19 October 2011

Woodrow Wilson and Barack Obama

In looking for analogues to the record of Barack Obama as President, many look to Hoover. But I think Woodrow Wilson offers some interesting comparisons.

Here is an exerpt from the collection of Wilson's campaign speeches from the election of 1912 in his book, The New Freedom. Compare this alternative he offers to Theodore Roosevelt's Progressive Party with his actual performance once in office.

"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.

They know that America is not a place of which it can be said, as it used to be, that a man may choose his own calling and pursue it just as far as his abilities enable him to pursue it; because to-day, if he enters certain fields, there are organizations which will use means against him that will prevent his building up a business which they do not want to have built up; organizations that will see to it that the ground is cut from under him and the markets shut against him. For if he begins to sell to certain retail dealers, to any retail dealers, the monopoly will refuse to sell to those dealers, and those dealers, afraid, will not buy the new man's wares.

And this is the country which has lifted to the admiration of the world its ideals of absolutely free opportunity, where no man is supposed to be under any limitation except the limitations of his character and of his mind; where there is supposed to be no distinction of class, no distinction of blood, no distinction of social status, but where men win or lose on their merits...

A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom...

Shall we try to get the grip of monopoly away from our lives, or shall we not? Shall we withhold our hand and say monopoly is inevitable, that all that we can do is to regulate it? Shall we say that all that we can do is to put government in competition with monopoly and try its strength against it? Shall we admit that the creature of our own hands is stronger
than we are?

We have been dreading all along the time when the combined power of high finance would be greater than the power of the government. Have we come to a time when the President of the United States or any man who wishes to be the President must doff his cap in the presence of this high finance, and say, "You are our inevitable master, but we will see how we can make the best of it?"

We are at the parting of the ways. We have, not one or two or three, but many, established and formidable monopolies in the United States. We have, not one or two, but many, fields of endeavor into which it is difficult, if not impossible, for the independent man to enter. We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.

If the government is to tell big business men how to run their business, then don't you see that big business men have to get closer to the government even than they are now? Don't you see that they must capture the government, in order not to be restrained too much by it? Must capture the government? They have already captured it.

Are you going to invite those inside to stay inside? They don't have to get there. They are there. Are you going to own your own premises, or are you not? That is your choice. Are you going to say: "You didn't get into the house the right way, but you are in there, God bless you; we will stand out here in the cold and you can hand us out something once in a while?"

At the least, under the plan I am opposing, there will be an avowed partnership between the government and the trusts. I take it that the firm will be ostensibly controlled by the senior member. For I take it that the government of the United States is at least the senior member, though the younger member has all along been running the business. But when all the momentum, when all the energy, when a great deal of the genius, as so often happens in partnerships the world over, is with the junior partner, I don't think that the superintendence of the senior partner is going to amount to very much.

And I don't believe that benevolence can be read into the hearts of the trusts by the superintendence and suggestions of the federal government; because the government has never within my recollection had its suggestions accepted by the trusts. On the contrary, the suggestions of the trusts have been accepted by the government.

There is no hope to be seen for the people of the United States until the partnership is dissolved. And the business of the party now entrusted with power is going to be to dissolve it.

Those who supported the third party supported, I believe, a program perfectly agreeable to the monopolies. How those who have been fighting monopoly through all their career can reconcile the continuation of the battle under the banner of the very men they have been fighting, I cannot imagine. I challenge the program in its fundamentals as not a progressive program at all. Why did Mr. Gary suggest this very method when he was at the head of the Steel Trust? Why is this very method commended here, there, and everywhere by the men who are interested in the maintenance of the present economic system of the United States? Why do the men who do not wish to be disturbed urge the adoption of this program? The rest of the program is very handsome; there is beating in it a great pulse of sympathy for the human race. But I do not want the sympathy of the trusts for the human race. I do not want their condescending assistance.

And I warn every progressive Republican that by lending his assistance to this program he is playing false to the very cause in which he had enlisted. That cause was a battle against monopoly, against control, against the concentration of power in our economic development, against all those things that interfere with absolutely free enterprise. I believe that some day these gentlemen will wake up and realize that they have misplaced their trust, not in an individual, it may be, but in a program which is fatal to the things we hold dearest.

If there is any meaning in the things I have been urging, it is this: that the incubus that lies upon this country is the present monopolistic organization of our industrial life. That is the thing which certain Republicans became "insurgents" in order to throw off. And yet some of them allowed themselves to be so misled as to go into the camp of the third party in order to remove what the third party proposed to legalize. My point is that this is a method conceived from the point of view of the very men who are to be controlled, and that this is just the wrong point of view from which to conceive it...

One of the wonderful things about America, to my mind, is this: that for more than a generation it has allowed itself to be governed by persons who were not invited to govern it. A singular thing about the people of the United States is their almost infinite patience, their willingness to stand quietly by and see things done which they have voted against and do not want done, and yet never lay the hand of disorder upon any arrangement of government.

There is hardly a part of the United States where men are not aware that secret private purposes and interests have been running the government. They have been running it through the agency of those interesting persons whom we call political "bosses." A boss is not so much a politician as the business agent in politics of the special interests. The boss is not a partisan; he is quite above politics! He has an understanding with the boss of the other party, so that, whether it is heads or tails, we lose. The two receive contributions from the same sources, and they spend those contributions for the same purposes...

The critical moment in the choosing of officials is that of their nomination more often than that of their election. When two party organizations, nominally opposing each other but actually working in perfect understanding and co-operation, see to it that both tickets have the same kind of men on them, it is Tweedledum or Tweedledee, so far as the people are concerned; the political managers have us coming and going. We may delude ourselves with the pleasing belief that we are electing our own officials, but of course the fact is we are merely making an indifferent and ineffectual choice between two sets of men named by interests which are not ours."

Woodrow Wilson, The New Freedom, 1913

How did Wilson treat some his supporters drawn to his message of reform?
"In 1912,  'an unprecedented number' of African Americans left the Republican Party to cast their vote for Democrat Wilson. They were encouraged by his promises of support for their issues.Wilson did not interfere with the well-established system of Jim Crow and backed the demands of Southern Democrats that their states be left alone to deal with issues of race and black voting without interference from Washington.

While president of Princeton University, Wilson discouraged blacks from even applying for admission, preferring to keep the peace among white students than have black students admitted.

Black leaders who supported Wilson in 1912 were angered when segregationist white Southerners took control of Congress and many executive departments.  Wilson ignored complaints that his cabinet officials had established official segregation in most federal government offices, in some departments for the first time since 1863. New facilities were designed to keep the races working there separated. Eric Foner says, "His administration imposed full racial segregation in Washington and hounded from office considerable numbers of black federal employees."

With the supporting winds of economic stability and a Democratic majority in the Congress, Wilson proceeded to act on his vision of reforms, in particular breaking up the 'trusts.'

"With Progressive ("Bull Moose") Party candidate Theodore Roosevelt and Republican nominee William Howard Taft dividing the Republican Party vote, Wilson was elected President as a Democrat in 1912.

In his first term as President, Wilson persuaded a Democratic Congress to pass major progressive reforms including the Federal Reserve Act, Federal Trade Commission Act, the Clayton Antitrust Act, the Federal Farm Loan Act and an income tax. Wilson brought many white Southerners into his administration, and supported the introduction of segregation into many federal agencies."

One of the people whom I greatly admire, Louis D. Brandeis, "the people's lawyer," was a Wilson supporter and was appointed by him to the Supreme Court.
"Brandeis's positions on regulating large corporations and monopolies carried over into the presidential campaign of 1912. Democratic candidate Woodrow Wilson made it "the central issue," and, according to Wilson historian Arthur Link, "part of a larger debate over the future of the economic system and the role of the national government in American life." Whereas the Progressive Party candidate, Theodore Roosevelt felt that trusts were inevitable and should be regulated, Wilson and his party aimed to "destroy the trusts" by ending special privileges, such as protective tariffs and unfair business practices that made them possible.

On that basis, Brandeis, though "nominally a Republican," supported Wilson and urged his friends and associates to join him. The two men met for the first time at a private conference in New Jersey that August and spent three hours discussing economic issues. Mason notes that Brandeis came away from the meeting a "confirmed admirer of Wilson, whom he described in letters to his friends as possessed of a remarkable mind and likely to make 'an ideal president.'" Wilson thereafter began using the term "regulated competition," the concept that Brandeis had developed, and made it the essence of his program. In September, Wilson asked Brandeis to "set forth explicitly the actual measures by which competition can be effectively regulated."

After his victory in the November election, Wilson wrote to Brandeis, "You were yourself a great part of the victory." Wilson considered nominating Brandeis first for Attorney General and later for Secretary of Commerce, but backed down after a loud outcry from corporate executives that he had once opposed in court battles. He concluded that Brandeis was too controversial a figure to appoint to his cabinet.

Nevertheless, during Wilson's first year as president, Brandeis "played a key role in shaping the Federal Reserve Act," according to banking historian Albert Link. He adds that "Brandeis's arguments were decisive in breaking the deadlock on the banking issue." Wilson endorsed the banking proposals of Brandeis and Secretary of State William Jennings Bryan, who, Piott points out, felt that "the banking system needed to be democratized and its currency issued and controlled by the government," and convinced Congress to enact the Federal Reserve Act in December 1913."

On December 23, 1913, the new President Woodrow Wilson signed The Federal Reserve Act into law.

Wilson secured passage of the Federal Reserve Act in late 1913. Wilson had tried to find a middle ground between conservative Republicans led by Senator Nelson W. Aldrich and the powerful left wing of the Democratic party led by William Jennings Bryan, who opposed all banking schemes and strenuously denounced private banks and Wall Street. The latter group wanted a government-owned central bank that could print paper money as Congress required. The compromise, based on the Aldrich Plan but sponsored by Democratic Congressmen Carter Glass and Robert Owen, allowed the private banks to control the 12 regional Federal Reserve banks, but appeased the agrarians by placing controlling interest in the System in a central board appointed by the president with Senate approval. Moreover, Wilson convinced Bryan's supporters that because Federal Reserve notes were obligations of the government, the plan met their demands for an elastic currency.

Having 12 regional banks was meant to weaken the influence of the powerful New York banks, a key demand of Bryan's allies in the South and West. This decentralization was a key factor in winning the support of Congressman Glass.[69] The final plan passed in December 1913. Some bankers felt it gave too much control to Washington, and some reformers felt it allowed bankers to maintain too much power. Several Congressmen claimed that New York bankers feigned their disapproval.

Wilson named Paul Warburg and other prominent bankers to direct the new system. While power was supposed to be decentralized, the New York branch dominated the Fed as the "first among equals".

And despite unattributed and unverifiable quotes to the contrary, I do not think Wilson ever publicly expressed any regrets over his signing of the Federal Reserve Act. And yet it seems remarkably at odds with the principles which he had put forward in his campaign speeches.  It is not hard to suppose that the policies of Wilson found their footing in the Roaring 20's and the emergence of the financial speculative sector as a dominant force in the country, and the debacle that followed thereafter.

Wilson is generally ranked well amongst the US presidents. He was an intelligent man and as far as I know the only President to hold a PhD. Say what you will, Obama is a highly intelligent and well-educated man.

I obviously cannot say how Barack Obama will be rated, as a second term is still very open to question. I do not mean to imply that Obama will be well regarded by history. His popularity ratings are shockingly low, in direct opposition to Wilson's first term. What intrigues me are their stylistic similarities, the penchant for compromise, and the embrace of means over ends in politics, despite professed commitments to great reform.

And at the end of the day, both men gave the Wall Street monied interests what they wanted, despite protestations and stated principles to the contrary. One can easily make the case that this was not their intention.

Perhaps this illustrates the notion that few understand the true nature of money, and the power of those who can control it. And an abiding notion I am obtaining in my older years that there are relatively few black and white situations in this variegated life, but many shades of gray.

And therefore it is easy to compromise and act from expediency so much that a person can lose their way, unless led with an occasional eye to enduring first principles, and a kindly light.