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'President Must Choose Between Retribution and Recovery'

How to Make a Weak Economy Worse

FDR's war against business showed that a president must choose between retribution and recovery.


You get the feeling President Obama is girding for battle with the financial sector. In last week's State of the Union address, he promised to regulate the industry. On Jan. 21, he was blunter, warning that he would not let companies that enjoyed "soaring profits and obscene bonuses" block his financial reforms. "If these folks want a fight," he said, "it's a fight I'm ready to have."

This declaration of war echoes that of Franklin Delano Roosevelt. In 1936, late in his campaign for a second presidential term, FDR spoke of the challenges of "business and financial monopoly, speculation, reckless banking." Wall Streeters and businessmen hated him, he said, adding that "I welcome their hatred."

Then Roosevelt escalated: "I should like to have it said of my first administration that in it the forces of selfishness and the lust for power met their match. I should like to have it said of my second administration that in it these forces met their master."

Mr. Obama might want to stick to a moderate approach. FDR's war against business played to the crowd, but it hurt the economy. While monetary policies impeded recovery in the late 1930s, it was the administration's assault on companies and capital that ensured the Depression's duration.

http://online.wsj.com/article/SB10001424052748703808904575024981110918808.html?mod=WSJ_Opinion_LEFTTopOpinion


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