Sunday, April 18, 2010

The New, New Deal and the Narcissism of the Legacy

"Those who cannot learn from history are doomed to repeat it." With that in mind, and the deliberate altering of the history taught in our schools, it becomes all the more clear why so many people would cheer the efforts of this president and this congress. They have been denied the truth of history and are therefore doomed...

Examining the chain of events leading up to the stock market crash of 1929 and the Great Depression has today become an exercise in pursuit as they are not served up willingly by educators. The accounts are still there, however, simply because they actually happened, and also because those who will perpetrate the same tragedies have not yet succeeded in scrubbing them from existence. Even so, now they must be actively sought out.

A further examination of the alleged remedies administered by equally
alleged leaders at the time reveals a terrifying sense of deja vu, one
that makes one wonder why someone would deliberately repeat such
grievous errors. Let's take a look back, keeping in mind our current
state of affairs regarding the economy.

In 1928, the country was in a recession and the housing market was anemic (sound familiar?). Then the Federal Reserve Board - which is nothing remotely federal but, rather, a private corporation - squeezed the money supply, nearly doubling the discount rate to banks in a little over a year and a half, from 3.5 percent to 6 percent between January 1928 and August 1929.

Over the next three years, the money supply shrank 30 percent and lines of credit were cut off. Meanwhile, Congress was debating the Smoot-Hawley Tariff Act, which was designed to protect struggling farmers against agricultural imports. The Act was even more draconian than the Fordney-McCumber Tariff, passed in 1922, and had an adverse effect on investing and the Stock Market. In the span of three days in 1929, the Market became unstable and ultimately crashed.

In June 1930, President Hoover signed Smoot-Hawley into law, further exacerbating the effects of Fordney-McCumber, virtually sealing off international trade of not only agricultural produce, but all goods. An international trade war erupted, halting the exportation of goods to foreign markets.

Federal spending skyrocketed in 1930 and 1931. Hundreds of millions of dollars were paid in farm subsidies. Congress established the Reconstruction Finance Corporation, distributing still more hundreds of millions of dollars to businesses (again, sound familiar?). As a result of the ensuing budget deficits, Hoover signed the Revenue Act, doubling the income tax rate, with the top bracket nearly tripling, from 24 percent to 63 percent. Hoover, Congress and the Federal Reserve, in a foolish attempt to minimize the effects of the recession, only made things drastically worse.

Enter Franklin D. Roosevelt who, in 1932, ran against Hoover by promising to not be Hoover, a promise that was discarded as soon as he was sworn into office. Roosevelt modelled the New Deal on the same misguided principles of Hoover, only worse. As Roosevelt advisor Rexford Guy Tugwell would later disclose:

"We didn't admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started."
Indeed, Roosevelt became Hoover on steroids, raising the top income tax bracket to 79 percent and then to 90 percent. In 1933, he instituted the National Industrial Recovery Act (NIRA) which essentially brought private manufacturing companies under government control. The federal government would now dictate production and pricing standards.

Perhaps a little too late, the Supreme Court eventually ruled NIRA was unconstitutional, but in six months after its passage, production dropped 25 percent. Roosevelt established the Civil Works Administration which was subsequently superseded by the Works Progress Administration, both of which have been credited with "putting people to work", but which were actually little more than money siphons for crooks and gluttons. And from 1931 until 1940, the unemployment rate never dropped below 14 percent. It was apparent that the only beneficiary of the New Deal was the government.

As a result of Roosevelt's government interference, the Great Depression lasted a decade. Barack Obama is following the same blueprint for disaster. The question, then, is does he do so from a perspective of ignorance of history, or does he do so believing that the people are ignorant of history? And is he more concerned about his legacy than with actually healing the nation's economy?

These are but a few legitimate questions regarding Obama's handling of this recession. There are many others, perhaps even more nefarious in context, such as whether Obama is simply a tool being used by a larger interest.

Liberty and Tyranny - Mark Levin

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1 comment:

Edisto Joe said...

History does repeat itself and make no mistake, the lesson you have just presented should be a wake up call to all. Under Roosevelt, American attention to the state of the economy and the country became overshadowed by war but the facts as you stated are recorded in history for all to read and learn. There is also another lesson to be learned in history about recession and stimulating the economy from a more recent time. It came from a fellow named Reagan.