A lot of ink has been spilled on what might be called the Roosevelt and Reagan models of the presidency. In the recent past, the conventional wisdom has been Reaganite: New presidents should focus on one or two clear objectives, as Ronald Reagan emphasized tax cuts and a defense buildup. Barack Obama's ambitions are more Rooseveltian. This president seeks not only to address the nation's banking crisis but to upgrade the nation's system of public education, produce an economy based on green energy, and transform American health care. And on the seventh day, he'll rest.
The current debate about the merits of these two presidential models misses the most problematic feature of the Obama agenda. Obama isn't overreaching by addressing too many issues at once. He's overreaching by addressing those issues in the wrong way.
To see why, one must compare FDR's First New Deal not with the Reagan Revolution, but with Abraham Lincoln's other presidency--the one that wasn't spent fighting the Civil War. In the first 16 months of his administration, Lincoln signed three of the most important and successful pieces of legislation in American history: the Homestead Act, the Land-Grant Colleges Act (sometimes called the Morrill Act), and the Pacific Railway Act. The first populated the prairie and kept urban wages high; the second created Cornell, MIT, and the great state universities of the Midwest; the third led to the building of North America's first transcontinental railroad. Congress and the president--Lincoln supported all three laws and was a factor in their passage--found the time to enact this ambitious program while battling Robert E. Lee and Stonewall Jackson, and while building the world's second-biggest navy almost from scratch. How did they do it?
The answer to that question is the same as the answer to this one: Why did Lincoln's laws work? Their success did not depend on complex judgments made by members of Congress or government regulators. The statutes in question were meant to confer opportunities, not to solve problems--yet they offer a terrific model for problem-solving government. Notice who did the hard work: not members of Congress, not Lincoln's omnicompetent cabinet, and not the president himself. Rather, the necessary elbow grease was supplied by the private citizens whose prospects Lincoln aimed to improve.
The Homestead Act hastened the day when the American farm belt would become the world's most productive farmland. The universities established by the Morrill Act helped produce the world's most educated workforce. The transcontinental railroad knit a continent-sized nation together without the need for centralized autocracy: an achievement then unique in world history. Each of these pieces of legislation was simple. Complex calculations were left to the homesteaders, to students and professors, to the workers who laid the track and the engineers who helped find a path through the mountains. They, not some 19th-century Timothy Geithner, were the ones who put in 15-hour days in order for these laws to succeed. The results were abundantly positive. These three laws helped America become both the world's workshop and the world's farm--a combination no other nation has achieved.
Compare that approach with the key statutes of the early New Deal. The National Industrial Recovery Act (and the National Recovery Administration that it created) aimed to cartelize the manufacturing sector of America's economy--to restrict production by having producers and government regulators, working together, allocate market share to different producers. The Agricultural Adjustment Act did the same for America's farms, dictating how much of which crops farmers could grow in order to prop up farm prices. The Securities Acts of 1933 and 1934 and the Glass-Steagall Act established detailed regulatory systems for the world of banking and finance. The only one of these acts that empowered private citizens was the NIRA--and the private citizens in question were industrial CEOs, not ordinary Joes on the assembly line. Success turned not on the wisdom and hard work of the citizenry, but on the knowledge and insight of corporate managers and government regulators. As Amity Shlaes shows in her recent book The Forgotten Man, the results were less than stellar: Seven years after FDR took office, unemployment still stood at 15 percent, nearly double today's figure.
