Obama Dusts Off Hoover Playbook

bhkad · #1 (**permalink**) 09-19-2008, 04:27 PM

Obama Dusts Off Hoover Playbook

"That is, he'll hike taxes during a weak economy."

IBDeditorials.com: Editorials, Political Cartoons, and Polls from Investor's Business Daily -- Obama Dusts Off Hoover Playbook

"(Obama's proposed) Massive new taxes and the abandonment of global economic freedom sold as "patriotism" is not only an outrage; it's a huge danger to an economy that has enough troubles already."

Are you Obama supporters saying you actually LIKE his version of change?

saltwn · #2 (**permalink**) 09-19-2008, 06:00 PM

In truth Hoover's celebration of technology failed to anticipate the end of a postwar building boom, or a glut of 26,000,000 new cars and other consumer goods flooding the market. Agriculture, mired in depression for much of the 1920's, was deprived of cash it needed to take part in the consumer revolution. At the same time, the average worker's wages of $1,500 a year failed to keep pace with the spectacular gains in productivity achieved since 1920. By 1929 production was outstripping demand.

The United States had too many banks, and too many of them played the stock market with depositors' funds, or speculated in their own stocks. Only a third or so belonged to the Federal Reserve System on which Hoover placed such reliance. In addition, government had yet to devise insurance for the jobless or income maintenance for the destitute. When unemployment resulted, buying power vanished overnight. Since most people were carrying a heavy debt load even before the crash, the onset of recession in the spring of 1930 meant that they simply stopped spending.

Together government and business actually spent more in the first half of 1930 than the previous year. Yet frightened consumers cut back their expenditures by ten percent. A severe drought ravaged the agricultural heartland beginning in the summer of 1930. Foreign banks went under, draining U.S. wealth and destroying world trade. The combination of these factors caused a downward spiral, as earning fell, domestic banks collapsed, and mortgages were called in. Hoover's hold the line policy in wages lasted little more than a year. Unemployment soared from five million in 1930 to over eleven million in 1931. A sharp recession had become the Great Depression.

We today also do not earn enough wages to keep up with technologies and buying power in a new world.
Wages have been artificially manipulated to stay low.
Taxes have been lowered on the largest money earners.
And we have an expensive war.
Assholes were allowed to manipulate the price of a home into ridiculous numbers.
There is a fuel crisis as a result of our refusal to go to other energy means besides imports.

bhkad · #3 (**permalink**) 09-19-2008, 06:17 PM

Quote:

Originally Posted by saltwn

In truth Hoover's celebration of technology failed to anticipate the end of a postwar building boom, or a glut of 26,000,000 new cars and other consumer goods flooding the market. Agriculture, mired in depression for much of the 1920's, was deprived of cash it needed to take part in the consumer revolution. At the same time, the average worker's wages of $1,500 a year failed to keep pace with the spectacular gains in productivity achieved since 1920. By 1929 production was outstripping demand.

The United States had too many banks, and too many of them played the stock market with depositors' funds, or speculated in their own stocks. Only a third or so belonged to the Federal Reserve System on which Hoover placed such reliance. In addition, government had yet to devise insurance for the jobless or income maintenance for the destitute. When unemployment resulted, buying power vanished overnight. Since most people were carrying a heavy debt load even before the crash, the onset of recession in the spring of 1930 meant that they simply stopped spending.

Together government and business actually spent more in the first half of 1930 than the previous year. Yet frightened consumers cut back their expenditures by ten percent. A severe drought ravaged the agricultural heartland beginning in the summer of 1930. Foreign banks went under, draining U.S. wealth and destroying world trade. The combination of these factors caused a downward spiral, as earning fell, domestic banks collapsed, and mortgages were called in. Hoover's hold the line policy in wages lasted little more than a year. Unemployment soared from five million in 1930 to over eleven million in 1931. A sharp recession had become the Great Depression.

We today also do not earn enough wages to keep up with technologies and buying power in a new world.
Wages have been artificially manipulated to stay low.
Taxes have been lowered on the largest money earners.
And we have an expensive war.
Assholes were allowed to manipulate the price of a home into ridiculous numbers.
There is a fuel crisis as a result of our refusal to go to other energy means besides imports.

In 2006 John McCain tried to prevent this mess and the Democrats stopped him.

Hot Air Blog Archive McCain’s attempt to fix Fannie Mae, Freddie Mac in 2005; Update: Obama can’t get AIG right

And it's customary to post a link to the source when you quote from it.

saltwn · #4 (**permalink**) 09-19-2008, 06:19 PM

Quote:

Originally Posted by bhkad

In 2006 John McCain tried to prevent this mess and the Democrats stopped him.

Hot Air Blog Archive McCain’s attempt to fix Fannie Mae, Freddie Mac in 2005; Update: Obama can’t get AIG right

And it's customary to post a link to the source when you quote from it.

In your face, Obama basher!!

bhkad · #5 (**permalink**) 09-19-2008, 06:33 PM

Quote:

Originally Posted by saltwn

In your face, Obama basher!!

faithful_servant · #6 (**permalink**) 09-22-2008, 02:42 PM

Quote:

Originally Posted by saltwn

In truth Hoover's celebration of technology failed to anticipate the end of a postwar building boom, or a glut of 26,000,000 new cars and other consumer goods flooding the market. Agriculture, mired in depression for much of the 1920's, was deprived of cash it needed to take part in the consumer revolution. At the same time, the average worker's wages of $1,500 a year failed to keep pace with the spectacular gains in productivity achieved since 1920. By 1929 production was outstripping demand.

The United States had too many banks, and too many of them played the stock market with depositors' funds, or speculated in their own stocks. Only a third or so belonged to the Federal Reserve System on which Hoover placed such reliance. In addition, government had yet to devise insurance for the jobless or income maintenance for the destitute. When unemployment resulted, buying power vanished overnight. Since most people were carrying a heavy debt load even before the crash, the onset of recession in the spring of 1930 meant that they simply stopped spending.

Together government and business actually spent more in the first half of 1930 than the previous year. Yet frightened consumers cut back their expenditures by ten percent. A severe drought ravaged the agricultural heartland beginning in the summer of 1930. Foreign banks went under, draining U.S. wealth and destroying world trade. The combination of these factors caused a downward spiral, as earning fell, domestic banks collapsed, and mortgages were called in. Hoover's hold the line policy in wages lasted little more than a year. Unemployment soared from five million in 1930 to over eleven million in 1931. A sharp recession had become the Great Depression.

We today also do not earn enough wages to keep up with technologies and buying power in a new world.
Wages have been artificially manipulated to stay low.
Taxes have been lowered on the largest money earners.
And we have an expensive war.
Assholes were allowed to manipulate the price of a home into ridiculous numbers.
There is a fuel crisis as a result of our refusal to go to other energy means besides imports.

A tinderbox that was ignited by the spark of increased taxes, then fanned into a full-blown conflagration by even higher taxes. Had the gov't stayed out of things and allowed the market to readjust, the Great Depression would have never happened and The Crash would have been a two page section in textbooks discussing this countries economic history. If you study our history prior to The Crash, you can find instances of equal, if not greater economic damage to our country. The difference is that the gov't largely stayed out of the way and allowed the market to adjust itself. Under FDR, the gov't tried to take control of the economy and the result was The Great Depression. Raising taxes sucked capital out of the economy and prevented businesses from hiring more workers.

saltwn · #7 (**permalink**) 09-22-2008, 03:09 PM

Quote:

Originally Posted by bhkad

In 2006 John McCain tried to prevent this mess and the Democrats stopped him.

Hot Air Blog Archive McCain’s attempt to fix Fannie Mae, Freddie Mac in 2005; Update: Obama can’t get AIG right

And it's customary to post a link to the source when you quote from it.

In 2003-2004 Tom Delay was speaker.

"I just finished a productive meeting with members of my economic team. We discussed our thriving economy and what we need to do to keep it that way. We care a lot about whether our fellow citizens are working, and whether or not they've got money in their pockets to save, spend, or invest as they see fit. We talked about America's role in the global economy"-from GWB 2007 speech to the Treasury dept.

This article states it more clearly:

Quote:

In 2003, Republicans controlled both branches of Congress (108th) and the White House. What happened to Fannie Mae and Freddie Mac regulatory reform under Republican leadership? Nothing.

Here's what I found when I searched THOMAS for the phrase Fannie Mae for the 108th Congress (2003-2004): eight bills .... but only six appear to relate to this topic, per their title. Of those six, only one was introduced after the White House weighed in (at least rhetorically) in September ... and the prime sponsor of that bill was a Democrat. The other bills seem to have resulted from the July scandal. No bill moved out of committee. Republican Congress Talked About Financial Reform, But Did Nothing

BTW , the previous post's quote was from Wiki.

saltwn · #8 (**permalink**) 09-22-2008, 03:25 PM

Quote:

Originally Posted by faithful_servant

A tinderbox that was ignited by the spark of increased taxes, then fanned into a full-blown conflagration by even higher taxes. Had the gov't stayed out of things and allowed the market to readjust, the Great Depression would have never happened and The Crash would have been a two page section in textbooks discussing this countries economic history. If you study our history prior to The Crash, you can find instances of equal, if not greater economic damage to our country. The difference is that the gov't largely stayed out of the way and allowed the market to adjust itself. Under FDR, the gov't tried to take control of the economy and the result was The Great Depression. Raising taxes sucked capital out of the economy and prevented businesses from hiring more workers.

If my mother was sitting next to you, she would slap you into next week to suggest that Roosevelt was responsible for the depression!

The policies of deregulation combined with keeping wages low as the article indicates were some of the things responsible. Others were unforeseen agricultural catastrophes and people (average citizens as well) playing the stock market.
Roosevelt saved the very lives of people who had lost EVERYTHING.
A man (one of many travelers) came to my grandmother's door (in Florida) to ask or work. He had WALKED all the way from NY State looking for work and living off the land along the way.
When I was in college, and we were studying that time period in history, A big ol' boy in the back of the room (who worked for DOW Chemical), stood at attention every time the instructor mentioned the WPA. He later explained that the work program Roosevelt put in place prevented him and his mother from dying.
Our parks and dams were built with such work programs. These people built us out of the depression with no help from deregulation or monopoly barons.

faithful_servant · #9 (**permalink**) 09-23-2008, 02:46 PM

Quote:

Originally Posted by saltwn

If my mother was sitting next to you, she would slap you into next week to suggest that Roosevelt was responsible for the depression!

The policies of deregulation combined with keeping wages low as the article indicates were some of the things responsible. Others were unforeseen agricultural catastrophes and people (average citizens as well) playing the stock market.
Roosevelt saved the very lives of people who had lost EVERYTHING.
A man (one of many travelers) came to my grandmother's door (in Florida) to ask or work. He had WALKED all the way from NY State looking for work and living off the land along the way.
When I was in college, and we were studying that time period in history, A big ol' boy in the back of the room (who worked for DOW Chemical), stood at attention every time the instructor mentioned the WPA. He later explained that the work program Roosevelt put in place prevented him and his mother from dying.
Our parks and dams were built with such work programs. These people built us out of the depression with no help from deregulation or monopoly barons.

All of this operates on the assumption that the Depression would have been there all along regardless. I don't believe that this is the case. The Depression happened and the gov't was powerless to stop it, but the steps they took to stop made it worse and longer than it needed to be. Essentially, the gov't took a bad situation and made it worse and then set themselves up as the hero for saving people from the mess they created. Had the gov't taken a hands-off approach and only addressed the underlying issues of the robber barons and unregulated trading of stocks, the Depression would have been shorter and far less severe. Businesses would have stayed solvent and people would have stayed employed. But the gov't destroyed businesses by taxing them to the point where they had no recourse but to close down. Tax rates for corporations were severe and this stopped them from making the changes necessary to adjust to the new labor/management paradigm and the shift from a primarily agragrain society to a primarily industrialized one. The gov't basically pulled the rug out from under the very people with the financial ability to adjust and instead made itself out as everyone's hero, when the fact is that the gov't was the cause for the severity and longevity of the Depression.

BTW - If my grandparents were still alive, they'd walk out of the room if you suggested that FDR was anything more than an idiot. All of them lived through the depression and all of them were pissed off that they lost good paying jobs (welders, schoolteachers, timberfallers) and had to take CCC/WPA jobs. Yeah, they paid the bills, but they also paid far less than what they were making and should have still been making had the gov't not taxed their employers into bankruptcy. My grandfathers had little use for each other, but one thing they could always agree on - FDR was an idiot.

saltwn · #10 (**permalink**) 09-23-2008, 06:29 PM

Quote:

The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize.

The "roaring twenties" was an era when our country prospered tremendously. The nation's total realized income rose from $74.3 billion in 1923 to $89 billion in 19291. However, the rewards of the "Coolidge Prosperity" of the 1920's were not shared evenly among all Americans. According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%2. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all3. Automotive industry mogul Henry Ford provides a striking example of the unequal distribution of wealth between the rich and the middle-class. Henry Ford reported a personal income of $14 million4 in the same year that the average personal income was $7505. By present day standards, where the average yearly income in the U.S. is around $18,5006, Mr. Ford would be earning over $345 million a year! This maldistribution of income between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income7.The Main Causes of the Great Depression

Quote:

What caused the Great Depression, the worst economic depression in US history? It was not just one factor, but instead a combination of domestic and worldwide conditions that led to the Great Depression. As such, there is no agreed upon list of all the causes of the Great Depression. Here instead is a list of the top reasons that historians and economists have cited as causing the Great Depression.

The effects of the Great Depression was huge across the world. Not only did it lead to the New Deal in America but more significantly, it was a direct cause of the rise of extremism in Germany leading to World War II.
1. Stock Market Crash of 1929
Many believe erroneously that the stock market crash that occurred on Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, it was one of the major causes that led to the Great Depression. Two months after the original crash in October, stockholders had lost more than $40 billion dollars. Even though the stock market began to regain some of its losses, by the end of 1930, it just was not enough and America truly entered what is called the Great Depression.
2. Bank Failures
Throughout the 1930s over 9,000 banks failed. Bank deposits were uninsured and thus as banks failed people simply lost their savings. Surviving banks, unsure of the economic situation and concerned for their own survival, stopped being as willing to create new loans. This exasperated the situation leading to less and less expenditures.
3. Reduction in Purchasing Across the Board
With the stock market crash and the fears of further economic woes, individuals from all classes stopped purchasing items. This then led to a reduction in the number of items produced and thus a reduction in the workforce. As people lost their jobs, they were unable to keep up with paying for items they had bought through installment plans and their items were repossessed. More and more inventory began to accumulate. The unemployment rate rose above 25% which meant, of course, even less spending to help alleviate the economic situation.
4. American Economic Policy with Europe
As businesses began failing, the government created the Hawley-Smoot Tariff in 1930 to help protect American companies. This charged a high tax for imports thereby leading to less trade between America and foreign countries along with some economic retaliation.
5. Drought Conditions
While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not even pay their taxes or other debts and had to sell their farms for no profit to themselves. This was the topic of John Steinbeck's The Grapes of Wrath. http://americanhistory.about.com/od/...depression.htm

What I ask myself is if your parents lived in the Northwest and mine lived in the Southeast, what conditions caused them each to come to different conclusions about blame for the Great Depression?
My parents and grandparents were bookkeepers, restaurant owners, nurses, and commercial fishermen at the time.

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