No End in Sight?

When he was campaigning, President Obama took a swipe at John McCain over the old Washington thing of appointing commissions to figure things out. So…what’s his latest move – yep – a commission headed by Alan Simpson and Erskine Bowles (egad…the penultimate in defining “odd couple”) to figure out how to save the country from bankruptcy?

Obama’s program, so aptly declared by Veep Biden, is to “spend, spend, spend,” obviously mostly by Congress creating government jobs (preferably high-scale union) to be financed by the taxpayers, but also on citizens going down to the nearest mall and maxing out the credit card, thereby increasing production of “things,” as if this country actually created much of anything anymore besides cars and trucks. The prez seems not to understand that people are bent upon hanging on to their cash during hard times, not throwing it away.

The most worrisome thing in contemplating the current White House is the nagging suspicion that the president is completely disconnected from reality. He continues to offer up spending programs as if the only thing necessary to support them is simply the printing of more money, though his Ivy League background doesn’t make this surprising. To see how that mindset works, one has only to go back to the 1930s, when the watchword was “spend, spend, spend,” mostly on government programs.

The Great Depression was not exactly like the current recession but certainly similar enough to draw credible comparisons. Instead of closing the banks temporarily as Roosevelt did upon taking office in 1933, then Senator Obama and his Congressional partners in crime, including republicans, bailed them out in 2008, using taxpayer money or, perhaps more accurately, money borrowed from China to be repaid by taxpayers. The fact that much of it has been repaid (or so claimed) doesn’t matter much since it’s not being disseminated among borrowers who might put it to use in actually making things and hiring people.

The financial crash came in 1929 and when FDR took office in 1933 the unemployment rate was 23.6% but went up to 24.9% during his first year. After all the spending for six years, the rate was at 19% in 1938 but down to 14.6% in 1940 as the U.S. began gearing up for war. The U.S. was already sending war materiel to Great Britain then, and the draft was put into place. From 1932 through 1940 the average yearly unemployment rate stood at 19.1%.

From 09 March to 16 June 1933 (famous 100 days), the “New Deal” was passed, including measures to regulate banks, distribute funds to the jobless, create jobs, raise agricultural prices, and set wage and production standards for industry. The nation went off the Gold Standard and paper money came to the fore. Does this seem strikingly descriptive of what’s happening today?

The banks have been bailed out but pay no attention to the president; money is being given systematically to the unemployed; jobs (especially “green ones,” whatever they are) are being earmarked into existence; there’s a pay czar as well as an automobile czar as well as a general all-around-performance czar, and the government, along with the unions, controls General Motors and Chrysler. In addition, the government is saddled with the toxic non-assets of Freddie and Fanny while all the while telling people to go out and spend. This is a good pastime as their properties are being foreclosed?

If the president continues to emulate FDR of the 1930s, the nation is in for a long slog. It actually took a war to correct the problems of the 1930s and the war came after some 10 years of average yearly unemployment of 19.1% or more. The democrats took control of both houses of Congress in 2007 when the unemployment rate stood at 4.4%. After three years of their control, that rate stood at 10%, or an increase of 127%, at the end of 2009. In other words, the people who run this country have absolutely no sense of history or they’re just plain dumb. Soon after taking office last year, Obama said the unemployment rate would not exceed 8%. Go figure.

The logical conclusion when considering the FDR/Obama comparison, each with overwhelming democrat majorities in Congress, is that millions in this country are in for hardships over a long period of time. Even now, the leaders are preparing to legislate programs that will bankrupt industry (cap-and-trade, never mind no climate-threat) and constantly raise the taxes of all citizens, notwithstanding the lies to the contrary being delivered from both the White House and Congress.

It doesn’t have to be this way. Just a look at the Reagan approach in the 1980s, as well as that of John F. Kennedy back in the 1960s, is all that’s necessary. Nations do not spend themselves out of bankruptcy any more than individual families do that. Nor do they tax themselves out of it. This country is leaderless and the next thing to hit it most likely will be inflation, a harbinger of doom at a time like this. The elections in November are critical. In the meantime, the president needs to start cleaning his house and getting it in order…if he knows how.