Tuesday, February 10, 2009

Greatest Depression Fighter of All Time?

Which American President Was the Greatest Depression Fighter of All Time?


by Jim Powell of CATO Institute

Campaigning or Governing?

Running a campaign is far different than governing a nation. Senator Hillary Clinton told Americans that on-the-job training was dangerous and unacceptable. Experience matters. Senator Obama rejected the "experience factor" and retorted that Americans wanted "good judgment" in their elected officials.

Within two weeks of being inaugurated Commander-in-Chief, President Obama is witnessing colossal blunders out of the gate. Dashcle, Killifer, Geithner, and Hilda Solis have embarassingly failed to pay back taxes in previous years. Bill Richardson bowed out of his nomination for Commerce Secretary. Serious conflict of interests in New Mexico as Governor have surfaced and an investigation is underway concerning his conduct. Erik Holder being America’s new Attorney General, admittedly goofed with the Marc Rich pardon, the poster child for hundreds of millions of dollars, being an absconding tax cheat. Secretary of State, Mrs. Clinton, has her husband’s library being funded by invisible and silent characters in the Arab world. Of course, there won’t be any quid pro quo or altering American interests as a result of $900 million dollars being funneled to to the Clinton library, right?

So urgent is a stimulus package that President Obama allowed Nancy Pelosi to write the bill. The bill, so full of pork barrel spending and embarrassment, has President Obama putting his prestige on the line for a bill that Americans by the hour are repudiating. President Obama has stated “its time to stop talking and to start acting.”

Where is the full force of the President Obama’s moral persuasion at a time that he declares that without this bill, America will face “catastrophe”? Should not the President have had a much larger role in crafting this piece of legislation to ensure its vitality and passage? Did not the President state on numerous occasions that bipartisanship was necessary to move America forward?

So why remain so aloof and on the sidelines as the most important crafting of a bill is cobbled together overnight? President Obama stated “I won the election”. The people of America have chosen him to lead. So where is the leadership?

Is it possible that his team wasn’t capable of actually writing a stimulus package? It is unthinkable that this might the case. But seeing how the Obama team has transitioned toward governing the United States thus far, it might not be far from the truth.

Maybe experience does matter? Maybe judgment matters as well?

An Irreversible Situation, Mr. President?

President Obama continues to sound the alarm. "Irreversible situation", "worst economy since the Great Depression", "catastrophe" awaits, etc...is the President's approach to halting unemployment, foreclosures, and contracting GDP.

Congenially the President held his first news conference. He said that some, meaning Republicans, "want to do nothing". Doing nothing, according to the President is not an option.

The $820 billion stimulus plan is "not perfect" the President opines. But we must forego perfection to avoid "catastrophe".

The President's dire language may compel Americans to trust him as Americans trusted Bush and Paulson's secret $700 billion TARP give-away plan intended to stablize the financial sector and the American economy. It did neither. Bad banks are still bad banks and not loaning money. Credit remains touch and go. Housing has continued its downward climb. Even while Obama's American Recovery Plan is being shoved down the throats of citizens, Americans are not privy to the allocation of the initial $350 billion of TARP I. Which banks received how much funding? The public, Treasury Secretary Paulson said, was not allowed to know for fear of the public producing a run on the bad banks in question.

Even more mesmerizing is that Elizabeth Warren, the chairperson of the Congressional Oversight Panel in charge of monitoring TARP bailout funds, delivered some stunning news. In crunching the figures of the initial TARP I cash injection by Paulson, she found that the government had injected $78 billion toward bailouts that had been lost. Where did the money go? Apparently, it' s too difficult to track.

How do you lose track of $78 billion? Lose a wallet, keys, notebooks, etc...are understandable. But lose a pot of money the equivalent size of the GDP of dozens of nations around the world?

The "Gong Show" continues. President Obama has stated on several occasions, as if American's still aren't sure: "I won the election". The President's insinuation is that Americans are expected to accept the looting of their treasury under the guise of saving Americans from apocalyptic Armageddon.

So times are bad. But they aren't the days of the Hoover Hotels, long soup lines, and the Dust Bowl. The majority of banks are solvent versus 1/3rd of the banks going under in the 1930's. About 93% of Americans continue to be employed. About 94% of Americans with home mortgages are making their payments. For the lower end of the pay scale, free health care, free education, free job training, several months of unemployment benefits, free food stamps, free or reduced housing, free children's healthcare insurance, etc...have made the poverty line of families the equal of the American family in the 1960's as a measure of wealth.

And President Obama is reduced to fear mongering language to compel Congressional passage of a poorly constructed spending plan?

Contrary to President Obama's mesasge, the CBO (Congressional Budget Office) has concluded that the American Recovery Act written as it is will actually be more harmful than actually doing nothing.

"We must do something" is no rational reason for propping up the same-old failed policies that FDR and LBJ so coveted as President. After eight years as President, Morgenthou being FDR's Treasury Secretary stated:

"We have tried spending money. We are spending more than we have ever spent before and it does not work ... After eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"

The Harvard Review President should be wise enough to learn history's lessons if he would dare open his eyes to their truths. Spending the people's money with reckless abandom is folly beyond measure. Slashing government spending and sending the people's money back to them in the form of tax cuts and business incentives is the wiser course of action.

No one man will destroy this great nation with a set of impoverished policies. The spirit of the people is too great.

But the impoverished policies of this administration draw us near to the immortal words of Thomas Jefferson. A generation who willfully incurs debts for the next generation to pay is an "immoral" generation.

President Obama's Bottom Line

This recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse," " said President Obama while stumping for his $820 billion stimulus package.

It will be "a catastrophe" are the words of our President concerning the Congressional bill if it does not pass.

"We are enduring the worst economy since the Great Depression" states President Obama before the television cameras.

Nearly 600,000 thousand jobs were lost last month, unemployment is at 7%, and the stock market had its worst January showing down 8% ever. These figures make President Obama's appeal for decisive and immediate action much more compelling.

But is not accuracy not more important than speed? After all, Treasury Paulson determined that $700 billion was necessary to avert financial Armageddon. The first half went secretly into the pockets of big banks. Stock prices have sunk even afterwards while unemployment continues it's climb. Credit markets have eased a bit. But confidence, lending, and business sentiment have tightened ever since.

According to President Obama, government is the only solution to the marketplace turmoil. With the "failed policies of tax cuts in the past eight years", the President wonders why he should consider these "old worn out arguments of more tax cuts" during an impending crisis in which he was elected to fix.

Americans elected President Obama to four years based upon his his "change that you can believe in" policies. He should govern as he sees fit. But the President shoudn't be pulling the wool over the people's eyes with less than truthful remarks.

This is a weak economy that is getting weaker. However, 10% unemploymnet marked the days of 1981 with 21% interest rates. During 1973-1974 high unemployment and stagflation ensued eating people's savings and earnings.

The way out of this period were structural tax rate deductions. Personal income tax rates were revised downward from 70% to 28%. Capital gains tax rates were reduced as well. The greatest peace time expansion for 11 years ensued. JFK understood capital friendly policies in 1961 and passed a stimulus bill reducing taxes thereby spurring economic growth during the 1960's. Warren Harding and Calvin Coolidge separately reduced marginal tax rates in the 1920's giving America a 7% GNP growth rate toward the longest peace time expansion in U.S. history.

President Obama should understand that tax cuts alone have worked in the recessions of the past. But government spending has been detrimental to the growth of economic development over the long-term. The liberal Democrats of the 1960's promised a panancea ushered in by the "Great Society" spending that was forthcoming. But the spending led to inflation in the 1970's and stagnant growth in private industry.

Democrats aren't interested in what works. Tax cuts have worked. History has vindicated this position. It's the spending that reigns out of control and has caused all sorts of problems. In the last 40 yeasrs Congress has imposed an undue burden upon the people witht the egregious and outlandish spending habits since the days of LBJ.

President Obama's potion to magically hike tax rates is intended to:

Balance the budget, spur economic growth, add jobs, halt foreclosures, create a green economy, provide universal health care coverage, and expand welfare coverage.

Indeed, he is either the Messiah and subject to no laws of which men are subject to. Or he is a traveling evangelist with a phony message to which 60 million plus voters were duped into believing.

Huckabee on Taxes