Sep 17 2009

President & DC Liberals Laying The Ground For Another Great Depression

Published by at 8:07 am under All General Discussions

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.I have been loathe to jump on the “economy is headed for a wreck” bandwagon for a couple of reasons. But now I have to admit the possibility the misguided and ignorant liberal policies in play could doom this nation to a long economic grind. Of course, assuming the current and proposed screw ups well up being misguided and ignorant is being optimistic on the drivers here. There could be much more sinister plans at work here – assuming people cling to the government for help during bad economic times, as opposed to throwing the screw ups out of power and bringing in fresh, young blood.

The first big siren call that the President and Congress were throwing salt on the economic wounds came from overseas actually, the UK to be exact:

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.

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.

OK, that was part theory. The fact is there has been evidence for a while the liberal policies coming out of DC were going to really hurt the economy, and therefore every person in the country except the uber rich. The stimulus package is a prime example of all talk, no results. It relied on the bloated and sluggish government bureaucracy to start up make work projects. They should be starting up in mass in by next year. The government processes are that slow. Instead of using tax cuts to prime the economic pump, they pulled money out of the economy and sent it towards pork projects of preferred constituents. Seems only the good shall be rescued.

But it is getting worse – even as America has yet to fathom that possibility. The Cap & Trade proposals to pretend to shrink CO2 will cost each family a significant chunk of their money (some claim $1800 a year – I think it will be much higher). Nothing new will happen, just life will be much more expensive. Even though we now have evidence from a new space mission, designed to show exactly were the green house gas producers are on Earth, that America is not a massive green house gas producer after all! Nothing we do here will offset the large producers of green house gas in Europe, Asian, the Mideast and Africa. Nothing. We will lose jobs and disposable income and Al Gore will become a $gazillionaire. But that is all this crazy liberal scheme will produce.

Then there is the planned destruction of our health care system with the idea of forcing us into government rationed health care, where DC decides who should be treated and who should not. Think that is going to be a positive force on our economy as the government rips out 1/6th of it? The irony is all those doe-eyed youngsters chanting ‘hope & change’ will be the ones footing the biggest part of the bill after seniors. What a just reward for voting on an image instead of the issues and the liberals whacky proposals.

But it gets even worse than this. The economic bubble burst over the sub prime mortgages liberals in Congress pushed through to help the poor (read: unable to afford) buy houses. What ensued was a predatory bonanza where mortgages were let out to millions of people without checks or backing, and then sold to the taxpayers. Who just bailed out all the crooks who lined their pockets and left their mess to collapse the confidence of the markets. Is this liberal congress going to make sure this does not happen again?

Hell no! They are going for more of the same! (H/T Reader Frogg1)

A number of experts believe that aggressive enforcement of the 1970s-era Community Reinvestment Act contributed to the mortgage meltdown, and thus to the greater financial crisis, by requiring financial institutions to lend to unqualified borrowers. Now, the Democratic majority in the House of Representatives is responding to that situation by proposing to expand the scope and power of the Community Reinvestment Act.

This morning House Financial Services Committee chairman Rep. Barney Frank held a hearing on H.R. 1479, the “Community Reinvestment Modernization Act of 2009.” The bill’s purpose is “to close the wealth gap in the United States” by increasing “home ownership and small business ownership for low- and moderate-income borrowers and persons of color.” It would extend CRA’s strict lending requirements to non-bank institutions like credit unions, insurance companies, and mortgage lenders. It would also make CRA more explicitly race-based by requiring CRA standards to be applied to minorities, regardless of income, going beyond earlier requirements that applied solely to low- and moderate-income areas.

Barney Frank is insane – that is all I can figure. He is also a socialist, because all he thinks about is playing Robin Hood with other people’s money (the government was the problem in the popular story, but that doesn’t stop Mad Money Frank). He makes drunken sailors look spend thrifty, and sober to boot!

But we are not done yet with the mounting evidence Team Obama and the DC liberals are going to send this economy back down into the tank again. Michael Barone notes other plans in action and in the works, identical to missteps made in the 1930’s:

Then there’s trade protectionism. A week ago Friday, late at night, the Obama administration slapped import tariffs on Chinese tires. The Chinese retaliated by imposing tariffs on auto parts and chickens — take that, United Auto Workers and Tyson Foods! Upshot: American consumers will pay more for tires, and auto-parts and chicken-processing jobs will be at risk.

And more of that may be in store. “The smell of trade war is suddenly in the air,” writes The Wall Street Journal, and Global Trade Alert reports that 130 protectionist measures are ready to be implemented by countries around the world. Are we seeing a repeat of the job-destroying protectionism that followed the Smoot-Hawley tariff of 1930? It’s starting to look like it.

Trade wars lead to real wars folks. One way to break and peace is to threaten livelihoods, careers and businesses. That is not all Michael noted, there are the pending tax increases coming next year as the wise Bush tax cuts (which pulled us out of the 9-11 tail spin and through two wars) are set to expire.

All in all, the evidence is building up that the liberals in DC are (a) either the most incompetent group of people this nation has ever seen and their idiotic fantasy policies are going to do needless damage to our economy and ignite international trade wars (and maybe a real one) OR these people are very clever, very smart and are taking the steps anyone would take to create crisis economically and internationally, in the hopes they can exploit those crises to acquire more power. That second idea is in itself dumb as a rock, since this nation is made up of millions of independently minded, capable people who are more than able to throw the bums out of office.

I do not have a clue which is right, it may be a combination, it could be neither. But I will note this, both scenarios assume the American people cling to government to protect them from reality. One is a benign, ignorance driven assumption, the second would be conniving and traitorous. Either way, they are both wrong assumptions, so events will not play out as expected. Reality always brings surprise endings.

12 responses so far

12 Responses to “President & DC Liberals Laying The Ground For Another Great Depression”

  1. WWS says:

    Good round up of recent developments – I find the trade war moves the most dangerous of all, because we forget that Hoover, Smoot, and Hawley never intended to start a trade war, either. They figured that everyone else in the world would see that this was a popular political move and not get too upset, and certainly they needed American goods too much to retaliate. Sure they did.

    Of course, once you start the boulder of protectionism rolling down hill, it’s pretty hard to stop. Unemployment actually wasn’t that high in the first year of the depression, 1929 – 1930. Two years after Smoot-Hawley was passed in June of 1930, export markets had totally collapsed and national unemployment stood at 25%. If nothing else, this shows that we do have hard historical evidence that a foolish Congress can destroy the nation’s economy – we’ve done it before.

    Of course, the big change we’re making this time around is that we’re basically printing a trillion dollars with no revenue raising plans behind them and just counting on things to all kind of work out, somehow. That plan does not increase my confidence level. An inflationary depression is supposed to be a theoretical impossibility – I think we’re going to get to test that supposition very soon.

    And for those who watch the stock market closely (as I do) then yes, it has been going up nicely lately – and it is primarily the companies and industries that will benefit most from high inflation levels (commodities and other raw materials) that are benefiting the most.

    It’s no coincidence that gold is within a few dollars of it’s all time historical high. (not just this year, but *ever*) If China decides to get angry enough to dump dollars and shift their reserves to gold, we’re going to see the financial world turned upside down in the blink of an eye.

    Yet another reason why it’s extremely unwise to poke China in the eye right now.

  2. kathie says:

    It has been said that most of the proposals (Obama’s signature issues as President) were written before Obama was inaugurated. I think it may be the case. Cap and Trade, Health Care, the Education Bill and the government taking over ALL loans for higher education. You have to ask who wrote the bills. Obama’s core group supporters, the one Van Jones headed up was a major player in Cap and Trade, ACORN had to be a major player in health care, if you look at their web site, the bill follows what they want. If the Fed controls higher education loans they can dictate to Universities in terms of environment, diversity of students, course offerings. If the Feds don’t like what they see they can direct students to Universities that follow their dictate.

    We are seeing the fundamental change Obama was talking about.
    Does he care about bankrupting the country. Actually I don’t think so, it fits into his plans very nicely. Obama’s speech to the AFL-CIO WAS TOTALLY OUT OF CONTROL FOR A PRESIDENT. His tone, his push, his slapping around of those who don’t agree, his inference that it is time for the workers to take back this country from the greedy, crooks, and the rich was a tone I saw at a teachers union rally many moons ago. Fists pumping the air, unison of voices, rousing ………and mob mentality. It scared me when I saw Obama lead this kind of rally before he was inaugurated, and it scares me more now. He has overloaded the system so it is difficult to follow all the moving pieces. Thank goodness for the internet!

  3. kathie says:

    I forgot George Soros…..his finger prints are all over the regulation of our financial markets.

  4. WWS says:

    And now Obama has just surrendered to Russia and abandoned the missile shield that Bush worked so long and hard to put in place. Not to mention abandoning all of Eastern Europe. Here’s change you can believe in.

    Wait for it – we will be bugging out of Afghanistan before you know it. Obama does not, in fact, have the stomach or the heart to defend this country. Today’s events prove that.

    Btw, what did you get from the Russians for giving them everything they wanted? Did we at least get a good return for selling out Poland and the Czhecks?

    Here’s what we got in return: Bupkis.

    Hope’n’change, baby. Hope’n’change.

  5. Frogg1 says:

    I’m with you AJ. I’ve been reading articles that go both ways and it has been hard to sort it out. Economics, in general, is more guess work than a proven science. That’s what makes it so difficult to predict. No two days in our country are exactly the same…..what variances exist can change anything economically proven in the past. There are general patterns of directions (repubs and Dems at opposite ends) that seem to have patterns of success or failure. But, no magic bullet. No one size fits all cure.

    It seems to me, however, that alot of the economists who are reporting the more positive “green shoots” projections are connected to the WH. Yet, even many of them (ie Larry Summers) give hints of warnings these days. The economists I have been paying the closest attention to are the ones who correctlly predicted the mess we are in years before we got here. Several of them were laughed on publically by their peers for their predictions. Yet, they were confident, anyway. And, there seems to be a consensus among them….

    we wil struggle with the economy for several more years.

    We will recover. Americans will do it…..not the government. And, the best thing we can do now is try to reign in our out of control government.

    Be optimistic. But, be prepared. Demand that your government become the government you want.

    I think we are having success. We just need to keep the pressure on.

  6. WWS says:

    Peter Schiff just announced he’s going to run for the Senate against Chris Dodd. Not only would I like to see Dodd retired, but Schiff is one of the few investment analysts who has been pretty much on the mark since 2007.

    He’s one of the few who saw the crash coming last fall and tried to warn people ahead of time. Not many listened then – are they listening now?

  7. ivehadit says:


    On 17, Sept 1939 The Soviets invaded Poland.
    On 17, Sept 2009 Obama surrendered the defensive shield that was to protect Poland.

    Nuff said. This is no coincidence. I am sick to my stomach. Really.

  8. kathie says:

    Which party is Schiff associated with. I think he voted for Clinton????

  9. crosspatch says:

    What if this is part of a quid pro quo? What if there are some plans to deal with Iran, after which there won’t be a threat and these sites won’t be needed anyway, in exchange for Russia turning a blind eye to whatever is going to go on?

  10. kathie says:

    So Russia is going to stop delivering the parts that Iran needs for the long range missile? I kinda remember Putin sitting with Bush at the Olympics, chatting away, making small talk as the were preparing to invade Georgia. Now those are friends you can count on. Russia and America on the same page? For some reason it is not believable.

  11. WWS says:

    I don’t know about Schiff’s past political connections, but he’s running as a Republican. I think he’s a strong candidate with a good presence. (he’s a frequent guest on the financial networks)

    And Dodd is looking quite vulnerable, especially to someone who isn’t scared to bring out all the Countrywide connections.

    This is another one for the Culture of Corruption, btw. “Friends of Angelo” indeed.

    Angelo Mozilo was the head of Countrywide, which was ground zero in the great home sector financial collapse of 2008.

    “Friends of Angelo” (politicians) got far-below market rates and other valuable financial perks. Oh, but don’t call these “bribes”!!! Even though Dodd was on the Senate finance committee at the time.

    Dodd was a friend of Angelo, and profited nicely from the “friendship”. Coincidentally, the Senate Finance Committee of which Dodd was a member never allowed any legislation to get past it which would have inhibited Angelo’s operations in any way.

    Angelo Mozilo has now been indicted for his actions as head of Countrywide.

    Dodd is doing his best Sgt. Schulz imitation: “I know NUT-THINK! NUT-THINK!!!”

    Go, Schiff, Go!