History as Obama's imperfect guide
Comparisons are made to the Depression and other events, but history has its limits.
The new millennium may have begun in 2000, but in the US at least, 2009 looks like an historic threshold: An African-American becomes president in the midst of the worst financial crisis since the Great Depression and during a long war on Islamic jihadism whose unconventionality still challenges the White House and its allies.
No wonder the media are studded with historical comparisons to the presidencies of Lincoln and FDR, who led the United States at times of peril at home and abroad.
Americans are getting schooled in the 1929 stock market crash and the New Deal that eventually followed. They're hearing about major efforts at global cooperation near the end of World War II, such as the Bretton Woods conference, which set up today's international money management system.
They're learning that President-elect Barack Obama has chosen a cabinet loosely modeled after that of Lincoln, a Republican who decided to turn his party rivals into his allies by including them in his inner governing circle.
Indeed, Mr. Obama is a lover of history, and told CBS in November that besides Lincoln, he had been reading about Franklin D. Roosevelt, a fellow Democrat who also entered office during a severe economic downturn.
It's encouraging that at this historic time, Obama and his incoming team are looking to the past, where much can be learned. The main lesson from the Depression, for instance, is a need for quick and substantial intervention. The Treasury and Federal Reserve have already done this in the financial sector. Obama seeks to build on that with an economic stimulus that could total as much as $1 trillion.
But history has its limits, and the new administration could err if it mistakes today for yesteryear. Unlike during the Depression, the US is not suffering 25 percent unemployment, and its economy is far more diverse and globally connected. And while Mr. Gates wants to rearm American diplomacy and renew ties with allies, he knows that defeating a diffuse Islamic extremism is not the same as containing geographically defined communism.
It may be that more recent history is the relevant guide, as the new administration decides how fast and how far to push its agenda. Democrats Bill Clinton and Jimmy Carter got distracted early on by narrow issues (gays in the military for Clinton, water projects for Carter). Ronald Reagan, by contrast, focused first on the economy.
Obama looks to be going for a unique "twofer" – concentrating on an economic stimulus that also acts as a down payment on other agenda items, such as clean energy.
Whether this will work is unknown. In many ways, Obama is on terra incognita. History cannot tell him how large the stimulus should be, or how boldly and swiftly the world can respond to a problem like global warming.
The best the new president (along with a Democratic Congress) can do is to make an educated guess based on the past, and on basic principles and political consensus. With that, he'll write history lessons for future presidents.