UCLA on FDR, stimulus packages in 2004
posted at 8:04 am on March 15, 2009 by Ed Morrissey
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Hot Air reader Manuel K forwards a 2004 study from UCLA, written as the post-9/11 recovery had gotten into full swing, about the failure of another recovery plan. Two economists at the unversity reviewed FDR’s efforts and their effects, and come to a much different conclusion about the New Deal than our current administration holds. In fact, they have reached a clear conclusion on stimulus packages such as those proposed by Barack Obama:
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.”
Oh, crud.
Update: Here’s the money quote:
“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.”
Yes, which we have discovered repeatedly since; the 1970s practically gives a how-to on that lesson. So why do politicians intervene? Two reasons. They have to answer to constituents who collectively understand economics very poorly. That pushes politicians to think that, in Mel Brooks’ immortal words, they have to do something “to save their phony-baloney jobs”.
Update II: The boss had this back in January, as Steve from Radio Vice Online reminds me.
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Surely someone prior to 2004 noticed FDR prolonged the recession of 1931-33 by 12 years due to idiotic policies.
angryed on March 15, 2009 at 8:09 AM
I would bet that you couldn’t get any prof from the UCLA economics department to stand behind that report now.
conservnut on March 15, 2009 at 8:18 AM
Whoops.
vcferlita on March 15, 2009 at 8:18 AM
Compound FDR’s failure record with Obama’s policies.
ARGH!
maverick muse on March 15, 2009 at 8:19 AM
Henry Morganthau, [FDR's Treasury Secretary]conceded this fact to Congressional Democrats in May 1939: “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!”*
(* Burton Folsom, Jr., New Deal or Raw Deal? (New York: Simon & Schuster, 2008), p. 2.)
Six years after FDR came into office…and unemployment still in double digits…from a high of 25% in 1933 to “modest” 17% in 1939, when Morganthau made this statement…six years of FDR[Obama} programs.
Were it not for WWII, and the Post-war boom, (lasting till 1960’s) there would have been no recovery had FDR’s policies remained intact. We’d have gone the way of Great Britian and a host of other nations who tried to spend their way back to recovery…some of these nations are still feeling the aftereffects of “spending their way” back to recovery, Great Britian being a primary example.
Present unemployment is about 7%-8%, and localized. From all indicators, that will change…and not in a good way. Not the sort of “Change” people thought they knew.
Team Obama is about is only making things worse…and it will get worse, unless the grown-ups step in and get this Obama-recovery beast under control.
coldwarrior on March 15, 2009 at 8:21 AM
I recommend reading “The Forgotten Man” by Amity Shlaes. The book is a history of the Great Depression from the forgootens man’s perspective. The forgotten man is not the man who gets public funds but rather …’He works, he votes, generally he prays – but he always pays…’. I learned more about the depression in the first chapter than I’ve ever learned in high school and college.
Fuquay Steve on March 15, 2009 at 8:24 AM
maverick muse,
well said. I remember Ed Markey when the first stimulus bill was passed explaining how turbines needs steel, hence American jobs. As if it was that simple! By the way I am going to make a post of that article.
rob verdi on March 15, 2009 at 8:24 AM
Dear Congressman
by Lee Adler
KentAllard on March 15, 2009 at 8:25 AM
Amity Shlaes’ Forgotten Man exposes those inconvenient truths of FDR’s horrible economic record that Harold L. Cole and Lee E. Ohanian conclude independently from their UCLA research.
maverick muse on March 15, 2009 at 8:26 AM
The money quote.
conservnut on March 15, 2009 at 8:26 AM
Go figure.
tru2tx on March 15, 2009 at 8:27 AM
Slay that beast and roast the pork!
maverick muse on March 15, 2009 at 8:28 AM
KentAllard on March 15, 2009 at 8:25 AM
He “proudly” voted for Obama yet is against his economic policies. The same economic policies that Obama laid out during the campaign. Oh man this country is screwed.
angryed on March 15, 2009 at 8:28 AM
It boils down to incentives. So long as our young people are convinced in schools that “profit” is a dirty word, we will find this nation becoming more and more reliant on government largesse and less reliant on the basics…make a product, design a product, market a product for profit, and jobs, real jobs, not welfare disguised, are created, capital flows, and the economy becomes more self-sufficient.
coldwarrior on March 15, 2009 at 8:30 AM
rob verdi, link but observe copyrights.
City Journal is great reading.
maverick muse on March 15, 2009 at 8:32 AM
If govt spending really worked, no country would ever face a recession since the govt always increases spending every year. The problem is that most Americans are clueless about how the economy works. Thanks to 50 years of ACLU/NEA domination in the schools kids graduate knowing how to put a condom on a banana blindfolded with one hand tied behind their backs. But ask them to tell you the difference between debt and deficit and they look at you like you’re speaking Greek.
angryed on March 15, 2009 at 8:32 AM
These two “economists” from UCLA probably delivered this message like a pair of little boys admitting they’ve done something bad.
Strange but funny thing is: People with brains in their heads have known this for decades!!
AubieJon on March 15, 2009 at 8:33 AM
There are still Keynesians out there who are convinced that the “depression” ended in 1933 and after that it was just recovery. Sure, not the best recovery, and there was a second “recession” in 1937, but the GDP!
I’ve tried talking to a guy at work who keeps bringing in articles written by Keynesians. He accepts this stuff as Gospel truth. Facts meas nothing.
I asked him if the $1 trillion stimulus was good (data? what data?) why not go with $10 trillion or $100 trillion? His response was “well, ‘they’ decided that $1 trillion was just the right amount needed.” He has no idea how “they” came to this “decision.”
With Obama now talking about the need to do it again, I’m thinking about going back to this guy and ask him about this new “decision” by “them.”
I dunno: is another charge at the windmill worth it?
karl9000 on March 15, 2009 at 8:36 AM
“It was hard for me to believe that you were entirely serious about that socialist question,” Mr. Obama told the reporter, who wrote: “He then dismissed the criticism, saying the large-scale government intervention in the markets and the expansion of social welfare programs had begun under his Republican predecessor, George W. Bush. ‘It wasn’t under me that we started buying a bunch of shares of banks,” Mr. Obama said. ‘And it wasn’t on my watch that we passed a massive new entitlement, the prescription drug plan, without a source of funding.’”
So true. But drawing on the mantle of George W. Bush should be no shield against charges of socialism. Having massively expanded the government and massively intervened in the economy, Bush checked his capitalist credentials long ago. For Obama, this really is smoke and mirrors time. Going for the grandest illusion of all, he then told the New York Times: “We’ve actually been operating in a way that has been entirely consistent with free-market principles.”
Excuse me while I pick my jaw off the ground. Everyone knows — or should know — that putting more and more of the government in charge of more and more of the economy is entirely inconsistent with free-market principles. This means that the president’s statement to the contrary is what is known as a big lie. Repeat it enough, and people believe it. President Obama, of course, only has to say it once: George W. Bush, the Republicans, they started this whole thing; since they represent “conservatism,” that must make him Mr. Free Market.
Confusing? Only so long as George W. Bush retains conservatism’s stamp of approval, thus stun-gunning conservatism. The resulting paralysis is what keeps a lot of the Obama hocus pocus going — even when the ruse is so obvious. Not to mainstream media reporters, of course; they’re hopeless. But conservatives, I’m afraid, are in denial.
MB4 on March 15, 2009 at 8:36 AM
Cool and now we have “FDR Heavy” in office.
FDR extended the depression 7 years how long will will FDRH
extend the recession? 12,14?
oldernwiser on March 15, 2009 at 8:38 AM
I’ve come to the conclusion that you really had two different depressions in the 1930s. The first depression was triggered in 1929 with the stock market crash during the Hoover Administration and was the result of a complex of factors such as too easy availability of credit, the implosion of the housing industry, and rampant stock speculation; while the second depression came on FDR’s watch and was triggered by the excessive spending of his New Deal programs–especially NRA, AAA, and the WPA–those three programs all involved excessive state spending and central planning of the economy.
When you look at graphs of failed businesses and banks, and unemployment, what you’ll see is that by Roosevelt’s inauguration, the economy was already beginning to improve thanks to Hoover’s reforms such as the FRC. The problem was that they took too long to take effect and I think Hoover underestimated the nature of the problem until it was too late. Hoover also made the mistake of raising taxes to pay for the FRC–and we all know how bad an idea it is to raise taxes during a recession/depression. Hoover also was unable to reassure the populace, being seen (unfairly) as distant and uncaring, which hurt the Republicans.
Interestingly, the Roosevelt reforms that did help were the ones that didn’t cost a whole lot of money to implement: the Bank Holiday actually did help to restore people’s confidence in the banking institutions and was purely a psychological ploy on Roosevelt’s part. I’d also contend that the creation of the FDIC and SEC helped. Roosevelt also grew overly ambitious and introduced too much in the range of social reforms and taxing corporations and the wealthy to pay for them, and then in 1935-36 started cutting public works programs while maintaining the corporate and wealth taxes just as the inflation from his expenditures on NRA and AAA hit with the inevitable happening–another depression.
So, the thirties were really the era of two depressions–one caused by economic circumstances on the ground and the other by failed government policies.
Matt Helm on March 15, 2009 at 8:41 AM
Even the liberals here at UCLA are begrudgingly beginning to admit this.
Why aren’t their counterparts on the opposite coast doing the same?
MB007 on March 15, 2009 at 8:45 AM
Obama’s aggregate policy initiatives have less to do with the stimulating the economy and more to do with a massive redistribution of national wealth.
I suggest everyone take a look at WSJ’s Danniel Henninger’s “The Obama Rosetta Stone”.
aquaviva on March 15, 2009 at 8:47 AM
Obama’s stimulus was about buying votes and expanding the size of government. Ending the recession was a secondary, if any, reason, regardless of what he publicly says.
That’s what Emanuel’s “Never let a crisis go to waste” is about. Do stuff allegedly in reponse to the crisis, but which is simply some other program you want even if it’s solely a vote-getting program.
Wethal on March 15, 2009 at 8:48 AM
You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.
- Adrian Rogers (1931)
MB4 on March 15, 2009 at 8:50 AM
coldwarrior
Exactly. These men admitted culpability in their day.
Those records were smothered by years of Democrat/Socialist MSM propaganda to the contrary. Again we date WHEN Socialism stole the Democrat Party, with FDR’s first Cabinet. Those persons involved documented their own accounts, also reported in Forgotten Man. This Socialist permeation of America’s culture is the common thread throughout Liberal Fascism.
REVISIONISM, destroying and erasing historical facts and the essence of matter, must face public scrutiny and be disabled from covering its own ass with DISTRACTIONS.
Pin down the lie and cut off funding its perpetrators: the media and educational administration’s corrupted curriculum that converted Civics Courses into Social Studies, and history into current [popular culture] events.
maverick muse on March 15, 2009 at 8:51 AM
Of course Obama is fully aware of this study, just as he is fully aware of the negative consequences of his stimulus. The goal here is continuous Democrat control, not for the nation to do well.
T J Green on March 15, 2009 at 8:54 AM
I’d like to see a study that compares the stimulative effects of the policies of tax cutters (JFK, Reagan, W)and the big government types (FDR, LBJ, O). The result I think would be illustrative, though obvious to most of the readers of HA.
DarkKnight3565 on March 15, 2009 at 8:55 AM
A lie can travel half way around the world while the truth is still putting on it’s shoes.
- Mark Twain
MB4 on March 15, 2009 at 8:56 AM
…but get a rude awakening when poverty hits home.
maverick muse on March 15, 2009 at 8:57 AM
Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and misapplying the wrong remedies.
- Groucho
MB4 on March 15, 2009 at 8:58 AM
MB4
Indeed.
All the more reason to stick and rally to the point.
maverick muse on March 15, 2009 at 8:59 AM
Until he reveals his transcripts, there is no “of course” about anything Obama is fully aware of or knows.
maverick muse on March 15, 2009 at 9:01 AM
Topics like these are why I read Hot Air Ed.
I use the same analogy, but infinitely less articulate.
csdeven on March 15, 2009 at 9:03 AM
maverick & coldwarrior, excellent posts!
jcheney on March 15, 2009 at 9:03 AM
The thing is that Obama thinks that what dragged out the recovery was that the “stimulus” wasn’t big enough.
The “charge” into large scale modern windmill parks is a sign..
the_nile on March 15, 2009 at 9:04 AM
While you are awake in this world Obama is asleep in another one.
Tav on March 15, 2009 at 9:04 AM
“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”
That’s the goal , and that’s the money quote.
the_nile on March 15, 2009 at 9:08 AM
I will make sure that free markets fail even if I have to put them in cement overshoes.
- Chicago Obama
MB4 on March 15, 2009 at 9:10 AM
The bad news for supporters of the free market, something we really don’t have, is that this study like so many before it is discredited or ignored by virtually everyone in economic academia/government roles.
Bush and crew with all the Goldman Sachs personnel started the ball rolling this time with his infamous quote, “I’ve abandoned free market principles to save the free market system.” Obama and Emmanuel are now taking it to new extremes. FDR looks like a piker compared to what is taking place/planned now.
By the time the validity of this study is realized it will be too late. Congress is putting into motion plans that there will be no return from. Snowe, Collins and Specter are front and center in this transformation.
patrick neid on March 15, 2009 at 9:12 AM
FDR enjoyed experimenting for experiment’s sake. He knew he had no idea what he was doing, and he didn’t care. The working Americans were mere ants to FDR WHO enjoyed destroying the ant nest of AN efficient economy purely from his elitist indifference to the colony. It was his colony to play with according to his whim. His gambling hurt the vast majority of the population while he considered himself above such matters. “Oh well, try this next.” FDR’s Socialist “too big to fail” intrusive economic policy failures enforced HUGE suffering upon Americans en masse.
Obama will do much worse damage. FDR compulsively messed with ant nests. Obama will exterminate.
maverick muse on March 15, 2009 at 9:14 AM
The carrot Obama dangles in front of the American masses is government welfare health care.
That Socialist Federal Government then has everyone’s DNA and the power to enforce inoculations.
Mr. Malleable’s carrot is toxic.
maverick muse on March 15, 2009 at 9:20 AM
What the article fails to say is that yes the recovery would have been rapid but it also would have been extremly painful to great sections of the americian population. Including the elites. Thus the urge to interven by the gov. One to save the fortunes and power of their supporters and two to allievate the suffering.
It would take a very strong President and Congress to sit on their hands and do nothing has people lost homes, went hungry, died etc. In fact stronger than most humans are.
Therefore to do nothing is an impossibility. What we as a population/nation should worry about is the actions Congress takes helps the suffering with the least impact to the overall economy.
For example the correct course of action IRT to forclosure is not to keep people in their homes but to allow them to fail yet to have a shelter set up so they are not out on the streets, help them maybe with the first month deposit for a rental, etc. That way we are not proping up a failed system but helping the transfer happen more quickly and less painful. We soften the human anguish side while not interfereing with the reallocation of capital in a free market
unseen on March 15, 2009 at 9:38 AM
This needs to be repeated in the house and senate.
This needs to be said on the steps of the capital.
It needs to be screamed in front of the white house.
It needs to be on national news.
It needs to be on international news.
It needs to be in all economics and history textbooks.
This has to be made common knowledge.
Karmashock on March 15, 2009 at 9:38 AM
Wasn’t WWII the biggest government spending effort in the country’s history? Wasn’t the post-war boom due, in part, to the GI Bill and Marshall Plan?
I wish FDR hadn’t created the permanent increase in the role of government, but during WWII the role of the government in the economy had never been greater and the debt/GDP ratio was far higher than it will ever be today.
dedalus on March 15, 2009 at 9:42 AM
WWII caused a wholesale production stream…of real products, and products that needed instant replacelment, hence, more production. Add to that the inability of most in America to purchase most personal products, because of wartime rationing, and the amount of savings of the average American went up, tremendously, and this money was loaned to the war effort, to banks, to enterprises, even to the government (war savings stamps/war bonds) so much so, that when the war ended, the conversion from war production (tanks, aircraft, jeeps, ships) to consumer goods was almost instant…a few months to less than a year. And all those savings went into buying all the “needs” and “wants” that were put off for four years…ushering in the largest mass consumer society in history, a consumer society that charged forward, demanding more, and getting it, with the resultant increase in capital, increase in innovation, and marketing. There was a lot more than babies coming out of the “baby boom” years.
When the Great Society was introduced, the “boom” ended. it was followed by a few “boomlets” when government lowered taxes, or stopped trying to perfect the imperfect, and also followed by several recessions, as government tweaked with the markets.
Right now, we are facing a lot more than a mere “tweaking.” We are facing a mass screwing.
coldwarrior on March 15, 2009 at 10:03 AM
WWII held the economy b/c (1) it created a world wherein we had the only industrialized economy left in the world; and (2) FDR focused on destroying the Axis, taking his attention off of destroying the economy.
besser tot als rot on March 15, 2009 at 10:05 AM
But wait, I thought getalife told us that doing nothing wasn’t an option…afterall you can’t let a crisis go to waste and it is a “Bush Depression”.
getaclue wouldn’t know sound economic policy if it hit her in the face. The Messiah is all-knowing, all-seeing, all-encompassing. Only he can pull us out of this. He is a miracle-worker.
Gag.
JAM on March 15, 2009 at 10:06 AM
The post-war boom was due to Europe and Asia rebuilding and buying everything they needed from N. America as well as pent up demand from Americans. I will give credit to Truman for not getting in the way of things in 1945-46 and allowing the process to happen. He could have easily gone back to FDR’s insanity when the war ended. The fact he didn’t meant a lot and he never gets credit for that.
angryed on March 15, 2009 at 10:07 AM
How ironic that we the people know exactly how to solve this problem but can’t because we are not one of the 535 real voters in this country. I hope some HA posters choose to run for office. We, mostly, understand the limits of government and the dangers of having a large one.
Mojave Mark on March 15, 2009 at 10:08 AM
As for the GI Bill…it led to a massive personal home ownership trend which began to ebb in the late 1950’s early 1960’s. The GI Bill also offered a mass chance to move from a largely agrarian society to a more technological society, as veterans filled college campuses. Bear in mind, that during WWII the average GI was earning between $33 to $66 a month. The GI Bill was compensation for the reduced wages offered the service members during wartime. [Keep this in mind. Until the Carter Era Community Reinvestment Act of 1977, other than veterans on the GI Bill, nobody in American could purchase a house with no down payment and get a loan 100% insured by the Fed. The CRA changed all that, and by the mid-1990’s, as the CRA was amended, pretty soon millions of Americans (and quite a few illegals) could purchase a home (well, sign a mortgage) with no money down, and were offered favorable initial interest rates…for nothing.
The Marshall Plan was designed to prevent two things…chaos from which socialism/Communism could gain a solid foothold in Europe..and to help stimulate American production.
The Marshall Plan was not a free government give-away.
It was a serious plan of investment in Europe designed to assist post-war recovery in Europe and to ensure markets for American products over the long run. It worked. Had the Soviets agreed to participate, or at least let their portion of Europe participate, it would have significantly changed all of Europe for the better.
But, as the Soviets understood, having their part of Europe beholden to the United States, would have made their stranglehold on Eastern Europe a lot weaker than it initially was. The Cold War was in large part based on markets and market access, while to a larger extent was based as well on the competing desire for survival of two systems…ours and theirs.
coldwarrior on March 15, 2009 at 10:15 AM
This is a excellent post and a great thread.
I beg Ed and AP to refrain from any more posts on two topics: anything having to do with Anna Nicole Smith and anything having to do with Megan McCain. At most, include mention of them in the headlines.
Oh, no; et tu, Boss?
http://michellemalkin.com/2009/03/15/is-meghan-mccain-for-real-or-not/
BuckeyeSam on March 15, 2009 at 10:21 AM
I saw on the fox news website this morning that they are going to intervene even more. They are still thinking about taxing health benefits! They can kiss my a$$. I am not paying those *&#^((*%&$#(%)*(#&#(*%(*&%(*&#(*#$%%^^(#$ taxes! It’s just another way to get people in a tighter pinch and have to depend on government programs. For instance: “Well, if I have to pay taxes on my health benefits I don’t want the benefit. I’ll just hook up with whatever government insurance program crap they are going to put out.”
boomer on March 15, 2009 at 10:24 AM
meh.
i thought we didnt trust academics. especially from UCLA.
ernesto on March 15, 2009 at 10:25 AM
Whatever options we have today, blowing up all of our industrialized competitors isn’t one of them. After we work through credit-spread problem as well as the contraction we’ll still find ourselves in a world of global competition. It seems the biggest mistake of the stimulus package was its lack of focus on infrastructure that would help the U.S. be more competitive in the long run. Instead we got whatever Pelosi & crew had on their standing list of lobbyist giveaways.
dedalus on March 15, 2009 at 10:26 AM
They need to start teaching basic economics in highschool!
aikidoka on March 15, 2009 at 10:32 AM
Is it my imagination or is everyone ignoriong the effect of our taxation, environmental and immigration policies, which have driven all our industry out of the country, We are now basically a service economy, producing very little in the way of tangible product.
The Buy America provisions in the Porlulus Bill are ludicrous. You couldn’t find enough US produced steel to comply.
Amazed on March 15, 2009 at 10:32 AM
Kudos to Michelle, AP, and Ed for the rapid success of this site. I might also add, that when you bring the likes of coldwarrior, maverick muse, unseen, patrick neid, matt helm, MB4 & so many others who bring so much information to these threads each and every day… Well, it makes this site both informative, educating, and entertaining all at the same time.
It’s always nice to see a success story, especially when the story involves such an important foundation; freedom of speech and expression.
Kudos to all involved…
Keemo on March 15, 2009 at 10:32 AM
wanna cracker polly?
you are incredibly simplistic. nothing new.
Jamson64 on March 15, 2009 at 10:35 AM
Did any of you click on the link in the headline news? The orchestrated blitz to sell the Obama program of massive government expansion is set to roll: http://news.yahoo.com/s/politico/20090314/pl_politico/20007
The whole plan is designed to demonize the Republicans as obstructionists to a plan that, in reality, will bankrupt our nation. The media will work overtime to champion a deceitful policy.
onlineanalyst on March 15, 2009 at 10:36 AM
I got a kick out of a news story promoted as how affordable green technology was for one homeowner. That homeowner had solar panels put on his roof for $20000. Then they noted that you and I (the American taxpayer) also paid $20000.
This is all a sad joke. What kills me is idiots like ernesto and their tired meh comments.
Jamson64 on March 15, 2009 at 10:38 AM
yes, by all means we should concentrate our energies on these three scum…
we can ignore the 57 (or whatever) dems in the senate, we can ignore the majority of dems in the house, we can ignore president obama…
let’s get those “powerful” 3 senators defeated, and everything will be just fine…
mockmook on March 15, 2009 at 10:45 AM
We may be facing a transformation of the consumer-dominated economy that began after WWII. During the post war boom the increase in consumer spending was based on fundamental factors that you well describe. However, during the past decade much of the spending growth was based on low interest rates and inflated home and stock values–themselves stoked by cheap credit.
Hopefully the government will pursue policies that support innovation, since that will be the path to GDP growth now that the financial alchemy option is no longer available.
dedalus on March 15, 2009 at 10:47 AM
Yep…let’s defeat all of them, all the Dems who supported this Stimulus/Pork Act…then we can start working toward making things fine. The gang of three…well, that’s just the aperitif before we start devouring real meat.
coldwarrior on March 15, 2009 at 10:50 AM
Yeah, there are enough (too many) Dem targets to choose from, and Maine and PA are more likely to replace their GOP Senators with Dems than with conservatives. Aside from Judd Gregg there aren’t any other GOP senators from the North East.
dedalus on March 15, 2009 at 10:51 AM
Fox News has been running a segment on this point this weekend. Apparently, three states require a semester of personal finance in high school. Although high schools shouldn’t become feeders for undergrad business schools, we need to provide young people with some kind of personal finance education at this level.
The financial illiteracy, among other forms of illiteracy, in this country is scary.
BuckeyeSam on March 15, 2009 at 10:53 AM
I think the UCLA study is great, but I recently read something (not a full-blown study, but a high-level overview) with some quotes from a recent Nobel winner, Edward Prescott, that outlines WHY macroeconomists don’t believe ANY stimulus package can work. If you read between the lines of what they say the likely outcomes are, the only possible conclusion is that stimulus packages are a giveaway from non-politically-connected individuals and groups to politically-connected individuals and groups. Hardly the recipe for success, unless you believe certain VERY DUBIOUS assumptions (e.g., that Maxine Waters would make a GREAT bank CEO). Also, this came out a few weeks ago and I think with all the talk of Porkulus II, we know the answer to the last question, unfortunately.
http://www.theweek.com/article/index/93473/The_selfdefeating_stimulus
venividivici on March 15, 2009 at 10:58 AM
What scares me the most, is the “over regulation” factor that started in states such as California some 30 years ago, and has spread around our country like cancer. Personally, I blame Lawyers & Judges, as well as the Democrat Party for this. I was living in Ca. when businesses were rewarded for programs that brought career opportunities to civilians; a time when the aerospace industry and the defense industry brought hundreds of thousands of jobs to Californians. I watched as these businesses packed it up and relocated to other states in order to survive the over regulation brought upon them like a cancer.
Now that the cancer has spread to much of the country, these businesses are now forced to relocate off American shores in order to survive. Millions of American jobs lost to foreigners due to the burdens cast upon business in our country. Lawyers, Judges, and the Democrat Party are to blame for this. Liberalism includes extreme selfishness and self-centeredness, which is what the lawyer business is all about. Writing and enforcing laws that feed their own industry at the peril of the whole.
It will take decades to reverse this trend, to get businesses to once again flourish in America. If this is going to happen, we must focus our attention on the causes. Our government is out of control, completely reinventing the realm of their job tasks. For our government to treat us as if we are incapable of taking care of ourselves, let alone inventing and creating the inventions and technology that has advanced the world for generations, is a dynamic that is insulting and completely void of the facts of our own history.
I really hate this current crop of politicians. Egocentricity, egocentrism, egoism, egomania, self-absorption, self-involvement, selfishness; most every one of them.
Then we look at the media, and what has become of this industry and the damage they have caused average citizens.
Keemo on March 15, 2009 at 11:00 AM
Veni- you just scared the bejeebers out of me
Jamson64 on March 15, 2009 at 11:01 AM
Back in 2000 I added a “street money” segment to an honors class I taught in a Toledo school. Just about 20-30 minutes a week. Demonstrated how a checking account works, brought in several examples of rent/lease contracts, talked about credit and why not to buy in to all those wonderful credit card offers the kids were receiving in the mail, talked about jobs, wages. taxes, how to draw up a budget, all of that.
Was told at the end of the semester by the Vice Principal, [OEA/NEA local steward] that I had to stop this. Was told that this was something either the parents would teach or the kids would pick up along the way.
Should have seen his reaction to my impromptu “street law” seminars…how not to make a traffic stop turn into a major felony, that sort of thing. {based on one of my students getting pulled over by the TPD, and then arrested for resisting arrest, and charged with a few other counts.
Financial illiteracy is rampant…all over America. And the bad guys take advantage of it all the time, Bernie Madoff, Obama, et al., and most of America is more believing in those late night infomercials on how to make a million working a few hours from home each week than they are believing that setting goals, drawing up a budget, and including reliable investments and such will get you from here to there a lot better off than buying and selling notes or flipping houses.
This is why it is soooo easy for the Dems to sway most of America witrh slogans and sound bites.
They “believe.” They don’t understand squat…but, by
GodObama they believe!coldwarrior on March 15, 2009 at 11:04 AM
Both the GI Bill and the Marshall Plan were massive government programs that were coordinated with America’s long-term strategic aims. Obama’s stimulus bill fails to meet the criteria of using the government’s role as spender of last resort to complement our long-term competitiveness.
dedalus on March 15, 2009 at 11:07 AM
“they have to do something “to save their phony-baloney jobs?”
that’s pretty much the reason, usually…..
but with this moron in charge, the reason is that he wants to destroy the free market economy.
notagool on March 15, 2009 at 11:08 AM
I’m normally not a conspiracy theorist, but I don’t believe Obama wants an economic recovery. After all, he wouldn’t want to waste a good crisis. What has he done to improve the economy? Massive spending, almost all to push an agenda of social engineering with little to no stimulative measures included in this spending orgy.
He knows exactly what he’s doing and he’s doing precisely what he said he would do. None of this surprises me, except the speed at which he’s moving. I don’t believe he wanted an economic recovery because people may have questioned the need for the unprecedented level of government expansion and spending. I don’t think he had anything to worry about along those lines. There are plenty of Obamabots to push his agenda forward.
alwaysright43 on March 15, 2009 at 11:08 AM
Because, like Obama, they do not want to admit to their real agenda.
Johan Klaus on March 15, 2009 at 11:09 AM
I’m really glad that the Messiah equates himself with FDR. Because during the 1930s, none of FDR’s “new deal’ programs worked to solve the great depression. The only thing that pulled us out was WWII, and G_d forbid we have to put our young through anything like that again.
Like FDR, Obama’s a great bullshit artist, but that’s as far as it goes. Mirroring the 1930s with a fist full of social engineering spending programs simply didn’t work then, and won’t work now. The democrats just don’t seem to understand, that government can’t create jobs. Moreover, our government must get out of the “government sponsored enterprise” (GSE’s) mortgage business.
byteshredder on March 15, 2009 at 11:10 AM
This is an example of how our government is operating through the courts… We lose and they gain!
http://jurist.law.pitt.edu/hotline/2009/03/supreme-court-gets-hayes-wrong-only.php
Keemo on March 15, 2009 at 11:15 AM
It’s insane that the possibility is even out there, but with the threat of bank nationalization in the air, it seems undeniable at this point. A nationalized Citibank would be ripe for use as a political rent-seeking tool by those in the public sector who think they should be calling all the shots.
venividivici on March 15, 2009 at 11:16 AM
Here is Obama on truth serum as to how he is going to handle the econmy and a few other things.
boomer on March 15, 2009 at 11:20 AM
A good chunk of my life, I lived in that intellectually challenged fool’s district. We used to call him “Fast Eddie” Markey. He only showed his ugly face when it was time to get re-elected.
Mooseman on March 15, 2009 at 11:21 AM
For many months, most of the media and the public have been behaving like teenagers swooning over a star, regarding Obama. However, the administration’s eye-popping economic policies and political gaffes might be starting to have an effect:
Detroit News: Obama opens new era of recklessness
“Overall, the Obama budget will make Americans more dependent on government, explode the federal deficit, risk further crippling of the economy and leave the nation more exposed to its enemies.”
New York Daily News: More than a bad day: Worries grow that Barack Obama & Co. have a competence problem
“Yes, it’s early, but an eerily familiar feeling is spreading across party lines and seeping into the national conversation. It’s a nagging doubt about the competency of the White House.”
And, amazingly, even some baby steps here:
David S. Broder, Washington Post: End of Honeymoon
“But it is not too soon to say that the Obama honeymoon is over. His critics in Washington and around the world have found their voices . . . like some thoughtful congressional Democrats with whom I have spoken, they worry that he has bitten off more than he can chew.”
Loxodonta on March 15, 2009 at 11:22 AM
If they are going to act like dems, it does not matter if they are replaced with dems.
Johan Klaus on March 15, 2009 at 11:26 AM
The government has pumped about $50B (and a $300B backstop) into a company with a market cap of about $10B and still avoided nationalizing it. If Obama was eager to nationalize Citi he’d have an argument based on the exposure that the taxpayer has relative to the exposure faced by private investors.
Summers and Geithner have said that governments make bad bank managers. Watching congress question the Fed or Treasury heads confirms that.
dedalus on March 15, 2009 at 11:26 AM
Geez Ed-
This is NEWS? I’ve been posting about an article “Great Myths of the Great Depression” here in Hot Air and in chat on your ustream show for a year or more.
It shows that the Fed Res brought on Black Tuesday, then Hoover and FDR and Congress took a market correction and made it a recession then took it to a depression and made that into the Great Depression.
And we never, ever learn.
And listening to Austan Goolsbee (WH Council Econ Advisors) on Fox News Sunday we are all SKRUED!
Amendment X on March 15, 2009 at 11:26 AM
I don’t know how immortal Brooks’s words are, I do know that there was a significant minority who were thinking wistfully that they could have Silent Cal Coolidge again. The idea isn’t exactly new.
I have been saying since September when it became clear that Obama would be the next president that Bush/Obama would compete with Hoover/Roosevelt for economic honors.
burt on March 15, 2009 at 11:30 AM
Something about “Those who do not learn from history are doomed to repeat it”. I wonder what that means?
Johan Klaus on March 15, 2009 at 11:38 AM
I heard Kathleen Parker and her newspaper cronies are working on a story about this study right now. Expect to see this hard-hitting investigative piece in your local paper real soon.
PatMac on March 15, 2009 at 11:43 AM
We’re from the government, we’re here to help.
GarandFan on March 15, 2009 at 11:46 AM
Sure it does since the majority party has all the leadership positions on committees and controls the legislation pipeline. Right now that’s the Dems.
dedalus on March 15, 2009 at 11:49 AM
Sure. I hear what they say and, taking it at face value, it implies that they won’t nationalize these banks. But, I don’t think it’s completely off the table, despite their public statements. According to traders in bank debt, they don’t think it’s off the table, either, as C and BAC bonds have been declining on the increased risk of bondholder “haircuts”.
The final chapter in the banking system meltdown has not been written, in my opinion. We could end up with government bank managers in a relatively short time, regardless of competence.
Anyway, the broader point was that the more the economy is transformed from an entrepreneurial/corporate economy into a political economy, the more incompetently managed it will be, since the skill sets of business managers and politicians are quite different. Just look at the psychological and intellectual makeup of the typical Kennedy School of Government graduate versus the typical Harvard Business School graduate.
venividivici on March 15, 2009 at 11:51 AM
Heh. Yeah Kathleen Parker and her media non-elites are surely on the case with this info because they know their jobs and future are on the line. Oh wait, that doesn’t matter. Love for Obama trumps all truth and eliminates any professional responsibilities.
econavenger on March 15, 2009 at 11:54 AM
Jamson64 on March 15, 2009 at 10:38 AM
you got a link?
funky chicken on March 15, 2009 at 11:55 AM
What happens if we do understand what happened, and we do it anyway?
Socratease on March 15, 2009 at 12:05 PM
It probably would have been the same with Hoover, too, as he, like Bush, started interventions early. Interestingly, Hoover put out feelers to FDR after his November victory so that they could have a unified voice and unified plan; FDR refused to talk to Hoover and remained silent until he took office.
We will never really know whether it was entirely FDR’s interventionist policies which were the mud which mired us, since the world was gearing itself up between about 1937 and 1939 for a massive war, and the jitters associated with that certainly affected the economy.
Not quite as simplistic as your comment seems to put it.
Here’s an interesting chart.
Notice that sustained growth didn’t begin until around 1949, almost four years after the end of the war.
unclesmrgol on March 15, 2009 at 12:05 PM
HotAir must have something against Uncommon Knowledge since I hardly see relevant interviews linked or blogged about.
If we are to go back to 2004, why not the Amity Shlaes interview (8/25/2008) about her book “The Forgotten Man: A New History of the Great Depression”: Part 1 of 5
BTW, does Peter Robinson need more credentials or something? I mean he was only “speechwriter to President Ronald Reagan. He wrote the historic Berlin Wall address in which President Reagan called on General Secretary Mikhail Gorbachev to “tear down this wall!”"
nottakingsides on March 15, 2009 at 12:08 PM
Agree with the point about government types vs entrepreneurs. Also agree that nationalization is a possibility–people like Greenspan and Lindsey Graham have spoken favorably of it.
The bond prices are reflecting the fact that BAC and C are perceived to be bankrupt. If these banks were another company (say Circuit City) the bondholders would get whatever the bankruptcy court had leftover. BAC and C won’t be allowed to file for bankruptcy since the government will step in first, but if the government does step in the bondholders should be treated in a manner similar to bankruptcy–preferred shareholders of C already have.
dedalus on March 15, 2009 at 12:12 PM
I left some significant words out of my prior post. Those words are in strong type.
I have been saying since September when it became clear that Obama would be the next president that Bush/Obama would compete with Hoover/Roosevelt for economic honors.
burt on March 15, 2009 at 12:33 PM
You got that! Don’t be distracted by Obama’s head fake towards the economy. This has nothing to do with restoring the business cycle. Obama and kind don’t care is it goes up or down, this is about gathering power and control.
They have the ‘out’ if the economy does not recover…well we didn’t stimulate it enough.
Forget the recession, think Government growth and control over every phase of your life.
Uniblogger on March 15, 2009 at 12:52 PM
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