Category Archives: Obama

No, It’s Not 1937 Again.

It is amazing how the mainstream media will pick up on some phrase or idea and then run with it before stopping to see if that idea survives objective examination.

I woke up this morning only to be told that it is now 1937.  I looked around for Rod Serling, but he was not behind any of my drapes and I didn’t find any cigarette stubs lying around either, so I knew this wasn’t the Twilight Zone.

Or maybe it is.

Submitted for your approval:

You may or may not be aware of the conventional historical wisdom, but here it is anyway.

FDR and his New Deal pulled America out of the Great Depression through a myriad of governmental programs and Keynesian economic policies of deficit spending.  By 1937, FDR had become concerned about the national debt his administration had run up, so he reduced government spending and support for New Deal programs. The result?  The economy tanked into the “Roosevelt Recession” of 1938.  Only when he increased government deficit spending the following year did the economy rebound.

This is a very convenient interpretation, if your present day agenda is having the federal government apply a second stimulus to our stalled economy, even if it means borrowing more money to spend, or raising taxes in the middle of our current economic doldrums.

My personal feeling is that FDR was a terrific leader in the first year of his presidency, and in the last five years of his presidency.  In between?  Not so good.

Back to 1937 with some facts that are similar to our situation today and some that disprove any commonality between 2011 and 1937.  Then judge for yourself if history is about to repeat itself.

  • In 1937, we were not really in year 7 or 8 of a Great Depression that began with the Stock Market Crash of 1929 and deepened with the passage of the protectionist Smoot-Hawley Tariff of June, 1930.  Our economic foundation had begun to crack and crumble years before, in the mid 1920s, on America’s farms. The market crash and Smoot-Hawley were consequences of the Farm Depression and declining consumer demand, not initial causes of the Great Depression. (Smoot-Hawley, BTW, was intended as tariff protection only for America’s beleaguered farmers, but once the bill reached the floor of Congress, it was larded up with additional layers of tariff protections for special interests who hired lobbyists to help reshape and expand the legislation. Does that sound familiar?)
  • The unemployment rate in 1937 was at 15% But the unemployment rate among non-farm workers was above 20%, and would remain so, until FDR created a “war economy” in 1940-41.
  • 1937 saw FDR’s budget actually reduce government expenditures by 3.6%. The current federal budget debate is about whether or not to reduce the rate of growth of the federal budget, not whether the budget itself will decrease in the years ahead. Current projections are that the federal government’s spending will increase so much in the next decade that, even if you accept the Obama Administration’s rosy projections for 4.1% annual economic growth, we will add more than $10 trillion dollars to the national debt.
  • In 1937, the GDP finally surpassed the GDP of 1929.  It had shown healthy growth since 1933, after four years of decline.
  • In 1937, US imports declined by 22.3% over the previous year. In 2011, imports are at an all-time high.
  • In 1937, private sector business investments decreased by 34.8%, not because FDR cut back on federal spending on the New Deal, but because of uncertainty made worse for business investors by a multitude of often conflicting government programs and regulations, and because FDR moved to raise taxes.

So, is it 1937 again in 2011?  You be the judge based on knowledge of historical facts, not because media parrots cluster around a catch phrase or somebody’s political talking points.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Sometimes, it isn’t too easy to make sense of economics, especially when the numbers are so large they can almost not be imagined.  And over the past month or so, the debt increase arguments in Washington tossed around numbers so much that you got the impression the speakers were trying to obfuscate rather than inform. So try this one on for size:

If the US government was a family, they would be making $58,000 a year, they spend $75,000 a year, and are $327,000 in credit card debt. They are proposing BIG spending cuts to reduce their spending to $72,000 a year. These are actual proportions of the federal budget and debt, reduced to a level that we can understand.

 

Advertisements

One nation, under God, indivisible? No, I don’t think so.

We are as fundamentally divided as a people now in 2011 as we were in the 1850s, just prior to the Civil War.  Back then the division centered around the issues of racially-based slavery and the proper relationship between the state and federal governments.  Today the divide is defined by an economically based  servitude and the nature of the relationship between the individual and the coercive power of government of all levels.

In the 1850s there were people on both sides of the divide who saw the inherent dangers the our situation but they had no real solution,  proving helpless to prevent the drift toward the Civil War.  And as Shelby Foote, the eminent Civil War historian points out, the Civil War was the result of our failure to do what Americans had previously done so well, i.e. compromise.  There were back then two groups of irreconcilable ideologues, abolitionists who considered slavery a moral evil, not a political issue, and ardent states’-rights proponents who saw the power of Washington in any area of their lives as a threat to their sovereignty.  These people identified themselves more closely as members of a particular group (their state) than as American citizens. For them the form of bondage that most offended was the subservience of the South to the Northern bankers, shippers, and industrialists.  Today there are many Americans who have a greater allegiance to an ethnic, cultural, religious or economic interest than to our national interest.

It might be instructive for Americans, and especially our leaders, to go back and revisit the years from 1850 to the outbreak of hostilities in 1861.  I doubt they will bother.

Yet I believe that in some sense, perhaps only lightly felt, Americans realize the perilous nature of our present situation, at least to the extent that they understand we can’t stay on our present course. (In a July 10 Rasmussen poll, 68% of Americans surveyed said the Unites States was heading in the wrong direction, only 25% in the right direction.)

I believe that ordinary Americans are looking for someone, a leader who could transcend our entrenched interest group-centered attitudes and bring us together.  That was, after all, a part of Obama’s appeal in 2008 when he said “there is not a conservative America and a liberal America, there is the United States of America.  There is not a white America, a black America, a latino America or an Asian America, there is the United States of America.”

Whatever happened to that idea?  More and more it seems these words were just empty campaign rhetoric.The man whom so many hoped would take blue states and red states and turn them into a Purple Nation has become just another political Great Divider. And our divide is wider and seems more insurmountable than ever.

So here we are now, no longer One Nation, Indivisible.  And lacking the leaders with the courage to risk offending their various political bases.  In one sense, we are reaping just what we have been sowing for more than a generation.  We no longer imbue our children with a sense of commonly held ideals, we no longer tell them our National Story. The road to political power is now paved with the efforts to get our fellow citizens to see themselves as belonging to specific interest groups (white, black, latino, male, female, gay, lesbian, transgendered, liberal/progressive, conservative, senior citizens, union members, public service employees, gun owners, etc. etc.) and if enough members of these various groups can be convinced of their own victim-hood and entitlement, so much the better.  If enough of these interest groups can then be cobbled together into temporary electoral coalitions, you win.

Shared sacrifice?  Common purpose?  Those ideas are for chumps, quaint perhaps, but not really meaningful in our world today.

The Civil War was the greatest political calamity our nation has ever faced,  It is a pity we haven’t remembered its lessons.  The Great Depression of the 1930s was the worst economic calamity we have endured.  The economic collapse of 2008-09 was proof that we turned our backs on the harsh lessons the Depression taught us about economic safeguards and restraints, and about fiscal responsibility.

Both the Civil War and Great Depression severely tested the bonds of our nation and its people.  Putting the pieces back together in each instance was a long, painful, and sacrificial process.

Getting out of our current political, social, and economic mess will also be slow and painful, and it will certainly entail sacrifices.  Are we any longer up to the task?

My guess is no, not as we are presently disposed.  What will be required is a different type of political leadership, perhaps a different shared definition of both Fulfillment and Success, and the renewal of a sense of shared identity and purpose (if in fact these things any longer exist in America). Here’s hoping it is not already too late.

Living (and Dying) Beyond Our Means – pt.2

By A.D. 180 the Pax Romana was coming to an end. Emperor Marcus Aurelius had died and the following century was to see a succession of nearly 25 rulers, most of them either unable or unwilling to deal with the problems of Empire.

What historians refer to as the “Crisis of the 3rd Century” was not the end of the Roman Empire.  But it was most assuredly the beginning of the end.  This period in Roman history was characterized by a rapid growth in the Roman government, a growing unsustainablity of its military commitments, increased levels of taxation upon its citizens, an inability to control the Empire’s borders, a debasing of the currency, and a social deterioration fueled by a growing level of political corruption, economic decline, a decline in traditional religious beliefs, and a growing detachment from the shared ethic and values that had previously given such meaning to the term “Roman Citizen”.

Spinoza said “If you want the Present to be different from the Past, study the Past.” I realize that it is less fashionable these days to teach/study actual history. Our schools, both public and private, prefer the teaching of “social studies” and cultural diversity instead. But it would be wise for us to heed Spinoza at least to the point where we recognize the possibility that history can, indeed, repeat itself.

The U.S.A. in 2011 is not the Roman Empire. Yet the historical lessons of the Empire’s decline can be instructive.  Certainly the parallels are rather alarming.

Like Rome, America has seen a dramatic increase in the size and scope of its government. Even as the private sector of our economy lost more than 7 million jobs since 2008, employment by government at all levels actually increased until the current budget year, when the flow of federal “stimulus” money ended. (BTW, is it any wonder that the Obama Democrats directed more than $300 billion dollars in stimulus monies to the preservation of public sector jobs? After all, the public sector unions contributed more than $400 million dollars to Obama and the Democratic Party in the 2008 election cycle. What was sold to the American people as an economic stimulus bill could just as accurately be characterized as a political favor to the Democratic party’s most faithful source of campaign funds.)

Diocletian divided the Roman Empire in the late 4th century, and his move is often seen as a response to the perception that the Roman Empire was essentially too big to govern.  In fact, by 384 A.D. the Empire had shrunk considerably from its greatest expanse under Emperor Trajan in 117 A.D. What was wrong was not the size of the Empire so much as the way in which it was being governed, and the inability of the massively centralized government to respond effectively and flexibly to new challenges.

Flash ahead to our current situation in 2011, if you will. Like 3rd century Rome, we have a massive, centralized government that is unable or unwilling to recognize and respond to America’s problems (and to consider that part of a necessary response is not to become part of the problem itself).

Like Rome, our currency has been debased by inflationary monetary policies, trade imbalances, and out of control borrowing. (Since the founding of the Federal Reserve in 1913, the U.S. dollar has lost 96% of its value, mostly due to inflation.)

Like Rome, we are overextended militarily.  Currently, the US has troops stationed in 135 countries worldwide. We have more than 50,000 troops in Germany, 66 years after the end of World War II and 20 years after the end of the Cold War. We still have more than 35,000 troops in Japan, 28,500 troops in Korea more than half a century after the end of that conflict.  And we have 150,000 troops in Iran and Afghanistan as a result of those wars. The troops that Bill Clinton sent to both Bosnia and Haiti on short term missions in the 1990s are still there. Meanwhile, we are unwilling to secure our own borders closer to home. (I won’t even go into the lunacy of Operation Fast & Furious where the US government sold sophisticated automatic weapons to Mexican drug cartels – that’s for another column).

Like Rome, we maintain policies that discourage long term economic planning and risk taking. Forget about corporate jet tax breaks (which Obama and the Democrats included in the stimulus bill, BTW) – that’s just chump change. But why is the U.S. corporate tax rate a whopping 35%?  This is twice as high as Canada’s and well above the rates in EU member states. And the cost of business regulations and taxation discourages the creation of new jobs at a time when they are desperately needed.

Other aspects of our corporate tax codes are just as unfathomable to me.  How did GE get away with paying ZERO federal taxes last year? And why do we encourage further exportation of U.S. jobs by the imposition of uncompetitive regulations on domestic industries?

Obama is fond of saying that he inherited an economy that had been “driven into the ditch”. Well, you don’t get out of a ditch by digging a deeper hole.

The current brouhaha in Washington, D.C. is about increasing the ceiling for the national debt. But the “federal debt” only covers what the government owes to its creditors, both the investing public and foreign countries (read:China). When you take into account what is owed to senior citizens, veterans, and retired government employees, the federal government currently has more than $61.6 trillion dollars in unfunded obligations, approximately $534,000 per household. When you look just at government employees, the situation is even more unsustainable.  The federal government has promised pension and health benefits worth more than $700,000 per retired civil servant. The key asset supporting this obligation? Not invested contributions, no, it’s federal government I.O.U.s that our children and grandchildren will have to pay.

The current sideshow in Washington, D.C. is just political theater.  Face it folks, we are already broke, most Americans just don’t realize it yet.

The decline and fall of the Roman Empire was primarily economic in nature, abetted by cynical leadership that no longer really believed in the greatness of its enterprise and unwilling to take the steps that might have averted the Empire’s demise.

Are we headed in the same direction? Draw your own conclusion, but I’m just sayin’…

Before you dismiss me as one who is willing to complain about a problem without offering anything in the way of a solution, I will give you this:

What needs to be done?

1)  Americans need to stop thinking that every problem in their lives requires the application of a government-run solution. Sometimes government itself can be part of the problem.

2)  When, over a reasonable period of time, a government program is found to be ineffective, it should be scrapped, not enlarged. Diamonds are forever, but not government bureaucracies.

3)  We need to simplify and redefine our understanding of the proper role of the federal government, as follows:

  • To defend and protect the liberty of the American people by  a) ensuring the internal and external security of American and b) by securing our borders;
  • To maintain social justice by  a) ensuring equality of opportunity, not by imposing equality of results and  b) by ensuring equality before the law;
  • To foster conditions for economic progress and growth by  a) maintaining the strength and integrity of the currency and  b) by not incurring an immoral burden of debt that future generations of Americans must pay.

Then the government should get out of the way and set the energy and ingenuity of the American people free once again.

Anti-War No More… Whatever happened to the Political Left?

Remember the Anti-war Left?  Back in the 1960s they protested the Vietnam War.  In the 1970s they agitated for the War Powers Resolution in Congress, moved to limit the powers of the CIA overseas and the FBI at home. In the 1980s they opposed Ronald Reagan at every turn. More recently, George W. Bush was decried as a warmonger, compared to Hitler (see MoveOn.org), accused of complicity in the 9/11 terrorist attacks and assailed for the “Surge” in Iraq.(Full disclosure: I am registered as an independent voter and I didn’t vote for Bush in 2000 or 2004.)

Recall the wrath of the Political  Left when Bush increased US troop levels in Afghanistan and Iraq?  Recall a similar outcry when Barack Obama sent 30,000 additional troops to Afghanistan? You probably don’t, because there wasn’t one. Remember back to when Richard Nixon began bombing Cambodia without consulting Congress? Have you heard more than a peep from the Political Left today, as Obama’s ordered US intervention in the Libyan civil war enters its third month?  The War Powers Resolution that was passed into law in 1973 (largely by Democrats) requires the President to end any military action after 60 days unless Congress approves it. Not only has the Obama administration not gotten such approval, it has stone-walled Congressional efforts to obtain information about the Libyan operations from both the Joint Chiefs of Staff and the Defense Department.  Can you see GW Bush getting such a pass?

In other areas, the Political Left has rolled over as well.  Suppose Bush had issued an executive order that any business seeking to bid on government contracts had to submit a list of all the political contributions it had made over the past five years? Obama is considering such an Order and there’s nary a peep.  Are we looking to play favorites or to subtly suppress the freedom of speech that political activity (including contributions) includes?

What if George Bush had created a Director of Conservative Media & Online Response position in his administration, with the task of attacking anyone in the media who reported unfavorably on Bush or his policies? Well, when Obama created just such a position two weeks ago (substitute “Progressive” for “Conservative”) it was met with acquiescence by the mainstream media, who themselves would fall under the administration’s review.  Hello?  Free press? Are you there? (And what, exactly, is “Progressive” about having such a Director within the administration?) When I think of Rapid Response Teams, I think of quick military action in defense of  US security, not administration goons trying to achieve electoral security by oppressing those who speak out in opposition. Free speech?  Where is Mario Savio when you really need him? (For those of you under fifty, Savio began and led the Free Speech Movement at Berkeley back in the early 1960s).  Savio’s memory is desecrated every time the Political Left attempts to silence speakers it doesn’t like on college campuses, or when the Obama administration attempts to intimidate people in the media or those seeking government contracts. And so much for diversity, I guess.

Barack Obama suckered many young, first-time and dissatisfied American voters in 2008. In less then two years he has revealed himself to be just another cynical politician in the worst sense of both of those words – a corrupt Chicago ward style of politics gone both national and global. Next week, I’ll present some more evidence to supports this contention. And if Jesse Lee and the Obama media goons want to get on my case for saying these things, they know where they can find me online.  I’ll even let them come aboard as subscribers.

And perhaps somebody on the Political Left can explain to us how selective moral indignation is defensible.  If Bush was held to be a fascist for his actions and policies, how is Obama any less?  Barack “Hope/Change” Obama is not the solution.  He is now part of the problem.

To conclude, I’ll leave you with the words of Mario Savio who saw a government that ran roughshod over human dignity,  liberty and freedom of expression:

“There’s a time when the operation of the machine becomes so odious—makes you so sick at heart—that you can’t take part. You can’t even passively take part. And you’ve got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you’ve got to make it stop. And you’ve got to indicate to the people who run it, to the people who own it, that unless you’re free, the machine will be prevented from working at all.” Sproul Hall Steps, December 2, 1964