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  • Back to the Thirties

    While he spoke about moving forward, and promised change as we look toward the future, in fact President Obama’s inaugural address was firmly entrenched in discredited policies of the past; policies that never worked.

    For example:

    “Now, there are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.”

    His words here are very reminiscent of Roosevelt’s words at the start of the Great Depression. But, our memories are indeed short, if we forget that Roosevelt’s plans were actually huge failures.

    Next, Obama invokes J. M. Keynes to support his call to planning, once again invoking a discredited idea from the past:

    “What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.”

    Keynes argued that the inefficiency of government spending compared with private spending did not apply during periods of recession. He reasoned that when the economy was not at full-employment (i.e. during a recession) government was “better than nothing.” Government could inject the economy with money, by borrowing and spending it, and put the unemployed to work.

    Of course, even if borrowing is helpful during these periods, it could still be spent privately (with tax cuts). So, Keynes had to argue that tax cuts are too slow, and that people saving the money, as they might do when given a tax cut, is not as good as government spending the money. However, Keynesian theories have not been supported by reality, and his proofs have long ago been abandoned by economists. Yet, Obama is embracing this new trend toward the past.

    Finally, Obama promises that the programs that work will remain and those that fail will be discontinued: “Where the answer is yes, we intend to move forward. Where the answer is no, programs will end.”

    Supposedly, this is a major difference from the past – when, apparently, government cared less about whether the programs were working. Of course, it is rare that a government program is ever ended. As Reagan put it, “There is nothing more permanent than a temporary government program.” It is also impossible to know whether a program is “stimulating the economy.” Those that benefit from them can make this known to all, but those that suffer cannot know or prove that it is the program that makes them suffer: the damage is indirect because it caused by high taxes, the crowd-out of private business, and so on. So, a true cost-benefit analysis of any given program is impossible.

    Obama has promised nothing more than a return to the 1930s; to the old discredited economic theories and the old discredited policies of central planning.

    Posted in Ongoing Priorities [slideshow_deploy]

    16 Responses to Back to the Thirties

    1. JP Ohio says:

      Thank you for pointing this out. It's hard to get into an analysis of Keynesian economics without putting people to sleep, but it's still important to try. Thanks for a great post.

      The Reagan quote is so true. For more, feel free to follow along: http://www.reaganlegacy.wordpress.com

    2. Matt Cohrs, Jacksonv says:

      This is definitely back to the 30's however more like Stalin or Hitler's style, we would be lucky if we only had to live through FDR again, I think it will be much worse.

    3. Kevin, Pasadena CA says:

      I find the arguments presented vague and unsupported. Too often people attempt to use phrases like "huge failures" and "discredited idea from teh past" as support or evidence for their thesis. The poster may be correct, but in the name of sound argumentation, please provide evidence or proof. I don't think my relatives who benefited under various New Deal programs thought them failures.

      The general tone that government is the problem (thanks R.R.) is stale and out of date. Was it too much regulation of the financial markets that has driven us to this point? I think not and President Obama is right in arguing for effective government – and I wish him all the best in battling the entrenched bureaucracies AND members of Congress from all across the political spectrum in finding and then eliminating programs, agencies and the like that are not serving the American people well.

      In the spirit of Publius!

    4. Truth-hound, San Die says:

      Kevin- Nice try, but the current financial crises WAS caused in large part by Gov't. regulation. Here's as brief & simple as possible a run-down for you:

      On one hand, some decent regulations were in place, but they were ignored by the wink-wink culture between the very Congress who passed them, and the gov't-run entities such as the SEC, who were entrusted to investigate partially-public entities such as Fannie & Freddie. (Thank you Barney Frank & Co!) So perhaps we ought to just make sure our gov't enforces the "honest-business-practices" type of regulations already in place.

      Furthermore, some of the regulations that were in place – the Credit Reinvestiment Act initiated by Carter, and even more damagingly re-inforced under Clinton, ARE MOST SIGNIFICANTLY RESPONSIBLE for this meltdown. Banks & mortgage companies don't make high-risk, unsecured loans to unqualified home buyers; they LOSE ALL THEIR MONEY and go out of business that way. People who lend money for a living only make loans that are HIGHLY LIKELY to go UNPAID if they can immediately sell them to someone else and shed the risk.

      Enter Gov't regulations (CRA+) that:

      1) FORCED banks to make these high-risk loans or face restrictions against business expansion and legal cases of discrimination (not to mention public verbal abuse and physical threats from such honorable organizations as ACORN- perhaps you've heard of them?)

      2) FORCED Fannie & Freddie to purchase unsecured bundled mortgages from the banks making the initial loans, which included these "nearly-100%-certain-not-to-pay" CRA-mandated loans. The gov't always had their hand in Fannie & Freddie's back pockets (and a bullet to their heads), so Fannie & Freddie were assured that when the whole thing came collapsing around them, they would have a leg to stand on when clammoring to the Gov't for money (that's provided by you & me the taxpayer, by the way) to "save" them.

      So, no, "the general tone that government is the problem" (thanks R.R.) (whoa, don't forget Thomas Jefferson, James Madison, George Washington, and Co., in that platitude!) is PATENTLY NEITHER stale NOR out of date.

      Come back and try again sometime, "but in the name of sound argumentation, please provide evidence or proof" for your assertions.

    5. Fred says:

      In FDR's day, most didn't even know he couldn't walk. He too was just a 'media image'.

    6. Ozzy6900, CT (The Bl says:

      President Obama seems to be infatuated with emulating FDR's failed programs. He as others firmly believe that FDR was the savior of America when in fact, his programs were the reason the Depression dragged on. President Obama proves this every time he speaks of basically sitting and waiting for the Government to "rescue" you.

    7. Burt Noyes, St. Augu says:

      Wow Kevin! Did you read the post you commented on, along with the links provided? If anyone talks in generalizations and with no "sound argumentation" as you call it, it is Barack Obama (PBUH).

      As far as your belief that there wasn't enough regulation of the financial markets, just talk to any stock broker, mortgage agent, bank president, or futures speculator and ask them what kind of hoops they have to jump through to maintain their accreditation so they can keep operating their over-regulated businesses.

      Bush, aware of the trouble that the mortgage industry was in, tried to increase the regulation of Fannie Mae/Freddie Mac but was rebuffed by the liberals in Congress. So G.W. should have been your man, not Obama (PBUH).

      If anything, it was too much involvement in the mortgage industry by the Feds through their propping up of bad Fannie Mae/Freddie Mac loans and bundled mortgages that helped fuel the housing bubble, which has since burst and now is costing the Americans trillions of misappropriated tax dollars.

      As far as government agencies and programs "that are not serving the American people well", you have just described most of the Federal government, which has expanded far beyond it's Constitutional limitations. You can definitely put the Social Security Administration, Medicare, Medicaid, HUD, Department of Education, Department of Transportation, and many other socialist programs in that bracket.

      American News Blog

    8. gary,yukon OK says:

      F.D.R was well loved, well recieved, and well remembered by all that love socialism and it's false promises. All of his policies looked good on paper and failed in the real world. If not for the fact that we were attacked at Pearl Harbor, this nation would have slid ever deeper into the grips of that great depression and our beloved F.D.R would have been remembered as the leader of a failed social experiement. Obama is being mis-advised as to the dangers of big government by those that seek to have a socialist order.

    9. Faye, Bay Point, CA says:

      I find the arguments most revealing, shocking and clear. Yep, my relatives too benefited. My farmer family felt it ok to be pd NOT to plant something. A neighbor was shamed of her 2-generation welfare family. I suppose they too benefited. My parents were both raised under FDR and resented him greatly as hard working adults. They switched parties. The union broke my dad's bus. for a bus. deal! He was never able to recover. I pray for righteous decisions by our new President and congress.

    10. Dennis A Social Circ says:

      Obama said that we are all Americans, and together we will make America the great nation again. I agree we are all Americans, but I wonder how well that we serve us, as everyone is intent on being seperate, a good example is African-American, Mexican-American, Chines-American, etc. We all came from somewhere at one one, our fore fathers all came from Europe, but they pulled together for the common cause. They wanted agreat nation and brought it forth on the one principle of a country of God fearing people. It worked for years, then the thought of being politically correct surfaced, and God no longer mattered. Where are we now, a splintered society with each group seeking its own means. Why can we not all be AMERICANS?????

    11. Mike, Oak Creek, WI says:

      Ah yes, the Republican answer to everything – tax cuts for the wealthy. How totally predictable. How totally lame.

      The american people have seen through your rhetoric, just look at the last election. You folks are going to have to come up with a new pack of lies to try to fool the people again.

      Good luck on that………

    12. Jim, Wisconsin says:

      Kevin and Mike, you guys are all wet, tax cuts do work and if you would stop listening to the biased media and do more research you will see it does. It's the liberal doctrine that's ruining this country. The other gentlemen were right on.

    13. Truth-hound, San Die says:

      Well, since a full 40%+ of Americans do not pay ANY income tax (i.e., they are the recipients of taxpayers' money, which subsidizes the society in which they live), I guess it would be difficult to give those people a tax cut, now wouldn't it?

    14. Rob Pearce, Arizona says:

      Dennis; Mike brings to mind another excellent point. We are not all Americans after all, some of us are Marxists and want to punish people for being successful.

      It's not enough that the very succcessful minority in our midst must pay the majority of taxes that carry generation after generation of do-nothings, who are free to not work and not contribute. This minority must be hated, punished and scorned by the people they support. Then they and the rest of us in the middle must endure the tired and worn out slogans these non Americans bring to us from their most successful economic model known as the Soviet Union (a form of government that exterminated more people than the Nazis).

      Mike makes the point that the old saying; "the price of freedom is eternal vigilance" is not just a chliche. There are in fact non Americans living among us who are bent on enslaving all of us to government. People who are continually erroding our freedoms by creating more and more laws to restrict freedom, people who are constantaly enumerating our constitution and telling us that it doesn't really mean what it's words say.

      Clearly these people living among us who are not Americans are trying to divide our "house" and cause it to fall. So, how sweet will life be if Mike and his friends get their way?

    15. Spiritof76, New Hamp says:

      Kevin and Mike represent the people today that think that Obama will pay their mortgage, car payment, health care, etc. etc. They repeat the same stupidity of their thought that taxing the rich is great. Please tell me how many people your poor neighbor has hired. Grow up and face reality. Nothing grows on tree. Expecting your neighbor who is more successful than you to pay for your living is not America. That is the reason why immigrants (legal) come to this country, work hard and most of them get ahead very quickly. It is about opportunity to succeed.

      Please list one country that has succeeded without resorting to some form of capitalism. The last I checked, that socialist utopia of Soviet Union was a miserable failure. Socialism was tried by the pilgrims during the first years of their stay here. William Bradford chronicled how they made a compact to own land jointly so that the yield can be divided equally amongst their group. Some people did not feel that they had to work hard as they figured that they could rely on others to work harder. The result of that experimentation was poor yield and starvation. Bradford (as the governor)then allocated private lands and allowed them to keep their own production. The result was amazing in that there was plenty of yield and eliminated starvation. That is how America got hooked on to private property rights and freedom.

    16. Mike, Hickory, NC says:

      (Quote): "Obama has promised nothing more than a return to the 1930s; to the old discredited economic theories and the old discredited policies of central planning".

      Exactly! Obama is about to prove yet again, (despite his denial and that of his Leftist government elitist allies in government, academia, the media, and elsewhere), that not only are both he and his allies misleading purveyors of Leftist Marxist/Communist/Socialist government elitism, but also indeed that such "central planning" government control as theirs is a defining function and feature of Leftist government elitism in all its’ forms so alien and hostile to the human need for freedom. Plus, both Obama and his allies are about to prove, yet again, the fact that such Leftist government elitism has always failed, is failing, and always will fail, no matter where, in how many ways, and how many times they are "implemented" and who “implements” them.

      Unfortunately, like "Pied Pipers" misleading those whom they conveniently "dumb-down" and mislead with their "siren song" for such Leftist policies (which nobody's freedoms, rights, and prosperity survives, except, of course, that of members of the "politburo/government", and certain "loyalists"), Obama and his Leftist allies have made "suckers" out of too many people as if the people can't be trusted to think for and govern themselves, only government elitists ("members of the politburo") can thus rise above the vices to which the rest of the people are vulnerable, and thus be made so trustworthy (which is Marxist). Thus they have indeed managed to demagogue, pander, and thus motivated voter fraud (ACORN, etc.) , disavowing it all, of course, all the way into their current positions of power.

      So now we have to witness "Obama and Co" using any economic excuse and pretense to "fast-track" (cram) more Socialism down our throats and entrench it; then, in 2010 and 2012, we must throw them and their Leftist government elitist demagoguing and pandering out; repair as much damage done by them as we can, and so also recover as many of our freedoms, rights, prosperity, and national security lost to such Leftist government elitists as we can.

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