Stephen L. Carter / Obama should learn from FDR’s example - pressofAtlanticCity.com: Commentary

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Stephen L. Carter / Obama should learn from FDR’s example

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Posted: Tuesday, November 20, 2012 12:01 am

Stephen L. Carter / Obama should learn from FDR’s example

Here's my advice for President Barack Obama as he embarks on his second term: Follow the example of one of your heroes, Franklin Delano Roosevelt. Not the Roosevelt of the first two terms, but the Roosevelt of the next two. The Roosevelt who won the war.

Everyone agrees that the economy is recovering from the recession far too slowly. Everyone wants U.S. businesses to start hiring again. The administration knows it needs to mend fences with business. Maybe it should study how Roosevelt pulled it off.

When it entered World War II in 1941, America was the world's mightiest industrial power, but lagged the major belligerents in military strength. Yet in 1942 - the first year of war production - U.S. factories produced more aircraft, tanks and artillery than all the Axis powers combined. The U.S. outproduced Japanese naval yards by a striking 16 to 1.

To accomplish this, Roosevelt had to recognize that the business community he had alienated held the key to the nation's survival. As Richard Overy explains in his book "Why the Allies Won," Roosevelt's response was to turn over war production to his political opponents.

He writes: "Corporate bosses had as much, if not more, experience of the kind of planning and coordination needed in a wartime economy than did government officials, whose only real experience was the ill-starred New Deal."

One of the most famous stories of the war involves the B-24 bomber, the U.S. wartime mainstay. Henry Ford was invited to bid on a parts contract. He refused. He would rather build the entire plane, he said, from start to finish, using his assembly-line method.

Even the military was initially skeptical. How could the mass-production techniques that turned out automobiles be adapted to the construction of planes, tanks and ships? The tried-and-true method of building one plane at a time appealed more to both the generals and the civilians in charge of production.

Ford insisted he could build a plant that would produce a bomber an hour. Nobody thought such a thing possible. Nevertheless, the administration gave him his head. The result was the Willow Run plant, one of the great success stories of wartime production. Running full tilt, the factory almost met the impossible goal: A finished bomber came off the line every 63 minutes.

It's not just that Ford was correct. It's that he was motivated by the desire to maximize profit, which provided the necessary incentive to innovate.

In his book "Freedom's Forge: How American Business Produced Victory in World War II," Arthur Herman notes that the business community successfully resisted efforts to place a single czar in charge of the production of war materiel. It preferred the extant system, which left "defense production in the hands of business, not the government." Obviously, some of this was self-interest, but not all of it. According to Herman, the system remained untouched "largely because everyone could see how well it worked."

The point isn't that business is necessarily better or smarter than government. It's that government isn't necessarily better or smarter than business. That's why genuine conversation and the exchange of ideas matter.

Unfortunately, the Obama administration got off on the wrong foot. Bob Woodward, in his book "The Price of Politics," tells of a telephone call in which Sam Palmisano, then chief executive officer of IBM Corp., warned then Chief of Staff Rahm Emanuel that the health care bill might cost the company $700 million over 10 years, leading to 20,000 lost jobs. Emanuel responded with profanity-laden disbelief.

But why? An increase in the cost of employees tends to lead to fewer employees. This isn't simple arithmetic. Sometimes the trade-offs are worth it, and being honest about them is helpful. Environmental regulation hit the Coal Belt hard, but led to cleaner air. Business doesn't always have to get its way. But it should be an integral part of a serious conversation.

All that is required is for the president to recognize that there are more good ideas than his experts have come up with.

Nor is the point whether the administration has friends in the business community - obviously it has many. It's whether Obama is willing to reach out to those with whom relations are more strained.

In both Herman's and Overy's telling, that's what Roosevelt and his people did. Getting the economy unstuck isn't the same as winning a war, but that doesn't mean we can't use the same methods. Once the U.S. joined the war, Roosevelt accepted the premise that business executives knew more about their fields than even the best-intentioned regulators.

From this beginning, political antagonists built together the mightiest industrial power the world has ever known. If the U.S. is to maintain its primacy, it could do worse than starting out the same way.

Stephen L. Carter is a professor of law at Yale University. He is the author of "The Violence of Peace: America's Wars in the Age of Obama," and the novel "The Impeachment of Abraham Lincoln." He wrote this for Bloomberg News.

Posted in on Tuesday, November 20, 2012 12:01 am.

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