Four months into his Presidency, a world economic conference was held in London. The European organizers hoped for a united agreement on the need to remove trade barriers, generate greater economic regulation and stabilize the world currency. Our Secretary of State, Cordell Hull was dispatched across the Atlantic, while President Roosevelt wrapped up the his first 100 days working with Congress to provide economic stimulus as well as giving the President greater power over the whole economy. As he disembarked, Secretary Hull asked the President to convince Congress to give him power to negotiate reciprocal reductions in our high tariffs. When he tried to comply, the President’s effort was rejected by Congress and FDR quickly gave up.
The America of 1933 was isolationist. The Smoot-Halley Tariffs enacted 3 years earlier were very popular and seen as a key to helping Americans get their jobs back. World War I had left a very bad taste in America’s mouth and the country was determined to keep to our own affairs and not involve ourselves with the corrupting influence of Europe. FDR, who had been part of the Wilson Administration and who had supported the League of Nations when he ran for Vice President in 1920, realized his international views were out-of- touch with his countrymen and was very careful not to run afoul of the national mind set. This dynamic not only killed his efforts to drop our trade barriers, it also meant the President couldn’t even consider taking a month to travel to Europe to participate in the conference. Such a move would have reminded the country of Wilson’s failed effort for peace in Europe at the end of WWI.
When the Congress adjourned, FDR did venture onto the Atlantic but only to sail up the coast of New England in his yawl, “Amberjack II” toward his summer home at Campabello Island off Lubec Maine. While the London conference was frustrated by America’s refusal to address world trade, FDR sailed through the Cap Code Canal and in late June as the London Conference turned to trying to stabilize the pound sterling, the currency of trade at that time, FDR made his way up the coast of Maine. In June the long summer days warm the air over the cold waters of the North Atlantic and the result is often fog. Thus in the last week of June 1933 the American President found himself fog bound off Washington County. One morning, three men, officials of the local Democratic Party, rowed through the fog out to the Amberjack II, to greet the President, and give him a mess of lobsters. FDR who had been reading his papers said, “So what do you boys think? What will be my next move on the pound at the London Conference?” To which the local Democratic Chair responded, “Well you’re a smart fella so my guess is your first move will be for them lobsters.” The President took their advice on the lobsters but ultimately made no move to be a constructive part of the London Conference of 1933.
4 months into his Presidency Barak Obama was faced with the London Conference of 2009. What he did with that challenge is instructive and noteworthy because it represented a different reading of history than the other actions our country has taken on the economy in Obama’s first 4 months in office. Up until this moment, most of our countries initiatives under President Obama’s leadership have been informed by the mistakes made during Herbert Hoover’s administration. Hoover raised taxes and reduced spending and we learning from that the awful consequences of restricting fiscal policy during a deflationary period. In contrast, under Obama we have increased spending and lowered taxes. Our response to the London Conference shows we have also learned from the mistakes made at the beginning of the Roosevelt Administration. Having learned that isolation was based on a dangerous myth, a myth that can produce a world crisis and an Adolph Hitler, Americans have learned to embrace the world and have refused to give in to the natural tendency to turn inward in a time of economic distress.
That is why it is important that Obama was not fog bound off the coast of Maine during the recent conference. He was engaged and using the soft power of the United States to see to it that the conference was a success. The 20 nations agreed to resist efforts to limit free trade, to move to greater financial regulation in all countries, and to take collective action to help the poorer countries. For those of us who watched in dismay over the last 2 decades as America forgot history and undid the regulatory framework erected by FDR, seeing policy informed by a dispassionate reading of history is maybe the greatest reason to be hopeful about our economic future. To see that Obama is informed by the mistakes of fellow Democrat Roosevelt is a refreshing contrast to Republican’s who seem to believe that the answer to every challenge is to blindly mimic what President Reagan did in the 1980's..
Every major new crisis leaves us shrouded in fog, stranded and looking for a new and safer course. At such times a prudent skipper seeks to be dispassionately informed by experiences of others in similar circumstances. Where did they find deep waters? What mistakes left them high and dry on hidden ledges? Obama demonstrated this week he is a careful navigator. What a welcome change after eight years being led by people who seemed to believe that history was for sissies, people who were so cocksure of their sense of direction that they never felt the need to glance at the compass. Such foolish bravado is frightening to those of us who have sailed the waters of the North Atlantic and been reminded over and over by that experience the need to be as prudent and as informed as possible when confronting forces that can easily and quickly overwhelm you. For us, it’s some comfort to have a new captain at the helm in the world wide economic storm which forces America to find safe passage through shoal waters in an fierce onshore gale. The events of this April leave us comforted and a little closer to safe harbors.
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AuthorPhil Merrill lives in Appleton, Maine ArchivesCategories |