Let me offer my two-bits in the debate between Noam Scheiber and Jon Chait over what the Republicans are trying to accomplish by holding up Obama’s stimulus bill and what could happen if they are successful in significantly diluting it. I don’t have an answer to question number one, except that I imagine that Republican Senators are acting from a variety of motives--from the narrowly partisan (compare the House Republicans this year or the Senate Republicans in 1993) to the foolishly ideological. And in a country where distrust of big government abounds, their efforts have not been entirely unsuccessful.
I do have an opinion on the second question: what could happen in the Obama administration isn’t successful--whether out of Republican perfidy or administration timidity--at arresting this downturn. Obama and the Democrats could get tossed out of office in 2012. They could even see setbacks in 2010 in spite of mix of seats that are up for re-election. My precedent, as I mentioned at the end of my essay on Keynes, is the British Labour Party. It took office in 1929 after a decade of high unemployment with the depression about to set. Paralyzed and confused, they did nothing; the party split and was routed in 1931. It didn’t return to power until 1945 even though the administrations that succeeded it were not able to do much about the depression either.
Noam argues that Franklin Roosevelt was able to win re-election resoundingly in 1936 in spite of his “failure to end the depression.” But that’s not quite right. Soon after he took office, Roosevelt began spending money and running big deficits and by 1936, he had achieved some success in getting the country moving again. Unemployment fell from 24.9 percent in 1933 to 16.9 percent in 1936 and on the eve of election had dropped below 15 percent. The economy grew 7.7 percent in 1934, 8.1 percent in 1935 and 14.1 percent in 1936. So voters saw something positive happening. Of course, you know the rest of the story: Roosevelt went back to Hoover-DeMint-McCain economics in 1937 and the economy plummeted. But in 1936, he enjoyed the image of success in combating the depression, even if he hadn’t ended it.
If you want to do some counter-history, imagine that FDR’s rival John Nance Garner had won a landslide over Hoover in 1932, but had been unwilling to take the kind of bold steps that Roosevelt had. By 1936, the Republicans might have been back in the White House. That’s worth considering as we contemplate the current battle over the stimulus program.
--John B. Judis