[From Saturday's FT]
In the US presidential election of 1932 Franklin Roosevelt's campaign song was: "Happy Days Are Here Again". He won. Four years later, happy days had not returned: unemployment was down but still exceeded 15 per cent. That year, FDR was re-elected in a landslide that makes Barack Obama's victory look small. He carried every state but Vermont and Maine and more than 60 per cent of the popular vote. He led the Democrats to majorities of 334 to 88 in the House of Representatives and 76 to 17 in the Senate.
The economy promptly tanked. In the end it was revived not by the New Deal but by the war FDR had promised to stay out of. He won two more presidential elections.
The similarities between 1932 and 2008 make the temptation to draw parallels impossible to resist. One lesson that might give the president-elect comfort is that voters can overlook a lot of failure if they are sure that a president is on their side. Persuading them of this was FDR's surpassing talent. Mr Obama may have the same knack.
The history of the Great Depression is obscured by partisan mythology. One must steer a middle course between regarding FDR as a kind of saint who delivered the US from economic collapse and global conflict, and a malicious bungler who trashed the constitution and prolonged the Depression. Perhaps it is a moot point whether Mr Obama should even wish to be another FDR. If the thought should cross his mind, though, here are some things to consider.
After a prolonged and deliberately stalled transition - he and Herbert Hoover could not work together - FDR started with a bang. He dealt decisively with the financial aspect of the economic crisis. He closed the banks and used the Reconstruction Finance Corporation to recapitalise those sound enough to reopen. Most promptly did reopen and confidence in banks revived. He also took the dollar off the gold standard and let it depreciate. These were abrupt departures from Hoover's policies and they worked.
Then it was mostly a case of one step forward, two steps back. In his first 100 days FDR passed a blizzard of new laws - a standard other presidents seem expected to meet, though why is unclear. Banking and finance aside, the first months of the New Deal were a muddle.
Public works created new employment. But the Agricultural Adjustment Act aimed to support farm incomes through price and production controls; its fingerprints are on today's wasteful farm policies. Then came the National Recovery Administration to oversee a complex web of industrial regulation. This was based on the idea that too much production (not too little demand) was prolonging the slump. The NRA slowed the recovery. When the Supreme Court shut it down in 1935, growth picked up.