Wednesday, August 18, 2010

It's Just History Repeating. . .

History loves irony, and right now the Democrats are giving it off in spades. They are repeating obvious mistakes that millions of others before them have made. Yet, like so many Wiley E. Coyotes, they’re shocked that things aren’t turning out the way they expected. In fact, they spent the weekend whining about the unfairness of it all.

Consider the following four issues: the stimulus, the TARP, Obama’s dictator-appeasement plan, and Obama’s mortgage rescue plan. Each is blowing up in their faces like an ACME explosive.


• DeStimulus: The Democrats spent the weekend freaking out both on and off the record that despite all the money they poured into the stimulus, unemployment remains higher than it was before the stimulus began. What’s worse, they think they are now being unfairly blamed by ungrateful taxpayers for running the deficit/debt to dangerously high levels.

But of course, they aren’t the first to do this. Indeed, consider the case of FDR’s Treasury Secretary Henry Morgenthau. Here is what Morgenthau wrote in his diary about their efforts to combat the Bush. . . er, Hoover Recession:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. . . [A]fter eight years of this administration we have just as much unemployment as when we started. . . and an enormous debt to boot!”
Sound familiar? Despite FDR’s mega-stimulus, unemployment fluctuated between 14% and 20% during his first eight years, with the 20% coming later, not earlier. You would think somebody (**cough cough** Obama **cough cough**) might have considered this before they acted, but maybe that’s too much to ask.

Interestingly, FDR raised the top income tax rate so he could keep spending, causing unemployment to spike. The top rate went from 24% under Hoover to 63% to 79% to 90%. In 1941, FDR even proposed raising it to 99.5% on all income above $100,000 -- probably would have worked better if he’d said $250,000. All this did was bring unemployment to an all time high and stretch out the Great Depression an extra 15 years. FYI, Obama wants to raise the top income tax rate so that he can keep spending. Obama’s rates are not as bad, he’s aiming for something in the 50% rate, but the effect will be the same. Geithner’s diaries should make for fun reading someday.


• TARP Monster: Do you remember how the TARP was supposed to save the banking system from the folly of the banks who were too big to fail? Well, it turns out the TARP put the banking system at the mercy of those very banks. Indeed, a recent report from the government’s own TARP watchdog reports that the TARP has hurt smaller banks, who are having trouble repaying the money, and they are now vulnerable to being taken over by the very same too-big-to-fail banks that caused the crisis. Soon, those too-big-to-fail banks will be too-bigger-to-fail.

By the way, the historical parallels to this are legion. For example, every time socialism has been put in place to help the common man or a dying industry, it ended up making living conditions worse, and it ended up wiping out small firms in favor of the large firms that caused the competitiveness problem in the first place. Similarly, for you history buffs, the US government’s attempts to fix (read: “bailout”) abusive and negligent railroads which were putting the whole economy at risk resulted in those same railroads consuming vast numbers of other industries who found themselves at the railroads’ mercy.


• Appeasement: You would think by now that people would understand that you can’t negotiate with dictators from a position of weakness. But the cornerstone of Obama’s foreign policy has been appeasement. He begged forgiveness of Muslims and got only contempt. He surrendered our friends in Eastern Europe to the Russians to get help with Iran. . . the same Russians who will start fueling Iranian reactors this week. And he begged the Chinese to go along with the harshiest, most-non-cuddly sanctions yet on Iran, only to have them flip him the bird and announce last week that they would start buying Iranian oil. His bended-knee effort to get the Iranians to behave appears to have made war inevitable. His kowtowing to North Korea has brought us closer to war with them than we’ve been at any point since the 1950s. And don’t get me started on Cuba, Venezuela, Brazil, Sudan, etc. The fact that begging for respect has never worked, never once crossed Team Obama’s minds.


• Mortgage Failure Program: Finally, do you remember Obama’s mortgage rescue plan, which was supposed to help homeowners by stopping the flood of foreclosures and thereby stabilizing the housing market? It’s not working. According to a special inspector general for the bailout programs, the mortgage plan has not “put an appreciable dent in foreclosure filings” and foreclosures have hit an all time high. In other words, it turns out that giving second chances to irresponsible people does not suddenly make them responsible. And this is forcing down home prices, further hurting the housing industry, and delaying the resolution of millions of inevitable foreclosures, all of which puts more homeowners at risk.


One definition of insanity involves trying the same things over and over but expecting different results. Interestingly, if you add in a little self-pity to that definition, then it seems you’ve defined the Democratic Party.


33 comments:

Joel Farnham said...

What caused the Great Depression? I have an answer. Increasingly stupid moves by the government to "help" people.

November can't come soon enough. I know it isn't a fixall, but it is a start.

AndrewPrice said...

Joel, There recessions and even depressions are part of the economic cycle. They are simply unavoidable. But they typically last about one year. The Great Depression lasted 15 years. And according to some great work by economists at UCLA, the blame for this is all the moves that FDR made -- every one of which prolonged the problem.

LL said...

BECAUSE I don't think that the people in the White House are THAT stupid, they have to be breaking the system on purpose -- at least that's what reason dictates. However, when I tell myself that I sound like a conspiracy theorist (to myself).

And to some extent, the "change and rearrange" society mantra that barack hussein obama chants - the cry of the utopian socialist fool - would support my thesis.

Every move they make is a bone-head move.

Anonymous said...

After reading your first line, all I can do is quote Shatner in Airplane II: "Irony can be pretty ironic sometimes." (Sorry, I just wanted to use that line.) :-)

Something tells me in the next couple of years, we're gonna start seeing a familiar phrase: "Are you better off now than you were four years ago?" As someone who voted for Obama (I know), I just hope the Republicans offer up someone I like! And I'm sure I'm not the only young person who's expressed that sentiment.

And while I'm no expert (or even novice) on the Great Depression, at least we had all that cool WPA artwork.

And you might be interested in this piece of satire about healthcare and the idea of "eat-easies."

AndrewPrice said...

LL, I think it's typical liberal blindness. Every liberal I've ever met thinks that people in the past were just ignorant and didn't know "how to do it the right way," and if they just had the chance to try it themselves, "they would get it right."

Plus, there's a real denial of human nature. I see it every day when I listen to liberals. They never accept that anyone is in trouble because they've made bad decisions, it was always the circumstances that caused stupid behavior. And they quickly decide that since circumstances are now different, we should bail those people out and it will never happen again.

I don't see a conspiracy, I see a failure of thinking.

AndrewPrice said...

Scott, Good line by Bill Shatner!

I'm not a fan of depression era art. It's all to "worker of the world unite" for my tastes -- kind of like fascist art only done in browns instead of grays.

Eat-easies are coming my friend. Give the health-Nazis time. If you want something with salt, saturated fats or sugar, they will hunt you down and send you to reeducation camp. Just hope you have a friendly doctor to write you a prescription for a medicinal burger!

Patti said...

and don't forget to add unending bush-bashing with that heaping helping of self-pity. and i'm with LL, they ain't THAT stupid.

Ed said...

I knew this all felt familiar! LOL! I wonder which of history's great mistakes they'll make next?

AndrewPrice said...

Patti, Yeah, the Bush-bashing should be in the definition all right. It seems reflexive at this point.

AndrewPrice said...

Ed, Who knows, but I'm sure it will be a doozy! But if history is any guide, expect Obama to get us into a war with someone (Iran, Korea. . . Canada).

BevfromNYC said...

I am sorry for interrupting
News Flash -
San Fran Nan thinks the people who are opposing the NY Mosque should be investigated!!!

"There is no question there is a concerted effort to make this a political issue by some. And I join those who have called for looking into how is this opposition to the mosque being funded," she said. "How is this being ginned up that here we are talking about Treasure Island, something we've been working on for decades, something of great interest to our community as we go forward to an election about the future of our country and two of the first three questions are about a zoning issue in New York City."

http://www.washingtontimes.com/blog/watercooler/2010/aug/17/audio-rep-pelosi-calls-investigation-wtc-mosque-op/

AndrewPrice said...

Bev, That's what fascists/communists/dictators always do -- they try to use the government to suppress people they don't like. I am not surprised that Nancy Pelosi want this. Her reflexes are completely in line with history's nastiest villains.

AndrewPrice said...

You know Bev, now that I think about this, the appropriate comparison is actually McCarthy. This isn't some misuse of government funds. This is the government trying to investigate the private activities of US citizens. This is Pelosi's verion of the House Un-PelosiApproved Activities Commission.

This is actually pretty outrageous.

Ed said...

Andrew, No sooner did you ask and Bev answered. We're about to repeat the McCarthy Era! I assume Stalin's Purges will follow, probably after November.

AndrewPrice said...

Ed, It seems that way. I just hope Pelosi finds herself purged along with the rest of them.

Jocelyn said...

"Just hope you have a friendly doctor to write you a prescription for a medicinal burger! "

Andrew, I think the answer is Heart Attack Grill.

http://www.heartattackgrill.com/

These are simply the most delicious burgers. Made with all natural Lard!

AndrewPrice said...

Jocelyn, I've heard of them but I've never seen them in person -- I watch a lot of Food Network. They look pretty good.

You know what the problem will be with medicinal burgers? They'll force you to buy them from a government burger shop. Can you imagine how horrible a government burger will taste? Yuck!

LawHawkRFD said...

Andrew: I think you're being disrespectful to FDR. He turned a run-of-the-mill depression into the Great Depression. Only a great president could produce a great depression.

As for appeasement, I think you go too far. Just because Obama plans to change his middle name from Hussein to Chamberlain is no reason to get all hysterical.

And in relation to the mortgage mess, Obama has the sense of history that you lack. He knows FDR's Fifth Freedom--the freedom to own your own home at somebody else's expense.

Please get your history straight. LOL

AndrewPrice said...

Lawhawk, The fifth freedom? I thought it was the right to have a chicken in every pot and a car in every garage or something like that? Oh wait, those are rights, not freedoms. I don't recall FDR being too big on freedoms?

You're right by the way, it takes a great president to turn a recession into a Great Depression. So since Obama is a pathetic president, I guess we're in for the Pathetic Depression?

LawHawkRFD said...

Andrew: As a UC history major, I must point out that Hoover promised a chicken in every pot and a car in every garage and Roosevelt delivered a chicken in every garage and two families, too.

AndrewPrice said...

Lawhawk, LOL! And now the modern Democrats what to give every chicken a car and let you smoke pot. It's amazing how some things never really change...

Joel Farnham said...

Andrew,

Well, well, well, Barney's Fwank is for the liquidation of Fannie Mae and Freddie Mac. He is sounding now like a very astute conservative, highly concerned about Fannie Mae and Freddie Mac.

He must know something is up. The internal polling must be getting really bad.

With this mosque flap and Pelosi calling for opposition investigations like Stalin, the Democrats are scrambling to survive.

AndrewPrice said...

Joel, I think they are in serious trouble. They were in deep trouble before any of this happened, but highlighting their surrendering tendencies right before an election, and Pelosi sounding like the Gestapo really pushed them over the edge.

I understand the Republicans have gained 5% in the polls since the mosque thing hit.

As for Frank, I think he knows that they need to divorce themselves from Fannie and Freddie fast before Republicans get a chance to start exposing that bastion of Democratic corruption.

In any event, it is good policy so let's hope they follow through no matter what their reasons.

Tennessee Jed said...

The same old story. It constantly begs the question "do they really not get it" or do they as Rush Limbaugh might suggest "know exactly what they are doing," and are hoping to crush American private enterprise once and for all.

CrispyRice said...

//banging head on wall
//banging head on wall
//banging head on wall
//banging head on wall
//banging head on wall
//banging head on wall
//banging head on wall

AndrewPrice said...

Jed, They don't get it. They have no desire to crush America's private economy, they want it to grow as big as possible so they can steal it and spend it.

AndrewPrice said...

CrispyRice, Keep banging and when you hit the point that you think the results will change, then you will be at one with the Democratic Universe.

CrispyRice said...

I'll keep trying Andrew - no matter how much it hurts me and everyone around me! ;)

AndrewPrice said...

LOL! That's the Democratic spirit!

rlaWTX said...

Crispy - I soooo know that feeling!!!

LL - I am an avowed non-conspiracy theorist -- but these days I can nearly be swayed for the same reasons... They can't be THAT stupid, can they??!!

Scott - I am tempted to take you to task about your voting history, but since you've seen the light, I'll let it slide. :-)

Andrew - that idea that "if only WE did it, it would work" would crack me up - if it didn't scare me so much. I think that's what keeps me falling onto the Dark Side of conspiracy-mongering. It seems to be more of a type of blindness instead of a concerted plan.

Lawhawk - thanks for clearing up our historical perspective! :-)

Commentarama helps keep me sane -- There Is Hope (REAL Hope)!!!

AndrewPrice said...

rlaWTX, Glad to hear we're helping out! :-)

It is simple blindness and lack of intellectual rigor, not any sort of evil conspiracy. The reality is that they don't pay much attention to history, and they really do believe that their policies will work -- and in that, they are backed up by all kinds of economic theories that tell them that they are right. The problem is that the theories are faulty, but they just don't want to admit that their whole world view is wrong.

Also, liberals more often than not are simply concerned with fixing a problem that they see at the moment, without ever worrying about the long term effects of their actions. And their solutions tend to be simplistic -- see poor person, hand money, problem solved. It's very childlike, undeveloped, emotional thinking that doesn't take into account how people respond to their actions -- but it's not intentionally destructive.

Besides, there has never been a moment in history where people have turned to the guy who caused the problem to fix it.

StanH said...

The most alarming thing to me is the thought that grownups actually thought of these initiatives as feasible…imbecilic comes to mind.

AndrewPrice said...

Stan, The human mind has an incredible capacity for being irrational and throwing good money after bad.

Post a Comment