to press for change step-by-step, rather than try to drive a wave of sweeping congressional actions in the storied, first 100 days. For one thing, when a president fails at sweeping initiatives, his political support for another go at it usually disappears. Anyway, step-by-step change doesnâ€™t mean marginal or modest changes. Rather, it can describe a political process where the Presidentâ€™s initial round of reforms in, say, health care, regulation, energy and tax policies over the first year are followed by a second round of reforms the following year. And if the nation is lucky, there can even be a third and fourth round after that. This is the time for an Obama administration and Congress to finally fix the systems we have â€” and not, as it was for FDR, the moment to invent wholly new ones.