Wednesday, January 28, 2009

What part of Massive Economic Woe do you not understand?

Let's go back to the Great Depression, and have a look at Franklin D. Roosevelt. He tried to fix a depression once, a long time ago. Let's have a look at him.

In an effort to fix the economy, he composed a "New Deal" Let's take a good, long look at that New Deal.

Now, according to Wikipedia, there were three parts to the "first" New Deal:

1) Bank and monetary reforms:

With strident language Roosevelt hurled blame at businessmen and bankers: "Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men....The money changers have fled from their high seats in the temple of our civilization."

Now doesn't this remind you of something Congress did recently? Oh wait, they did that to the car makers. They let their pets Fanny Mae and Freddie Mac slip right on by.

2) The Economy Act - Now doesn't just that name right there remind you of something Congress did? The Economic Stimulus Package, anyone? But the one in the New Deal wasn't like that, at least not by the site I'm looking at.

3) Farm and Rural programs - We haven't gotten here yet, though I wonder if it's on Obama's to-do list.

Now, the public is convinced the New Deal helped get us out of the Depression - Wrong! FDR's New Deal prolonged the Great Depression:

Two UCLA economists say they have figured out why the Great Depression dragged on for almost 15 years, and they blame a suspect previously thought to be beyond reproach: President Franklin D. Roosevelt.

After scrutinizing Roosevelt's record for four years, Harold L. Cole and Lee E. Ohanian conclude in a new study that New Deal policies signed into law 71 years ago thwarted economic recovery for seven long years.

The New Deal fixed nothing - it just prolonged the pain. More about the New Deal here.

Now let's fast forward several decades, up to 2009. We are in the middle of a recession. Our new president, not even in office at the time I write this, is calling for another stimulus package. This one will cost us $1 trillion dollars. I wonder how many zeros you'd have to tack on that one ... I believe it's twelve. Either way, that's a heckuva lota money.

Obama is working hard to push this insanity. Check this out:

President-elect Barack Obama said Thursday the recession could "linger for years" unless Congress pumps unprecedented sums from Washington into the economy, making his highest-profile case yet on an issue certain to define and dominate his early presidency.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," Obama said in a speech set to be delivered at George Mason University in Fairfax, Va., outside Washington.

It was the fourth day in a row that Obama has made a pitch for a huge infusion of taxpayer dollars to revive the sinking economy he will inherit from President George W. Bush.

He wants to revive a sinking economy. Now doesn't this sound like something we've heard before? Oh, I don't know, the Great Depression, anyone?

2cents wrote about this on the blog There's My Two Cents:

So, history shows that recessions are 12-24 months, but Obama is saying this particular one will last well beyond that. Why is that? First of all, isn't that warning essentially an admission that what he's going to do won't work? And, isn't it also an admission that he knows it won't work? More importantly, when was the last time a recession stretched out into several years? Bingo - the Great Depression.

Failing banks, bad economy, people buying everything on credit, sure sounds like immediately prior to the Great Depression to me. This next quote comes from both the UCLA study and 2cents:

The conclusions of this study are critical to understand:

Roosevelt's role in lifting the nation out of the Great Depression has been so revered that Time magazine readers cited it in 1999 when naming him the 20th century's second-most influential figure.

…"The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened."

The facts are clear: if Obama gets his way with this stimulus package, he
will transform this recession into another Great Depression.

Obama wants to put $1 trillion into the economy. The first stimulus didn't work. The banks apparently squandered the bailout they were given (at least, no one can locate that money they were given), the economy's still in the trash. Why does he think pumping more money in is going to work?

People, this is not going to work. At the best, it'll be like it was with Carter, the intrest rates, the shortages, etc. At the worst, it will be a second Great Depression. Pumping money into a sinking economy did not work the first, and it will not work a second time.

I don't care what you call me. Put down the Kool-Aid and listen to what's being said. By the way, where do you think he's gonna get the money to pay for this $1 Trillion dollar stimulus package? Taxes, perhaps? Or maybe he'll borrow it from China.

Massive economic woe, anyone?

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