Posts Tagged ‘We have tried spending money’

Americans Decide They Don’t Want Another Great Depression, Turn To GOP In Greatest Numbers Since 1930

September 9, 2010

Hmmm, do we want to go back to FDR and keep the Great Depression running like a Merry Go Round, or do we want to get off that particular ride?

Apparently, Americans are deciding that they don’t want the next liberal demagogue who will keep the country in a perpetual state of suffering.

GOP Turnout Exceeding Democrats’ For First Time Since 1930
By Ed Carson
Wed., Sept. 08, 2010 3:59 PM ET
Tags: Elections – Republicans – Democrats

Republican primary turnout for statewide offices is outpacing the Democratic vote for the first time since 1930, according to election expert Curtis Gans of the American University.

* The share of Americans voting in GOP primaries hit 10.5%, up from 8.2% in the 2006 primaries and the highest since 1970.

* The share of Americans voting in Democratic primaries was a record low of 8.3%.

* Republican turnout in their statewide primaries exceeded Democratic turnout by over 4 million votes.

A wide variety of polls and individual primaries have pointed to a big Republican enthusiasm gap vs. gloomy Democrats, but this survey offers a comprehensive look at actual voting patterns. “If there is an analagous election, it could be that of 1994, where the Democrats lost massively,” the report says.

The full report is here (pdf).

And you can express it negatively, too:

Study: Democratic turnout for primaries lowest in 80 years

During the 1930s America had King Überüberliberal FDR (at least before Obama came along to strip him of the title), to go along with more Democrats than you could shake a stick at, running and ruining the country.

And no matter how badly FDR and the Democrats in Congress failed, or for how long they kept failing, Americans just kept re-electing them.

Here’s another article about those days:

FDR’s policies prolonged Depression by 7 years, UCLA economists calculate
By Meg Sullivan
8/10/2004 12:23:12 PM

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.

“Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump,” said Ohanian, vice chair of UCLA’s Department of Economics. “We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.”

In an article in the August issue of the Journal of Political Economy, Ohanian and Cole blame specific anti-competition and pro-labor measures that Roosevelt promoted and signed into law June 16, 1933.

“President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services,” said Cole, also a UCLA professor of economics. “So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.”

Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, Cole and Ohanian were able to establish average wages and prices across a range of industries just prior to the Depression. By adjusting for annual increases in productivity, they were able to use the 1929 benchmark to figure out what prices and wages would have been during every year of the Depression had Roosevelt’s policies not gone into effect. They then compared those figures with actual prices and wages as reflected in the Conference Board data.

In the three years following the implementation of Roosevelt’s policies, wages in 11 key industries averaged 25 percent higher than they otherwise would have done, the economists calculate. But unemployment was also 25 percent higher than it should have been, given gains in productivity.

Meanwhile, prices across 19 industries averaged 23 percent above where they should have been, given the state of the economy. With goods and services that much harder for consumers to afford, demand stalled and the gross national product floundered at 27 percent below where it otherwise might have been.

“High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns,” Ohanian said. “As we’ve seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market’s self-correcting forces.”

The policies were contained in the National Industrial Recovery Act (NIRA), which exempted industries from antitrust prosecution if they agreed to enter into collective bargaining agreements that significantly raised wages. Because protection from antitrust prosecution all but ensured higher prices for goods and services, a wide range of industries took the bait, Cole and Ohanian found. By 1934 more than 500 industries, which accounted for nearly 80 percent of private, non-agricultural employment, had entered into the collective bargaining agreements called for under NIRA.

Cole and Ohanian calculate that NIRA and its aftermath account for 60 percent of the weak recovery. Without the policies, they contend that the Depression would have ended in 1936 instead of the year when they believe the slump actually ended: 1943.

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.

“This is exciting and valuable research,” said Robert E. Lucas Jr., the 1995 Nobel Laureate in economics, and the John Dewey Distinguished Service Professor of Economics at the University of Chicago. “The prevention and cure of depressions is a central mission of macroeconomics, and if we can’t understand what happened in the 1930s, how can we be sure it won’t happen again?”

NIRA’s role in prolonging the Depression has not been more closely scrutinized because the Supreme Court declared the act unconstitutional within two years of its passage.

“Historians have assumed that the policies didn’t have an impact because they were too short-lived, but the proof is in the pudding,” Ohanian said. “We show that they really did artificially inflate wages and prices.”

Even after being deemed unconstitutional, Roosevelt’s anti-competition policies persisted — albeit under a different guise, the scholars found. Ohanian and Cole painstakingly documented the extent to which the Roosevelt administration looked the other way as industries once protected by NIRA continued to engage in price-fixing practices for four more years.

The number of antitrust cases brought by the Department of Justice fell from an average of 12.5 cases per year during the 1920s to an average of 6.5 cases per year from 1935 to 1938, the scholars found. Collusion had become so widespread that one Department of Interior official complained of receiving identical bids from a protected industry (steel) on 257 different occasions between mid-1935 and mid-1936. The bids were not only identical but also 50 percent higher than foreign steel prices. Without competition, wholesale prices remained inflated, averaging 14 percent higher than they would have been without the troublesome practices, the UCLA economists calculate.

NIRA’s labor provisions, meanwhile, were strengthened in the National Relations Act, signed into law in 1935. As union membership doubled, so did labor’s bargaining power, rising from 14 million strike days in 1936 to about 28 million in 1937. By 1939 wages in protected industries remained 24 percent to 33 percent above where they should have been, based on 1929 figures, Cole and Ohanian calculate. Unemployment persisted. By 1939 the U.S. unemployment rate was 17.2 percent, down somewhat from its 1933 peak of 24.9 percent but still remarkably high. By comparison, in May 2003, the unemployment rate of 6.1 percent was the highest in nine years.

Recovery came only after the Department of Justice dramatically stepped enforcement of antitrust cases nearly four-fold and organized labor suffered a string of setbacks, the economists found.

“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.”

-UCLA-

LSMS368

One of the greatest indictments of FDR’s legacy comes from FDR’s own Treasury Secretary and closest personal friend:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enought to eat. 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!” – Henry Morganthau, FDR’s Treasury Secretary, May 1939

In April 1939, after those two terms in office, unemployment was at 20.7%.  Morganthau was an honest enough man to admit that his and FDR’s policies had utterly failed.  But generations of dishonest liberal propagandist journalists and historians merely ignored Morganthau’s honest and accurate admission and heralded the man who did more to drive America into socialism than anyone until one Barack Hussein Obama stepped onto the scene.

FDR’s failure to do anything but further destroy the American economy becomes critical because Obama has been widely viewed as the 2nd incarnation of FDR.

I mean, the SAME Time Magazine that thought FDR walked on water gave us this cover:

And we don’t want that guy.  He’s the LAST thing we should want.  Because we don’t want to linger in the great misery of the Great Depression for year after year.

And thank God more Americans are realizing the Obama-as-FDR fraud than at any time since FDR came along to lead America into unparalleled misery.

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Even Liberals Realizing Obama Has Been Total Bust At Creating Jobs

October 8, 2009

This article is in many ways typical New York Times.  It comes from a distinctly liberal perspective, and views solutions to the problems that America faces through a liberal prism.

The big difference in this case is that it really takes a critical look at a Democrat.  It slams Barack Obama as being basically disinterested and uninvolved in – and even uncomprehending of – the biggest crisis facing the country.

Does Obama Get It?

By BOB HERBERT
Published: October 5, 2009

The big question on the domestic front right now is whether President Obama understands the gravity of the employment crisis facing the country.  Does he get it?
The signals coming out of the White House have not been encouraging.

The Beltway crowd and the Einsteins of high finance who never saw this economic collapse coming are now telling us with their usual breezy arrogance that the Great Recession is probably over.  Their focus, of course, is on data, abstractions like the gross domestic product, not the continued suffering of living, breathing human beings struggling with the nightmare of joblessness.

Even Mr. Obama, in an interview with The Times, gave short shrift to the idea of an additional economic stimulus package, telling John Harwood a few weeks ago that the economy had likely turned a corner. “As you know,” the president said, “jobs tend to be a lagging indicator; they come last.”

The view of most American families is somewhat less blasé. Faced with the relentless monthly costs of housing, transportation, food, clothing, education and so forth, they have precious little time to wait for this lagging indicator to come creeping across the finish line.

Americans need jobs now, and if the economy on its own is incapable of putting people back to work — which appears to be the case — then the government needs to step in with aggressive job-creation efforts.

Nearly one in four American families has suffered a job loss over the past year, according to a survey released by the Economic Policy Institute. Nearly 1 in 10 Americans is officially unemployed, and the real-world jobless rate is worse.

We’re running on a treadmill that is carrying us backward. Something approaching 10 million new jobs would have to be created just to get back to where we were when the recession began in December 2007. There is nothing currently in the works to jump-start job creation on that scale.

A massive long-term campaign to rebuild the nation’s infrastructure — which would put large numbers of people to work establishing the essential industrial platform for a truly 21st-century American economy — has not seriously been considered. Large-scale public-works programs that would reach deep into the inner cities and out to hard-pressed suburban and rural areas have been dismissed as the residue of an ancient, unsophisticated era.

We seem to be waiting for some mythical rebound to come rolling in, magically equipped with robust job creation, a long-term bull market and paradise regained for consumers.

It ain’t happening.

While the data mavens were talking about green shoots in September, employers in the real world were letting another 263,000 of their workers go, bringing the jobless rate to 9.8 percent, the highest in more than a quarter of a century. It would have been higher still but 571,000 people dropped out of the labor market. They’re jobless but not counted as unemployed. The number of people officially unemployed — 15.1 million — is, as The Wall Street Journal noted, greater than the population of 46 of the 50 states.

The Obama administration seems hamstrung by the unemployment crisis. No big ideas have emerged. No dramatically creative initiatives. While devoting enormous amounts of energy to health care, and trying now to decide what to do about Afghanistan, the president has not even conveyed the sense of urgency that the crisis in employment warrants.

If that does not change, these staggering levels of joblessness have the potential to cripple not just the well-being of millions of American families, but any real prospects for sustained economic recovery and the political prospects of the president as well. An unemployed electorate is an unhappy electorate.

The survey for the Economic Policy Institute was conducted in September by Hart Research Associates. Respondents said that they had more faith in President Obama’s ability to handle the economy than Congressional Republicans. The tally was 43 percent to 32 percent. But when asked who had been helped most by government stimulus efforts, substantial majorities said “large banks” and “Wall Street investment companies.”

When asked how “average working people” or “you and your family” had benefited, very small percentages, in a range of 10 percent to 13 percent, said they had fared well.

The word now, in the wake of last week’s demoralizing jobless numbers, is that the administration is looking more closely at its job creation options. Whether anything dramatic emerges remains to be seen.

The master in this area, of course, was Franklin Roosevelt. His first Inaugural Address was famous for the phrase: “The only thing we have to fear. …” But he also said in that speech: “Our greatest primary task is to put people to work.” And he said the country should treat that task “as we would treat the emergency of a war.”

Now that’s the sense of urgency we need.

More Articles in Opinion » A version of this article appeared in print on October 6, 2009, on page A31 of the New York edition.

Not to dive into the genetic fallacy, as so many liberals so often do, but it is nevertheless significant that the Economic Policy Institute is a distinctly liberal think tank.  And Hart Research Associates aint exactly Rasmussen.  So while I don’t know that they aren’t right in their survey about Obama vs. Congressional Republicans, I would point out: 1) that I wouldn’t regard it as gospel; and 2) don’t forget that as LOW as Bush got in the polls, he STILL outperformed the Democrat-controlled Congress throughout his entire presidency.

In fact, Bush had more than DOUBLE the ratings of the Democrat Congress:

Bush’s job approval rating fell to 24 percent from last month’s record low for a Zogby poll of 29 percent. A paltry 11 percent gave Congress a positive grade, tying last month’s record low.

So in terms of net differences, Bush actually fared quite a bit better when pitted against a Democrat Congress than Obama is faring when pitted against Congressional Republicans.  And I would submit that the public thinks a lot more highly of Republican ideas than this smoke-and-mirror statistic would otherwise indicate.  Just sayin’.

I made that point just to demonstrate the statistical sleight of hand going on.

Now, Bob Herbert is a big government, rah-rah FDR guy, who sees the big public projects of the WPA as the model for our country’s salvation.

For what it’s worth, I – and Congressional Republicans – agree(d) that that would have been FAR better than Obama’s $3.27 trillion pork-laden employment bust known as the stimulus.

A New York Times story points out why Republicans opposed the porkulus so fiercely:

But the committee’s ranking Republican, Jerry Lewis of California, asserted that the program would do far too little to finance road construction, flood control projects and other works for the public good.

“Facts are stubborn things,” Lewis said, describing the package as a recipe for bloated government programs that would saddle taxpayers with a debt burden “well, well into the future.”

And now even the New York Times is essentially acknowledging that the Republicans were right and Obama was wrong.

I would also point out that the Hoover Dam is named the Hoover Dam because Herbert Hoover was doing public works projects before FDR.  And Herbert Hoover was the guy that every Democrat loves to blame for the Great Depression.

And while we’re on the subject of what happened in the 1930s, I might as well point out that things didn’t go so good under the leadership of FDR.

In fact, FDR’s Treasury Secretary had this to say as he looked back over the decade:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong… somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. 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!” — Henry Morganthau, FDR’s Treasury Secretary, May 1939

A look at the graph of unemployment should help you understand what Henry Morganthau understood:

It shouldn’t surprise you when you take the time to learn about what FDR attempted that he actually prolonged the Great Depression by seven years.

Having mentioned the massive yet mysteriously ignored failure of FDR to solve unemployment or get the economy going, allow me to return to Obama’s current failure.

Still another liberal publication, Time Magazine, ran an article back in July entitled, “Obama’s Stimulus Plan: Failing by Its Own Measure.”  It begins:

Back in early January, when Barack Obama was still President-elect, two of his chief economic advisers — leading proponents of a stimulus bill — predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn’t quite worked out that way. Last month, the jobless rate in the U.S. hit 9.5%, the highest level it has reached since 1983.

And of course, it’s currently 9.8% – and almost certain to keep rising.

Now contrast what the Obama team predicted – a ceiling no higher than 8% unemployment – and then see what the administration is trying to pass off now:

Vice President Joe Biden delivered a rousing review of the government’s economic stimulus plan in a conversation with the nation’s governors. “In my wildest dreams, I never thought it would work this well,” he said. “Thank you, thank you.”

I mean, is this a statement that when team Obama said that they believed their stimulus plan would keep unemployment under 8% that they were being fundamentally dishonest with the American people?  And that 9.8% unemployment is better than their wildest dreams?

And don’t just say Vice President Joe Biden is an idiot and dismiss him.  He IS an idiot, of course.  But he is the official spokesidiot of the Obama Administration.

Having affirmed that significant public works-style projects would have been a massive improvement over the failed Obama stimulus, allow me to briefly point out a few other things that would have helped the nation restore confidence in the U.S. economy and the jobs that would have gone with it.

For one thing, tax breaks would have helped, but we didn’t get them.

Contrary to Democrat fluffery, there really weren’t “tax breaks” in the stimulus.  Rather, the people who got the “breaks” didn’t actually pay federal income taxes.  The “tax breaks” were really welfare breaks.  Lowering taxes stimulates more investment and more productivity by allowing investors to keep more of what they earn, rather than incentivizing them to shelter their money, which raising taxes invariably does.  Transferring money from the pockets of tax payers and giving it to those who didn’t pay federal income taxes – even if you euphemistically call it a “tax break” – simply doesn’t accomplish that goal.

Another thing that would have helped was targeting stimulus toward the businesses that actually do most of the hiring.

Small businesses which employ 20 or fewer workers are responsible for 50% of the jobs in this country.  And businesses defined as “small businesses” are responsible for nearly 3/4ths of the total jobs in the USA.

And what did small businesses get from the stimulus? Butkus.  The porn-loving National Endowment for the Arts actually got more stimulus funds than all the small businesses in the country combined.

If Democrats wanted to create jobs, they might have considered giving the money to businesses that actually created jobs, rather than to their politically connected liberal special interest groups.  Again, just sayin’.

It also would have helped if the stimulus had been something that actually helped more than it hurt.  The Congressional Budget Office, hardly a conservative bastion, reported that the stimulus bill would lead to a lower GDP 5 to 10 years out than if Congress had done absolutely NOTHING.  The enormous government spending will ultimately crowd out private investment which would have had a much higher chance of increasing GDP than the spending in the stimulus bill.