Thursday, April 03, 2008

Hoover Hooey!

Well, it's election season again, so just like in 2004 when we were hearing endless comparisons of the economy to the great depression, or at least depicted using terminology from the era, we're once again hearing the Democrats invoking the name of Hoover to apply to Bush, McCain, Republicans generally, etc.

One of the posters at RedState pointed out this Wall Street Journal article directly refuting the accusations and implying their sense of history is grossly distorted. Here's some highlights:

To hear Mr. Schumer and his fellow-traveling columnists tell it, Hoover's great policy blunder was to do nothing, all the while insisting that everything was fine. But the problem with Hoover's economic policy isn't that it was passive but that it was actively destructive.

In 1930, he signed the Smoot-Hawley Tariff Act, setting off a wave of protectionist retaliation that undid the globalization of the preceding decades and did far more harm to the world economy than the stock-market crash ever did. Two years later, amid a bad recession, he undid the Calvin Coolidge-Andrew Mellon tax cuts, raising the top marginal income-tax rate to 63% from 25%. The recession became a Depression.

Now, since we're talking Hoover, which Presidential candidate has a similar agenda of protectionism and tax increases? Hmmm.

It goes on to describe Hillary and Obama's various plans to increase taxes on higher income earners and their promises to limit trade in various ways. Of course they're both doing this as they're crying about recession left and right. For some strange reason they think taking out massive amounts of cash from the economy, especially from folks most likely to invest into it, and bulking up government bureaucracies to further fiddle with free market forces is sound economic policy. Further they never seem to fail in coming up with new massive spending to ensure their tax increases do little to nothing to actually help with the deficit that is hurting the value of the dollar on the international markets. But I digress... back to the Hoover Hooey:

Why are Democrats Confused?

There's a pretty easy explanation on why Hillary, Obama, and other Democratic leaders are confused about their history... it is "common knowledge" that FDR's new deal "saved us" from the Great Depression. His massive bureaucratic solutions to the economic woes of the time that did everything from burning food while people starved to stripping the limits on central power our nation was founded on are often credited with as opposed to blamed for the economic recovery that seemed to coincide more with our entrance into World War II than anything.

Obviously if massive government "saved us" it must have been in contrast to little government before right? That's the mentality in a nutshell.

The problem is that it was bigger government under Hoover that took us from the frying pan and into the fryer. It was the ever expanding government afterwards under FDR that helped prolong the depression for years and years afterwards. It was policies like Hillary's and Obama's that led the way from recession to depression back then. It is Hillary and Obama emulating Hoover these days. You'll never get the big government worshipping folks to admit this though... it "saved us." They have no evidence that it did, but they believe it... and they "feel" that they're right.

Feelings, nothing more than feeelings...

Sort of like how they "feel" the economy is in the crapper... even though most people polled admit they're doing alright (either the same or better, etc) when asked about their own situation. It's when the pollsters ask about the economy in general and how they believe other people are doing that they agree that the economy has gone to hell.

How can that be? We've heard endless doom and gloom about a possible recession coming! That can't be right!

The problem of course is that feelings aren't facts. The facts are that the economy has slowed and things like the housing bubble starting to burst are throwing the economy towards a possible extended downturn. Sounds bad, right? It's certainly not good. But neither was the tech bubble bursting in 2000 and the recession that followed it. That economic slowdown/downturn that occurred in Clinton's last year produced similar economic worries and adjustments that were absolutely necessary. Yet the economy recovered.

That's right, it recovered. You may not believe it since it is "common knowledge" that it only got worse, but the economic growth that occurred after the recession had recovered the jobs lost by the end of 2004. The unemployment rate returned to the "full employment" levels of 5% or less. Inflation, real wages, etc are roughly on par since Bush took office. The biggest problem has been with government spending/deficit and of course more problems with creditors and bad loans.

Some look at the federal deficit as a problem with the taxes being too low. But government revenues actually increased, even with the lower tax rates on all tax payers (that's right, all taxpayers, not just the rich... another issue Hillary and Obama have with feeling conflicting with facts). How did revenues go up? Economic growth. Why do we still have a deficit? Spending increased faster than the revenue growth. The Hillary/Obama plan of taking massive amounts of money out of the economy, stifling growth, for short term revenue gains and smaller long term gains is even more baffling since their campaign promises imply that they're going to spend all the revenue they might gain in the short term, doing little to nothing about the deficit.

The Chihuahuas vs The Big Dog

Every which way you look at it, their economic policies make no sense. McCain may not know economics as much as he should, an admission that Hillary and Obama have trotted out at every opportunity, but McCain was the Chairman of the Commerce Committee longer or as long as either, and that's not including the years where he was just a member. He's dealt with more economic policy issues than either Democratic contender has ever seen during a legislative career that dates back to the early years of the Reagan Administration.

Even in areas where McCain's credentials aren't the strongest, he's still a 600lb gorilla over the chihuahuas the Democrats have put forward.

And their policies make this blatantly clear as they recommend policy after policy that historically appear to be massive blunders in the making... from the economy to Iraq. The change they're offering is repeating Bush's mistakes while McCain offers the change of embracing the policies that either worked or new policies more likely to work.

Of course why worry about that?

Worry about...

...HoooOOoooOOOooovers Ghost:

Scary ain't it?

For how Hillary/Obama's Iraq "plans" are just a large scale rehash of a couple of Bush's biggest Iraq blunders see: Food for Thought

1 comment:

Coyote said...

I don't know about economic downturn, but expect inflation to go much higher in the next couple of years. With personal & governmental debt high, low interest rates and the devaluation of the USD$ aganst other benchmark currencies - sure as shit, inflation will be increasing.

mark my words, homeboy...