March 21st, 2012
These posts aren’t usually on subjects unrelated to stocks and the market but I just couldn’t resist this one. I’m working my way through the last of Edmund Morris’ monumental biographical trilogy of Theodore Roosevelt called Colonel Roosevelt. If you haven’t read much about our 36th president then you can’t possibly understand much about what made the world we live in today. In many ways the two periods are nothing alike but when it came to the political, economic and international scene there are interesting similarities.
There probably aren’t many history professors and teachers assigning the following project to their pupils: “Compare the similarities and differences between 1912 and 2012” but, if I taught such a course, I certainly would.
This morning’s NYTimes business section included and article entitled “Inequality Undermines Democracy” which stated:
The gap between the rich and the rest has been much wider in the United States than in other developed nationsfor decades….. Our tolerance for a widening income gap may be ebbing, however. Since Occupy Wall Street and kindred movements highlighted the issue, the chasm between the rich and ordinary workers has become a crucial talking point in the Democratic Party’s arsenal. In a speech in Osawatomie, Kan., last December, President Obama underscored how “the rungs of the ladder of opportunity had grown farther and farther apart, and the middle class has shrunk.”
…..a growing share of Americans have lost faith in their ability to get ahead. We have accepted income inequality in the past partly because of the belief that capitalism can’t work without it. If entrepreneurs invest and workers improve their skills to improve their lot in life, a government that heavily taxed the rich to give to the poor could destroy that incentive and stymie economic growth that benefits everybody…..Evidence is mounting, however, that inequality itself is obstructing Americans’ shot at a better life.
That was written today but it could just as easily have been written 100 years ago, in 1912, when the country was going through a similar argument about social and economic equality. At the time, it was Theodore Roosevelt who, like the Tea Party of today, was disenchanted with the way the Republican Party led by his successor, Howard Taft, was pulling the country back from his Progressive programs. During his eight years in office he had promised more progressive (read “liberal”) reforms to come. A battle for the nomination of the Republican Party to run against the Democrat Woodrow Wilson ensued between Taft and the “progressive” Roosevelt.
Predating Obama’s trip this year, Roosevelt traveled to Osawatomie, KS in the summer of 1910 to set the stage for that nomination battle by delivering a historic speech. He argued that one of the central issues of the government was protection of human welfare and property rights. That 1910 Osawatomie speech later became the basis for his 1912 break from the Republican Party and formation of his Bull Moose Progressive Party. In it he said that human welfare was more important than property rights and that only a powerful federal government could regulate the economy and guarantee social justice. A President can only succeed in making his economic agenda successful, he believed, if he makes the protection of human welfare his highest priority.“
[Interestingly, Osawatomie might also lay claim to being the “birthplace” of the Civil War since it was where John Brown led his first anti-slavery massacre in 1856 followed by his raid at Harper’s Ferry in 1859 and the start of the Civil War in 1860. Immediately before the Civil War, Kansas was the battleground of the effort to prevent the expansion of slavery and, in that battle, a main terminus of the underground railway for fugative slaves from the South.]
Key elements of Roosevelt’s New Democracy speech were (from Wikipedia). It’s amazing how many of those issues are the ones still we debate today in one form or another:
- A National Health Service to include all existing government medical agencies.
- Social insurance to provide for the elderly, the unemployed, and the disabled.
- Limited injunctions in strikes.
- A minimum wage law for women.
- An eight hour workday.
- A federal securities commission.
- Farm relief.
- Workers’ compensation for work-related injuries.
- An inheritance tax.
- A Constitutional amendment to allow a Federal income tax.
- Women’s suffrage.
- Direct election of Senators.
- Primary elections for state and federal nominations.
- Strict limits and disclosure requirements on political campaign contributions.
- Registration of lobbyists.
- Recording and publication of Congressional committee proceedings.
We often incorrectly believe that the issues facing us are new and, at times, appear insurmountable. But all we need do is, like in stock charting, to look at history and see that what is happening today follow from and follow patterns like events in the past. If we understand that history and those patterns we are likely to make better decisions today.