Barack Obama accused of making 'Depression' mistakes

redrum

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http://www.telegraph.co.uk/finance/economics/6147211/Barack-Obama-accused-of-making-Depression-mistakes.html


Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan.

By Edmund Conway
Published: 9:55PM BST 06 Sep 2009

History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929, pictured Photo: AP

His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.

There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.

In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.

The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows."

Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further. Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."

The paper, which recommends that the US return to a more laissez-faire economic system rather than intervening further in activity, has been endorsed by Nobel laureate James Buchanan, who said: "We have learned some things from comparable experiences of the 1930s' Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work."
 

Ries

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What, exactly, ended the Depression?
WW2.

And in WW2, the US government did ten times the amount of the same stuff, and much more, that Obama is being accused of in this article.

To end the Depression, it was required to borrow MUCH more money- the US national debt at the end of WW2 dwarfs everything Obama is proposing.
It was required to "socialize" and "nationalize" the entire US manufacturing, distribution, and financial systems- everything was rationed, wages and prices were regulated by the government, and the government told private industry what they could make, where, when, and how.

So the article says the depression didnt end when Roosevelt poured some money and debt into it- true.
But the article completely ignores the fact that the depression did end, when Roosevelt poured about 5 times as much money and debt into it.

Funny how everybody forgets that part.
They just think that somehow, feeling good about killing Nazi's made everything better?
 

RWS

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Nobel laureate James Buchanan . . . said: "We . . . . have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work."
A trenchant observation.
 

Dudester

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RWS, first we have to be functioning under a Capitalistic system (which we're not) before we can make it work. Under capitalism giant corp sink or swim depending on their business moves and decisions. GM would NEVER get a bail out under true capitalism. I don't really know what we are - A Hypocritical Freak Show, that I'm sure of but can't go beyond that - Sorry RWS, wish I could be of more help ! Dudester
 

redrum

Registered
Ries said:
What, exactly, ended the Depression?
WW2.

And in WW2, the US government did ten times the amount of the same stuff, and much more, that Obama is being accused of in this article.

To end the Depression, it was required to borrow MUCH more money- the US national debt at the end of WW2 dwarfs everything Obama is proposing.
It was required to "socialize" and "nationalize" the entire US manufacturing, distribution, and financial systems- everything was rationed, wages and prices were regulated by the government, and the government told private industry what they could make, where, when, and how.

So the article says the depression didnt end when Roosevelt poured some money and debt into it- true.
But the article completely ignores the fact that the depression did end, when Roosevelt poured about 5 times as much money and debt into it.

Funny how everybody forgets that part.
They just think that somehow, feeling good about killing Nazi's made everything better?

Huh?!

Ries i have to say, with all due respect, i don't know where you are getting your information. you really should check your sources before making such sweeping, bold statements. you made similar false statements in the thread about the DC march.

i also don't understand your "feeling good about killing Nazi's" comment.

how on earth can you possibly say “the US national debt at the end of WW2 dwarfs everything Obama is proposing.” The obama administration is increasing the debt to points that have never been seen before in human history. We will never be able to pay back the debt unless some kind of debt restructuring takes place, which would lead to a devaluation of the currency. There is not even enough money in the entire world to pay back what the US owes and will continue to owe with the unfunded obligations it has committed to such as Defense, Social Security and Medicare for tens of trillions.

http://en.wikipedia.org/wiki/United_States_public_debt

“The buildup and involvement in World War II plus other social programs during the F.D. Roosevelt and Truman presidencies in the 1930s and 40's caused a sixteen-fold increase in the debt from $16 billion in 1930 to $260 billion in 1950. After this period, the debt's growth closely matched the rate of inflation where it tripled in size from $260 billion in 1950 to around $909 billion in 1980. Nominal debt in dollars quadrupled during the Reagan and Bush presidencies from 1980 to 1992, and remained at about the same level by the end of the Clinton presidency in 2000. More recently the debt increased from $5,629 billion to $9,926 billion during the George W. Bush presidency from 2000 to 2008. The debt is now projected to double under the Obama presidency to a level close to 97% of GDP.

There is also a HUGE difference between the US now and then. Back in the 30’s we were the world’s largest creditor nation. Today we are the world’s largest debtor nation. Back in the 30’s we still had a very large manufacturing base. Today that base is all but gone. Today our GDP is calculated using consumer and government spending as the number 1 and 2 contributors to GDP.

Roosevelt, in fact, made the depression far worse. You can say he put the “great” into the great depression. And obama is following right along in his footsteps. Only this time, our fall is going to be much more severe. Therefore, don’t compare obama to Roosevelt because Roosevelt is not the model we should be following. The solution to the debt is not increased government spending.

http://mises.org/freemarket_detail.aspx?control=258
 

windy

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If the article is saying that the American Empire has peaked and is now in a long slow decline then i would agree completly.
What i would disagree with would be the date the decline began. Personally the beginning of the end came the moment the supreme court handed the 2000 election to the imbecile Bush,who has destroyed everything he ever touched in his life.
Timeline of events.
Rise of the American Empire 1900/1945
American Empire fully established 1945 with control of 50% of global economy
Beginning of the end Bush/Cheney 00

Obama has inherited what was already taking place. China now has the USA by the balls and only has to stop buying US debt for the $$$$ to go into freefall.

So you could argue that Chinas rise to power began in 2000 and was accomplished in 2008 during the last year of the functioning retard Bush.

Obama is just the first of many US presisdents who will have to guide the US as it comes to terms with the fact that it is no longer the top dog. And that someone else has the US economy by the balls for a change.
This will be harder than people think as there are many British people that still think they have an empire.

Time to brush up on my Chinese
 

redrum

Registered
windy said:
Obama has inherited what was already taking place.

So you could argue that Chinas rise to power began in 2000 and was accomplished in 2008 during the last year of the functioning retard Bush.

Obama is just the first of many US presisdents who will have to guide the US as it comes to terms with the fact that it is no longer the top dog.

windy...i do agree with most of your points except for the following:

1) it's important not to cast blame only on bush. both bush and obama work for the same team. there is no difference between democrat and republican. the same power group always stays in power in their non elected positions i.e. Council on Foreign Relations, Trilateral Commission, Wall Street, mega corporations...etc.

all they do is change the face by inserting a different pitch man every four years. the mas populace then wastes all their time arguing amongst themselves, forever caught in the false paradigm of left vs right, never being able to connect the dots between the two and acknowledging our true enemy.

2) again, because bush and obama are on the same team, obama did not "inherit" anything. he is simply picking up where bush left off, advancing the same agenda. if he were truly not an employee of the global elite, he would have already made significant changes to back up his campaign promises of hope and change.

what has changed since he took office? nothing. just the opposite, they have become worse because he is purposely making them worse. we have more military spending, more war and more troops being sent over seas. guantanamo bay has not been closed. the bush patriot act/homeland security civil rights violating laws have not been repealed. the stimulus bailouts have doubled.

this is a betrayal, clear and simple.
 

bigbadwolf

Registered
redrum said:
“The buildup and involvement in World War II plus other social programs during the F.D. Roosevelt and Truman presidencies in the 1930s and 40's caused a sixteen-fold increase in the debt from $16 billion in 1930 to $260 billion in 1950. After this period, the debt's growth closely matched the rate of inflation where it tripled in size from $260 billion in 1950 to around $909 billion in 1980. Nominal debt in dollars quadrupled during the Reagan and Bush presidencies from 1980 to 1992, and remained at about the same level by the end of the Clinton presidency in 2000. More recently the debt increased from $5,629 billion to $9,926 billion during the George W. Bush presidency from 2000 to 2008. The debt is now projected to double under the Obama presidency to a level close to 97% of GDP.
But wasn't US GDP around $150bn in 1930 (and probably around the same for the rest of the decade)? Now put that against $260bn national debt in 1950.
 
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