Tag Archives: Roosevelt

MY 2 CENTS ON “YOU DIDN’T BUILD THAT”

Posted on July 26, 2012 | 1 comment

 

“People know that vast personal incomes come not only through the effort or ability or luck of those who receive them, but also because of the opportunities for advantage which Government itself contributes.  Therefore, the duty rests upon the Government to restrict such incomes by very high taxes.”

Who said that?  It was not our current president.  Here’s a clue – It was the only President in our history who presided over an even longer economic recovery than Barack Obama.  It was Franklin Delano Roosevelt in an address to Congress in 1935.  It is no coincidence that the economic policies of both presidents failed.  Minds that think alike produce results that look alike.  Roosevelt ordered thousands of young pigs to be destroyed to raise the price of pork – in a depression!  Obama ordered thousands of serviceable cars destroyed which raised the cost of transportation for lower income families — in a recession.

As the opening quote attests, Roosevelt sought to siphon money from the employer class to pay for federal government programs.  Obama seeks to do the same.  Roosevelt’s plan for recovery was to put people to work on the taxpayer’s payroll, not in the private sector.  See the CCC and WPA.  Obama’s plan is to rebuild roads and bridges (WPA) and subsidize unprofitable environmental programs like the Solyndra (CCC).

Roosevelt took measures later declared unconstitutional by the Supreme Court.  See The Schechter Brothers and the NRA (National Industrial Recovery Act).  Obama has also been at odds with the Supreme Court.  Both presidents felt restrained by the Court, as well they should.  The Court is there to protect the people from an overreaching government.  Both presidents sought powers beyond those stipulated by our founders, albeit for different reasons.

When two presidents think so much alike and manage economic recoveries with results that are so much alike, it’s not coincidence.  It’s because their policies don’t work.  And what are those different reasons?  Roosevelt’s goal was to restore the economy and benefit lower income workers.  He just didn’t know how to do it.  Obama’s goal is to put a choker on capitalism and completely transform America.  He knows what he is doing.  It’s up to the voters not to let him do it.

 

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OUR SOCIALIST PRESIDENTS

Posted on April 27, 2011 | 14 comments

Wilson, Roosevelt and Johnson were socialistic presidents. All three believed in America but sought to make it an even greater nation. Barack Obama is the first truly Socialist, not just socialistic, president. Obama seeks to transform America into a Marxist Socialist nation. He believes the United States is a deeply flawed arrogant oppressor nation that needs to be brought to its knees. John Bolton expressed it well when he said “Barack Obama is the first post-American president.”

Wilson’s socialistic efforts were unsuccessful. His presidency ran from 1913 to 1921. It was a period of growing prosperity in America. The people wanted no part of his socialistic ideas. Roosevelt (FDR) was elected in the midst of a recession that was the bust after the boom of the roaring twenties. The people turned to government for help. The economic circumstances could be compared to the bust that George Bush inherited following the dot com boom. Whereas, Bush turned the recession into recovery, Roosevelt turned his recession into the ‘Great Depression’. But his intentions were as good as his policies were bad.

Johnson’s contribution was the nanny state with his ‘War on Poverty’. Great welfare programs supported both the misfortunately indigent as well as the slovenly. President Johnson was a politician who built a huge populist power base for the Democratic Party but he was not a Socialist.

Wilson, Roosevelt and Johnson were Democrats who guided the United States in a socialist direction. President Obama is a Socialist who is presiding over the culmination of their work. He must be stopped. The 2012 election is a fork in the road and the road to the left is a one way route. There hasn’t been an election as critical to the future of the nation since Lincoln won the White House.

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“WILL SOMEONE PLEASE SHUT PAUL KRUGMAN UP”

Posted on October 25, 2010 | Leave a comment

The Economist in Chief for the New York Times has been pleading for our government to spend more, spend heavily and spend it now. Nobel Paul insists we must spend and spend until the economy improves. Like the old carpenters joke “I measured twice and cut twice, but the board was still too short”, Krugman would have us keep cutting the board until it is long enough.

Thankfully no one is listening, not even Barack Obama. Perhaps hoping for a more appreciative ear across the pond, Krugman turned to England. His urgings for the U.K. to spend its way out of debt prompted the UK Telegraph to run the headline that is the title of this post.

“Professor Krugman lambasts Britain’s coalition government in his latest column for its deficit reduction plan, which he reckons will condemn the UK to a depression.

Here’s a taste: “What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it”.

Krugman is obviously referring to the Roosevelt era and inferring that the Great Depression occurred because FDR did not spend enough. When Roosevelt assumed office the National debt was less than 20% of GDP. By the end of his first term it was 50% of GDP, now it is about 90%. On May 9, 1939, after 7 years of the Roosevelt administration, Henry Morgenthau, FDR’s Treasury Secretary and chief architect of the New Deal said “We have tried spending money. We are spending more than we have ever spent before and it does not work.”

Now just who is it that is refusing to learn from the past?

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HOW LONG WILL THE STICKY RECESSION STICK?

Posted on August 20, 2010 | Leave a comment

Recessions are a natural element of the economic cycles in a free market society. They even serve a useful purpose. Recessions put a damper on the irrational exuberance that leads to boom and bust. Recovery from recession is just as natural as its recurrence.

MOTHER OF SEVEN Photo from FDR Library via National Archives and Records Administration

Since the end of the Great Depression the average length of a recession has been 11 months; the longest was 16 months in duration. The National Bureau of Economic Research is the universally accepted arbiter for determining when these periods began and when they ended. The NBER has set December 2007 as the start of the current recession. That makes it 2 years and 9 months old. It is by far, the longest recession on record.

Banks have cash to lend, corporations are flush, interest rates are low, labor is plentiful and cheap. These are the seeds for renewal of growth that naturally occur in any recession. But they are not taking root. It is the herbicidal policies of the Obama Administration we have to thank for that.

Taxes will rise but the details remain unknown. The rule of law has been subrogated to executive dictate. Assets have been acquired by government through intimidation. Unions are supported by government as seldom before. Obamacare has significantly increased the cost of adding new employees to a payroll. The Dodd and Frank Act for financial reform has given regulators carte blanche to make the law, no one knows what’s in store. Cap & Trade and Card Check hang as specters for 2011. The Federal debt is set to soar. Socialism is knocking at the door. There is no need to wonder why business is not rushing to expand and banks are reluctant to lend.

The collapse of the mortgage industry brought on this recession. It was the Community Reinvestment Act (CRA) and the actions of the government sponsored enterprises Fannie Mae and Freddie Mac that fed the real estate bubble which, one day, simply had to burst. It was Andrew Cuomo, Secretary for HUD who threatened the banks because “only” 42% of their loans were to sub-prime lenders. This was not a naturally occurring recession. It was government induced and now it is being government prolonged. It is FDR redux.

What did Reagan say? “Government is not the solution to the problem. Government IS the problem”.

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ROOSEVELT REDUX

Posted on July 24, 2010 | 1 comment

ROOSEVELT

OBAMA

Franklin Delano Roosevelt (FDR) is to liberals what Ronald Reagan is to conservatives, a hero for their cause. Roosevelt was more destructive 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, 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 saw deflation as one of the causes of continuing recession, not as 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 the prime elements of FDR’s stimulus program.

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 growth of mass unemployment.” (sound familiar?)

A Farm Board was created for the control of production and prices of crops and livestock. Crop farmers were required by the board to let land lie fallow and paid by the government for crops they were ordered not to produce. Six million young pigs were ordered to be slaughtered at government expense as a measure to reduce the supply and increase the price of bacon and pork. (Instead of pigs, Obama chose used cars).

Roosevelt’s first legislative victory was passage of the National Industrial Recovery Act administered by the National Recovery Administration (NRA). This law gave Washington vast new powers of control over private enterprise, even to the establishment of maximum and minimum wages and prices for various industries. 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?).

It turned out to be a step too far. As a strategy to end the controversy surrounding the NRA, Roosevelt chose to make an example of a Kosher chicken processing firm in Brooklyn, NY by arresting the proprietors who were found guilty of violating the new law and put in jail. The strategy backfired when the proprietors, known as the Schechter brothers, fought back. The issue went to the Supreme Court. The Court decided the National Industrial Recovery Act was unconstitutional. The decision was unanimous. Roosevelt had no choice but to dismantle the NRA.

Today’s closest equivalency to FDR’s NRA is the system of czars, purse strings and intimidation currently being employed to control private industry. The fractured nature of this approach makes it more difficult to defeat. These methods also create greater uncertainty for the business community than when there is a clear cut law around which to plan, even though the law may be an unfavorable one.

FDR was first elected in 1932. Eight years later, as Roosevelt’s second term in office was coming to an end, the unemployment rate stood at 14.6%. Henry Morgenthau, Jr., FDR’s Secretary of the Treasury from 1934-1945, admitted to himself as he wrote in his personal diary that their 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 came the day reputed to live on in infamy, the day the Japanese attacked Pearl Harbor, December 7th 1941. Tanks and planes, guns and ships started rolling off assembly lines running 24 hours a day. Rosie was busy riveting away. Government debt soared but no one cared. The cause was shared by all. The American worker went back to work. FDR, already the only President to win a third term, went on to win a fourth.

Obama is treading the same path taken by FDR, with steps that prolonged a recession and gave us a depression. But take heart dear friends, we survived the Civil War, Woodrow Wilson, Franklin Roosevelt and World War II. We will survive Barack Obama as well.

Bob B

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