Hoover, Or Reagan?

FDR made a bad situation worse in his first term too.

The article seems like wishful thinking (if a bad economy can be considered such.) Brock makes a good point and while FDR didn't have a two term limit, he didn't have as many willing to break the rules for him as Obama does.

Bernanke added over $630 billion to the economy before the $700 billion dollar bailout was even voted on. Losing a dime on the dollar with the stroke of a pen.

They'll be able to used that $700 billion to keep funding ACORN and it's clones to tighten their grip. Elections soon may not matter. 2010 may tell the tale.

Comparing Obama to any former president may look silly after we get to feel his impact.

Peggy Noonan wrote a big article before the 1996 election about why Clinton looked like a one-term president. At the time, I thought she knew something.

It's foolish to make predictions. None of us knows yet what Obama will do, and sometimes there are surprising events that change everything (e.g., McCain might easily have been elected if the markets didn't crash before the election).

You know, actually, the parallel to Hoover is a bit eerie. Hoover was a brilliant engineer and manager, a humanitarian who managed the relief effort in Europe after the First World War to international acclaim. He was a very brainy guy, very "modern" in his outlook, felt the rambunctiousness of the free-market economy needed scientific guiding. In the tradition of Teddy Roosevelt, he believed in many of the tenets of Progressivism.

Furthermore, like Obama, he was elected by people who'd enjoyed long years of economic growth and prosperity, and had restlessly turned to the idea of "managing" the apparently inexhaustible prosperity better, of "spreading the wealth" a little bit more, and rejecting the quaint old-fashioned "deregulating" policies of Coolidge that "favored" the rich and well-connected.

Then, of course, just like Obama, he was overtaken by economic events (albeit after he'd been in office 7 months, not 2 months before he took office), and had to spin on a dime from "managing" a healthy roaring economy to trying to save one that had had an inexplicable and near-fatal heart attack. He did not do very well, and his successor, who was more like him than is generally appreciated -- FDR had a very favorable opinion of Hoover in the late 20s -- did not do very well either.

Will Obama? It's hard to know. The only example of Presidential action arguably springboarding the US out of recession is Reagan's massive tax cuts, which short-circuited the 1982 recession in time to ensure his re-election two years later. But Reagan had an inflationary economy to work with, an economy arguably already champing at the bit, with its energies merely inappropriately diverted into the stagnant and fetid pond of government. All he had to do was release the brakes.

Obama, on the other hand, looks very much like he's inheriting a deflationary economy, which as the Depression proved is intrinsically hard to get moving, and an economy in which the accepted 20th century solution to stagnation, namely shoveling out the money and easy credit, has already been tried to its uttermost limit, which makes it worse than the Depression. With Keynesian solutions discredited by the failures of FDR's "brain trust", and monetary solutions discredited by the failure of Greenspan and Bernanke, with the entire history of the 20th century warning against nationalization, and the people completely disenchanted with laissez faire -- what is left to try? Prayer? Holding hands?

Quite honestly, it would appear to me that we need to reach a point where most people expect much less of their immediate future than they do now, but expect much more of their distant future. We need to be more cautious and pessimistic about our present, more optimistic and energetic about our future, instead of the other way around. I can't imagine any way to get there without first having a sustained economic contraction (to rid the system of its irrational exuberance), followed by...something...to restore hope and striving for the future.

Quite honestly, it would appear to me that we need to reach a point where most people expect much less of their immediate future than they do now, but expect much more of their distant future. We need to be more cautious and pessimistic about our present, more optimistic and energetic about our future, instead of the other way around.

I do not see how this could happen; to the best of my knowledge, the situation you described NEVER existed. People are optimistic about distant future only (although not always) when they are also optimistic about near future. Moreover, pessimism about distant future has been very much in vogue for the last 40 years at least. I think you are asking for something that simlpy contradicts human nature.

Obama may wind up more like a Huey Long, if Long had managed to stay alive and get elected president. From Wikipedia...

"Long created the Share Our Wealth program in 1934, with the motto "Every Man a King," proposing new wealth redistribution measures in the form of a net asset tax on large corporations and individuals of great wealth to curb the poverty and crime resulting from the Great Depression. He was an ardent critic of the Federal Reserve System.

Charismatic and immensely popular for his social reform programs and willingness to take forceful action, Long was accused by his opponents of dictatorial tendencies for his near-total control of the state government. At the height of his popularity, the colorful and flamboyant Long was shot on September 8, 1935, at the Louisiana State Capitol in Baton Rouge; he died two days later at the age of 42. His last words were reportedly, "God, don't let me die. I have so much left to do."[1]"

I don't think the Great Depression provides more than a cautionary tale of what NOT to do.

For example, Many "New Deal" policies encouraged (or mandated) barriers that held labor, markets, trade, and goods captive. This prevented the realignment of wages, prices and employment that could have reduced unemployment and set a non-warfare basis for recovery.

http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409

So, perhaps the REDUCTION of government influence on labor, trade, and goods would be a useful restorative.

Not realistic, though. Think of all the elective and appointed aristocrats, and their courtiers, that would be out of influence.

Quite honestly, it would appear to me that we need to reach a point where most people expect much less of their immediate future than they do now, but expect much more of their distant future. We need to be more cautious and pessimistic about our present, more optimistic and energetic about our future, instead of the other way around.

What an absolutely idiotic post, Pham.

As I said before WTF are you snorting today?

I think Carl has it exactly right. Carl's words mirror what Arthur C. Clarke says about predictions on technological progress (too often optimistic in the near term, too often pessimistic and unimaginative in the long term), and Carl's words also describe the right way to invest in the stock market.

As I said before WTF are you snorting today?

That's strike...a couple dozen, Anonymous Moronic Troll.

You seem to have nothing positive to contribute to this forum, and seem to revel in incivility. My patience is huge, but not infinitely so.

You're out of here.

Hmmmmm.

@ Ilya

"I do not see how this could happen; to the best of my knowledge, the situation you described NEVER existed. People are optimistic about distant future only (although not always) when they are also optimistic about near future."

People waiting on the lists to legally immigrate into America.

Their current short term situation may be an unhappy one, but the long term prospect of being an American citizen is one of optimism.

Hmmmmm.

*shrug* perhaps it all depends on how much influence the unions will have on the Democrats in Congress and Obama. If there is anything that could put the economy into a long term mess it would be unions.

Unionization, particularly with Card Check rules in place, during a recession would be a business killer.

Hmmmmm.

"Their current short term situation may be an unhappy one, but the long term prospect of being an American citizen is one of optimism."

BTW this is my personal experience.

Hmmmm.

Interesting.

ClaytonCramer.com

I think a lot of people are going to get a crash course in how unions work. Because if the unions didn't have the power to significantly influence Congress and Obama then, as a past example, the Longshoreman's Union should have been destroyed by the federal government when they went on strike the last time.

Close down every port on the west coast during a war?

That's balls.

Ilya, I agree the situation has been stably as you describe for a few decades -- and this is arguably one of the major problems in modern America -- but if you cast your net wider across history, I think you find some quite different social mythology.

For example, one of the defining characteristics of the late Roman Empire (among the aristocracy) was a profound pessimism about the future, coupled with an arrogance about the present. They thought they were living in the greatest civilization ever, but that it was in inevitable decline and it would not be long before the barbarians would come and sweep all into the darkness. It's no great surprise that mystic religions specializing in personal redemption after a catastrophic end time (Christianity and Islam) became wildly popular, and that significant chunks of the aristocratic youth joined the monastery movement and foreswore the sinking ship of state for their own personal salvation.

There have been other periods of local optimism but despair about the future, I think most notably around the time of the Reformation.

Contrariwise, there have been periods of low expectations for one's self and immediate future, but very high expectations for one's children and the more distant future. Arguably this feeling was dominant in the young United States at least until the Civil War. Someone born in a rude hut in backwoods New Hampshire in 1760 could aspire to no more than be able to read and write, and could count on a hard life and very likely an early death -- but he could also count (or at least felt he could) that his sons and daughters might go to college and learn to talk Latin like a proper gentleman or lady, and that they might become wealthy.

My feeling -- although maybe it's just middle age creeping in on the bones -- is that for the last 40 to 50 years, we have stopped putting our major hopes and dreams on our distant future, on our children -- on the things they might enjoy by virtue of our hard work -- and started insisting that we have our Heaven on Earth, right now. So I feel we are slowly sliding toward the cynicism and low spirits of empires at their apex, or in early decline, and, like they, we are more susceptible to apocalyptic "religions" (collectivism, post-modernism, Al Goreism) that tell us The End Times Are Near, and we should work hard to ensure our individual souls are saved.

My feeling -- although maybe it's just middle age creeping in on the bones -- is that for the last 40 to 50 years, we have stopped putting our major hopes and dreams on our distant future, on our children -- on the things they might enjoy by virtue of our hard work -- and started insisting that we have our Heaven on Earth, right now.

If I may be more cynical. I think its that we've had a period running since the 80s to now, where the kind of things that were common a generation ago, like saving money, not buying things you couldn't afford etc... That period is ending in one enormous hangover and the nasty feeling you get waking up next to something quite unexpected and trying to remember what you did the night before.

I've often wondered how much of the Reagan, and in the UK, Thatcher booms were tax cut related (certainly a portion, after all taxes were insanely high) and how much was related to the dramatic relaxation of traditional credit practices.

I started my first part time job in 1984 in an electrical retailer. We offered Hire Purchase at 43% APR and getting it was fairly hard. Within a year, the company was offering store cards to anybody over 18 with a bank account.

Credit was excellent for keeping the economy moving but it wasn't sustainable.

Charismatic and immensely popular for his social reform programs and willingness to take forceful action...

Charismatic yes, but everything we've seen of Obama to date indicates an UN-willingness to take forceful action. His response to Georgia I think is a case in point; McCain came out within 24 hours with his opinions, Obama waited much longer, and only expressed his opinions, such as they were, after extensive deliberations with his advisers. Foreign policy vs. domestic yes, but I think he prefers to be considered deliberate, not bold or forceful.

It's actually quite simple:

He WANTS to emulate J.F.K.
His policies will emulate Jimmy Carter.