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Horton Hears a Hoover??!!

38 comments Horton Hears a Hoover??!!

The Republi-can’t Party (their motto should be “No We Can’t”), fearing that they are becoming the “party of no” have recently reached back into history to demand ideals that have already failed to impassion the American people in the recent election such as more “Drill, Baby, Drill” epitomized in their recent “budget” outline presented this past Thursday (can you call something without numbers a budget?). Worse yet, they have latched on to failed presidential contender John McCain’s previous calls for a “spending freeze.” As if delving back into recent failed historical ideologies is not bad enough, the Republi-can’ts have decided to review the Great Depression and grab the failed ideas that prolonged it.

In the midst of the Great Depression former President Hoover stated, “Prosperity cannot be restored by raids upon the public treasury.”  Today those words are echoed by House Minority Leader John Boehner who recently stated, “Our plan is rooted in the philosophy that we cannot borrow and spend our way back to prosperity.”  The striking similarity of these two phrases gives us no doubt where Boehner is getting this philosophy that the Republi-can’t Party has become so heavily rooted in, what is in doubt, is the soundness of such a philosophy.

To give you a better idea of the man the Republi-can’ts are pulling their modern philosophy from, here are some more quotes from the man who had no problem giving farmers grain to feed their animals but refused to give people money for starving humans to eat.

Like modern Republi-can’ts today, Hoover believed that the economic depression can not be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cell of the economic body–the producers and consumers themselves. Recovery can be expedited and it effects mitigated by cooperative action. That cooperation requires that every individual should sustain faith and courage that each should maintain his self-reliance. I am sure that the emaciated men in the breadlines, the men and women beggars in the streets, and the children dependent on them, all appreciated his desire for them to be self-reliant.

Hoover’s opposition to federal relief came from “fear lest that taxation to provide that relief be levied on concentrated wealth” because then like today inequality, even before the depression, had driven the gap between rich and poor so wide that the previous years were called the “Gilded Age.” Of course today that gap is even larger. CEO’s once made 24 times their average employee, now it is over 400 times. And like today, those in the upper brackets managed to find ways to avoid paying. For example, Federal income taxes for Mr. J.P. Morgan, who encouraged workers to contribute to relief (“we must all do our bit”), amounted to zero for the years 1930, 1931 and 1932. (To be fair, I am aware that 10% of the population pays about 70% of the taxes but if they paid people more and took less than they wouldn’t get taxed so much..eh?)

As the Republi-can’ts continue to threaten the upcoming budget with yet another filibuster (they have more than doubled the frequency of filibuster threats over identical periods of time in the past) keep in mind that they continue to echo Hoover who said, “I am opposed to any direct or indirect government aid.” As Congress pleaded for all sorts of fiat money, public works, aid and the like, “As long as I sit at this desk they won’t get by.” This sounds a lot like what I am hearing from the Republi-can’ts. Don’t you agree?

The vetoing of a number relief bills was the least of what Hoover did-in the summer of 1932 Hoover refused to increase government spending to the point where he ignored hundreds of WWI veterans, known as the Bonus Expeditionary Force, who camped out across the White House begging for advances on service bonds they were given for fighting in the war. The bonds would not mature for twenty years but the soldiers were willing to take the immediate value and forgo the compounded interest they would have accrued if they could get access immediately.  To press their need they marched on Washington from all over the country, riding the rails and living on handouts, under the rule of “no panhandling, no drinking, no radicalism.” After two months 15,000 or the original 70,000 remained camped across White House. Hoover never agreed to even meet with them. He met with essay writers and wrestlers but not people begging for relief from the country and government they fought for. In the end, Hoover had the military drive the bonus marchers out of Washington, burning their tent city. Tear gas used by the military killed a three month old baby who had been born on the outside the White House waiting for succor from the President. An op-ed in the local newspaper suggested that the baby’s tombstone should read, “Here lays Bernard Myers, aged three months, gassed to death by order of President Hoover.”

Like the rest of the nation, he gave them nothing. He did nothing.He merely reduced taxes and waited for the cycle to end. The only thing that ended was his presidency.

I know there are a lot of Republi-can’ts and conservatives out there touting Amity Shale’s new book, “The Forgotten Man: A New History of the Great Depression” as proof positive that government spending doesn’t work. In fact it did work. In the first few years FDR’s New Deal brought unemployment down from over 20% to 10%. To support her thesis, Shales claims that unemployment was much higher than 10%. She gets these higher numbers by not counting any of the jobs created by government programs because they were only temporary. This is very similar to what Republican National Committee Chairman Michael Steele said not too long ago about temporary jobs created by the stimulus. If temporary jobs are not real jobs, than are all politicians including Michael Steele unemployed? When I was an IT recruiter I used to put people to work making $70/hr on a short-term contract job; I do not think they would have considered themselves unemployed. I was laid off several times after the dot.com bubble but I was never unemployed, I may have been underemployed but I counted even temporary jobs I could find as employment. At the bare minimum it kept me off the welfare rolls and saved me from losing my home.

When FDR was fighting the Great Depression he was making excellent progress until he fell under the sway of the fiscal hawks in his administration who convinced him it was time to switch gears and start balancing the budget to bring down the deficit. This slowed growth and diminished economic recovery. Critics of stimulus spending make the ubiquitous claim that it was World War II that got us out of the Great Depression not New Deal spending. But how did WWII get us out of the depression? Oh yeah–with massive government spending for the war effort i.e. fiscal stimulus. These same fiscal conservatives had no problem going into massive deficit spending to fund the Iraq War, a war of choice, whose cost has been estimated at over a $1 trillion (see Joseph Stiglitz, Nobel Prize winning economist and former Chief Economist at the World Bank). In fact most Americans supported the spending except for those who, like me, opposed the war in general. Why should it be more alarming for governments to get into debt to put people into useful work satisfying human needs than to borrow for guns and tanks whose only aim is to kill other human beings?

Now is not the time to worry about cutting spending. We keep hearing how people aren’t spending money so there is no consumer spending. Then we hear about the global drop in export sales so there is no trade spending. Then we hear that companies are not hiring or purchasing new capital to grow their business so there is no commercial spending. That leaves us with one option—government spending. The more reluctant people and corporations are to spend, the greater the case for the government to spend to fill the gap.

If this were an ordinary recession, I would say we should be using our monetary policy to manage the brunt of the economic problems. Unfortunately, conventional monetary policy has reached its limit. The fed has already reduced the interest rates to half a percent with no signs that it has greatly slowed the economic decline. The fed of course has recently done some quantitative easing i.e. massive printing of new money but that does us little good if the people receiving the money are afraid to spend or lend it, thus creating a liquidity trap. In this instance, it is better for the government to spend since nobody else will.

We will surely have a massive deficit but the world will not end. At virtually every point in our nation’s history the national debt has grown inexorably year after year with only two massive reductions. Despite the continual anguished cries warning of impending national bankruptcy the debt has kept growing and the nation has prospered over the long term. Government budgets do not operate like the budgets of households or people.

I know the Republi-can’ts are trying to find their footing and redefine themselves but now is not the time to fall sway to political grandstanding over misguided fears that we are bankrupting our children, now is the time to work together. Governors who claim that they will not accept stimulus money because they don’t believe it is fiscally irresponsible know that a provision in the bill allows the state legislature to overrule the governor and accept the money. Refusing the money, while knowing that it will be accepted anyway, allows these governors to pretend to be fiscal conservatives and get the money at the same time. Such behavior is disingenuous and shows that they lack real courage and leadership. The same goes for those “conservadems” who appear to be siding with Republi-can’ts to reduce the efficacy and scope of President Obama’s budget. I am already concerned that it is not bold or big enough or that he will make good on his promise to try to reduce the deficit by half before his four years are up, please do not betray the voters who are desperately looking to you to show true leadership. I know you live in conservative states but is your reelection more valuable than our national salvation?

If you want to worry about our children’s future ,worry about the lack of jobs that will greet them when they exit high school or college. According to political scientist, Thomas Schaller, “the U.S. economy must generate about 150,000 net new jobs each month just to employ Americans entering the work force from high school, college or the military; in a seven-year period, that requires 12.6 million new jobs just to keep pace.” To get an idea of how hard that is, Schaller points out that “the Bush administration’s job creation record these past seven years: 4.7 million.” Which I might add has been entirely wiped out. The March 6th Employment Situation Summary from the Bureau of Labor states that, “over the past 12 months, the number of unemployed persons has increased by about 5.0 million.” It is time to start chanting Jobs, Baby, Jobs or else we’ll be raising a nation of Oliver Twists.

Despite what President Reagan once said, the government is not the problem–we are. We have abrogated our social contract by failing to actively participate in shaping our own futures. It is high time we grow-up and realize that we, the people, are the government so if the government fails it is really we that have failed.

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3:35PM PDT on Apr 1, 2009

The New Deal was central to creating the massive middle class that we once had. As a direct result of these policies, the US became the leading world economic power, with the highest quality of life on Earth.

The New Deal programs that provided direct aid enabled families to remain united through hard times, and was a lifeline into the workforce, then the middle class, for millions of families. It opened the door to higher education and, as a result, the US had the most educated and capable working class on Earth. The New Deal brought us everything from some of the best schools on the planet, to beautiful parks, the best health care available in the world, etc.The list goes on, and the result was obvious in the quality of life that we once enjoyed. However, these policies did put rules on the rich, making them pay a fair tax rate, and they found this unacceptable.

We have watched, over the past 30 years, as government attacked the New Deal with an ax. We see the results in the deterioration of the infrastructure, failing schools, soaring poverty, loss of fundamental workers' rights and protections and, most telling of all, a rapidly falling life expectancy accompanied with an infant mortality rate among our poor that now surpasses that of most Third World countries. We now have unprecedented economic disparities, and the US is no longer a world leader in any respect.

The New Deal obviously led to an era of prosperity.

2:18PM PDT on Apr 1, 2009

GAWD, WHY DO EVEN TRY TO CONVINCE ONE ANOTHER THAT ONE PARTY IS RIGHT/BETTER/SUPERIOR THAN THE OTHER?! Please stop this madness and do what you can to dissolve bi-partisanship as all it does is drive wedges between the masses, rendering their cumulative power ineffective ~

12:40PM PDT on Apr 1, 2009

No Helen, just because the facts do not bear out the legend of FDR and the Depression does not mean they are revisionists. What it means is that for those willing to read, the facts are there and they underline the failure of the FDR's New Deal.

It took some time for the facts to be acknowledged but they are and FDR/Keynesian economics are being dismembered as they should be. Obama and Geitner do not face any old style Dems and Repubs in their own cabinet telling them they are going overboard. Their asking for power to take over any entity they feel needs government financial oversight is even more than FDR did.

Delusion indeed.

8:05AM PDT on Apr 1, 2009

EXCITED much, Pete?

Anyone who thinks the New Deal was ineffective is a historical revisionist.

Anyone who thinks Obama is a liberal or likely to do anything on the scale FDR did is deluded.

6:21AM PDT on Apr 1, 2009

Any of you folks NAIVE enough to think it was any ONE PARTY that has made such a mess of our economy go snort some more of that liquid bleach & Comet concoction you did before palcing your post for several minutes and get back to me on the thought of the wascalley wepubwecans (R) and the Bush 1/2 contributing as the devastating blow(s)...

Well... ???

The last 16 years have been the worst in US history when it comes to congressional behavior, debt spending, wasteful GOV spending, pet projects, earmarks, et al...
Dump on top of that all the programs created by LBJ & Company's Great Society and the spidervein affect... talk about trickle-down counterproductive-economics...

this nation has whizzed away some strongest/yellow amonia smelling money known to mankind! TRILLIONS!!

AND now OBAMA wants to do what FDR did, then some... that which slumped the USA DEEPER into depression!

WHO, Ultimately is to BLAME!!

SUPPOSED Watchdogs of America, the MEDIA... slobbering dogs for shallow glitz of a Rookie-President (ref. Thomas Sowell Tuesday, March 31, 2009) and a spoonfed, ignorant, spoiled, whining American public who cares more about American Idol, Madonna's newest baby stunt, or Obombadier's wifee's wordrobe being worn in EUROPE!!

HOLD ONE AND ALL Accountable and we will have TRUE accountability... BOTH parties need to be brought to their KNEES by the people... NOT the other way around by TAX & SPEND Programs that will HIT anyone earming 50k a ye

6:15AM PDT on Apr 1, 2009

People here who say that FDR's policies extended the Depression really don't understand what the Depression was. It was not "after all a recession", but was far more complex. What we call the Great Depression was really two recessions happening concurrently with ,arguably, the greatest ecological disaster in U.S. history (the dustbowl) at a time of great social/civic unrest, while the world sped rapidly toward the largest war in the history of mankind. Many of Roosevelt's policies were NOT aimed at economic reform but were, by necessity, targeted at restoring farmland, or at the social re-structering of the U.S. needed for its survival.
Having said that, using pure Keynes as an economic policy is almost as foolish as using pure Friedman. (Friedman type policies got us not only into our current mess, but led to the recession of 1929.) Nothing is ever completely one way, in terms of economic policy we must find a happy medium between Keynes and Friedman. It worked quite well in the fifties.

5:52AM PDT on Apr 1, 2009

hello Lydia, U post very good views and I do agree with some of them, We do have to get the flow of paper money, in order 2 gain control our spending, you have 2 spend money 2 make money. Keep more Jobs in United States, improve or exports. Big one 4 Congress 2 set ACTS. 2 control corporate corruption & greed.And Scott WTG U did your home work, nicely none. Love & Peace 2 U claudia

6:41PM PDT on Mar 31, 2009

Lydia,
When you borrow money, you better put it to good use. When a student takes out a student loan, they most often earn more with the education that they pay for, than they would have received if they had not borrowed money for school. The real question is what do we get for our money. If we stabilize the economy so that the free market is able to reengage with lending, investing, business activity and sales returning to healthy, if not prosperous levels, then we have gotten our money's worth.

6:40PM PDT on Mar 31, 2009

Richelle,

What American once said "We post signs in their language, we print documents in their language and they have newspapers in the native tounges as well. I fear that these people will never assimilate"? Ben Franklin talking about the Germans. In the 1800 the "Know Nothings" were nationalists like yourself who tried to keep out the Irish for taking jobs and not being real Americans. The truth of the matter is that historically many 1st generation immigrants had a difficult time learning the language because they worked so many days/hours but their children always assimilated. It is the same today. Growing up in ethnicaly diverse areas my whole life I have seen how the 2nd generation children of immigrants behave and act almost no different than the average American (whatever that is). What is American culture anyway? Is it New Jersey culture, Montana culture or Mississippi culture? We are a diverse nation founded on a political and philosophical principle not on race, language, religion or ethnicity. You say today's immigrants don't want to be American but have they really been given a chance? It is easy to say that our ancestors came here legally because if you were a white protestant you were pretty much guaranteed access. The same can not be said for other groups (see Chinese Exclusion Act or U.S. refusal to grant asylum to European Jews during WWII).

5:34PM PDT on Mar 31, 2009

Sorry, but the one thing I counted on the Repubs doing right was changing the Clinton bill that made it a law for everything governmental to be in any language. Millions of dollars are spent on providing for those (whether legal or not) who don't speak english. But the repubs like the cheap (illegal) labor, especially where I live. Hey, a lot of us decended from immigrants. But those immigrants of the past wanted to become Americans and learn English. They may have kept their past heritage but they didn't take it directly to the welfare office or blast it on their car stereos.

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