#11 Austerity Versus Stimulus – What Is the History?
A Reference Library
Capsule: #11 Austerity Versus Stimulus – What Is the History? definitively illustrates the results of austerity policies and stimulus policies in a direct comparison. Austerity is when government gets out of the way of the free market and allows it to work itself out. Stimulus is where fascism is added to progressivism to manipulate the marketplace, resulting in progressive-fascism.
You Choose – Regaling Prosperity or Grinding Poverty
Focus: If it was possible to magically start another decade right this moment that could mirror either the Roaring Twenties or the Dirty Thirties, which one would you choose?
Details: #11 Austerity Versus Stimulus – What Is the History? examines two prime examples of austerity and stimulus policy. To hear liberals describe it, Keynesianism has a long history of success. In fact, Keynesianism has never even once been implemented by an American government. In a recession Keynes prescribed stimulus of private sector investment, not government sector employment and infrastructure, as has been the norm. He also prescribed surplus budgeting during prosperity and a plan to surplus away any recession deficit spending after the recession. What is mistaken for Keynesianism is actually a hybrid of the progressivism of Woodrow Wilson and the Euro-fascism of the 1920s and 30s. Unfortunately, this progressive-fascism has a long history of failure, a factor which has led to today’s Obama Malaise. It is austerity that actually has a history of success.
Excerpts: ~In the marketplace, need and demand are not at all equivalent. Demand is a result of affordability. Without excess money to buy new goods or services there is only need, but no demand. Need is an excess of debt and/or a lack of necessities. Affordability is having financial wealth in excess of need, whether as cash, manageable credit or some other valuable commodity. Demand can only come from existing wealth that exceeds need. If need exceeds wealth, then any additional money acquired goes to paying down need and no new demand is created. To create new demand, existing wealth in excess of need must first exist, and second, be enticed into the marketplace as demand. If consumers that possess excess wealth have no confidence in the success of the marketplace returning that excess wealth, they will hold onto it and there will be no new demand even though the excess wealth exists that might otherwise produce new demand. So, to generate new demand one must have a marketplace that produces confidence in consumers that their excess wealth spent on demand will be at least replaced, or preferably multiplied as a return in the future. … When need overwhelms demand one has a depression, recession or malaise, depending on the extent of the imbalance. To produce a prosperous economy one must have demand in excess of need, as in the mid to late 1980s, the mid to late 1990s and the mid 2000s. Just as FDRHoover’s policies produced a prolonged malaise called the Great Depression, President Obama’s policies of government stimulus spending, subsidies and bailouts have predictably produced the prolonged Obama Malaise.~
Preface: The Nuclear Counterarguments Essay Series is written for both contemporary American liberals and contemporary American conservatives – for the liberal (or progressive) as an exit counseling process with the purpose of removing the inherent paranoia that prevents them from seeing that in their core belief they are, in fact not a liberal, and for the conservative as a strategy for dealing with liberal acquaintances. (FYI, I am a Canadian – the implications of this are explained in the Introduction and #1 Deprogramming Liberalism with Nuclear Counterarguments.)
[All citations are active number/letter codes. Code links beginning with an * indicate that the linked page has additional information for the topic at hand. Links without an * are cited for evidence of existence and reference only, as in a quotation or number or case in point. Citations validate my points so that you can trust my claims, and will often provide you with invaluable supplemental information.]
Written in first-person narrative to liberals,
but also for conservatives.
• Mini critical thinking exercise
On an internet forum I had a discussion with a liberal economist about the politics of the price of oil. Based on his ideological view of the news he adamantly predicted oil would go from the current $60 per barrel (I’m guesstimating the numbers – its been so long I can’t remember for sure) to $80 in a given period of time. So I challenged him to put his money where his mouth was and go long on $10,000 worth of oil futures. Despite his bravado he would not do it, but he still insisted he would be proven correct. (I didn’t ask him at the time, but I got the feeling that he would have gladly made the bet with my money if I had offered it.) Now, I dabble in market trading and know a thing or two about the oil market. And one thing I do know is that predicting where its price will go is a very tricky thing. It turned out his prediction was wrong and the price went down to $50 inside of two weeks, by which he would have lost his shirt if he had bought those oil futures (unlike stocks, oil futures are heavily leveraged).
Nineteenth century French economist Frederic Bastiat observed, “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” Bastiat is the author of the famous “Broken Window Fallacy”. [*4a3a34a] (I wonder if Paul Krugman would like to volunteer to have his house blown up for the supposed benefit it would bring to the home construction industry?) Alas – oh for those enlightened times. You see, American neighbor, we in the twenty-first century have economists that are much worse than Bastiat’s observation. Many economists realize that predicting the future is a very difficult thing even with first looking to the past to see what has happened before in similar situations. Then there are the few (many?) who don’t abide by the first’s caution. Instead they rely solely on an occultic faith in their ideology. If economists were as great at making accurate economic predictions as many of them would like to think they are, wouldn’t all economists be billionaires, and wouldn’t everybody want to become an economist? Neither is true, and it has to do with a poignant and amusing definition of an economist I once read on another forum that went something like this: An economist is a master at excusing tomorrow their projection from yesterday that failed today.
Although virtually every volume of the Nuclear Counterarguments Essay Series is about liberals playing stupid, this essay is probably the most blatantly revealing in this manner. What do you think the answer to this question is, American neighbor: Do you think the success of America as a free nation has been more a result of Americans allowed to act freely to create prosperity, or from government control generating prosperity?ab
• Historian histrionics
As has already been illustrated a few times, liberals like to play stupid at an extreme level when it comes to Franklin D. Roosevelt. Here’s a blatant example: Liberals believe that FDRHoover “saved capitalism”. [Give me a moment while I stop laughing, American neighbor.] Go ahead and do a Google search for >FDR*saved capitalism< (include the * proximity limiter). I got 13 million results. [Sorry – give me another moment.]
We saw in #8 The Not So Surprising History of Tax Cuts that the Great Depression was most likely the result of a combination of the Smoot-Hawley Tariff Act which virtually shut down world trade, and bad Fed policy. However liberals like to oversimplify things for demagogic purposes, so they claim the depression was the result of the 1929 stock market crash and free-market capitalism in general. This can easily be refuted by the fact that the market crash could have been mostly prevented with the simple implementation of the uptick rule. [lspedel] If the whole market crash scenario could have been fixed with one little stock market rule change, indicting all of free-market capitalism hardly makes sense.
This is all about seeing FDRHoover as a great President. You see, American neighbor, when it comes to rating America’s Presidents, liberal historians set the table by being mostly contrarians – whatever makes common sense is inverted onto its head, and whatever is nonsense is lauded as genius – except for Herbert Hoover (and a few early Presidents). For instance, almost everything that progressive, Woodrow Wilson implemented turned into a disaster immediately or sometime down the road – the Federal Reserve, the League of Nations, extremely progressive income tax, the Federal Trade Commission, increased racial segregation in government, and delaying entry into WWI. But liberal historians rate Wilson as one of America’s best Presidents. [shakes head] Then look at his successor, Warren G. Harding. He inherited Wilson’s resultant mess (a severe depression), and following his “Less government in business and more business in government” campaign slogan, turned America around in a scant 1 1/2 years with a reinstitution of consumer demand capitalism. For this and for precipitating the Roaring Twenties, liberal historians rate Harding as one of America’s worst Presidents. [shakes head again] From Wikipedia:
300-word pages of text = 64
Reference citation links = 47
Recommended-reading links = 39
Profound insights = 63
Cover photo: Cover photo: U.S. Department of Energy photograph XX-59
Cover background: SQUIDFINGERS [4rol8]
Copyright 2012 Jim Autio License Note: Although free, this essay remains the copyrighted property of the author, and may not be reproduced, copied or distributed for commercial or non-commercial purposes. For fair use only.
~Harding’s Treasury Secretary, Andrew Mellon, ordered a study which demonstrated historically that, as income tax rates were increased, money was driven underground or abroad. Mellon concluded that lower rates would increase tax revenues. Based on this advice, Harding cut taxes, starting in 1922. The top marginal rate was reduced annually in four stages from 73% in 1921 to 25% in 1925. Taxes were cut for lower incomes starting in 1923. The lower rates substantially increased the money flowing to the treasury. By late 1922 the economy began to turn around. Unemployment was pared from its 1921 high of 12% to an average of 3.3% for the remainder of the decade. The misery index which is a combination of unemployment and inflation had its sharpest decline in U.S. history under President Harding. Wages, profits, and productivity all made substantial gains during the 1920s. Libertarian historian Thomas Woods contends that the tax cuts implemented by President Harding ended the Depression of 1920-21 and were responsible for creating a decade-long expansion. Historians Schweikart and Allen also argue that Harding’s tax and economic policies in part “…produced the most vibrant eight year burst of manufacturing and innovation in the nation’s history.”~ – [y2p2bf]ac
• Keynesian economics has never been tried
Herbert Hoover is the one place where many conservatives and liberal historians can wholeheartedly agree. Both see Hoover as a disaster of a President. Hoover created the FDRHoovernomics of government command capitalism that is so popular with today’s liberals – progressive-fascism. Oh, I realize that they claim it is Keynesian economics, but what they really mean is FDRHoovernomics. You see American neighbor, Keynesian economics has never been attempted in America. Keynes said that to reverse a recession the government should stimulate the private sector investment with deficit spending by borrowing money (for example, that is not what President Obama has done – almost all of his stimulus money went to government programs and workers – federal money bailed out state programs, and unions more specifically). Keynes favored surplus spending during economic expansion to pay for additional spending during downturns. If deficits became necessary Keynes also directed that a parallel plan be devised at the same time to immediately reduce the deficit into a surplus to rebalance the books once the recession was over (don’t hold your breath waiting for Obama’s surplus plan). [*ylkw3tv, *plrndm5, *666wuws] Keynes opposed structural deficits like America has had for decades. He advocated only temporary deficits and debt, with surpluses as a norm. That has never happened. Did you get that, American neighbor? Keynesian deficit/surplus economics has NEVER been utilized by an American government since Keynes put out his theory. And Keynes did not advocate that government should or even could stimulate consumer demand (as liberals constantly claim), only that it could help sustain private investment, which also rules out tax increases during downturns. So-called Keynesians subsequently hyjacked Keynes’ name and mutated his theory for their own purposes. Indeed, after a meeting with American Keynesian economists, Keynes is reported to have said to his wife, Lydia, “I was the only non-Keynesian there.”ad
• Progressivism + fascism = progressive-fascism = FDRHoovernomics
Before economist Keynes even came out with his theory in 1936 Herbert Hoover invented FDRHoovernomics in the early thirties, a hybrid of Woodrow Wilson’s progressivism and the fascism popular in Europe of the 1920s and 30s. FDRHoover and following administrations have developed FDRHoovernomics into spend like hell on government programs, regulate the private sector like hell, tax the private sector like hell, and above all, increase the size of government like hell. Then, subsidize favored groups like green industries, farmers and union companies, penalize those who do not fit the agenda, and then hope for the best. (Heavy protection tariffs had also been a major policy of FDRHoovernomics until the late forties and early fifties, but have not been entirely eliminated, and are still favored by most extreme leftists. FDRHoover also encouraged and protected monopolies in exchange for an industry acceptance of minimum wages, and price and quota controls – all of which hampered the economy.) [*3bo25wt] FDRHoover followed in Herbert Hoover’s footsteps and expanded on his ideas. Remember from #6 Tyranny Versus Liberty, we discussed FDRHoover’s National Industrial Recovery Act:
~NIRA, as implemented by the NRA, became notorious for generating large numbers of regulations. The agency approved 557 basic and 189 supplemental industry codes in two years. Between 4,000 and 5,000 business practices were prohibited, some 3,000 administrative orders running to over 10,000 pages promulgated, and thousands of opinions and guides from national, regional, and local code boards interpreted and enforced the Act.~ [25d3e42]
This was fascism, American neighbor. It was a manipulative takeover of the economy by the government. As I wrote of NIRA in essay #6: “It committed some of the same marketplace manipulations as Hitler’s ‘Plan’ for the Third Reich, including government authorized cartels and monopolies, nationalized public works programs, price regulation, forced unionization and communal farms.”
~One of these programs was the National Recovery Administration (NRA), which, with its codes and industry organizations, was said by some critics to have a certain resemblance, as an economic institution, to Mussolini’s corporatism.~ [czvjfb]
~Mussolini himself praised the New Deal as following his own corporate state, as quoted in a July 1933 article in the New York Times, “Your plan for coordination of industry follows precisely our lines of cooperation.”~ [czvjfb]
~Journalist John T. Flynn, a former socialist, in his 1944 book As We Go Marching, surveyed the interwar policies of Fascist Italy and Nazi Germany, and pointed to what he called uncomfortably similar American policies. Flynn saw links between ‘generic’ fascism and a large number of policies of the United States. He said that “the New Dealers … began to flirt with the alluring pastime of reconstructing the capitalist system … and in the process of this new career they began to fashion doctrines that turned out to be the principles of fascism.”~ [czvjfb] 
~In response to the Court’s striking down the NRA as unconstitutional, Huey Long said “I raise my hand in reverence to the Supreme Court that saved this nation from fascism.”~ [czvjfb]
FDRHoover had promised this sort of draconian solution:
~To end the crisis, he would seek from Congress a “broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.” This was the passage that, somewhat ominously, drew the loudest applause. … ROOSEVELT ASKS DICTATOR’S ROLE cried the headline next day in Hearst’s New York Sunday Mirror.~ [yben4sl]
Democratic Senator, Carter Glass of Virginia in a letter to reporter Walter Lippmann responded to FDRHoover’s NRA:
~ “…in my view, the methods employed have been brutal and absolutely in contravention of every guaranty of the Constitution and of the spirit of sane civilization. […] I am glad, as I am sure you will ever be, that you have the courage to pungently describe the utterly dangerous effort of the federal government at Washington to transplant Hitlerism to every corner of this nation.”~ [3h8gkqg]
Indeed, FDRHoover admired Mussolini’s ability to prevent the worldwide depression from affecting Italy, calling him, “that admirable Italian gentleman”. [3bo25wt] FDRHoover appointed General Hugh (“Ironpants”) Johnson to head his National Recovery Administration, described in Wikipedia:
~Johnson played a major role in the New Deal. In 1933 Roosevelt appointed Johnson to administer the National Recovery Administration (NRA). One author claims Johnson looked on Italian Fascist corporativism as a kind of model. He distributed copies of a fascist tract called “The Corporate State” by one of Mussolini’s favorite economists, including giving one to Labor Secretary Frances Perkins and asking her give copies to her cabinet.~ [3shletz]
~Italian Premier Benito Mussolini was convinced that the New Deal was copying Fascist economic policies. Nazi Minister of Economics Hjalmar Schacht declared that President Franklin Roosevelt had the same economic idea as Hitler and Mussolini; the official Nazi Party organ, Völkischer Beobachter, applauded “Roosevelt’s adoption of National Socialist strains of thought in his economic and social policies.” Hitler expressed admiration for FDR’s approach, saying, “I have sympathy with President Roosevelt because he marches straight toward his objective over Congress, over lobbies, over stubborn bureaucracies.” FDR’s Secretary of the Interior Harold Ickes conceded that “what we were doing in this country were some of the things that were being done in Russia and even some of the things that were being in Germany.”~ [3m37sya]  Read this for more detail: [*pyrcpl9]
~The New York Times reported that the mood in Washington in 1933 was “strangely reminiscent of Rome in the first weeks after the march of the Blackshirts, of Moscow at the beginning of the Five-Year Plan… America today literally asks for orders.” The Roosevelt administration, reported the Times, “envisages a federation of industry, labor and government after the fashion of the corporative State as it exists in Italy.”~ [3m37sya]
FDRHoover’s environmentalist Civilian Conservation Corps placed youths under military type conditions to work on environmental projects:
~His Civilian Conservation Corps prompted William Green, president of the American Federation of Labor, to protest that “it smacks of Fascism, of Hitlerism, of a form of Sovietism.”~ [yben4sl]
Another Democrat responded:
~Former Presidential Nominee Al Smith accused the New Dealers of trying “to disguise themselves as Karl Marx or Lenin or any of the rest of that bunch.”~ [yben4sl]
Despite being warned of the consequences, the NRA introduced a minimum wage that immediately put 500,000 blacks out of work, mostly replaced by white workers. Women were replaced by men, and seniors, young apprentices and the handicapped just lost their jobs. These were the unintended consequences of FDRHoover’s progressive-fascism. (As was later evident during the war when FDRHoover interned Japanese Americans, he was a racist and segregationist. He refused to enter the anti-lynching fight in order to mollify southern Democrats. He initially kept domestic and farm workers out of the Social Security program (over 90% were black). Blacks were also segregated out of the Civil Conservation Corps, a public works relief program, and barred from employment in residential housing construction.)
So how did FDRHoover “fix” these problems? By adding more progressive-fascism in the form of dictatorial powers for the Secretary of Labor that allowed for government issued quotas for industries as to the amounts of skilled workers permitted. Huge bureaucracies were created to manage these new programs. [76nw2wz – page 173]ae
• FDR just followed Herbert Hoover’s lead
Again, Keynes advocated private sector investment stimulus with no tax hikes during a recession and no increase in the size of government, which he saw as inhibiting investment. FDRHoover never implemented any of Keynes prescriptions, but continued to follow Herbert Hoover’s command capitalism prescription of progressive-fascism. In another example of fascism FDRHoover attempted to usurp the separation of powers by packing the Supreme Court, but even his own Democratic Party opposed him on this fascistic and subversive measure, and it failed.
Arguing over how much to implement FDRHoovernomic’s progressive-fascism has been the name of the game ever since (but deceitfully calling it Keynesian economics). Occasionally some aspects of FDRHoovernomics have been de-emphasized, a reduction in government spending and tariffs after WWII, reduced taxes at the end of the war and under JFK, Carter, Reagan, the Contract and Bush 43, reduced regulations under Reagan, and lessened government expansion under Reagan and Clinton, but FDRHoovernomic’s progressive-fascism has always been the functioning economic system since Herbert Hoover invented it and FDRHoover established it as fundamental governance during the Great Depression.
So in a bout of mind boggling contrariness against common sense liberal historians rate FDRHoover in the top three of all Presidents (here is where I will explain why I call Franklin D. Roosevelt, FDRHoover). Liberals like to pretend that FDRHoover was some sort of economic genius who saved America from the Great Depression that Herbert Hoover created. Well, except that FDRHoover didn’t save America from the Great Depression – he perpetuated it for years upon years and turned the decade into the Dirty Thirties. But think about this, American neighbor. If Herbert Hoover was such a dolt as is claimed by both many conservatives and liberals alike for campaigning on the principle of “rugged individualism” and then flipping into a progressive-fascist once in office, what exactly makes FDRHoover any less of a dolt for following and expanding Hoover’s progressive-fascism policies after winning the Presidency from Hoover by campaigning to abandon Hoover’s progressive-fascism policies? Yup, you read that right, American neighbor. FDRHoover campaigned against Herbert Hoover’s failing big government solutions for the Great Depression. He called for a 25% cut in government spending.
~Indeed, while Hoover fulminated against “socalled new deals,” it was Roosevelt who accused the President of “reckless and extravagant” spending, and of thinking “that we ought to center control of everything in Washington as rapidly as possible.” Roosevelt’s running mate, Congressman John Nance Garner of Texas, 63, even claimed that Hoover was “leading the country down the path of socialism.”~ [yben4sl]
~Economist Marriner Eccles observed that “given later developments, the campaign speeches often read like a giant misprint, in which Roosevelt and Hoover speak each other’s lines.” Roosevelt denounced Hoover’s failures to restore prosperity or even halt the downward slide, and he ridiculed Hoover’s huge deficits. Roosevelt campaigned on the Democratic platform advocating “immediate and drastic reductions of all public expenditures,” “abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagances” and for a “sound currency to be maintained at all hazards.”~ [62mbtaz]
Sounds just like it was right out of the Warren G. Harding playbook, doesn’t it, American neighbor? But once FDRHoover had assumed the presidency he immediately reversed his positions just as Hoover had, and made Hoover’s big government solutions look small by comparison. FDRHoover wasn’t an original thinker, American neighbor. Rexford Tugwell, one of FDRHoover’s “Brain Trust” academic advisers who were instrumental in the development of his policies, said:
~ “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”~ [4aecqf3]
• American vampires
Now you know why I call Franklin D. Roosevelt, FDRHoover – they were blood brothers, American neighbor. Like twin vampires they drained the blood out of a wounded America with the command capitalism fangs of FDRHoovernomic’s progressive-fascism firmly fixed on the neck of the American Dream. Remember that we saw in #8 The Not So Surprising History of Tax Cuts, how Presidents Harding’s and Coolidge’s Hardingnomics style of government saw the national debt go down every year of the Roaring Twenties? Here’s a direct comparison with what the national debt did during the Hoover/FDR Dirty Thirties:ag
• Graph – U.S. Total National Debt – 1920s & 1930s
Yeah – FDRHoover was a so much better President than Warren G. Harding. [/deep sarcasm] It only took Hoover and FDRHoover three plus years to reverse the debt back to the $26B level that Harding and Coolidge began reducing from a full ten years before. Remember, both decades began with a severe depression. Harding and Coolidge cut the national debt by a whopping 35% and produced a rip-roaring economy, whereas Hoover and FDRHoover increased the national debt by an even more whopping 149% and expanded the economic misery right past the end of the decade! And how about the names of the two eras, American neighbor? Don’t the names, the Roaring Twenties and the Dirty Thirties get through the thick skulls of liberals? It wasn’t just the Dust Bowl that made the thirties dirty. For many people the only clothes they owned for long periods were the clothes on their back, homeless wanderers riding on top of freight trains, sleeping wherever, eating at soup kitchens. What exactly was so great about the Great Depression? Nonfarm unemployment reached an astonishing 37%! 5,000 banks failed! The devastating effects of the Great Depression literally lasted ten times longer than those of the 1920 Depression, and only ended with FDRHoover’s death (as we determined in #8 The Not So Surprising History of Tax Cuts). (Thank God he died when he did. If he had lived past the end of the war he would have enacted his Second Bill of Rights, which was even more draconian than the New Deal. No doubt, America would have become an all-out fascist state not unlike pre-war Italy.)
Total unemployed workers went down from 4.9M in 1921 to 1.6M in 1929. The nonfarm unemployment rate from 1923 to 1929 averaged 5.5%. But total unemployment from 1931 to 1939 went up from 8M to 9.4M and the nonfarm unemployment rate averaged 29.2%!!! (There are a lot of bogus unemployment numbers out there about the Dirty Thirties, American neighbor – I had one liberal historian try to tell me the rate in 1939 was 9%! [LOL!] The numbers I use are from the official U.S. Census Bureau Statistical Abstracts, under the United States Department of Commerce. Nonfarm unemployment numbers are used to ferret out the distortions incurred by temporary seasonal work and are still the most popular in use today – nonfarm U3 are the ones you commonly hear of in the news.) [3vbl9tb, bglktzk – Historical Statistics of the United States, Colonial Times to 1970, Part 1, ZIP, page 126] (The nonfarm unemployment rate numbers of the four decades before 1940 are basically the equivalent of today’s U6 unemployment rate. The reason that today’s official U3 measurement is imprecise for measuring the impact of unemployment before 1940 is that there was no early retirement and myriads of government support programs like welfare and Food Stamps for those who had given up looking for a job, as there is today. This makes the Civilian Workforce numbers in the Abstracts virtually irrelevant for measuring the true hardship of unemployment during that time period. Indeed, the fact that many during the Great Depression were unemployed for years – U6 does not count those unemployed over one year – suggests that even the nonfarm numbers for the 1930s in the following chart probably underestimate the true extent of the misery.)ah
• Graph – U.S. Nonfarm Unemployment Rate – 1920s & 1930s
• FDR’s own Treasury Secretary despaired of the New Deal
Do you now see why FDRHoover’s own Treasury Secretary, Henry Morgenthau in May, 1939 despaired of the New Deal as a complete and utter, utter failure? In a meeting discussing budgetary strategy in 1939 Morgenthau was fed up with FDRHoover’s intransigence and laid out this blunt assessment (this is an expansion of the same quote used in #8 The Not So Surprising History of Tax Cuts):
~ “Now, gentlemen, we have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong as far as I am concerned, somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. We have never taken care of them. We have said we would give everybody a job that wanted it. … We have never done anything for them. I want to see those people taken care of. […] But why not let’s come to grips? And as I say, all I am interested in is to really see this country prosperous and this form of Government continue, because if after eight years if we can’t make a success somebody else is going to claim that right to make it and he’s got the right to make that trial. I say after eight years of this Administration we have just as much unemployment as when we started. … And an enormous debt to boot! We are just sitting here and fiddling and I am just wearing myself out and getting sick. Because why? I can’t see any daylight. I want it for my people. [sic] for my children, and your children. I want to see some daylight and I don’t see it.”~ [3owqeez, yea7hpd]
So when you inevitably hear liberals spinning the unemployment numbers for the thirties to supposedly show the rate dramatically decreasing over the course of the decade, just think of this passionate quotation from FDRHoover’s own Treasury Secretary. Morgenthau in 1939 obviously knew that the New Deal was unsuccessful in creating jobs: “I say after eight years of this Administration we have just as much unemployment as when we started”. The unemployment rate in 1939 was exactly the same as it had been in 1931. And actually he understated it when he said there was still the same amount of unemployed workers – the total of unemployed workers went up from 8M to 9.4M. But did you get that, American neighbor? FDRHoover’s own Treasury Secretary said, “We are spending more than we have ever spent before and it does not work.” Admitted failure. “We have never made good on our promises.” More admitted failure. “I want to see some daylight and I don’t see it.” Despair on top of failure.ai
• How bad was it?
Can you spell F A I L U R E in capital letters, American neighbor? When has a politician ever made such an admission? How bad must it have been to make such an admission?!? Bad. VERY BAD!!! VERY, VERY BAD!!! At the beginning of the eight years Morgenthau referenced, the nonfarm unemployment rate was 25.2%. After eight years of FDRHoovernomics in 1939 when Morgenthau made this statement it was again 25.2% after having reached 37.6%! What more do liberals need to know?!? But a direct comparison between unemployment in the twenties and the thirties is not entirely honest as an indicator of the health of the economy (for one, remember our qualification of the U6 comparison that underestimated the misery of the Great Depression). The government payroll was much smaller during the twenties and the budget was creating a surplus. During the thirties, massive government deficit spending artificially reduced the unemployment figures by inflating the debt subsidized government payroll. The net effect was that the economic situation during the thirties was actually much, much worse than the unemployment numbers indicate at first glance – as if an average of 29.2% wasn’t bad enough!aj
• American public rejected the New Deal
In a parallel with Treasury Secretary Henry Morgenthau’s views, by 1939 Americans had overwhelmingly rejected FDRHoover’s economic strategies. Gallup polled the public with four telling questions. It is important to realize that it was FDRHoover that was proactive in his punishment of business, and business who was reactive toward FDRHoover’s punishments. So when the first question asked: “Do you think the general attitude of the Roosevelt administration toward business is too friendly or not friendly enough?” Americans responded 54% to 11% that FDRHoover’s proactive strategies toward business were not friendly enough. The next question reversed the first, with a response of 65% to 11% that the result of FDRHoover’s proactive punishments had quite naturally produced an unfriendly reaction from business. The third question asked, “Do you think the attitude of the Roosevelt administration toward business is delaying the recovery?” Americans responded by 63% to 37% that yes, FDRHoover’s proactive punishments were hurting the recovery. The fourth question reversed the third, with a response of 69% to 31% of yes, the natural reaction of business to FDRHoover’s punishments was hurting the recovery. Americans could see the same failure Morgenthau had seen. [79h6ttn]ak
• Contrast between 1920s & 1930s higher than first appears
In fact, the unemployment comparison between the two decades is even more stark than described above. The U.S. resident population grew from 1920 to 1929 by 14.4%, while from 1930 to 1939 it grew only 6.3%. So, while during the 1920s the population increased at over twice the rate of the 1930s, it still managed to have virtually full employment for almost all of the decade. VERY impressive! [bglktzk – Historical Statistics of the United States, Colonial Times to 1970, Part 1, ZIP, page 8]al
• GDP was a measure of government spending not prosperity
But liberals will say the GDP went up. Well that’s what happens when the government “primes the pump” with deficit spending – there’s an artificial boost in the GDP, but that doesn’t mean the economy is doing any better. The GDP then becomes a measure of add-on government spending rather than an indicator of the health of the economy. (This was recently and inadvertently confirmed by Democratic Senate Leader Harry Reid [*b59qk9r]) FDRHoover abruptly reduced spending in 1937 and the GDP followed suit in 1938, illustrating that the prior GDP rise was only a crutch that did not mend a broken economy, but only propped up the GDP number by artificial means. So what does a rise in the GDP mean with the number of unemployed going from 8M to 9.4M? (Oh oh, American neighbor – I hope your head doesn’t pop.) It means the government simply got bigger, and favorites of the government (their favored rich friends) got richer on government handouts of borrowed money, and the poor still had no jobs! (Sort of like today.) Talk about a jobless non-recovery!am
• Which decade would you choose?
America was destitute for over a decade – and liberals think FDRHoover was some sort of presidential god?!? On which sitcom??? From whose comic book??? In what circus??? There are two possible ideological approaches to an economic collapse. One calls for a drastic reduction in the size of government along with its influence on the economy – austerity. The other demands a massive government with increased involvement in the economy – stimulus. Both strategies were used back to back, beginning with economic depressions. The first was tremendously successful during the Roaring Twenties. The second was a disaster right through the Dirty Thirties and well into the forties. Go back and take another look at the two previous charts in this essay and then answer this question, American neighbor: If it was possible to magically start another decade right this moment that could mirror either the Roaring Twenties or the Dirty Thirties, which one would you choose? Obviously the only rational choice would be the Roaring Twenties! Am I right, American neighbor? Am I right?!? (Certainly, Henry Morgenthau, if he were alive today would choose the Roaring Twenties.)
But do you think the Roaring Twenties would be Barack Obama’s choice? What about Nancy Pelosi? Do you think she would choose the Roaring Twenties over the Dirty Thirties? What about Harry Reid? How about Paul Krugman? Do you think the members at Daily Kos would vote for the Roaring Twenties? Al Gore? John Kerry? Hillary Clinton? Do you think the NY Times would publish a front page editorial demanding the Roaring Twenties? What about ABC, NBC, CBS and CNN? The Rolling Stone? The New Republic? Time Magazine? The Huffington Post? What about all of those liberal historians that think FDRHoover was just so damned great? Would any of them choose the Roaring Twenties over the Dirty Thirties? You know they would not, American neighbor. Their scoff reflex would kick into high gear and they would gladly choose a decade of utter misery over a decade of regaling prosperity if it meant not abandoning their beloved FDRHoover and their liberal ideology. After all, choosing the Roaring Twenties would mean to them an admission that their liberal command capitalism was an absolute failure, and give conservative demand capitalism the credit it deserves, but because they all play monumentally stupid, they would choose that America again go through the utter misery of ten thoroughly rotten years of the Great Depression’s Dirty Thirties rather than admit their ideology is wrong and conservatism is right. Don’t believe me, American neighbor? Read this: [*72jw4oz]an
• Fascists buy elections
There is one more reason that liberals would choose the Dirty Thirties. FDRHoover bought elections with deficit spending. Yeah, you read that right, American neighbor. How the hell do you think that he and the Democrat congress kept getting re-elected with an average 29.2% nonfarm unemployment? It sure wasn’t because of their performance. FDRHoover strategically spent massive budget deficits purchasing voter blocks necessary to keep power. This too is what fascists do to gain and keep control. [3uppe9p] Don’t you think President Obama and congressional Democrats want to do the same thing, American neighbor? The debt is out of control. Their stimulus spending has never worked (this will be conclusively illustrated later in this essay). The country is caught in an economic malaise with no end in sight. And yet all liberals want to do is raise taxes and spend even more! Is this FDRHoover madness or conniving? Both!ao
• The ‘ratchet effect’
But what is to stop America from choosing the consumer demand capitalism of Hardingnomics right now, American neighbor? We may not be able to magically reinvent the Roaring Twenties, but we can certainly employ the economic strategy that produced it – austerity: cut taxes, cut regulations, cut government spending, cut the size of government, additionally, cut the corporate welfare of modern corporatism and sign more free trade agreements. There is an economic thesis called the “ratchet effect” that postulates a consistent result of large growth in government during calamitous economic events. In fact, this has been true throughout virtually every economic event in the past one hundred years in America. The single significant exception was the 1920 Depression, where Hardingnomics brought about a decrease in government size which resulted in huge budget surpluses and the greatest economic recovery in American history. This is what is needed now. Unfortunately in relative terms America has again chosen the repeated failure of government command capitalism – FDRHoovernomic’s progressive-fascism (or more specifically to today, carrot and stick capitalism). Again we see the “ratchet effect” of government expansion. President Obama is more wedded to that disastrous economic plan than any President has been since FDRHoover protracted the Great Depression with it and turned the 1930s into the Dirty Thirties. When will America wake up and choose leaders willing to make hard, economically and historically correct decisions? How about you, American neighbor? Have you woken up?ap
• FDR – follower
So, American neighbor, can you explain to me this irrational thinking that places FDRHoover as one of America’s best Presidents and Warren G. Harding as one of the worst? First explain to me the difference between Herbert Hoover and FDRHoover and then maybe we can have that discussion. Both Presidents turned out to be progressive nanny-statists who distained the laissez-faire economics of Harding and Coolidge that brought on the Roaring Twenties, and instead thought that a big, intrusive government of FDRHoovernomics was the solution, when in fact their progressive-fascist big government policies were the problem. That’s why Morgenthau said, “I say after eight years of this Administration we have just as much unemployment as when we started.” Why would he say “eight years” which dates back to 1931, two years before FDRHoover became President? Morgenthau had only been Treasurer since 1934 so obviously he meant “administration” as a small “a” in a generic sense, because of course, the New Deal was an extension and expansion of the manipulation of the economy, continuing Herbert Hoover’s progressive-fascism. You see, American neighbor, FDRHoover was hardly a leader – he was a follower. First, he followed Hoover’s campaign strategy of promising smaller government. Then, when he became President he switched just as Hoover had, to instead follow Hoover’s government command capitalism economic policies. Remember our “Brain Trust” quote from above:
~ “We didn’t admit it at the time, but practically the whole New Deal was extrapolated from programs that Hoover started.”~ [4aecqf3]
Self explanatory, American neighbor. Of course we also saw in #6 Tyranny Versus Liberty, that FDRHoover was not beyond following communists, fascists and nazis either (as did Hoover):
~[FDR] invented nothing in the New Deal. This is his greatest achievement. He combined … familiar elements so calmly and with so friendly a smile, that even after a year of the New Deal there are still people who do not realize that a revolution has taken place. … Roosevelt had the benefit of several other great national experiments as useful points of reference for the American New Deal. He had before him the spectacle of the Soviet Union with its recent dramatization of economic reorganization through the Five-Year Plan. He had before him the example of Fascist Italy with its regimentation of business, labor and banking in the ‘CorporativeState.’ He had before him the instances of Kemal, Mussolini and Hitler in restoring national pride and self-confidence to beaten or dispirited peoples.~ – John Franklin Carter, a personal friend of FDRHoover in his 1934 book The New Dealers [39bnmad]
And then he followed Woodrow Wilson’s precedent of delaying the entry into the war. And then finally he followed Great Britain’s Prime Minister, Winston Churchill into WWII. Even when FDRHoover interned Japanese Americans during the war he was only following Hitler’s lead with the Jews. (Well at least he was smart enough not to gas them, but how smart did one have to be for that? He just confiscated their properties.)aq
• FDR – one original thought
FDRHoover never had an original thought as President. OK, OK, maybe he did have one original thought. From a letter to Luther C. Steward, President, National Federation of Public Employees:
So FDRHoover’s one original thought was that government employee unions were a lousy idea – he didn’t want to share government power with the unions. (And again – how smart do you need to be to realize what a lousy idea it was, especially today after seeing what unions have done to today’s budget deficits and debt obligations at the federal, state and local levels?) But don’t forget, that’s just one original thought in a twelve year Presidency! (And they said W was dumb – sheesh!)ar
• FDR learned nothing from before him
FDRHoover obviously learned nothing good from Woodrow Wilson’s progressive follies, nor Herbert Hoover’s progressive-fascism, nor Warren G. Harding’s success in cutting short a severe depression. If FDRHoover was so great, it was obviously only because he followed so closely in the footsteps of an even greater President who first laid out his path for him – Herbert Hoover. [cough! cough! /sarcasm on the great part] FDRHoover and Hoover set the country back a full ten years. I’d say FDRHoover wasn’t exactly blessed with intelligence, but afflicted with the same contrariness to common sense that plagues today’s liberal historians (no wonder they like him so much). FDRHoover was a control freak. NIRA was ten thousand pages of progressive-fascist control, for gawds sake! He demonized business and the private sector with class warfare, and punished them at every turn (except of course for his favored allies – just like the Euro-fascists did). He wanted almost all of American society under the government thumb. In fact, FDRHoover comes off as a sort of corrupt charlatan-dunce. His one ability was that he was charismatic enough to convince America (bolstered through purchasing their votes with government programs) that he and his political twin brother’s FDRHoovernomics and their resultant depression and malaise were as good as it would ever get and that Americans should be satisfied with it. He was a tyrant with a soothing voice who purchased and convinced the majority of Americans that his anti-constitutional, anti-liberty, anti-founding fathers, anti-limited government, anti-American, progressive-fascist policies were good for America. Hardly what I’d rate as a top three President – closer to a bottom three.
But really, American neighbor. For the last forty-plus years contemporary liberals have worshipped at the feet of FDRHoover, when in fact their real hero was actually Herbert Hoover (and European fascists). FDRHoover was just a facsimile of Herbert Hoover, but with much larger aspirations. FDRHoover lied his way into office so that he could steal Herbert Hoover’s ideas and turn the country into a progressive-fascist tyranny with him as the head fascist. Why do you think he ignored the two-term presidential tradition? He didn’t care about America – he cared only about power. The irony is that the depression gave him the opportunity, but the war took it away, and then his own death removed any chance of a return to his New Deal progressive-fascism. And that irony is even more prescient when you know that FDRHoover, the most fascist President in America’s history, while calling for the implementation of more fascism with his Second Bill of Rights called the Roaring Twenties (the free-est period of the last one hundred years) “the spirit of Fascism here at home.” [BIG WTH moment!] So when some liberal claims that FDRHoover was just so great, you now know that they are actually talking about FDRHoover’s inspiration, Herbert Hoover – whether they know it or not.
Can you now see how liberals play utterly stupid when it comes to FDRHoover, American neighbor? And they play stupid about the Great Depression and the Dirty Thirties. And the New Deal progressive-fascism of FDRHoovernomics. And the Roaring Twenties. And the consumer demand capitalism of Hardingnomics. And rating Presidents. And deficit spending. And … is there anything liberals don’t play stupid with? Let me know if you find something, American neighbor… [/hair-pulling exasperation]as
• Chicken bones & gumps
If any one group in society today represents the shamans of primitive ages, it is economists. Two of the predominant roles of the shaman were to ward off evil spirits and see into the future. These are virtually exact definitions of the economist’s role in today’s society. They attempt to direct companies, institutions and governments to avoid economic calamities by predicting appropriate solutions. There is one kind of shaman that particularly parallels liberal economists – the psychopomp. The psychopomp acts as a bridge between spiritual realms. [2mehrg] This is how liberal economists see their role in society, as expert diviners of chicken bones able to tell the future, not just to maneuver economic policies for best results, but to ward off the evils of the free market through bridging the gap to a better spiritual place of government control. The job of liberal economist psychogump (the modern day psychopomp) is considered a sacred calling (by themselves, anyway) to guide society to utopia, so instead of basing their projections into the future on historic and current economic and societal information, the psychogump makes the leap into the spiritual realm, attempting to influence the market and governments to institute utopian policies based solely on ideological dogma and goals by reading chicken bones thrown onto the ground. The psychogump is a medium to the spiritual realm of orthodox economics and its fundamentalist belief in a manufactured utopia. [*yge5cde] Those economists who do not hold such views are considered heretics by the occult of psychogump economics, but it was the heretics that projected the financial crisis of 2008 and the following malaise. Remember our definition of a heretic:
~ “A heretic is a man who sees with his own eyes.”~ – Gotthold Ephraim Lessing
The psychogumps had put their groupthink faith in government manipulation of the marketplace to produce utopia. The few heretics who stood on the street corners with their sandwich boards of doom warning of the coming apocalypse were ridiculed and maligned by the exalted psychogump priesthood. Remember our definition of an economist from the MCTE: “An economist is a master at excusing tomorrow their projection from yesterday that failed today.” But there is one little phrase that may even better define economists – >”than economists expected”<. Try a Google search with the quotation marks. Almost nothing seems to come out as most economists expect. Here are some examples; “fall more than economists expected”, “faster than economists expected”, “narrowed more than economists expected”, “drops more than economists expected”, “larger than economists expected”, “faster than than economists expected”, “better than economists expected”, “lower than economists expected”. And that’s just the first Google results page! There are 33,000 more pages!!! So I thought, is this fair? So I figured we should compare “than” with “as” and get the other side of the story. And I thought of some more words to expand our sample. Here’s the results I got:at
• Table – economists
That’s 895,600 results for “than” and 176,220 results for “as”. This works out to a 5 to 1 ratio of failure. As an example have a gander at these links exploring the prognostications of the most exalted Grand Poobah of all psychogumps: [*6xfpc22, *64538w4] So now you have an idea of the value of most economists’ projections when they claim to know what the future holds. And now you also know why economists aren’t billionaires. And now you also know why the exalted psychogump priesthood so blindly walked America and the world into the financial crisis of 2008.au
• Psychogumps misread their chicken bones 1
Who do you think contemporary American liberals rely on to support their views of how the economy supposedly works, American neighbor? They rely on the psychogumps to provide them credibility when liberals claim that, for example, tax cuts cause deficits, restrict employment growth, and hinder the economy. Here is an example: [4y6x35u] In February 2003, 450 exalted psychogumps got together in a mass dance-around-the-fire-and-orgy ritual (or at least it was rumored – [wink]), and then signed a petition delusionally-paranoid-statement of objection to President Bush’s planned tax cuts, insisting the cuts would cause higher deficits, decrease the gap of taxes paid between the rich and the poor, and insisted they were not the answer to unemployment and a slowed economy. Strictly based on their ideology (and their chicken bone readings) these psychogumps worked themselves up into a state of euphoric paranoia about the proposed tax cuts. But what did we find in N.C. essays #8 and #9 when we examined the results of the Bush tax cuts? (800 pound gorilla alert!) We found that everything the psychogumps predicted would happen was exactly 180 degrees out of phase from the actual results. Government revenues went up and did not cause the deficits – increased government spending did. We also found that the gap between taxes paid by the rich as compared to the poor increased, not decreased. Eight million jobs were created over the next four years and the unemployment rate was reduced to 4.6% by 2007. The percentage of the potential labor force employed rose for four years after having fallen since the last year of the Clinton administration, and the economy continued to expand until the housing bubble began losing steam. In other words, the 450 exalted psychogumps completely misread their ideological chicken bones. Every single psychogump projection was wrong. Do you think it was that they just misread the market, American neighbor? If they had cared to look, as we have, they would have found what we did – that the history of tax cuts correlates with increased government revenues, increased employment, increased economic growth, and an increased proportion of taxes paid by the rich. No, American neighbor, the psychogumps made their projections based on their fundamentalist ideology paranoia, not based on sound economic research – just as the anonymous psychogump I discussed oil with had predicted a jump in the price based on his fundamentalist ideological beliefs paranoia. Their projections were right out of the Harvard and Princeton Department of Economics faculty lounges based on elegant theories of how psychogumps think the economy should work, not on how it actually works as illustrated by history.av
• Psychogumps give bad advice to their employers
Obviously for these psychogumps to so publicly sew doubt into the marketplace, most or all must have also given erroneous recommendations and advice at their places of employment, possibly causing serious financial damage to their employers, or at least restraining their employers from making what might have otherwise been profitable business decisions. Many others were undoubtedly college professors teaching their junk occultism to their students who are now giving the same sort of erroneous advice to their employers. How much additional damage did they do to the marketplace as a whole with their very public campaign of doom and gloom paranoia undermining the confidence of investors and the business world? Could the Bush recovery have been even stronger if these ideological psychogumps had just kept their dumb yaps shut? Could the otherwise additional confidence and robustness in the marketplace have significantly softened the blow of the 2008 financial crisis, and led to a quicker recovery with much less unemployment now? And maybe there would have been a different President elected in 2008 that wouldn’t have bought into their psychogump nonsense, prolonging, deepening and taking ownership of the Obama Malaise, as the present one has? Yes, American neighbor, there have undoubtedly been many likely negative ramifications from the erroneous prognostications paranoid predictions of these 450 wannabe prophets of doom. To at least some extent their ideologically motivated doubt paranoia has been sewn into subsequent economic events and they must at least partly share in the blame for where the economy is today in 2012.
So what do you think happened to those 450 exalted psychogumps, American neighbor? Do you think that the twenty-four Nobel laureates gave back their prizes in shame? Do you think the 450 psychogumps were fired from their jobs for their public incompetence and contribution to today’s Obama Malaise and are now unemployed or working at carwashes or as parking lot attendants, more commensurate with their understanding of the economy? No, I doubt it either. They are alpha liberals – it doesn’t matter that what they said should have been career-destroying. They probably got raises and promotions for their noble motivations in their brave paranoid fight against evil conservatism! If they didn’t run the Harvard and Princeton Department of Economics programs at the time, some of them most assuredly do now.aw
• Obama’s stimulus program
Who was the economic genius behind the Barack Obama stimulus package known as the American Recovery and Reinvestment Act of 2009? Shouldn’t they have been hailed and celebrated for the supposed success of that plan? After all we were told that:
~ “One year later it is largely thanks to the Recovery Act that a second depression is no longer a possibility.”~ – Barack Obama [25qq2ff]
This is an example of psychogump-talk. Now think about this statement, American neighbor. If this were true it would have been a monumental accomplishment in world history. As bad as the recession and following Obama Malaise have been, if it had truly turned into a “second depression” at that time the misery in America would have been immensely magnified, but claiming to have prevented another depression is sophistry, American neighbor. We have seen that the Great Depression had losses in the millions of total nonfarm jobs. But Obama’s own definition of a “second depression” was a creation of a million jobs! (I am not kidding – more later.) Couldn’t George W. Bush then claim to have prevented another depression after inheriting the tech bubble bust from Bill Clinton? Or could it not be claimed that Reagan prevented a depression developing from the stagflation he inherited from Jimmy Carter? And then there is this: There have already been numerous depressions in America’s history, the last of the nineteenth century having been known worldwide as the Long Depression that in the United States began with the Panic of 1873 and lasted until 1879. The first one of the twentieth century was the Depression of 1920–21 following the First World War. The second, of course, is the Great Depression of the 1930s. With the above statement the President was heralding a supposedly monumental economic achievement in the history of America, and either no administration psychogumps bothered to tell him that he was ill-informed about America’s economic history, or his advisers were as clueless as he was. This would not have been a “second depression”. It would have been a fourth depression just in the last 137 years. [3zdurq] The “second depression” in American history started in 1815, and I am sorry to say that Obama’s stimulus package didn’t prevent it – the malaise lasted for six years.
Does this sound like an administration that thoroughly researched the current situation and compared it to historic events, as could be reasonably expected before making such a messianic statement? Tell me, American neighbor, does this statement sound like it was written by economic advisors to the President who knew a little bit about what they were talking about, or isn’t it more likely that this was a propaganda product invented by alpha liberals – economic illiterates from a political strategy session with no economic adults in the room? Do you actually believe that the economist most responsible for the implementation of the stimulus program would have signed off on such a statement? And if she did, what would that say about her?
We know it was a political statement and not an economic statement because Barack Obama has admittedly done it before. In 2006 then Senator Obama said of raising the debt ceiling when Bush was President:
~ “The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. […] Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.”~
Of course, we also know that President Obama did a 180 degree flip flop on this. Here was his explanation of his “leadership failure” by which he has created trillions in additional federal debt:
~ “I think that it’s important to understand the vantage point of a Senator versus the vantage point of a…President. … And so that was just a example of a new Senator, you know, making what is a political vote as opposed to doing what was important for the country. And I’m the first one to acknowledge it.”~
So the Obama fully admits to voting politically on an important economic policy. My question then is: Why should we not believe that everything he does as a politician is done for political gain instead of putting the country first? And isn’t it interesting that Obama did exactly what FDRHoover did, calling down the leadership of the previous President, and then following in his footsteps and doubling down on his worst policies of bailouts, subsidies, over spending and excessive government expansion?
But if what Barack Obama said was true about preventing a depression, shouldn’t that someone who put together his stimulus plan have gotten a Nobel prize for economics? How many times does a challenge like averting a worldwide depression come along in history? So who was this mystery economic genius? Apparently it was Christina Romer, Chair of the Council of Economic Advisers for the administration. She along with another economist were the architects of the so-called recovery plan, so when will she receive her Nobel prize for economics? She won’t. She didn’t win. Apparently no one thought that averting only the second economic depression in the history of America was important enough to even bother nominating her. [/sarcasm] She resigned from her chair position ostensibly for family reasons (aren’t they always?), before her stimulus projection target date was even reached. (Another 800 pound gorilla alert!) Her stimulus plan was a total, miserable failure that, if anything, correlated with a reduction in total employment and a limiting of economic growth. If there was ever a chance of another depression, Obama’s stimulus package would have been a contribution to its development (and still might). I will explain, American neighbor.ax
• No stimulus program goals were met 1
The details of the American Recovery and Reinvestment Act of 2009 were farmed out as an NGO creation of the Apollo Alliance, a liberal group dedicated to utopian dreams. Democratic Senate Majority Leader Harry Reid had this to say in announcing the package:
~ “This legislation is the first step in building a clean energy economy that creates jobs and moves us closer to solving our enormous energy and environmental challenges. We’ve talked about moving forward on these ideas for decades. The Apollo Alliance has been an important factor in helping us develop and execute a strategy that makes great progress on these goals and in motivating the public to support them.”~ [2whg2ay, *brkek6o, *cwomjlo]
This is more psychogump-talk born of the naive utopian optimism in psychogump economics which is of course devoid of any contextual research or rational analysis. Everything in this statement resulted in utter failure (read the second and third links). The stimulus program achieved NONE of these goals. In fact the green strategy was such a failure that Obama never even mentioned it in his speech presenting his second stimulus proposal in September, 2011. Government subsidized ethanol and biofuel production, and other green energy sources have been a terrible ongoing disaster, driving up the price of food and other goods, and costing net jobs rather than creating net jobs (remember we dealt with this in #6 Tyranny Versus Liberty). Here’s another specific example of its failure and cost to Americans taxpayers: [*4o9vjqj] Vice President, Joe Biden said of the $500M Solyndra loan at the time:
~ “This announcement today is part of the unprecedented investment this administration is making in renewable energy and exactly what the Recovery Act is all about.”~ [3fmxhew]
Ain’t that the truth, American neighbor? Watch this video and keep in mind that Solyndra went bankrupt just over a year after this Obama speech, resulting in over $500M of taxpayers money being flushed down the drain: [*74k8qf2, *8yv98et] (Definitely watch the video in that second link as well.) And here’s another couple. Read to the bottom of the first link where it says $65M in grants have created a whole 72 jobs. The second link is even more astonishing! [*3bf2vbq, *43jty3x, *7pmwsvb] The third link illustrates that the green energy scam was really about paying back bundlers for Obama’s campaign war chest. [rolls eyes] This is just more of FDRHoover’s progressive-fascism.ay
• Dishonest stimulus numbers
Also, remember back in #3 Groupthink Truths Versus Self-evident Truths, where we discovered how government determinations of budget deficits and surpluses turned out to be a snake oil salesman’s delight. Employment and unemployment numbers are used in a similar fashion when unemployment is high. For instance, when you hear that the unemployment rate is 10%, it is not that 10% of people that wish to work can’t find a job. That 10% represents only those who are supposedly actively searching for a job. You see, American neighbor, it does not include those who have given up or have accepted lesser part time employment to help fill the gap (which could add up to another 10%!). It also means that while the original 10% number could slip to 9.8% from one month to the next, indicating an apparent improvement in the jobs situation, in fact it might mean that more people gave up looking for work than found a job, so while the unemployment number went down and looks better, the jobs situation actually got worse! [*26nzuqm, *6jqgbhl] This is just more psychogump-talk designed to manipulate and obfuscate. Here’s another one. If you owe money on two separate credit cards and you have $500, would it be honest to allocate $500 to each credit card in your monthly budget as if you actually had $1000, American neighbor? Of course not. It would be both dishonest and utterly stupid. But this is exactly what the administration has done with Obamacare to make it seem affordable. Of course, conservatives have been talking about this since Obamacare was passed into law, but here in a video Health and Human Services Secretary, Kathleen Sebelius who is in charge of Obamacare openly admits to the lie: [*5vkek7j] Yawn – of course she still has her job, American neighbor. Lying to the American people about half a trillion dollars to advance a corrupt ideological agenda is not nearly enough to hold against a liberal.az
• Stimulus snake oil – ‘jobs saved or created’
Well, as it turns out there is more than one way to sell unemployment snake oil. The Obama administration has come up with another wonderful new sophistry of psychogump-talk to self-congratulate the President for a supposed job-well-done. It is the simple but deliberately deceptive little term – “jobs saved or created”. But this doesn’t exactly pass the smell test either. No administration has ever before utilized such a nebulous term such as this. In fact, it sounds like it came out of that same psychogump-talk political strategy session that produced the vacuous, “a second depression is no longer a possibility”.
Remember when the global warming hockey stick graphs were proven to be frauds, American neighbor? (If you have lived in a cave for the past couple of years – or as a liberal – and didn’t know this, I will explain it all in a later essay.) It turned out that the computer models used would produce the desired hockey stick shaped graphs even if random data was entered into the programs. In other words the results were preordained by the programming. How convenient. [/sarcasm] The Congressional Budget Office, the official number cruncher for the federal government apparently thought that sort of sleight of hand was a dandy trick, so they employed the same tactic for President Obama’s $862B stimulus legislation (so did the independent psychogumps). [*y98ynu5, *3444jtj] Then, with a straight face the administration claimed that it “saved or created” up to 2 million jobs during the first year despite all empirical evidence to the contrary. [yd3ozb3] These phantom jobs were not actually jobs counted and measured, but instead were calculated with a slippery sleight of hand using slick computer programming. That is why the wide “estimate”. How convenient again. [/sarcasm again]
So how did Obama’s computer model work out for him? Surprise! It claimed that his stimulus package “saved or created” 2.5 to 3.6 million jobs in the first sixteen months! [74fjdpv] Naturally, liberals were ecstatic about these supposed results and no less than esteemed Noble winning psychogump, Paul Krugman of the NY Times (the Mr. Haney of economists [34m55kl]) pushed for another even larger stimulus package. Indeed, the administration was so confident in their “expert” abilities to manipulate the marketplace that Vice President Joe Biden in April of 2010 bombastically psychogump-talked, “Well I’m here to tell you some time in the next couple of months we’re going to be creating between 250,000 jobs a month and 500,000 jobs a month.” [2c26kvn] After that there was the psychogump-talk announcement of the “Recovery Summer”. Both Biden’s prediction and the so-called Recovery Summer were dismal failures. Considering that liberal governments have this propensity for fudging numbers and throwing out psychogump-talk to make a given situation look rosier than it actually is, maybe it might be a good idea to look at some hard empirical evidence before throwing another trillion plus dollars at the problem as psychogump, Paul Krugman would like.
Let’s compare how these “3.6 million jobs saved or created” stack up with the administration psychogump projections of what would happen. In February 2009 when the American Recovery and Reinvestment Act of 2009 [dzsmpq] was first implemented, total nonfarm employment was 132.8M (million) workers. [n8g5cl] The administration (specifically our wonder wizard, Christina Romer – Chair of Economic Advisers) in January had released a document projecting employment creation expected from her stimulus package. [36bkbq3] This document was the result of administration economists who projected employment totals for the fourth quarter of 2010. They insisted that the lines representing total employment would just keep getting longer, but something didn’t quite jive between their theoretical computer calculation of “3.6 million jobs saved or created” and the actual amount of real employment in the marketplace:ba
• Graph – U.S. Total Nonfarm Employment – projections vs. reality
Now what’s wrong with this picture, American neighbor? The actual numbers and lines don’t seem to match up with Christina Romer’s expectations. Not only is the actual total employment number for the fourth quarter of 2010 lower than what was projected WITH the stimulus package, it is also lower than their own projection if they had NOT implemented their stimulus package (this is what the employment total was supposed to be if the “second depression” had supposedly been allowed to develop). But, incredibly, it is even lower than when they first implemented the stimulus package in the first place! (This means that their actual result was even worse than a “second depression” by their own definition!) In fact, during that first year when 2M jobs were supposedly saved or created, the employment totals in America went down every month for twelve months in a row! [rolls eyes] Did you get that, American neighbor? How the heck does the President claim that 2M jobs were “saved or created” in the first year when the total amount of nonfarm employees in America went down every month for twelve straight months?!? [n8g5cl] Then just four months after that, the Obama administration and sycophantic liberals insisted that there were “3.6 million jobs saved or created” by the stimulus package and that it averted a “second depression”. Actually some of the President’s psychogump snake oil salesmen, the Council of Economic Advisors, concluded that the stimulus package “raised employment by 2.5 to 3.6 million jobs relative to what it otherwise would have been.” You cannot get more snake-oil-slippery than that, American neighbor (a statement truly worthy of Mr. Haney of Green Acres).
Update: It is now January, 2014 when I am writing this. The jobs number for December, 2013 just came out. The total is now 136.9 million. It is now three years past the stimulus target date of the fourth quarter of 2010. The target of 137.6 million jobs has still not been met – the Obama Malaise continues.bb
• Talking ‘net jobs’
Enter PolitiFact, a supposed fact checker – more like a fact chucker. They have taken this snake oil and applied it to every Republican that they can find. Somehow, in all of their supposed fact checking they managed to chuck the fact that total jobs went down. You see, American neighbor, it does not matter if fifty teaching jobs were created from stimulus funds somewhere in America someday. If on that same day 1,000 other people lost their jobs, it is disingenuous to pretend that the bottom line on the stimulus that day was that fifty jobs were created. What matters is the net amount over the selected time frame. The net effect would be that 950 people became unemployed – that is the story! That has always been the story – the net effect. Jobs are always coming and going. It is technically called churn. Jobs are created, jobs are lost, and workers are replaced by other workers. Using the psychogump reasoning of Mr. Haney we could probably find that some jobs were created somewhere everyday throughout the Dirty Thirties as a result of churn, but that wouldn’t make it a story of Hoover and FDRHoover as job creators. We saw earlier that the Dirty Thirties from 1931 to 1939 averaged 29.2% nonfarm unemployment and the unemployed totals went from 8M to 9.4M! Alternatively, if I say that the sun is setting, no one believes that I am literally saying that the sun is falling out of the sky – except at PolitiFact, apparently. Everyone knows that just to administer this behemoth stimulus package many new bureaucrats were hired by federal and state governments – obviously somebody got a job, even if only to manage the program! So when a Republican or any conservative says that the sun has set, and the Obama stimulus package “created zero jobs”, you don’t need to be Einstein to figure out that they weren’t saying that the sun fell out of the sky, and were talking net jobs – the only thing that really matters. Unless you are playing stupid, or really do believe that they were also saying that the sun actually does fall out of the sky – hello PolitiFact! (Or liberals – see the last link.) [3kw2qsx, 3s9f49t, 6ynvvky, ybfrxql, 2fdovuu, *73ue8uc] We here at Deprogramming Liberalism headquarters rate PolitiFact an Organization On Fire (for Obama).bc
• Obama stimulus plan worse than a ‘second depression’
Are you buying this psychogump-talk, American neighbor? Neither am I. Total employment went down, not up, so based on ACTUAL numbers instead of phantom CBO computer models (or any of the other models noted by PolitiFactChuck), the stimulus package was much worse than just a failure to fulfill its own projection. Not only did the stimulus package utterly fail to create any jobs, it actually correlates with an overall net job loss. By their very own definition it is even worse than the “second depression” they claimed to have saved the country from if they hadn’t implemented the stimulus in the first place! [palm to forehead] D’oh!
Originally the stimulus plan was supposed to cost $787B, but ended up costing $862B (do a search >787 stimulus cost 862<). We have seen in Christina Romer’s projections that it was supposed to create 4.8 million jobs at a cost of $180,000 per job created (no bargain by any standards), but in fact ended up costing $233,000 for every job lost! Did you get that, American neighbor? Using Obama’s own administration numbers they spent $233,000 of stimulus money for each one of the 3.6 million jobs (133.9 – 130.3) that his stimulus package admitted to destroying in the official projection release! Talk about incompetent! Yikes!
And it was even worse than you see, American neighbor. The economy needed to create 100,000 jobs per month just to keep up with the amount of new people entering the workforce each month. Not only did the existing jobs total decline, but the demand for jobs expanded by approximately 2.2M, so from the beginning of the stimulus plan to the fourth quarter of 2010 the actual deficit of jobs just to break even was actually 4.7M jobs! Yikes again! If we go back to when job creation began to stall in May of 2007 the employment total was 137.6M. From there to December of 2010 4.3M jobs needed to be created just to keep up with increased demand for a total of 141.9M. With an actual total of 130.3M that leaves an 11.6M shortfall of jobs from full employment at the end of the stimulus package projection timeline. Did you get that, American neighbor? How anyone can see 11.6M missing jobs as any sort of success for the stimulus package is beyond me. If this is success what the heck would failure look like?!? [hands over face, shaking head]
So much for supposed “jobs saved or created”. President Obama and liberals are living in a fantasy world where they play stupid that the stimulus package greatly improved the economy and employment, when it is patently self-evident that Obama’s policies have been a huge drag on the economy and actually cost millions of jobs – by their own numbers! And Paul Krugman wants MORE of this?!? Oh yeah – now I get it. Just like my discussion partner psychogump at the beginning of this essay who was unwilling to bet his own money on his own cocksure projection for the price of oil, Mr. Haney is not betting on another stimulus with his job, which is no doubt very secure with the NY Times. He’s betting with yours (if you’re lucky enough to still have one, American neighbor).bd
• The Obama permatemp worker & off the books recovery
It is even worse than this, American neighbor. What little recovery there has been has obviously not produced jobs, and even when some employment has been created it has seldom resulted in permanent, full time positions. Remember the so-called “Macjobs” of the Bush years where liberals attempted to downplay the George W. Bush era employment recovery of over eight million jobs created from 2003 to 2007 as only creating low wage MacDonalds type jobs? (Another liberal noble lie.) Well, today’s America really is worse than a “Macjobs” economy. [*4rhrfzs] It is now not unusual for an employer to lay off permanent workers, and when hiring again, instead go with temporary workers. These are called permatemp jobs. They offer no benefits, often less wages, less security of employment with easy hire and easy fire with no severance pay, offer little chance of promotion, may need the employee to purchase liability insurance, may leave an employee open to a negligence lawsuit if they cause financial damages at the workplace, and don’t look good on a resume. Pretty hard to make a career out of a temporary position. Have a look at this link and weep, American neighbor: [*283omtf] There is your Obama permatemp recovery (otherwise known as the Obama Malaise).
Update: Now in late 2013, since the beginning of Obama’s presidency 88% of all jobs created have been only part-time. Did that connect with you, American neighbor? Only 12% of all jobs created since Obama announced and implemented his stimulus plan have been full-time jobs! [mq3cvaw]
But it is even worse than that, American neighbor. America is now developing what is known as an off the books economy where a cash-only black market develops to avoid taxes and regulations, which then allows the underemployed a chance to make some income, and rocky businesses to stay afloat. It also means people stop paying their mortgages and attempt to draw out the foreclosure process while essentially paying no rent either. It basically forces people into breaking the law to survive. (I witnessed this first hand on a smaller scale when our national sales tax in Canada was implemented in 1991. Contractors especially were offering cash discounts to get jobs while the customer didn’t have to pay the GST.) This is indicated when cash circulation grows while individual income tax returns decrease by even more than the decline in the GDP. These workers are looking up to the permatemps – sheesh! This is starting to sound like an FDRHoover recovery! What’s next? Traveling by boxcar?!? [cwodevz, 779cn9d, 7v4oslt]
Update 2013: As the Obama Malaise lengthens, so does the off the books economy expand. The more the President makes legitimately working within the economy more expensive with higher taxes, more regulations and Obamacare, the more of the economy goes underground, thus additionally proving that Obama’s big government policies are not working – they are self-defeating.[*d8m84j5]be
• Psychogumps misread their chicken bones 2
Well, now we know why Christina Romer didn’t get a Nobel prize. Contrary to the administration’s psychogump-talk propaganda of saving America from a “second depression” with supposedly “3.6 million jobs saved or created”, the actual numbers clearly illustrate that their job growth projections were so far out in left field that they were mugged in the adjacent parking lot out back. And it is not just the administration and its economists that have some explaining to do – 200 independent alpha liberal psychogumps signed a letter to Congress that said:
~We the undersigned encourage Congress to pass quickly the American Recovery and Reinvestment Act of 2009 and stem the tide of rising joblessness.~ [c5mvxu]
Oops… But again, American neighbor, it is very unlikely any of these psychogumps were betting with their own jobs (I wonder if the anonymous psychogump I discussed oil prices with is on this list), and I see some of them are already Nobel prize winners. In fact, every psychogump on this list should be fired for incompetence. Why should they be able to play high stakes poker with the jobs of Americans and have nothing personal in the game? You don’t think that they would have all gladly taken the personal accolades if their projection had been realized? And as a matter of curiosity I wonder if they aren’t even now taking claim for “3.6 million jobs saved or created” and stopping a “second depression”. It is not like their projection didn’t work out with no harm done. The result of their wretched psychogump-talk advise was exactly the opposite of their projection! Many more Americans are now suffering than before the Democratic Congress took their advise. Why should there not be consequences? This is far more than just an oops. Every one of them should be fired immediately and replaced with economists who won’t be so reckless with other peoples’ jobs in the future. 200 more unemployed should be added to their own dismal results.
I bet they all fit our definition from above: “An economist is a master at excusing tomorrow their projection from yesterday that failed today.” I don’t doubt that any of them could produce some real paranoid doozers like, “It’s all Bush’s fault!” as if Bush was holding a gun to their heads forcing them to sign that congressional petition, or maybe Bush has a machine that directs the economy just like the weather machine he used to direct hurricane Katrina to hit New Orleans. Maybe it’s all a giant conspiracy because Bush called up his Bilderberg buddies and asked them to steer jets to crash into the recovery, or the new one is, it is all the Tea Party’s fault for holding Congress hostage! See, American neighbor? I can speak paranoid psychogump-talk too. [/sarcasm – sort-of]bf
• Liberals claim that ‘we should look at the facts’
What also gets me are these liberal bloggers that have flooded the internet insisting on lecturing us that if we would just look at the facts we would see how beneficial the Obama stimulus package was. So without actually looking at the documentation, projections or actual results, these bloggers instead parrot psychogump talking points as if they had done the research themselves. They adamantly claim that millions of jobs were created (when millions of jobs were lost), that there were hundreds of billions of dollars in tax cuts for individuals (they were temporary tax credits and rebates, many to people who don’t pay federal income taxes – BIG difference), and an increase in GDP (this projection was with the same kind of self-fulfilling computer programming as the slippery “jobs saved or created” programming – and again, how convenient). Then they plead with us, “See how well Keynesian economics works?” without having a clue what Keynesian economics actually is (see above). True Keynesian economic policies would be ten times better than the progressive-fascist FDRHoovernomics we have now, but of course Hardingnomics would be a hundred times better than Keynesianism.bg
• No stimulus program goals were met 2
So tell me, American neighbor, what was the stated goal of the stimulus program? You don’t borrow and spend almost a trillion dollars without a planned objective. It was stated to increase total employment in America from 132.8M to 137.6M by the end of 2010. So did the stimulus package meet its goal? On February 17, 2011 the then new White House press secretary passed his first real test of whether he could speak psychogump-talk to the American people with a straight face, insisting that the stimulus program had met its goals:
~ “The stimulus package recovery act contained within it goals. … Those goals have been met.”~ [4s2ufmj]
As we have seen in administration documents the stated goal was a total of 137.6M employed in America by the fourth quarter of 2010. When the fourth quarter of 2010 ended there were a total of 130.3M employed in America. What happened to the missing seven million jobs? Forget the Mr. Haney type weasel words “a second depression is no longer a possibility” and “jobs saved or created”. Did the program meet its own stated objectives? No. It was a complete and utter failure! And what does this say about the Obama administration? They are willing to play stupid with the most important concern of Americans today. So Obama is willing to lie to himself and apparently so are those under him. And Obama is willing to lie to you, American neighbor. He is counting on you playing stupid right along with him, and of course Obama is counting on his sycophantic orthodox media and blogger friends to cover for his lie to the American people. That is a given. Nobody plays stupid better than the orthodox media and liberal bloggers – except maybe psychogumps and liberal historians. (This link illustrates the orthodox media’s sycophancy from the unemployment side of the administration projections. I bet MRC would find even fewer stories from the side we covered of the stated goal of total employment, which I think is much more revealing than the unemployment rate: [*48ebsad]) But if this President can play stupid on something as important and easy to verify as this, how can he be trusted to properly and honestly address any problem in America? Can you not see how delusional this is, American neighbor? If every failure is counted by this President as a goal met, there is little hope for America until he is replaced. He will play stupid with every single issue, because that is what liberals do with their unintended consequences. They hold up the trophy of victory, high-fiving themselves in celebration, while the country swirls down the toilet bowl.bh
• Haney family members think the stimulus program worked great
Mrs. Haney, Nancy Pelosi is also an expert at psychogump-talk and playing stupid: [*4fqx73y] She thinks that the two and a half million less jobs than when stimulus began and the seven million less jobs than the stated objective “was definitely worth it”. This begs the question, what would it take for her to see it as not worth it?!? Well, here is what she thought was worth it: Obama’s own hand-picked psychogumps selected to play stupid with the numbers have admitted fabricated that every fictional job supposedly created cost $278,000 each. [3bf62xc] So even by their own fanciful numbers the stimulus was hardly “worth it”. But, of course, we have seen it was much, much worse than this. The administration spent almost a trillion dollars of borrowed money supposedly to create 4.8M jobs, and instead 3.6M jobs were LOST from there own projection if they had done nothing! They actually spent $239,000 of borrowed money for every job they cost the economy – by their own numbers!
Mr. Haney’s genius brother, Vice President Biden also knows how to do psychogump-talk. From October 23, 2011: “Nobody can look you in the eye and tell you that the Recovery Act and that stimulus did not create jobs and did not do very good things for the economy.” [6dce4q4] There were 132.8M employed when the stimulus package was implemented. As of September, 2011 there were 131.7M total workers in America. [n8g5cl] What kind of arithmetic is Joe Biden using? Grade five students could do the math, then look Joe Biden “in the eye”, and correctly tell him that the “stimulus did not create jobs”!
And here we go again. Now in 2012 an internal memo has surfaced from psychogump Lawrence Summers, former Director of the Obama White House Economic Council that made employment projections from variously considered stimulus packages:
Of course, Obama chose the $890B stimulus plan and by the first quarter of 2011 the country had lost over two million jobs. Psychogump Lawrence Summers resigned in disgrace about the same time as psychogump Christina Romer resigned in disgrace, and no, he did not win a Nobel Prize either. More epic failure. [7tgzfr4] bi
• Unarguable Evidence of Obama Stimulus Failure
Unarguable Evidence of Obama Stimulus Failure
As if you need any more evidence of the utter failure of this President to enact a successful strategy to get the economy moving, here are more graphs that literally SCREAM out for a new President in 2012. All of the last nine recoveries after recessions have resulted in a growing labor force, except this present one. As illustrated, Obama’s stimulus package has resulted in less jobs, not more. The first three graphs at the right all confirm that finding and each other – the third one I call the Obama Hockey Stick Graph: [*877mo2u, *7a2m2po, *6wrqdem] This next link sums up the accumulated failures of Obama’s stimulus plan quite nicely. However, I’m not sure how they got a GDP increase of 6% from 2009 to 2011 (they probably rounded up the non-inflation adjusted number up from 5.6%). [*889fp4n] This is what I found (fourth graph at right) with Real GDP numbers (inflation adjusted – considered more precise); an utterly dismal 1.2% GDP increase in three years. [7aj6bng] If we compare that to Bush’s tax cuts recovery plan, from 2003 to 2005 (Democrats resisted allowing Bush to fully implement his plan until 2003) there was a 9.1% GDP rise, a rate 7.5 times greater than Obama’s! [6r3sc4c] Looking at Reagan’s tax cut recovery plan, from 1983 to 1985 (as with Bush, Democrats would not allow Reagan to fully implement his plan until 1983) it produced a 15.8% GDP increase, an astounding 13 times greater than Obama’s!!! [78qg6hc] Again, can you spell F A I L U R E in capital letters, American neighbor?
Home ownership (fifth graph at right) continues to plummet: [*6r9swt3]
And so do median incomes (sixth graph at right): [*8m7a67d]
Look, American neighbor. The results of the real estate bust and financial crash were severe, perhaps even worse than first thought, as President Obama uses as an excuse. But Barack Obama was elected based on many lofty, confident promises. It is simply not enough to just blame Bush and expect to be excused from one’s own responsibilities. If Obama and his advisors underestimated the severity of the resulting malaise, that speaks directly to their lack of competence. And the fact that they have refused to change course even with history providing a roadmap to recovery, but instead are stubbornly holding to their failing strategies, all the while claiming success, speaks of a man who values being seen to be right more than getting it right. This relates directly to Richard Hofstadter’s observation from The Paranoid Style in American Politics, first noted in #5 Bouncing Around Inside a Liberal’s Head:
~A distinguished historian has said that one of the most valuable things about history is that it teaches us how things do not happen. It is precisely this kind of awareness that the paranoid fails to develop. He has a special resistance of his own, of course, to developing such awareness, but circumstances often deprive him of exposure to events that might enlighten him—and in any case he resists enlightenment.~
Enlightenment from a look at history plainly tells us that the correct course of action to cure America of its current Obama Malaise and decline in world standing are the austerity measures of the Roaring Twenties and not the government expansion policies of FDRHoover. Has there ever been a President so immensely and arrogantly confident of his abilities who has delivered so pathetically little? Since Obama’s inflated ego has not allowed him to admit to the unmitigated failures of the first three years of his administration, and then adjust course, it is imperative that he be replaced with someone who will. In fact, by his own admission he should resign in disgrace: [*7o9bd39]da
• 4 1/2 years – 8 job creation kick starts – all failures
Want more evidence of Barack Obama’s failure? Read his own words. Eight times he has announced that he is going to focus on creating jobs. Nobody believes him. He doesn’t even believe himself. It is just platitudes to encourage his base to stay onside. [m4z3sbq, kg7yd87]
~February 2009: The president tells Congress “now is the time to jumpstart job creation” and his agenda “begins with jobs.”~
~November 2009: Meeting with his Economic Recovery Advisory Board, the president says his administration “will not rest until we are succeeding in generating the jobs that this economy needs.”~
~April 2010: Obama goes on a “Main Street” tour, saying “it’s time to rebuild our economy on a new foundation so that we’ve got real and sustained growth.”~
~June 2010: The president declares a “Recovery Summer” to highlight the jobs created by stimulus-funded infrastructure projects. “If we want to ensure that Americans can compete with any nation in the world, we’re going to have to get serious about our long-term vision for this country and we’re going to have to get serious about our infrastructure,” he said.~
~December 2010: The president tells reporters “we are past the crisis point in the economy, but we now have to pivot and focus on jobs and growth.”~
~August 2011: After lawmakers reach a compromise to avert default, the president vows “in the coming months, I’ll continue also to fight for what the American people care most about: new jobs, higher wages and faster economic growth.”~
~February 2013: At the start of his second term, the president refocuses on job creation in his State of the Union address, saying “a growing economy that creates good, middle-class jobs–that must be the North Star that guides our efforts.”~
~May 2013: Kicking off his “Jobs and Opportunity Tour,” the president says “all of us have to commit ourselves to doing better than we’re doing now. And all of us have to rally around the single-greatest challenge that we face as a country right now, and that’s reigniting the true engine of economic growth, a rising, thriving middle class.”~
• Marketplace need & demand
Liberals think that because the rich won’t spend their riches to stimulate the economy during this Obama Malaise, it is because the rich just want to hoard their money because they are greedy. Liberals erroneously think this because they do not understand human motivations and the difference between need and demand in the marketplace.
In the marketplace, need and demand are not at all equivalent. Demand is a result of perceived affordability. Without perceived excess money to buy new goods or services there is only need, but no demand. Need is an excess of debt and/or a lack of necessities and/or fear of loss. Affordability is having perceived financial wealth in excess of perceived need, whether as cash, manageable credit or some other valuable commodity. Demand can only come from existing wealth that exceeds perceived need. If need exceeds wealth, then any additional money acquired goes to paying down need and no new demand is created. To create new demand, existing wealth in excess of perceived need must first exist, and second, be enticed into the marketplace as demand. If consumers that possess excess wealth have no confidence in the success of the marketplace returning that excess wealth, or they fear that future market downturns may take away savings and investments, they will hold onto it and there will be no new demand even though the excess wealth exists that might otherwise produce new demand. So, to generate new demand one must have a marketplace that produces confidence in consumers that their excess wealth spent on demand will be at least replaced, or preferably multiplied as a return in the future, and that their savings are adequate and safe.
It is for these reasons government stimulus spending, subsidies and bailouts do not stimulate demand. Because government stimulus spending, subsidies and bailouts are necessarily limited in size and scope compared to the gargantuan size and scope of the marketplace, it produces no confidence in the consumers that possess excess wealth to spend it on demand items. Another problem with government policies of stimulus spending, subsidies and bailouts is that it mostly goes to paying off need like topping up government pension funds, acquiring more government workers, building infrastructure, subsidizing industry that investors refuse to invest in, bailing out companies that are marketplace failures, etc. None of these things are demand items – they are all need. They do not produce confidence in consumers, but instead produce anxiety because of the increased government debt creating fears of future tax increases. Additionally, investors do not see bailed-out or artificially pumped marketplaces as safe investments. The same bad apples are still in the barrel, just covered over with a layer of roses to hide the smell of rot.
Need is also the reason that spending on wars does not stimulate the consumer marketplace. Military expense is need, not demand, and does not produce confidence in the marketplace to free up excess consumer wealth. There may be industry-specific demand generated within the war industries, but it is conducive on continued government spending which is also counter-productive because of the crowding out effect. When the government spending is reduced as the war is wrapped up, the industry-specific demand will evaporate (fully explained in #8 The Not So Surprising History of Tax Cuts). Therefore, any kind of government spending on need does not generate either current or future demand in the overall marketplace. See for yourself:
The Household Income Index (3rd last graph above) [ntpek3u] tracks median annual household income before taxes (median means that there are as many households above as there are below at any given time). It is based on the peak year of the tech bubble, 2000 as an index of 100. Notice the recovery after the Bush tax cuts. But especially notice the non-recovery after the Obama stimulus in 2009. A new study has astoundingly revealed that household income dropped by 1.8% during the recession, but has dropped another 4.4% during the so-called recovery! [k4mqde5] It is obvious that no new wealth that would generate new demand was ever created. Wealth that would create demand was instead lost – the Obama Malaise. Need is the predominant factor in the economy, not demand.
When need overwhelms demand one has a depression, recession or malaise, depending on the extent of the imbalance. To produce a prosperous economy one must have perceived demand in excess of perceived need, as in the mid to late 1980s, the late 1990s and the mid 2000s. Just as FDRHoover’s policies produced a prolonged malaise called the Great Depression, President Obama’s policies of government stimulus spending, subsidies and bailouts have predictably produced the prolonged Obama Malaise. No added amount of government spending will reverse it. Indeed, added stimulus spending will only exacerbate the imbalance into another recession or possibly even a depression through the crowding out effect and further reduction in consumer confidence.
To generate new demand, the consumers with excess perceived wealth must be assured of its return so that they may spend it on demand. The surest way for government to help produce such confidence is through the obvious solution of preserving the Bush tax rates and then cutting taxes further. As we also saw in #8 The Not So Surprising History of Tax Cuts, tax cuts produce consumer confidence in the marketplace which in turn generates new demand (as evidenced by increased government revenues as a result of higher earnings). Another policy is the removal of costly regulations that allows for lower consumer prices and higher investment returns. Further, the artificial depressing of interest rates through quantitative easing (printing money) is not encouraging borrowing because of the fear of a sudden rise in interest rates when the easing is removed. Quantitative easing must be stopped so that interest rates can find their natural marketplace levels, thus allowing consumers to again build confidence in market forces rather than fear of big government manipulation. This would also make interest rate dependant investment vehicles like bonds more profitable and attractive, and produce more confidence in the marketplace for those with money to invest. (Here is the real explanation for quantitative easing: [*kuhrv4n]) Add to these a reduction in government spending and paying down of debt that otherwise crowd out marketplace investment, and you will get a result not unlike the regaling prosperity of the Roaring Twenties which was produced by these same policies. Who wouldn’t want that?!?
However, continue with the same tired policies of tax and spend and printing more money, and the Obama Malaise will continue on indefinitely. Think about it this way. The 1% are continuing to increase their wealth, but they aren’t spending it and creating new demand. They fear leaders like “spread-the-wealth-around” Obama and movements like Occupy Wall Street, and so their perceived need grows with their wealth. Of course, that means that their perceived excess wealth that might be spent on demand items in more confident times is instead redirected to need items like very low interest bonds to essentially park their money. So the Obama Malaise continues. Demanding that the government take more money away from the 1% in the form of higher taxes just leads to more hoarding, and if enacted, more of the crowding out effect. Lose-lose.
Update: Now in October of 2013 an extensive analysis of the world economy has shown that new demand is still unsurprisingly elusive in the marketplace:
~Five years after U.S. investment bank Lehman Brothers collapsed, triggering a global financial crisis and shattering confidence worldwide, families in major countries around the world are still hunkered down, too spooked and distrustful to take chances with their money.~
Consumers have shifted their priorities from demand to need despite that the world marketplace continues to grow, albeit, at a very slow malaise pace. The Obama stimulus along with stimulus packages from most other developed nations around the world have done nothing to mollify growing perceived need and replace it with new demand, even within the ranks of the very wealthy. In plain language, consumer confidence sucks, and big government borrowing and spending doesn’t make it suck any less. Indeed, the theory of the crowding out effect seems to have been vindicated in spades. [*q994tlm]bk
• Deprogramming lessons
As we saw in #9 Liberals Are the Compassionate Ones – Really?, in regard to the “crowding out effect”, when government spending replaces private charity, the net benefit to the needy went down. If we are to learn anything from FDRhoover’s and Barack Obama’s high debt stimulus spending and marketplace manipulation, it is that it crowds out consumer and business activity by creating uncertainty and sapping the confidence of participants in the marketplace. So instead of producing a recovery, it prolongs the malaise. The clear contrast to this is the Roaring Twenties where government marketplace intrusion was removed in a multitude of ways and the marketplace immediately reversed from a devastating deflationary spiral into a prolonged confident prosperity.
Psychogumps claim that austerity doesn’t work – look at Europe. First, what austerity? Failed economies where the government/economic system collapses from its own debt weight are not examples of austerity. They’re examples of collapse. Name for me one European country that as an economic policy has cut taxes, cut spending, cut the size of government, and cut regulations. Second, the whole of the Eurozone would have to embrace austerity measures. Greece and Spain enacting a few meagre austerity measures will have about as much effect on the whole European economy as would Maryland and Rhode Island in regard to the U.S. economy. Austerity will have to be country-wide in the U.S. and continent-wide in today’s united Europe. The Roaring Twenties illustrates that austerity measures work. Other examples are Germany and Japan after WWII. In defeat they had no choice but to implement austere economic policies. They have since become two of the great economic powerhouses in the world. There are no examples of where a country in dire economic straights has stimulated its way back to prosperity. So-called stimulus just doesn’t work. Austerity does.
This essay is really only about one liberal principle: Contemporary liberalism requires a strict adherence to playing stupid. When it comes to FDRHoover and macroeconomics, liberals just plain play stupid at a magnitude that is beyond startling. Liberals have been conditioned to believe that up is down and black is white when it comes to America’s economic history: Contemporary liberalism is a type of societal conditioning. This especially includes liberal historians and psychogumps. When a liberal historian or psychogump touts FDRHooover’s progressive-fascism, guess what that makes them? Obviously, a progressive-fascist. And when Barack Obama promotes the same progressive-fascist policies as FDRHoover’s progressive-fascist policies, guess what that makes Barack Obama? Again, obviously, a progressive-fascist. And if you tout FDRHooover’s or Barack Obama’s progressive-fascism, guess what that makes you, American neighbor? In fact, except for denying that a fetus is a person (where do liberals think people come from? more later), I cannot think of a more revealing example of playing stupid. Liberal historians and psychogumps are capable of looking at an itsy-bitsy, little line like this, _ and are able to compare it to a line like this, ______________ and see absolutely no difference in their lengths. Surely that takes a special kind of playing stupid that could only be acquired through long hours of liberal book reading and university programming. It is they and other Ivy League liberals that are championed as leaders of liberal thought – intellectuals. From this we can extrapolate a definition:
‘intellectual’ – A liberal who uses a title or degree as a license to play stupid in their particular specialty.
If those liberal historians and psychogumps are examples of what are supposed to be ‘intellectuals’, count me with Sarah Palin (who balanced her state budget from a previous deficit – more later) as a red necked hick from the sticks, American neighbor.
So what do you think, American neighbor? Do you think those 450 intellectual psychogumps who opposed George W. Bush’s tax cuts would choose a return to the Roaring Twenties over the Dirty Thirties? What about those 200 intellectual psychogumps who supported Barack Obama’s stimulus package? And let’s not leave out all of those intellectual liberal historians who think FDRHoover was such a great President. And what the heck, let’s also include all of today’s intellectual liberal media who think Barack Obama is one America’s smartest ever Presidents. And what about the Obama administration intellectual psychogumps, including intellectual Christina Romer? Do you think any of these self-proclaimed ‘intellectuals’ would choose a return to the Roaring Twenties over the Dirty Thirties? No, I doubt there would be more than a handful either, American neighbor. [shakes head] The fear of separating from the herd is just too strong: Compulsive paranoia is the foundation of contemporary liberalism. It is just simply amazing that liberals can promote the noble lie that FDRHoover “saved capitalism”, contrary to all of the evidence that he almost completely destroyed it in America (and most certainly would have if he had lived to implement his progressive-fascist Second Bill of Rights). Liberals also insist that Obama’s stimulus package created jobs, and maintain a parallel noble lie that Bush’s income tax cuts did not lead to a creation of jobs, again contrary to the plainly evidenced facts. The numbers are easily verified, illustrating that all of these liberal claims are self-evident frauds – liberalisms. The Obama and Bush employment claims of liberals are nothing more than ‘intellectual’ inspired groupthink that a grade-schooler could disprove just by examining this one page: [n8g5cl] Sheesh!
So let’s go back to our MCTE question: “Do you think the success of America as a free nation has been more a result of Americans allowed to act freely to create prosperity, or from government control generating prosperity?” Do I even have to state the obvious answer, American neighbor? Refusing to listen to your liberal scoff mechanism in choosing the Roaring Twenties over the Dirty Thirties in our hypothetical question as to which you would choose for the next decade if you could, confirms to us both that you are not a liberal at your core, American neighbor. Despite your conditioning, you are indeed capable of discerning between successful governing principles and failures when given the opportunity to examine the issues within contextual investigation and critical analysis. Much of the foundation for contemporary liberalism is based in Presidents Herbert Hoover’s and FDRHoover’s progressive-fascism doctrines – they erected a regulatory maize of walls within America that brought it to its knees. But contemporary conservatism is founded in the economic principles adhered to by Presidents Warren G. Harding and Calvin Coolidge who tore down the walls within to allow America to blossom. The fact that you chose conservative principles over liberal ones is for you a huge victory over your programmed liberal conditioning. Congratulations on this milestone, American neighbor! Your choice will be fully affirmed for you in the next essay.bl
• Deprogramming exercise
Here is an interesting article about an in-depth economic analysis of the prolonging of the Great Depression. It comes to the same conclusions I have. FDRHoover was a failure, illustrating that President Obama’s desire to follow FDRhoover’s failed policies is suicidal for the economy. [*6q2rzu] Next read this astonishing link. It’s not what Jim Cramer has discovered that is so astonishing, but that a Democrat would say it publicly. Two thumbs up, Jim! [*4ymjsd8] For a stark illustration of the “success” of Obama’s progressive-fascism read this: [*7o46zqv] And if you still doubt that the Obama stimulus package was a political slush fund, read this: [*d6mce3k] Finally, if in some bizarre way you still aren’t sure whether stimulus or austerity works better, read this: [*kfw2vhr]
Here are two images to take to bed with you tonight, American neighbor – the depressing, beggarly soup lines of FDRHoover’s Dirty Thirties, and the confident and jubilant party atmosphere of the prosperous Roaring Twenties.
Update 2013: If you still want more evidence of the Obama Malaise check out this link. 33 Shocking Facts Which Show How Badly The Economy Has Tanked Since Obama Became President [*l83pzhc]bm
• Humor, sort-of
Naturally from the “And you thought Sarah Palin was stupid…” file we have a bit of humor in Presidential proportions under two liberal principles. First is our 800 pound gorilla principle: Contemporary liberalism requires a strict adherence to playing stupid. Next is our universally applicable principle: Contemporary liberalism is absurd.
My wife observed that Wilson, Hoover and Roosevelt sound like the Three Stooges of American Presidents. I am inclined to agree, but let’s not forget that there were actually more than three actors who played the Stooges over the years. That’s where Barack Obama/Hoover comes in – for following in the first three’s footsteps, he is the fourth stooge of American Presidents. (Oh drat! I forgot about LBJHoover! [ear pull! doink! smack!])
Uber-‘intellectual’ psychogump Paul Krugman (Mr. Haney) insists that the stimulus of war spending during the Second World War ended the Great Depression (remember we dealt with this in #8 The Not So Surprising History of Tax Cuts). The fact that the war ended with a recession that was threatening to return to the malaise of the Great Depression demonstrates how wrong this thinking is. So why don’t liberals credit Bush’s war spending as stimulative? Hmmm? Democrats love to vilify former President Bush for his war spending and his additional domestic deficit spending, but according to Mr. Haney and fellow ‘intellectual’, Barack Obama, those expenses should now be looked at as millions of jobs “saved or created”. And imagine, during the first eight years of FDRHoover’s presidency when his Treasury Secretary admitted, “I say after eight years of this Administration we have just as much unemployment as when we started.” According to the Mr. Haney psychogump-talk of Obamanomic’s “saved or created” jobs scenario, Hoover and FDRHoover’s first eight years of stimulus spending during the Great Depression must have “saved or created” up to 20 million jobs! How could that idiot Morgenthau have missed those tens of millions of jobs “saved or created”?!? I guess he wasn’t an ‘intellectual’… [/sarcasm – 800 pound gorillas thump their chests]