Tag Archives: Great Depression

FORTY-ONE STRAIGHT MONTHS OVER EIGHT PERCENT

Unemployment has been 8% or higher for the last 41 months and Barack Obama said in Ohio on Friday that the country is headed in the right direction.  If that’s the case, I have to ask just where it is he thinks we should go?

The U6 number which includes would-be workers who have given up and dropped off the stats is pushing very close to 15%.  The country hasn’t experienced such economic malaise lasting this long since the Great Depression, literally.

Increasing taxes on the rich won’t create jobs.  Adding an immeasurable cost of doing business with a health care plan when we still don’t know what’s in it won’t create jobs.  Blocking energy programs like the Keystone Pipeline and placing moratoriums on drilling in the Gulf doesn’t create jobs.  Subsidizing green energy programs like Solyndra hasn’t created any net jobs.  The Joint Economic Committee led by Congressman Kevin Brady issued a report saying that the Obama recovery now ranks dead last in modern times.  Spending stimulus, housing bailouts, auto bailouts, financial bailouts, cash for clunkers, extending unemployment benefits and $5 trillion in deficit spending left the Obama recovery dead last in modern times.

If you are a President, how do you create jobs?  You don’t.  Business creates jobs; you clear the road stand aside and cheer.  You don’t stand in the middle, over-regulate and jeer — and then blame the lack of progress on your predecessor.

The ONLY THING OUR ECONOMY NEEDS IS A NEW PRESIDENT

Roosevelt Redux: How Obama is Creating a Great Depression of His Own

By Robert R. Barker

Franklin Delano Roosevelt (FDR) is to liberals as Ronald Reagan is to conservatives, a greatly revered hero of their cause.  Barack Obama is following in FDR’s shoes.  Roosevelt was more destructive to the economy in his own time than Obama has been in his… thus far.

Roosevelt responded to the recession he inherited with a combination of massive spending on new government programs and sweeping controls over private industry, (sound familiar?).  His thinking was that government spending would get people back to work, and controls over private industry would end deflation.  Rules and regulations over private industry were put in place designed, incredibly, to increase the prices of goods.  The President and his advisors thought deflation was a cause of the recession.  But of course it wasn’t a cause; it was a result.

The Works Progress Administration (WPA) and the Civilian Conservation Corps (CCC) were formed.  The WPA was created to carry out infrastructure projects (sound familiar?) and the CCC to provide government jobs for young men by performing work of a conservation nature on government-owned land.  The WPA and CCC were prime elements of FDR’s stimulus program.  Both programs increased the size of government and added to the Federal payroll but did little for private industry which is the heart of an economy.

The Reconstruction Finance Corporation (RFC) was a government sponsored organization (GSO) structured somewhat like Fannie Mae and Freddie Mac.  The RFC was expanded by Roosevelt and served as the money conduit for bailing out failing banks.  It was funded with over 5 billion dollars in taxpayer money, equivalent to 84 billion today after adjusting for inflation.  According to Wikipedia, “The RFC was bogged down in bureaucracy and failed to disperse much of its funds.  It failed to reverse the problem of mass unemployment.”  (Sound familiar?)

FDR created a Farm Board with the power to control the amount of production and the price of grains and livestock.  The board mandated that crop farmers let some of their fields lie fallow.  Agriculture farmers were paid by the government for crops that didn’t exist because they were forbidden to plant them.  Livestock farmers were not overlooked either.  Six million young piglets were ordered destroyed at taxpayer expense.  The purpose was to reduce the supply of pigs and increase the price of bacon and pork.  Instead of pigs, Obama chose to destroy used cars.  At least that move is more humane.

Roosevelt’s first legislative victory was congressional passage of the National Industrial Recovery Act to be administered by the National Recovery Administration (NRA).  This new law created a new agency giving Washington vast powers of control over private enterprise.  It established maximum and minimum wages and price controls over many goods and services.  It was the most contentious of all the programs in Roosevelt’s “New Deal.”  Had it not been for the economic crisis then at hand, such sweeping legislation could never have been enacted.  (Sound familiar?)

But the NRA turned out to be a step too far.  In an attempt to end the controversy surrounding the program, Roosevelt chose to make an example of a kosher chicken processing firm run by two immigrant brothers in Brooklyn, NY.  The proprietors were arrested, tried, found guilty and jailed for selling chickens at prices below those allowed by the law and for permitting wholesale customers to pick and choose which birds they wanted to buy.  Both acts violated regulations set by the National Recovery Administration.

The strategy backfired when the proprietors, the Schechter brothers, fought back.  The case went to the Supreme Court where, by a unanimous decision, the National Industrial Recovery Act was declared to be unconstitutional.  The NRA which administered the Act was dismantled.  Today we see parallels in Obama’s use of czars and broad powers of regulation to control the private sector.  If the question of the constitutionality of the Patient Protection and Affordable Care Act, commonly known as  ObamaCare, winds up in the Supreme Court it will be one more instance of Roosevelt redux.

Eight years after Roosevelt was first elected, unemployment stood at 14.6%.  Henry Morgenthau, Jr., FDR’s Secretary of the Treasury from 1934-1945, admitted to himself in a written in his personal diary that the stimulus spending programs had failed.

“We have tried spending money.  We are spending more money than we have ever spent before and it does not work…  We have never made good on our promises. . . . I say after eight years of this administration we have just as much unemployment as when we started . . . . And an enormous debt to boot!”

Then on December 7th 1941, Japan attacked Pearl Harbor.  The unemployed went back to work.  Assembly lines ran around the clock making tanks and planes, guns and ships in the all-out war effort.  FDR, already the only President to win a third term, went on to win a fourth.

Obama is treading the same path as FDR, repeating the same steps that turned a recession into the Great Depression.  But fear not; we survived the Civil War, Woodrow Wilson, Franklin Roosevelt and World War II.  We’ll survive Barack Obama as well.  But we must make certain he only reigns for one term.

o 0 O 00

This article was first published in American Thinker on June 14, 2011 and is reprinted verbatim here.

PAUL KRUGMAN GETS ONE RIGHT

Depression and Democracy is the title of Krugman’s column in the New York Times today.  I know little about the Hungarian political party known as Fidesz, but beyond that, what Krugman wrote was dead right as far as it went.  Democracy is under threat.

…the gravity of European political developments isn’t widely understood.

First of all, the crisis of the euro is killing the European dream. The shared currency, which was supposed to bind nations together, has instead created an atmosphere of bitter acrimony.

…a Europe-wide recession now looks likely

Europeans [are] furious at what is perceived, fairly or unfairly (or actually a bit of both), as a heavy-handed exercise of German power.

Nobody familiar with Europe’s history can look at this resurgence of hostility without feeling a shiver.

The ecojournalist doesn’t hesitate to use the H word either.  Krugman never was known for his political correctness, if you will pardon the pun.

…ominous political trends shouldn’t be dismissed just because there’s no Hitler in sight.

Now we must delve into uncertain territory, what the author thinks but doesn’t say.  Just which movement on the current scene does he think a figure like H best represents?  Krugman limits his remarks in the article to political parties in Europe.  Speaking domestically, would it be the Occupy movement or the Tea Party?

Spokesfolks from the left see the problems; they just don’t see the causes so they come to the wrong conclusions about the solutions.  They are looking at the malaise through a window when they should be using a mirror.