Democrats And the Politics Of Recession
It is now common to hear the current economic downturn described as the worst since the Great Depression. Yet as we approach the second election since this downturn began, it is clear that the politics of the two could not be more dissimilar. Three generations ago, Democrats rode the Depression to congressional gains in four straight elections. They more than doubled their House and Senate totals between 1929 and 1937. If current polls are accurate, today's Democrats are about to see their winning streak end at two elections. Why?</br></br>Today's Democrats face economic variables far less daunting than those of their 1930s predecessors. Unemployment had been 3.2% in 1929. By 1933, when FDR took office, it was 24.9%. It fell, but not far. Over FDR's first term, unemployment averaged 18.6%. Even by 1940, as FDR sought his third term -- and despite direct intervention through programs like the Work Projects Administration (WPA) and the Civilian Conservation Corps (CCC) -- it was still 14.6%. Today's 9.6% rate is about half of FDR's first-term average.</br></br>The same comparative advantage holds true for economic growth. During the Depression, the economy shrank for four straight years following the 1929 stock market crash. This included FDR's first year in office. In real terms, the economy did not regain its 1929 level until 1936, and the Depression did not end until World War II's massive mobilization. Within those dozen years, FDR also endured his own "double dip," dubbed the "Roosevelt recession," in 1938. This reality hardly reflects the simplified conventional wisdom that the New Deal quickly ended the Depression.</br></br>If today's experts are correct and the recession has already ended, President Obama's economic record compares very favorably to FDR's. Since the third quarter of 2009, his first year in office, the economy has grown -- hardly robustly, but progress nonetheless.</br></br>On taxes too, Mr. Obama holds an advantage over FDR. Between 1932 and 1936, revenue collected by the government doubled, rising to $3.9 billion from $1.9 billion. At their 1938 peak, federal receipts were $6.8 billion -- three-and-a-half times 1932's level. These increases were no accident. FDR sought, and got, significantly higher taxes.