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Posts Tagged ‘FDR’

There are a couple of interesting sayings about history. One of them is: “History repeats itself”.  Another one, closely related and penned by George Santayana,  is: “Those who do not learn from history are doomed to repeat it.” The economic history of the United States is now in one such process of repetition as our economy and stock market continue to melt.  Ben Bernanke, a student of the Great Depression and Chairman of the Federal Reserve, has taken significant steps to try to avert a repetition of the Great Depression that followed in the wake of the stock market crash of 1929.  He has already drastically reduced interest rates. With rates now close to zero, this is little more that he can do.  Treasury Secretary Paulson has also advocated taking major economic actions and has quickly acted to save the investment banks (which are now bank holding companies). It seems that he has also learned something from history, although probably not nearly enough.

If there is one person who history has blamed for the depression it is the Republican President at the time, Herbert Hoover.  Hoover is blamed, not so much for what he did, but for what he did not do. He sat back and watched as the stock market slid and the banks collapsed, over a period of about three years.  The stock market fell to an eventual value less than 10% of what it had been at its peak, and over 10,000 banks failed.  Unemployment went up to 25%.  Many businesses ceased to exist.  Unemployed people were standing in bread lines to get food.  Hoover did nothing because he believed that the capital markets were self-regulating and that no-rules capitalism would always correct itself.  Despite his own record in his earlier years of being a government interventionist, when he became President he had come to believe that a hands-off policy would be the best for the economy.  History has shown him to tragically wrong, and by the time he left office the United States was deeply mired in economic chaos and hardship.

We are at a point now in our economic history that, in many ways, is similar to where we were in 1931- our stock market is now about halfway to the bottom. We have an ineffectual, conservative, government, steeped in the Republican, feudalistic philosophy of trickle down economics. Our government believes that if we can just repair the damage to our big businesses and banks then everything will be OK.  George Bush and his wealthy advisers stubbornly cling to their self-serving, failed, economic beliefs and have no effective plan to restart the economy that for the past several years had been surviving only by the economic churning of a real estate Ponzi scheme.

Despite the catastrophic failure of Republican feudalism,  John McCain still deeply believes that the correct order of things is for the United States to have a small, ultra-wealthy class from which all things trickle down to the ordinary man (should I say peasant?).  He is a man who, if elected to be President, would do absolutely nothing to correct the imbalance of our tax system that so greatly, and catastrophically, favors the ultra-rich.  He is fundamentally a stingy man who would cut taxes even more for the rich if he could. He would tax the health care benefits of the middle class, and he would drastically cut Medicare which provides the sole source of medical insurance for many of America’s elderly.  A cold and uncaring man, given more to fighting wars than reaching out and helping people in need, he is certainly the Herbert Hoover of today.

On the other hand, Barack Obama has come forward with a new vision – a New Deal, so to speak. He will spend massive amounts of money to create a high technology effort to produce modern forms of energy that will make us self reliant and in the process he will create millions of new jobs for the middle class.  He will provide better health insurance for all and work toward greatly improving our schools – a critical step if America is ever to succeed in today’s economiy. He will pay for this by revising our tax code so that the wealthy and the ultra-wealthy will once again pay their fair share of taxes. He will eliminate wasteful and corrupt spending, (like the Iraq War), and he will impose new regulations on Wall Street that will prevent the greediest of the greedy from ever again recreating a state of economic deregulation such as we have had, that, in the past, resulted in the stock market crash of 1929 and now has resulted in the stock market crash of 2008. Barack Obama is essentially the Franklin Delano Roosevelt of our day.

It now up to us to choose who shall lead this country out of this economic quagmire.  Will we learn history’s harsh economic lesson or ignore it?  Will we choose the ghost of Herbert Hoover or the spirit of FDR to lead us out of economic ruin?  History has already clearly shown which of these is the right man for the task – all we have to do now is vote.

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