Divisive Politics

Politics is divisive. It is either/or - with no alternative choices & no synergy - a zero, or negative, sum proposition. Even the most popular politicians, leaders like Ronald Reagan, win only around 60% of the vote; 40%+ oppose. Usually it is worse. Three of four recent presidential elections produced no majority winner. Politics is also coercive. Winners impose; losers can’t opt out. That is why we should use politics sparingly.

This election is particularly frightening because of the level of promises and the naive belief among some of the electorate that government is the answer to their problems. I heard a couple analysts speculate that this is because a majority of the voters now are too young to remember the 1970s, when we had the disastrous regulations that crippled the economy and when the government declared war on poverty and poverty won, when government programs helped create a criminal dependent underclass that we did not properly address until the middle of the 1990s. The government induced gas shortages are not part of their memory either, nor is the general malaise. They think they can just create solutions by government fiat and perhaps we once again must relearn the lessons.

More surprising to me is the oxymoron of a politician being a uniter. According to recent polls 60% of Americans think Obama can unite Americans. McCain scores about the same (58%). Every politician promises this and I think they believe what they say. Most Americans seem to buy it, but it is the triumph of hope over experience. The closest our country has come to having a uniter during my lifetime was Ronald Reagan and (as I mentioned above) more than 40% of the people voted against him.

We hear that Obama is a uniter. How? He cannot even unite Democrats. About half the Democrats still prefer Hilary. He has united the left wing of the Democratic Party so far. If he wins the nomination he may unite the Democrats, but he is unlikely to get much of the other half of the population behind him. No politician can. It is the nature of politics.

That is why a less intrusive government is desirable. When we all have choices and must make agreement s with each other, we come up with solutions that are win/win. In a voluntary agreement, each person gets more than he would have gotten w/o the agreement. It is a positive sum proposition. The total benefit increases. Government can almost never do this. That is why it relies on coercion.

Government has an essential role to play in our society. Don’t get me wrong about this. But government is only one player in a mix of solutions that include private individuals, firms, NGOs, religious organizations, associations and the myriad of intuitions that make up our civil society. Government is part of many solutions, but rarely the most important part. Government does best when it builds and physical and societal infrastructure of society, but where it does not manage particular transactions. In the old metaphysical metaphor, government should be like the watchmaker who sets programs in motion but then lets them more or less alone.

The idea that government will do much else, especially that the Federal Government will do much else, is a threat to freedom. We learned that lesson many times, but it does not stick, and it looks like we will have to learn it again the hard way. We can hope for more, but we really cannot get it.

Posted by Jack at April 21, 2008 11:03 PM
Comment #251147

“This election is particularly frightening because of the level of promises and the naive belief among some of the electorate that government is the answer to their problems. “

Agreed! Those people who think the government having spent trillions of dollars and thousands of lives by occupying a sovereign nation is the answer to the terrorism problem are scary. Those who buy into the governments promises to bring democracy to the Middle East and make the terrorist threat go away indeed seem to have unreal expectations of what the government can do for them.

Now if we’re talking about people who look to the disastrous results of the laissez-faire policies of the 20’s that are now being repeated after 25+ years of Republican control and question the results and then they compare them to the prosperous years of the 40’s, 50’s, 60’s and 70’s after mostly democratic rule and say , “hey, policy DOES matter”. Then those people I think have a reasonable expectation of what government CAN do based on factual evidence.

Posted by: muirgeo at April 22, 2008 12:26 AM
Comment #251148


Do you remember the 1970s? All the bad thing that “threaten” us today like stagflation, high unemployment, inflation, destruction of our power overseas etc, actually happened back then.

Yours is also not a dynamic analysis. Around 1970, the post-war system (Bretton Woods etc) started to break down. The world changed and even if you liked the 1950s or 1960s, you could not have them anymore. We had to change to adapt. I might point out the Jimmy Carter and a Dem congress actually started deregulation in earnest. Good for them.

From around 1982, we had such good times that many people consider an unemployment rate of 5% appallingly high.

The other point you are missing is what you might call the booze analogy. We need some level of government and at first it feels good even to have too much. But at some point, it gets to be too much. The Federal government takes a greater % of our GDP (which is a much bigger GDP) than it did through most of our history.

Back in 1928, government was probably too small for the industrial economy we had become. But just like drinking a beer, a little is fine, but there gets to be too much.

Beyond all that, your history is a bit messed up. The 1950s had a Republican president most of the time. We also had a Repubican in the late 60s early 70s. The past 25 years were mixed. We had both Republicans and Dems as presidents. Dems controlled the House 12 of the last 25 years. When looking back in history, the party structure doesn’t mean very much. Think of the current Democrats. They reject almost every economic policy of the Bill Clinton regime (such as NAFTA, free trade in general, welfare reform). American parties are not ideologically pure.

Posted by: Jack at April 22, 2008 12:44 AM
Comment #251154

And in the 20s, had we not ventured into the area of protectionism it is very doubtful that the crash and subsequent depression would have occurred. The fairy tale that it was ‘laissez-faire policies’ that caused the depression is something that the left clings to like a warm teddy bear, but reality is a different story.

Posted by: Rhinehold at April 22, 2008 1:00 AM
Comment #251159


Kind of like the Fairy tale that Laissez Faire didn’t create any bubbles. It was all FDR’s fault.
I guess the Fed’s response to the credit crunch has been all wrong too. They should have let the markets fail, and then put us on a gold standard and abolished themselves saying “have a good time America, we’re going to Alcapulco.”


I don’t know about you, but it seems to me that a little thing in Vietnam might have had something to do with stagflation. You know double digit interest and a recession. Of course the Fed had nothing to do with squeezing out the Vietnam bubble, It was Reagan’s triumphant march into Washington that did it, just like it was those Iranians scared of him that released the hostages, not Jum Baker or Iran Contra that had anything to do with the release of hostages.

Life—-is just a bowl of Cherries——-damn, another pit!!

Posted by: googlumpugus at April 22, 2008 1:30 AM
Comment #251161

It was the ’70s when OPEC first what was it tripled oil prices along with the vietnam war that caused the majority of economic stress. We always seem to forget that in our rush to blame Carter and the dems for everytning.

You are right we cant go back to the 50’s or 60’s but we can go ahead and make government much better than the past 30 years. That is what we must do.

Here is the difference of republican then and republican now. Maybe its the change in ideology that has been the problem with politics lately, Jack.

“The death knoll of the Republic had rung as soon as the active power became lodged in the hands of those who sought not to do justice to all citizens, rich and poor alike, but to stand for one special class and for it’s interests as opposed to the interest of others. - T. Roosevelt Labor Day 1903”

“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again…
There is a tiny splinter group, of course, that believes you can do these things.
Among them are H.L. Hunt…a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible and they are stupid.
-Dwight D. Eisenhower, writing to his brother Edgar, May 2, l956”

“Until now has there ever been a time in which so many of the prophecies are coming together.
There have been times in the past when people thought the end of the world was coming,
and so forth, but never anything like this.
-Ronald Reagan, December 6, 1983”

“I know all the bad things that happened in that war. I was in uniform four years myself.
-Ronald Reagan, who spent World War II making Army training films at Hal Roach Studios in Hollywood, April 19, 1985 ”

“Facts are stupid things.
-Ronald Reagan, misquoting John Adams, “Facts are stubborn things.”, 1988”

“It was just a job. It wasn’t any special interest in consumer affairs. I needed a paycheck and the Attorney General said that I would be best to go down there, because he knew I was anti-consumer.
-Dan Quayle, commenting on his job as chief investigator of the consumer protection division of the Indiana Attorney General’s office from 1970-1971 “

I wont even get into Bushisms because it is all down hill from here. But hopefully Jack you can see the difference in quality of leadership in the repub party as time marched on. OK maybe one:

“Our enemies are innovative and resourceful. And so are we. They never stop thinking about ways to harm our Country and our people. And neither do we. George W.Bush Aug 5, 2004.”

Here we go again with the libertarian revisionist history eh Rhinehold? Dont forget to mention that FDR held the country together in the most trying of times. The communist, the socialist the fascist and the Nazi’s as well as the usual gang of repubs and dems, conservatives and liberals were all tugging at the fabric of this country. Thanks to FDR it held together and went on to fight WWII. Of course it would have been much easier had the uber capitalist of the time not been so anti American:)

Posted by: j2t2 at April 22, 2008 2:47 AM
Comment #251162

Yeah Im sorry Jack but I jusy couldnt help it, here’s W at his most honest.

“You know I could run for governor but I’m basically a media creation. I’ve never done anything. I’ve worked for my dad. I worked in the oil business. But that’s not the kind of profile you have to have to get elected to public office. -George W. Bush, 1989”

“Victory means exit strategy, and it’s important for the President to explain to us what the exit strategy is.
-George W. Bush, discussing Kosovo with the Houston Chronicle, April 9, 1999 “

And of course his VP’s classic-

If you’re going to go in and try to topple Saddam Hussein, you have to go to Baghdad. Once you’ve got Baghdad, it’s not clear what you do with it. It’s not clear what kind of government you would put in place of the one that’s currently there now. Is it going to be a Shia regime, a Sunni regime or a Kurdish regime? Or one that tilts toward the Baathists, or one that tilts toward the Islamic fundamentalists? How much credibility is that government going to have if it’s set up by the United States military when it’s there? How long does the United States military have to stay to protect the people that sign on for that government, and what happens to it once we leave?
-Dick Cheney, then Secretary of Defense, April 1991

Oh I left out Nixon didnt I.

“I want to be sure he is a ruthless son of a bitch, that he will do what he’s told, that every income tax return I want to see I see, that he will go after our enemies and not go after our friends.
-Richard Nixon, describing his ideal candidate for IRS commissioner, 1971”

Hopefully you can see my point on the quality of leadership our present system offers Jack.

Posted by: j2t2 at April 22, 2008 3:57 AM
Comment #251165

The uniting aspect of Obama’s campaign is that he’s not relied for the most part on the kind of campaigninging that severs parts of the opponents support. He works to gain their sympathies and loyalties more than he seeks to deprive his opponent of them. He puts much more emphasis on the tactics that allow him to push his way into demographics that don’t support him as strongly and make gains.

If you want to tell the difference, note: Hillary’s using the Kitchen Sink, Obama’s being much more targeted, much more restrained. Conventional wisdom would be that he would lose support from his campaign as this attack intensified. But he rebounds and regroups. His positive support has resilience and robustness that makes negative tactics less likely to be successful. Hillary says, fight fire with fire, but her numbers keep eroding. She burns out her own supporters, her own allies. Obama maintains his supporters and allies, and therefore what uniting he manages nets more gains for him. It’s that simple.

Posted by: Stephen Daugherty at April 22, 2008 8:02 AM
Comment #251166

This election is particularly frightening because of the level of promises and the naive belief among some of the electorate that government is the answer to their problems.

That is why a less intrusive government is desirable.

Posted by Jack

Jack the informed public understands these things. They understand that Republicans have promised less government and they realize indeed we HAVE got less from government (crumbling infrastructure and military) while the public debt has grown to over $9 trillion dollars.

We understand that the Republicans did NOT give us a tax cut. We understand they simply have loaned our children’s future to us and much of the borrow money has gone to their political donors. Company’s like Haliburton who have profited off the government and have now moved their operations overseas so as to not have to pay taxes on the treasury dollars we paid to them.

We understand that when the Republican led government calls for less intrusive government they mean nothing of the sort. That’s why we are hopeful of the promises made by Senators Clinton and Obama. They sound like promises made and kept by past democratic leaders that led to the most prosperous times this country has seen.

If you’re telling me I’m naive for believing , in my case Obama’s message) I would really like to know on what basis the same, but with a much greater heaping of naivety, one could believe Mr McCains message or the Republicans in general.

The fact of the matter is good government beats the heck out of poor government and I can’t see ever again voting to put in charge of the government people who don’t believe it can work.

Posted by: muirgeo at April 22, 2008 8:38 AM
Comment #251167


All systems, natural and human, experience cycles. The only way to mostly avoid them is to nail down things so tight that you kill off change. This usually also kills off all the good things you want to achieve.
We know that the massive government intervention did not end the great depression because it was still going on in 1937, worse than in 1930. Some of the programs of the time were okay. Most failed and disappeared. The popular imagination of the time is at odds with the facts of the history.
Most economists agree that the massive tariffs helped spread and deepen the depression.

We are talking about different things. I understand that we are dealing with an interconnected system that includes government, business and society and that simplistic solutions are counterproductive. Experience with massive government intrusion (i.e. communist and Nazi regimes) is uniformly not only bad but horrendous. Our own smaller planning mistakes are less bad, but still instructive. Most recently and ongoing is the ethanol debacle.

You want to blame individuals and quote some silly things they may have said as proof. Yet we NEVER see things working smoothly. Maybe that indicates that it is not merely a few silly comments that run the economy.

The biggest failing of liberal analysis is its lack of dynamism. They don’t understand changing composition. For example, they see income distrution as unchanging, failing to understand that although the strucutre looks similar, the individuals occupying the various place constantly change. Liberals also look at the current situation and project it forward and backward. The fail to understand that different conditions require different solutions AND that some “problems” have no solution at all. They can be mitigated but not solved.

The energy “crisis” is a good example. We have “solved” the energy crisis on many occasions. As we solve one set of problems, our expectations and plans create a new one. We can mange this, but not solve it.

The difference between government interventionists (liberals) and those who want less of it (conservatives) is how much each groups has faith in various types of decision making. If you believe in more intervention, you have to believe that officials and bureaucrats can make better decisions for the people than they can themselves. It also presupposes a good ability to forecast the future. If you believe that people can make better decisions themselves and you have less confidence in the ability of large organizations to make accurate predictions, you need to seek less intervention.

We should not argue stereotypes. Few liberals want government to plan all aspects of the economy and few conservatives want to dispense with all planning. We should also not mistake people for ideas. Bill Clinton, for example, behaved conservatively in regard to the economy in terms of trade and welfare reform. George W. Bush has at times acted to create more government intervention. We should discuss the results of policies and where intervention may be necessary or where it will cause more harm than good.

We also need to recognize that we are dealing with complex systems that are well beyond the understanding of any group of bureaucrats of researchers. Sometimes things fail BECAUSE of not in spite of their best efforts. The market mechanism provides a means of decentralized decision making. There is no doubt that the market will almost always produce a more innovative and efficient result. People seek government intervention to address what they consider injustices created by the market. This may be justified, but anything that goes beyond basic government service providing (security, infrastructure) should be questioned.

Posted by: Jack at April 22, 2008 8:38 AM
Comment #251168
Kind of like the Fairy tale that Laissez Faire didn’t create any bubbles. It was all FDR’s fault.

Inventing straw men googlumpugus?

FYI, Laissez Faire != Anarchy. I know, it is a tired old tool of the progressive toolbox, but when interested in discussing facts and reality those tools should be left in the box. Pulling them out tells me that there is no interest in doing so…

I guess the Fed’s response to the credit crunch has been all wrong too.

I don’t believe I’ve suggested anything like that, but straw men seem to be the only arguments you can defeat, so if it makes you feel better to build them up and then tear them down, feel free…

Here we go again with the libertarian revisionist history eh Rhinehold?

If by that you mean an accurate, based in fact, examination of American History, yes here we go again.

Dont forget to mention that FDR held the country together in the most trying of times.

I’ve never said he didn’t. And I never mentioned FDR, I was speaking about what caused the Depression, not what extended it… Or did you not even read what I wrote before you started on your rant?

The communist, the socialist the fascist and the Nazi’s as well as the usual gang of repubs and dems, conservatives and liberals were all tugging at the fabric of this country.

It’s a shame that the progressives used that chaos to take control of the government though, when it comes to the notion of liberty. But that’s another fight for another day I suppose.

Thanks to FDR it held together and went on to fight WWII.

Good thing for FDR, btw, as he was on his way out of the door and would never had won a 3rd term had Hitler not been insane…

Of course it would have been much easier had the uber capitalist of the time not been so anti American:)

Yeah, those greedy bastards, not investing their own money into a failing economy while being told any profit that they make would be confiscated at a 100% tax rate. So very selfish of them. Don’t they know it was not their wealth but the country’s? I mean, that’s the view of the progressives, like Obama, isn’t it?

Posted by: Rhinehold at April 22, 2008 8:49 AM
Comment #251170


There are just some things you cannot have or cannot have all at once.

Remember that half of all Americans always make less than the median income. Very few people have as much money as they “need”, no matter how much they have. The economy has cycles. People are not always nice and it is very hard to get reasonable people to agree on very much for very long. On the things we DO agree about, we don’t need politics.

The promises both Obama and Clinton are making have sometimes been kept by Dems, but they did not bring prosperity. Both candidates, for example, are promising to do things opposite of the Clinton programs in the 1990s. If you believe the Clinton programs worked in the 1990s, you cannot support what Hilary and Barack are saying now. If you think they did not work, then you have a problem with the prosperity thing. You may recall that Kennedy lowered taxes. Did that work or not? Remember, look at what they do, not what they call themselves.


Re Obama being a uniter. Let’s see what % of the vote he gets. If you cannot get most people to vote for you, you are not a uniter. Reagan got nearly 60%. If Obama does that well, he will be as much a uniter as Reagan. I don’t think he will be able to pull it off.

Posted by: Jack at April 22, 2008 8:58 AM
Comment #251173

Your comments about the “prosperity” of the ’40s, ’50s, 60’s, and ’70s are, I’m sorry to say, stunning for their apparent ignorance of history.

The prosperity of which you speak was entirely through the middle ’60s, it was fraught with normal fluctuations of boom and recession (unlike the last 25 years), and it was built, if on government spending, on government spending 60% of which WENT TO THE MILITARY. The economy went into its celebrated ’70s “malaise” after Lyndon Johnson launched the so-called “war on poverty” which, as Jack points out, we lost.

Now, if you want to go back to the sort of government priorities that produced the booming economy of the ’40s, ’50s, and ’60s, that is, almost no social spending and six out of every ten dollars of government spending going to the military, your liberalism looks like something with which liberals would probably think conservatives could agree.

That has a sort of Stanley Kubrick quality to it, don’t you think?

Posted by: Lee Jamison at April 22, 2008 9:38 AM
Comment #251177

R William McKinley 1897-1901
R Theodore Roosevelt 1901-1909
R William H Taft 1909-1911
D Woodrow Wilson 1913-1919 *
R Warren G Harding 1921-1923
R Calvin Coolidge 1923-1929
R Herbert C Hoover 1929-1931

From 1897 to 1931 both the house and the senate were controlled by the republicans. With the exception of a Democratic majority in the Senate from 1911 to 1913.

D Franklin Roosevelt 1933-1945
D Harry S Truman 1945-1953

Democratic controlled House and Senate except from 1947 to 1949

The period in which we got out of the Republican led Great Depression was almost universally controlled by the Democratic party. Oh and we won a World War in less time then we’ve been in Iraq under democratic leadership.

So when people try to change the subject of the causes of the Great Depression and who had the solutions these facts are pertinent because most of their hand-waving is irrelevant in light of them.

History is repeating itself after 25 years of Reaganomics. And the history re-writers are at it again.

The naivety of the general public is found in voters who think the economy does well when presidents like Reagan and Bush spend trillions and trillions of dollars they don’t have while forgetting that long term consequences don’t show them selves in the short term.

Posted by: muirgeo at April 22, 2008 10:58 AM
Comment #251179

The problem with the programs set up by FDR and LBJ was that they were assuming that Democrats would retain control of both houses of Congress and the Presidency well into the future. Poverty won when people opposed to the programs were appointed to run them. Like Jack, with “criminal dependent underclass”? You are a Rpblcn, working for the government, right?

Posted by: ohrealy at April 22, 2008 11:03 AM
Comment #251181
So when people try to change the subject of the causes of the Great Depression and who had the solutions these facts are pertinent because most of their hand-waving is irrelevant in light of them.


Not being a Democrat or Republican I could give a rat’s ass about who was in charge. What is important is what was done, and not done, and what caused the problems. Unless those are identified and acknowledged we will repeat them again.

And are you seriously trying to convince people that the Democratic party of then (Jim Crow laws, anti-federalist, etc) is the same Democratic party of today, believing and supporting the same things?

Jack has tried to point out that in times of economic pressures, identifying the problem and releasing the people from the constrants of federal taxation have helped. Even John Kennedy understood this. FDR, once he started TEMPORARY deficit spending, by assisting those that needed help and not taxing the american people as much as he wanted too, helped ease the locked up economy of the depression. Even Bill Clinton understood these facts!

But you don’t want to hear it, you want to play the partisan politics card and get us right where we were then.

The main reason the Depression was more than a normal, cyclical recession was because of the Smoot-Hawley tariff, an act of protectionism that plunged us into a non-free market nightmare.

The Hawley-Smoot Tariff (or Smoot-Hawley Tariff Act) was signed into law on June 17, 1930, and raised U.S. tariffs on over 20,000 imported goods to record levels, and, in the opinion of some economists, was responsible for the severity of the Great Depression. In the United States 1,028 economists signed petition against this legislation but it was passed in June 1930. According to The Economist, the Smoot-Hawley tariff act turned a stock market collapse into a long Depression. Many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half.

In fact, not only did it exacerbate the stock market collapse, many believe that the passing of the act CAUSED the stock market crash.

Although the tariff act was passed after the stock-market crash of 1929, many economic historians consider the political discussion leading up to the passing of the act a factor in causing the crash , the recession that began in late 1929, or both, and its eventual passage a factor in deepening the Great Depression. Unemployment was at 7.8% in 1930 when the Smoot-Hawley tariff was passed, but it jumped to 16.3% in 1931, 24.9% in 1932, and 25.1% in 1933.

The sad thing is that it appears that the Republicans have learned this lesson, as well as Bill Clinton when he passed NAFTA, but it seems the Democrats of today, being pushed by the progressives in their party, are hell bent on recreating these exact same actions that will cause a worldwide depression if not combatted.

Perhaps if Hillary or Obama had a little more experience the would undestand this…

Or, as was evidenced by the most recent debate, it is more likely that ‘fairness’ is more important than economic health to the left in this country.

Posted by: Rhinehold at April 22, 2008 11:46 AM
Comment #251182
The problem with the programs set up by FDR and LBJ was that they were assuming that Democrats would retain control of both houses of Congress and the Presidency well into the future.

LOL, why didn’t we just set up a monarchy then, would make more sense, wouldn’t it?

Nevermind that the reason those who ‘opposed those programs’ were elected is because the majority of people wanted something done about the expansion of those programs…

I’m sorry, ohrealy, but to think that you can eliminate poverty, which is most often a result of bad choices that people make in their personal lives in this day and age, is nieve to the extreme.

What country has eliminated poverty, ever, ohrealy? Please name one.

Instead, we should be helping those that we can help monitarily with temporary help while helping those that need motivation, training, mentoring with those things that THEY need, to provide everyone the opportunity to raise out of poverty. Then, we know that if they remain there it is because of their own inaction or desires to remain there.

Tell me, if your child were still living at home when they were 30, not wanting to get a job or take care of themselves and willing to live off of your hard work, what would you do? Continue to take care of them for the rest of their lives or demand that they attempt to better their own way in life?

Posted by: Rhinehold at April 22, 2008 11:51 AM
Comment #251185

Something is not right, and it is starting to show up. An article says the average life span for the deep south and mississippi river states have had a decline in life span spanning race, color and gender. This is a sign that we are not providing adiquate medical care for our lower class (BTW, that is what “liberals/progressives” have been saying for a while ). So maybe the blue team is not so wrong after all. The US has great medical care if you can afford it, and its getting more expensive all the time. I make 40-60k a year depending on overtime and I am almost pushed out of being able to afford health care. One major issue and you are BANKRUPT with insurance.

Posted by: timesend at April 22, 2008 12:15 PM
Comment #251187

I’ve heard some very good points outlining past Democrat Party achievements with regard to our economy.

Now, if we had a Democrat Party today that even slightly resembled the old party you would not find such resistance to Obama and Clinton.

About all that remains of the Democrat party of the past is the name. The present day Democrat party has been hijacked by socialists who believe my hard earned money belongs to them. They ridicule my religious beliefs, trample on my rights in the name of “fairness” and believe in giving aid and comfort to our enemies.

The new Democrat Party can hardly mouth the word patriotism, hates what our flag stands for, believes government should be in charge of our children, and seeks to regulate every aspect of my life for the “common” good.

The new Democrat Party is so arrogant as to believe it can control the global environment, charm our enemies into a world love-fest, confiscate wealth to distribute to those who support them and are more deserving, and pervert our judicial system.

The new Democrat Party in its quest for power has resulted in burning food for fuel, brought starvation to many more millions on the planet, believes that the use of our own resources of oil and coal is anathema while ignoring the pain and misery of their fellow Americans.

The new Democrat Party has discovered that misery loves them, and consequently believe that if misery can be spread across the nation they will have achieved perpetual power.

Just a few personal opinions that require no references as they will be understood by all who are not blinded by the new Democrat chant for change.

Posted by: Jim M at April 22, 2008 12:28 PM
Comment #251188

Jack, your opening paragraph describes the democratic method of making decisions. And you say we should use it sparingly.

Your writings tended to lean a bit to the authoritarian leadership and decision style. This however, is a candid admission that the democratic process is to be used “sparingly”.

I commend your candor, if not your authoritarian lean. Makes your extraordinary support of Bush all these years very understandable, too!

Posted by: David R. Remer at April 22, 2008 12:30 PM
Comment #251189

It wasn’t the war on poverty that sank America’s fortunes, it was trying to get something for nothing, not raising taxes to pay for both the war and the social programs. This was avoided with the notion being that one would not be sacrificed for the other. The reality was, we had the economic wherewithal to fund both, we just chose to borrow to pay for it, which lead to greater inflation.

You must pay for what you get. Politicians want to sell you on tax cuts, government programs, or both, but in the end, you must make a choice between the different things you want. We don’t need more budget tomfoolery, or more Small Government Wishful thinking about starving the beast. What we need is wisdom, and a better sense of our priorities.

Some say we need less politics. I say we need more, but also more mature politics. We need genuine discussion, not merely adolescent shouting matches and nitpicking about the meaning of different words and gestures.

That is what makes Obama a Uniter. He seems better able than any person there to speak that language, to be a peacemaker. He has that experience. The fact that he has closed the distance between Clinton and him in the polls every time is evidence of his abilities. He came into this race a mostly unknown quantity, just a guy who made some pretty speeches at the last Presidential Convention.

He’s coming out of it the leader of the party. When’s the last time you heard of anybody doing something that radical? I think somebody with that kind of political talent is better suited to the kind of political rearrangement needed to get the issues people care about in motion than anybody else. You don’t need people who rely on the current political order to make change happen. You need a person who can reorganize his party to get things done.

Posted by: Stephen Daugherty at April 22, 2008 12:50 PM
Comment #251193

SD, your party sucks. As does the GOP. Obama’s mission is NOT to reorganize the Dem. Party, but, to realign coalitions, such that your party or any other, has little choice but to bend to the will of the majority of Americans.

Your Party is a minority of Americans. We need majority consensus to address America’s problems. If your Party chooses to work with that majority coalition realignment, the better for it. If your Party chooses to fight it, becoming allied with the GOP, that will be entirely predictable.

But, Obama is the right person, NOT because of fidelity to his Party or any mission to resurrect your Part from its enormous failures and corruptions. He is the right person because of his potential to motivate responsible action by voters regardless of their corrupt Party bureaucracies.

Obama will prove to be the Independent voter’s candidate if elected, bringing many Democrats and Republicans along to join the new coalition of rational, expediting, and solution oriented majority.

Posted by: David R. Remer at April 22, 2008 1:23 PM
Comment #251194

Obama’s “unity” in his own party is so limited that 30% of Hillary’s voters claim they would rather vote for McCain than Obama. That, my friend, is out of the people already in the left-hand lane. Sure, there are Republicans sick that the Republican Party is no more Republican than the Democratic Party is Democrat who will vote for him because they are too mad to see straight who will vote for him because they don’t have a clue what he stands for. Obama looks to me to be the same salve for the disaffected as Jimmy Carter.

He will wind up “uniting” the country the same way, too.

Posted by: Lee Jamison at April 22, 2008 1:31 PM
Comment #251195

I need to fire my proofreader.

Posted by: Lee Jamison at April 22, 2008 1:33 PM
Comment #251199

Rhinehold, you’re confusing my point with your propaganda. I’m saying that it’s pointless for the Democrats to propose social programs. Bush even scuttled COPS, which was relatively bi-partisan, even though police forces employ many veterans, because who needs them once they’re out of the service. Whenever the Rpblcns get back into power, they will do the same to any other non-military programs.

“those programs” never existed for long enough to do anything substantive about poverty except provide a few people with jobs that they never would have had. LBJ was trying to move our society away from one with servants to one with employees. CATO institute types then began importing their servants from foreign parts to create a bigger pool of low wage workers to keep society the way they want it.

Somebody else blamed the Democrats for the corn ethanol BS, but Bob Dole and other corn belt Rpblcns were bigger promoters of that program than Democrats.

On the whole Axelrod, it’s not politics, it’s BHO thing, they are probably praying for a good sized HRC victory today, to delay a meltdown.

Posted by: ohrealy at April 22, 2008 1:56 PM
Comment #251202

Rhinehold said: “Jack has tried to point out that in times of economic pressures, identifying the problem and releasing the people from the constrants of federal taxation have helped.”

Such a blanket statement is completely unsupported by history. Cutting federal taxes while increasing deficits and national debt have short term gains, and depending on how long such deficits are sustained, horrible long term consequences. We are witnessing some of them today with wealth disparity that is throwing the electorate away from fiscal conservativism. A very negative consequence of relieving the public of federal taxes in the most irresponsible of ways possible.

Posted by: David R. Remer at April 22, 2008 3:22 PM
Comment #251203

Rhinehold and Jack,

While I agree Smoot Halley had lot’s to do with deepening the depression the cycles of Laissez Faire are what created the instabilities. As muriego noted it was a Republican legislature that enacted it. Those responsible conservatives who wanted us not to spend too much and protect us from foreigners.

While Laissez Faire may be a teddy bear or anarchy to you (I can’t tell by your posts), it is mostly an excuse for corporatism and good ole boy politics. Yes, less intervention is a good thing. Inadequate intervention is a worse thing. The constant cry of anti-interventionism is that you’ll ruin us. US usually turns out to be the wealthy.

We have seen the results of these cries. Hoover and Bush. It doesn’t work. Whatever name you put to it. The reality doesn’t match the idealology.


So you’re saying that correcting problems with Nafta and not fast tracking Cafta will lead to a deprssion? I just want to get you on record, here.

Posted by: googlumpugus at April 22, 2008 3:27 PM
Comment #251208

Lee Jamison-
Hillary supporters have become a little competitive, but I think the vast majority of those people would come back to Obama in the general election. Even among my evenly split family, we know we’re supporting a Democrat come November.

David R. Remer-
I’d say that we’re saying the same thing in different terms.

Posted by: Stephen Daugherty at April 22, 2008 4:27 PM
Comment #251213

Smoot-Hawley was passed in June 1930. The stock market crashed in October 1929. To suggest any respected economist thinks Smoot-Hawley caused the Great Depression is ludicrous. Smoot-Hawley contributed to it, but only in a very limited way, since exports were a relatively small part of the US economy at the time, and then, mostly farm-related. Sorry, but there really is not “there” there.

Attempts to blame the Great Depression, or its severity, on Smoot-Hawley are usually the product of Milton Friedman free market advocates. Those attempts are about as valid as Marxist versions of what really happened. Both Free Market ideologues and Marxists make interesting points, but they are basically launching ideological forays to support an agenda and, more importantly, deflect blame.

The current Chairman of the Federal Reserve is a student of the 1929 Depression. He perceives 1929 as primarily a crash of credit… a margined stock market, runs on banks, and much more… And he is supposedly acting today with an eye on the credit markets, and preventing another crash.

He may or may not succeed. The situation is very bad, and it’s not over. Let’s all hope the Fed succeeds.

Posted by: phx8 at April 22, 2008 5:33 PM
Comment #251220

America’s Great Depression Timeline


America’s Great Depression is regarded as having begun in 1929 with the Stock Market crash, and ended in 1941 with America’s entry into World War II. However, to fully understand the Great Depression, one must look at it in context of events that happened before and after those dates. For that reason, the timeline below includes events many decades before and after the Great Depression itself.

Posted by: Weary Willie at April 22, 2008 6:45 PM
Comment #251222

Jack, you “heard a couple of analysts speculate” about the 1970’s? So these are not your views about why we had certain economic problems in the 1970’s? I hope not because these analysts need to be dope-slapped for wrapping all the challenges that occurred in that decade up into a simplistic and inaccurate tirade against government.
Government regulation? What government regulation? do you mean the insanely stupid price controls introduced by a republican president?
The “Criminal dependent underclass” ? You seem to be suggesting by this, I assume, badly worded phrase, that if you have little you are somehow a criminal.
Government induced gas shortage? I have no idea what you are talking about. We supported Israel and were boycotted by OPEC in 1974-5. Is that what you are talking about? Should we not have supported Israel? The price of a barrel of oil was around 2 dollars in early 1973 and 12 dollars in 1976. This pushed inflation up into double digits. Did our government do this through regulation?
the government declared war on poverty in the 70’s? I thought Lyndon Johnson did this in 1965? Do I have my dates wrong?
Honestly Jack, If you are going to revise history into little nuggets of (mis)information to fit your preconceived notions about how an economy should work, at least be a little more clever about it all.

Posted by: charles ross at April 22, 2008 7:02 PM
Comment #251230
While I agree Smoot Halley had lot’s to do with deepening the depression the cycles of Laissez Faire are what created the instabilities.

bzzt. What caused the instabilities were over oversupply and overproduction. It was the governmental reactions to the problem the caused the Depression. Left alone, it would most likely have resolved itself out in a less harmful way, as it had done in earlier, milder and much shorter Depressions But the government just couldn’t help itself. To call the administration of Hoover one of governmental inaction is to ignore history in favor or partisanship.

As muriego noted it was a Republican legislature that enacted it. Those responsible conservatives who wanted us not to spend too much and protect us from foreigners.

Again, the republican party of the 1920s is not the republican party of today. I’ve never understood the propensity for people to argue 90 year old politics within the context of modern views and think that those views will hold up.

Hoover, and his administration, were very very interventionist.

By 1928, the Fed was raising interest rates and chocking off the money supply. Between 1/28 and 8/29 the rate was increased 4 times from 3.5 to 6 percent. Further, the central bank took further deflationary action by aggressively selling government securities for months after the stock market crashed. For the next 3 years, the money supply shrank by 30 percent. As prices tumbled, the Fed’s higher interest rate policy boosted REAL rates dramatically.

This was bad intervention #1.

At their peak, the stocks were selling for 19 times earnings, high but not what a stock market analyst would call overspeculation. The Fed’s policies had put us in a position to start a recession, it was the further interventions that brought about Depression…

On the very monrning of Black Thursday, the nation’s newspapers reported that the political forces for higher trade-damaging tariffs were making gains on Capital Hill. In fact, the discussions about this ‘Smoot-Hawley Tariff Act’ had been in and out of the newspapers over the summer, the same summer that saw stacks see-sawing up and down. Moreover, research has shown that the peaks and valleys matched up with the Act as it made it’s way through congress. As it gained support, stocks fell. As it lost support, stocks rose. The stock market crash was only a reflection - not the direct cause - of the destructive government politics that would ultimately produce the Great Depression: The market rose and feel in almost direct synchronization with what the Fed and Congress were doing.

(BTW, the notion that the rich were ok through the depression is wrong as well. Churchill, Birdseye and Durant (founder of GM) were all wiped out. Joeseph Kennedy, Bernard Baruch and Charlie Chaplin got out as the fluctuations started in the summer of 1929.)

BUT, the contention being made is that the ‘hands-off, free market approach of Hoover’ is the culprit.

Was he a ‘hands-off’ President? Roosevelt didn’t think so…

During the campaign, Roosevelt blasted Hoover for spending and taxing too much, for boosting the national debt, choking off trade and putting millions on the dole. He accused the president of “reckless and extravagant” spending, of thinking “that we ought to center control of everything in Washington as rapidly as possible” and of presiding over “the greatest spending administration in peacetime in all of history.” Roosevelt’s running mate, John Nance Garner, charged that Hoover was “leading the country down the path of socialism. Contrary to the conventional view about Hoover, Roosevelt and Garner were absolutely right.

The Fordney-McCumber Tariff of 1922 had already put American agriculture in a tailspin. Smoot-Hawley virtually closed the borders to foreign goods and ignited a vicious international trade war. Some contendsthat the Smoot-Hawley Tariff was ‘midly harmful at best’ but not a big deal, the US didn’t import much then anyway. But they neglect to add in the other effect of the act, to cause our trading partners to put tariffs against us in response, basically ending international trade for over a decade…

Professor Barry Poulson (obviously not a credible economist) describes the scope of the act:

The act raised the rates on the entire range of dutiable commodities; for example, the average rate increased from 20 percent to 34 percent on agricultural products; from 36 percent to 47 percent on wines, spirits, and beverages; from 50 to 60 percent on wool and woolen manufactures. In all, 887 tariffs were sharply increased and the act broadened the list of dutiable commodities to 3,218 items. A crucial part of the Smoot-Hawley Tariff was that many tariffs were for a specific amount of money rathan than a percentage of the price. As prices fell by half or more during the Great Depression, the effective rate of these specific tariffs doubled, increasing the protection afforded under the act.

Tariffs on linseed oil, tungsten, and casein hammered the US paint, steel and paper industries. More than 800 items used in automobile production were taxed by Smoot-Hawley. Most of the 60,000 people employed in the US plants making cheap clothing out of imported rags went home jobless after the tariff on wool rags increased 140 percent.

Officials thought “If we raise the trade barriers, people would buy more goods from the US, and that should solve the unemployment problem.” Sound familiar?

But it ignores the real problem, when you shut off imports, you also simultaniously shot off exports.

Canada, was the first to retaliate. Foreign companies and their workers were flattened by the steep tariff rats. With their ability to sell in the US market severely hampered, they curtailed their purchases of American goods. American agriculture was particularly hard hit. With a stroke of the presidential pen, farmers in this country lost nearly a third of their markets. Farm prices plummeted and tens of thousands of farmers went bankrupt. A bushel of wheat that sold for $1 in 1929 was selling for 30 cents in 1932. The stock market, which had regained much of the ground it had lost since the previous October (Black Tuesday, etc) tumbled again and for the last time on the day that the act was signed into law and fell without respite for the next 2 years.

The market’s high, as measured by the DOW was set on Sept 3, 1929 at 381. It hit ist 1929 low of 198 on November 13, then rebounded to 294 by April 1930. It declined again as the tariff bill made its way toward Hoover’s desk in June and did not bottom out until it reached a mere 41 two years later. It would be 25 years before the Dow would climb to 381 again.

I know, most people are told that the market crash signaled the beginning of the Depression, but it didn’t. It was an event in the making, but the real damage was done with other bad governmental intervention…

With the farms failing, rural banks started to fail. In record numbers, dragging down hundreds of thousands of their customers. 9 thousand banks closed their doors in the US between 1930 and 1933. Bank robbers were hailed as being heroes of the rural farmer, Dillinger, Bonnie and Clyde, Baby Face Nelson, etc. Their events occurred during the same summer during the Depression, btw, and led to the beginnings of the FBI (an interesting history examination for another day…) But here it was INACTION by the government, letting these banks fail and the ones that did not fail start calling in farm loans, that further deepened the oncoming Depression.

But, Hoover was a free market guy, right? Wrong.

Within a month after the stock crash, Hoover convened conferences of business leaders for the purpose of jawboning them into keeping wages artificially high, even though prices and profits were fallling. Consumer prices plunged almost 25 percent between 1929 and 1933 while nominal wages on average decreased only 15 percent.

As economist Richard Ebeling (another non-respected economist apparently) noted “The ‘high wage’ policy of the Hoover administration and the trade unions … succeeded only in pricing workers out of the labor market, generating an increasing circle of unemployment.”

Hoover dramatically increased government spending for subsidy and reief schemes. In the space of one year alone, from 1930 to 1930, the federal government’s share of GNP soard from 16.4 percent to 21.5 percent. Hoover’s agricultural bureaucracy doled out hundreds of millions of dollars to wheat and cotton farmers even as the new tariffs wiped out their markets. His Reconstruction Finance Corporation ladled out billions more in business subsidies. Commenting decades later on Hoover’s adminsitration, Rexford Guy Tugwell, one of the architects of FDR’s policies of the 1930s explained “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started”.

Doesn’t sound like a hands off type of administration to me… but perhaps I’m not looking at the issue through the eyes of partisanship… *shrug*

Heck, he even went to the point of penalizing people for paying their employees!

Larry Schweikart and Michael Allen (more non-respected economists) stressed that Hoover ‘offered no incentives to the wealthy to invest in new plants to stimulate hiring. He even taxed bank checks, which accelerated the decline in the availability of money by penalizing people for writing checks.’

In September 1931, with the money supply tumbling and the conomy reeling from the impact of Smoot-Hawley, the Fed imposed the biggest hike in its discount rate in history. Bank deposits fell 15 percent within four months and sizable, deflationary declines in the nation’s moiney supply persisted through the first half of 1932.

Then, on the heels of all of this, the congress passed and the president signed into law the Revenue Act of 1932. The largest tax increase in peacetime history, it doubled the income tax.

Oh, and apart from raising the top bracket from 24 to 63 percent, exemptions were lowered; the earned income credit was abolished; corporate and estate taxes were raised; new gift, gasoline, and auto taxes were imposed; and postal rates were sharply hiked.

Now, you’re telling me that Hoover’s administration’s massive economic interventions and its effects were the fault of ‘free markets’? But, more from Schweikart and Allen…

By 1933, the numbers produced by this comedy of errors were staggering: national unemploymente rates reached 25 percent, but within some individual cities, the statistics seemed beyond comprehension. Cleveland reported that 50 percent of its labor force was unemployed; Toledo, 80 percent; and some states even averaged over 40 percent. Becauseof the dual edged sword of declining revenues and increasing welfare demands, the burden on the cities pushed many municipalities to the brink. Schools in New York shut down, and teachers in Chicago were owed some $20 million. PRivate schools, in many cases, failed completely. One government study found that by 1933 some fifteen hundred colleges had gone belly-up, and the book sales plummeted. Chicago’s library system did not purchase a single book in a year-long period.

So, can we finally dispense with the notion that Hoover’s administration were ‘free-marketers’ and the Depression was caused by ‘Laissez Faire’ policies?

While Laissez Faire may be a teddy bear or anarchy to you (I can’t tell by your posts), it is mostly an excuse for corporatism and good ole boy politics. Yes, less intervention is a good thing. Inadequate intervention is a worse thing. The constant cry of anti-interventionism is that you’ll ruin us. US usually turns out to be the wealthy.

Well, considering I am not an anarchist and am strongly anti-monopolistic, believing that a free market can only exist with strong anti-trust laws in place, I can only hope you would not consider my views anarchistic… but of course, that has never stopped anyone before.

And the government should be involved in ensuring that the large swings that can occur are flattened out a bit. But just as non-intervention can be a bad thing, over-intervention, especially the wrong kind, is much much worse. If the market is truly free, that is. Monopolies make it not so, and our Government is the biggest proponent of monopolistic entities that exists…

He perceives 1929 as primarily a crash of credit… a margined stock market, runs on banks, and much more… And he is supposedly acting today with an eye on the credit markets, and preventing another crash.

I wonder if he accepts the fault of the Fed in creating the environment for the Depression? I hope so. If he repeats the actions of his predicessors, we are in trouble…

Posted by: Rhinehold at April 22, 2008 10:48 PM
Comment #251234
Jack wrote: They think they can just create solutions by government fiat and perhaps we once again must relearn the lessons.
That’s most likely (based on history, track-record, and human nature).

Some painful lessons are already in the pipeline.
Some economic conditions have never been worse ever, and/or since the 1930s and 1940s.

David R. Remer wrote: But, Obama is the right person, NOT because of fidelity to his Party or any mission to resurrect your Party from its enormous failures and corruptions. He is the right person because of his potential to motivate responsible action by voters regardless of their corrupt Party bureaucracies.
Not if too many voters are too focused only on the presidential campaign, and sabotage their new president (again) by rewarding do-nothing with 93%-to-99% re-election rates, despite Congress’ refusal to deal with these 10 abuses hammering most Americans.
Stephen Daugherty wrote: That is what makes Obama a Uniter. He seems better able than any person there to speak that language, to be a peacemaker. He has that experience. The fact that he has closed the distance between Clinton and him in the polls every time is evidence of his abilities. He came into this race a mostly unknown quantity, just a guy who made some pretty speeches at the last Presidential Convention.
HHHMmmmmmmmm … some of Obama’s statements last week are not what one might attribute to a “Uniter” or “peacemaker”.

And that might be why Obama didn’t do better in Pennsylvania, despite spending 3 times more than Hillary.
It’s safe to say those comments didn’t win Obama more votes.

People should perhaps not get their hopes up too high, because the next president will probably get sabotaged and saddled with the same do-nothing Congress.
The president is only one person.
The Republicans will probably lose a few more seats in Congress.
The Democrats will probably gain a few more seats in Congress.
And the dysfunctional Congress will most likely continue the status qup, because the voters will most likely still fail to do their part, by simply not repeatedly rewarding too many bad politicians with 93%-to-99% re-election rates. Too many voters are still too concerned only about winning seats for THEIR party, rather than ousting bad politicins.

Whoever the next president is, none of the candidates have very good voting records.
Perhaps that is why there are no clear winners?
All of the candidates voting records are pretty lousy.
All 3 get “D”s and “D-“s on their illegal immigration voting records: grades.betterimmigration.com/view_all.php3?Flag=GRADE

Jack wrote: We learned that lesson many times, but it does not stick, and it looks like we will have to learn it again the hard way. We can hope for more, but we really cannot get it.
Probably not. And hope is not a strategy.

Education is part of the solution.
We can get our education:

  • the smart way,

  • or the “hard way”.
It will probably be the hard and painful way.

Pain and misery is a good teacher too.
It’s the final (if not too late) lesson; sort of like the instinct to survive. When will the levels of greed, corruption, usury, lawlessness, delusion, and laziness decline? When it become to painful.

Responsibility = Power + Conscience + Education + Transparency + Accountability
Corruption = Power - Conscience - Education - Transparency - Accountability

At any rate, the voters have the government that the voters elect, and deserve.

Posted by: d.a.n at April 23, 2008 12:14 AM
Comment #251237

That is quite a fanciful construct of events contributing to the Great Depression.

First, it doesn’t account for Joseph Kennedy. He made a fortune selling the market short, which played an enormous role in driving down the market. Inadequate government regulations allowed excessive use of margin and unscrupulous short selling. It was a little bit like the market crash of 1987, which was driven by computerized trading. If the Fed had not intervened in 1987, then given enough time, computer program trading would have driven the markets to zero. But in 1929, limits and trading restrictions were not in place.

But that was just the stock market.

There were runs on banks. Without FDIC insurance, people saw their savings wiped out in panics.

The motto of the Republicans was “the business of America is business.” The exploitation of workers was horrendous, and the conflicts between workers and owners were equally horrendous. If one single event typified Hoover and the GOP and the class warfare of the time, it was the debacle surrounding the Bonus Army.

There are several competing schools of thought providing plausible explanations for the Great Depression. The causes are not as well understood as we would like!

Raising the federal funds rate at that time seemed like a mistake by the Federal Reserve, and it almost certainly made a negative contribution to the Great Depression.

Today, most countries are raising their interest rates. The USA is the exception. We are cutting interest rates. We are in a very scary downward spiral-

The spiral is driven by the enormous federal debt, trade deficits, federal budget deficits, an economically ruinous war, the subprime debacle, the failure of conservative economic policies to create jobs, especially manufacturing jobs, because too many jobs been outsourced, a plunging dollar, inflation, stagnant and even falling wages, and the redistribution of wealth from the poor and the middle, to the rich…

Posted by: phx8 at April 23, 2008 1:18 AM
Comment #251241
First, it doesn’t account for Joseph Kennedy.

It wasn’t the stock market crash that caused the Depression, it was just the first event, in many, that caused it. If it was just that, it would have been a recession most likely, not a full Depression.

In fact, as I pointed out, the stock market had nearly recovered by April 1930. It was then that the borders, import/export wise, were about to close. THAT is the big key, it wasn’t until after the borders reopened to fight WWI (and stayed open) that the Depression ended.

I’m dumbfounded, personally, how you can discount the impact that not being able to sell food overseas had on the farmers in the US, which helped CAUSE the run on the banks, the banks to close and the remaining banks to call the loans on many farms? On how the thousands of tax hikes and artificial wage setting while prices were plumetting didn’t have that much to do with it. These things were caused by WRONG governmental intervention. Yes, it was the Republicans, ala Hoover, that did these things, it wasn’t the ‘free market’.

Posted by: Rhinehold at April 23, 2008 1:31 AM
Comment #251242

BTW, Kennedy was completely out of the stock market by the time it crashed. He took advantage of it being pumped up, and most likely had a small bearing on it doing so, but it makes it hard to say he caused the crash when he was months removed from being in it at the time…

His short selling came after the crash and hardly did much long term damage because, as I pointed out, the market had mostly recovered by April of 1930, before tanking again.

And you don’t find it telling, at all, that the second, ultimate, crash came about the DAY the Smoot-Hawley Tariff was signed into law?

BTW, as for ‘fanciful’, please explain to me which facts I stated which you disagree with? That I may have left out some of the other external factors is a given, there was a lot involved and going on at the time that contributed, but were the interventions of the Hoover administration ‘hands off’ policies or very much ‘interventionist’ policies?

Do you agree that the Depression was not caused by ‘Laissez Faire’ policies? Hoover certainly wasn’t displaying any…

Posted by: Rhinehold at April 23, 2008 1:43 AM
Comment #251244

“Again, the republican party of the 1920s is not the republican party of today.” Rhinehold

The end result is the same. Supply side economics dependent on debt spending with massive wealth disparity leading to a failure of demand as the majority of the population goes into debt with nothing left to spend, followed by an economic crash. Yes the current crop of republicans are not the same but the fact is once again the second largest economic collapse our country has seen in the last 80 years is a result of them being in charge a little too long. Not a result of democratic over- regulation.

History requires Rhinehold to write a very long rewrite of it assuming a filibuster length post might seem to align the facts better with his version of them. Now you can get started explaining away the current economic disaster unfolding after another too long stint of republican short-sightedness and supply side wealth robbing buffoonery.

Hopefully this is the last time we’ll have to repeat the experiment.

Posted by: muirgeo at April 23, 2008 3:03 AM
Comment #251245

Politics is devisive. Politicians hardly ever seem to stand for things that would be best for our country, most often seem to stand for things that are poor for the country, and always seem to stand for things that will get them the most power.

A good example is that none of the presidential candidates have a good track record on issues like protecting our borders from terrorists. It shouldn’t take a mental heavyweight to figure this out. No matter who’s elected, the security of America is screwed.

Obama cannot be a “uniter” because he is EXTREMELY LIBERAL. To be a uniter he would have to be more Middle of the Road (MOR). McCain has a better chance of bringing Unity precisely because he is much less extreme.

And…We don’t need to elect “new” politicians every election, we just need politicians with the guts to stand up for the things that America NEEDS. A grassroots campaign to get politicians to do the real work of GOVERNING would have much more effect than trying to replace every politician up for re-election. I’ve yet to see any homework done by the promoters of this wacky scheme. For example, Michigan state legislators are term-limited…we now have the stupidist bunch of politicians in the country (they keep making the same mistakes their predecessors made when they first came into office; they have no depth of experience).
I don’t think it could be in America’s best interest to have inexperienced people deciding when to go to war (especially since even the experienced ones, including Democrats, were so incredibly stupid in giving Bush the OK to go to war in Iraq).

Politics is devisive. Let it be so. But some things should be dealt with OUTSIDE the realm of politics…
+National security
On these issues there should only be right & wrong, not right and left.

Posted by: Don at April 23, 2008 3:06 AM
Comment #251249



Are we in a recession? No. Are we headed for one? It doesn’t appear so.


Not even close.

Unless we make stupid wrong decisions again, like we did in 1929-1939…

And this time we have the history to show us the way, if we choose to view it, unlike then.

Posted by: Rhinehold at April 23, 2008 8:08 AM
Comment #251252


Again more historical ignorance. The current economic downturn may not even qualify as a recession. That will require some looking back after another five or six months. During your vaunted ’50s, ’60s and ’70s each decade experienced genuine undisputed retractions of the economy, with those of the early and late ’70s each amounting to more than 4% losses. We’ve not even come close to that kind of recession since the days of Jimmy Carter.

Are there elements in common between this cycle of retrenchment and the Great Depression? Yes. In those days banks, sure that the stock market was on a permanent spiral into the stratosphere were rampantly speculating in the stock market with depositor funds. The speculation in hedge funds and peculiar mortgage instruments in the run-up to this correction has been similar tho that situation. However, in the 1920s the response to the demise of these markets was to use the powers of the relatively new Federal Reserve to REDUCE the money supply in an effort to maintain the strong dollar. The result of that was that people with money retreated into cash instead of investing in the risk of the economy. The economy starved from the bottom up until the deficit spending of W.W.II began to loosen spending and put cash back in the hands of working people and small businesses.

Monetary policy made the Great Depression what it was and made it last as long as it did. That was not partisan. It was people not knowing how to run a consumer-driven industrial economy.

Read some Friedman.

Posted by: lee Jamison at April 23, 2008 9:57 AM
Comment #251256

“Again more historical ignorance. The current economic downturn may not even qualify as a recession.”

I’d argue the “economic upturn” was a figment of imaginative Wall Street bubble blowing paper pushers who have as much a trillion dollars of unaccountable leveraged assets that need to be recognized.

I’m no economic expert but I think your optimism is based on denial or ignorance of the facts greater then my own. Further, disaster was averted by government stepping in and saving Wall Streets collective butt from itself. Not by self correcting mechanism of the market.

Posted by: muirgeo at April 23, 2008 10:58 AM
Comment #251261

Friedman has been decisively repudiated, both academically and by events. The Chicago School has been proven wrong by the real world, again and again, and the major contributions of “Free Market” thinking has been military dictatorships, market booms and busts, and the re-distribution of the profits generated by labor from workers to owners, or to put it another way, the redistribution and intensive concentration of wealth away from the poor and middle class, to the rich.

Read “Shock Doctrine” by Naomi Kline. It’s available at the library.

Protectionism played a role in making the Great Depression worse, but US exports were too small a percentage of the US economy to make a big diffrence, and again, most of the exports were agricultural. Agriculture took its biggest hit from the Dust Bowl.

Also, the Great Depression was worldwide. Different countries experienced varying lengths and degrees of severity in their economic downturns. Not to make it too confusing, but you could argue the aftermath of World War I made the eventual contraction inevitable.

Another interesting book, which is out of print, is “The Road Back” by Remarque (the same guy who wrote “All Quiet on the Western Front”). In the sequel, the returning German veterans go communist. NOT a story that Americans and Europeans wanted out there!

The stereotypical war veteran is supposedly superpatriotic and supportive of the government that sent them to war. However, many veterans start asking inconvenient questions. It will be interesting to see what happens to the veterans of Iraq when they start asking questions.

Posted by: phx8 at April 23, 2008 11:49 AM
Comment #251269


While I agree with the facts you presented and agree that intervention of “belt tightening measures” were not exclusive to Hoover. You avoided the Laissez Faire issue of non intervention in irresponsible credit expansion. Margin trading, and an unregulated banking enviroment were exactly what led to the bubbles of the twenties. The Fed’s reactions were limited at best in the twenties, and chasing a horse already out of the barn in the thirties. It was and is exactly the Laissez Faire attitude that led to the overreaction of contrictive policies. No one listened to Keynes until the deficit spending of WWII showed the real problem was money supply.

I too, fear an overreaction, not by the Fed, but by the Congress and a pandering president.

You still haven’t explained your Nafta comment. Since the only other Libertarian I’ve heard economic theory from is Ron Paul (I know he is Repulican) where do you differ from him?

Posted by: googlumpugus at April 23, 2008 1:20 PM
Comment #251274

Good point googlumpugus,

I posed the following question over concerning the current financial system meltdow over at CafeHayek and recieved mostly personal attacks as none of the regulatory minimlist good mustar a fair retort.

The question is; Some one please explain to me the regulatory factors that “caused” the wizards of Wall Street and banking to over leverage their assests to the tune of $1 trillion dollars?

Bottom line what we see unfolding before our eyes is a marker failure some what staved off FOR NOW by government funded corporate welfare and rescue.

Posted by: muirgeo at April 23, 2008 2:22 PM
Comment #251303

I don’t believe it is authoritarian to mind your own business and expect others to do the same. I do not believe that most things should be decided politically. If I get my friends together, we do NOT have the right to vote to take away your property or violate your rights.

Many things just are not the business of government, no matter if it is the government of the few, the many or the one. Successful democracy is much more than majority rules. In large areas of our lives, we need to ability to op-out and go our own ways, make our own decisions.

Re Obama – if he wins a majority of the vote, he will represent the majority. If not, he won’t. It is a tautology. GW Bush won a majority, BTW. So did GHW Bush, Ronald Reagan and even Jimmy Carter the first time. And, BTW, no Dem since Carter has polled more than 50% in a presidential election.

But Obama still cannot even get passed the Dem primary. Hilary just kicked his butt in Pennsylvania and she now has a majority of the actual Dem votes cast, although the Dems will choose to disenfranchise the voters of Florida and Michigan.

The stock market crash did not cause the depression. It came on after the crash in steps. A mere stock market crash does not cause a depression. We had a bad crash in 1987. Most people don’t even remember it at all.

It is no crime to be poor, but during the 1970s there grew up a criminal underclass the likes of which we had not previously seen. It was fed by the programs of the great society. Johnson declared war on poverty , but it took a short time for poverty to win.

There were lots of external pressures in the 1970s, as there are now. You may recall 9/11 etc. Our economy weathered that pretty well. So well that we sort of forget the shock.


The policies of the war on poverty destroyed families, neighborhoods and the general morality of the poor. Crime rates soared; hopes died; responsibility lapsed. I am thankful that it did not have the money to continue this misguided direction.
Don’t you remember the late 1970s and early 1980s? People have forgotten what hard economic times really look like. Unemployment of 5% just doesn’t qualify as depression. Places like France and Germany experience 8-10% unemployment almost all the time and we used to have those sorts of numbers.

The economy turned down this year. It still is not nearly as bad as the early 1980s and nothing remotely like depression conditions. The economy was good from 2003-2006. If you were not happy with the times then, it is unlikely you will ever be satisfied, since those were among the best years in American history to be looking for a job, investing or buying goods and services.

Posted by: Jack at April 23, 2008 10:44 PM
Comment #251304


Regarding unemployment, you would be wise to be careful comparing our unemployment rates with Europe. I’ve never analyzed the differences in reporting technique, but am aware of it’s existence.

The US a few years back, changed the way they report this number, skewing the result.

Unempluyment in general, is a monetary policy choice. There will always be slack in an economy, none is 100% efficient. Modulating between inflationary and unempluyment pressures is a delicate dance.

The point that we are not, at this point, in a recession is valid and entirely possible.

But to borrow from Greenspan, there is some serious turbulence in the air.

Posted by: googlumpugus at April 23, 2008 11:36 PM
Comment #251306

The ninteenth and early twentieth century were replete with serious economic oscillations.

Shay’s and the Whiskey Rebellions of the first years of our nation were resultant of economic upheavals. Washington and Adams believed they may have ended our nation, and raised an army against our own Revolutionary heroes to quash them.

Oscillations of the business cycle were not well understood until Keynes discussions of aggregates. Psychology being what it is, there are still many problems in pinning down these cycles as simple fuctions of economic numbers.

The reason behind the creation of the Fed, imperfect as it was, was to dampen these oscillations. It was Keynes who provided the main tool for them to function successfully, as they have since WWII.

Can they make mistakes? Of course. Do they act alone? No. Many political and psychological factors effect their functionality.

The problem I have with Libertarian economics, as I understand it, is they wish to abolish the Fed, or automate it, or cripple it, by tying monetary policy to a precious metal standard. This is the one advantage we’ve had over the 19th century, beyond technology, is relative economic stability. The US became the major economic juggernaut POST WWII. This allows some degree of politcal stability. As China and India rise economically this may change, though they are much more politically unstable.

Ron Paul made populist splashes about Free Markets, small government, and Gold standards along with abolition of the Fed and IRS. While unsophistcates eat that up, the reality would likely be chaos in the US. We might see a roaring economic boom, likely however, followed by a disasterous crash.

I have no problem with more openess about the Fed, education about hidden taxes, or even some other form of tax collection. Big government is no panacea, but neither is small government that is too weak to have impact. In a frontier society, one can always head to the frontier to escape whatever tyranny one blames for life’s problems. Shoot a few Indians, take their lands and start over. There is nowhere left to run.

Yes, the Fed makes mistakes in economic reality. That doesn’t justify scrapping a working model for a tinfoil theory about economics. I don’t want a return to the extreme cycles of the 1800’s. nor would most fanatics supporting guys like Ron Paul. It all sounds nioe, but if it were as easy and clear as they make it, it would have been done long ago. It wasn’t for a reason.

Posted by: googlumpugus at April 24, 2008 12:10 AM
Comment #251373


I lived in Europe for 13 years. In many cases, we Americans overstate our unemployement rate in comparison to Europe. They have a lot of people in “training” who never really will get a job based on that but are not unemployed by that standard.

Europe, BTW, has differnet economic systems. So I (we) are making generalized statement. Continental Europe (France, Germany, Belgium etc) has rigid labor markets. Scandinavia, esp Denmark, Uk, Ireland are more flexible. But if you average the whole EU (and you have to in order to compare it to the U.S.) unemployment is more of a problem and has been for a long time.

By historical or world standards, we do not have a serious unemployment problem in America. We are facing an economic downturn, which may be only a slowing of growth. This is nothing like we experienced in really hard times.

I remember the late 1970s. In those days it really was hard to find a job, even at fast food etc. Today we have choices. Nobody born since the middle 1980s has ever seen hard times in America. Funny, my father told me nobody born after the middle of the 1930s ever saw hard times in America. I think were both right. Things have gotten a lot better.

Posted by: Jack at April 24, 2008 10:15 PM
Comment #251379


It depended on where you lived. In 1974 or 75, I was working in grocery stores as a stocker, while I went to college in Ohio. I remeber waitng all to interview for one job while they interviewed 50-100 other people. I always found a job, but of course, these were minimum wage jobs.

In 1977 I came to Houston looking for a job. I walked into a grocery, talked to the manager and was hired on the spot, above minimum wage. It was the reason I came to Houston. Houston was a boom town. In 1983, I moved to Dallas because jobs in civil engineering were hard to find in Houston after the S and L fiasco, and dirt cheap oil.

I agree we are not in bad shape economically, but even now, that depends on where you live.

Posted by: googlumpugus at April 25, 2008 12:07 AM
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