Locking up the Free Markets and Throwin' Away the Key.


Sometimes by looking back on the historical relevance of a past can be a guide or lesson book for the future. You can apply this to the present day economic tragedy and the political state of affairs of 2008 to the environment of 1933. The Wall Street Journal just published an article by Paul H. Rubin, Get Ready for the New New Deal. An intriguing comparison of the FDR administration to a potential Obama administration and how that may not be the right thing for America’s future.
The new president's response was to restructure the economy with the New Deal -- an expansion of the role of government once unimaginable in America. We now know that FDR's policies likely prolonged the Great Depression because the economy never fully recovered in the 1930s, and actually got worse in the latter half of the decade.
Keeping in mind, as rightfully pointed out in the WSJ article, Obama is one of the most Liberal members of Congress. Himself as well as Nancy Pelosi, Herry Reid, and other noted Liberal leaders have all blamed this on de-regulation. How else should we expect them to react other than imposing further directives and possibly even going as far as creating new and more powerful regulatory bodies.
Unlike FDR, Mr. Obama will not have to create the mechanisms government uses to interfere with the economy before imposing his policies. FDR had to get the Supreme Court to overturn a century's worth of precedents limiting the power of government before he could use the Constitution's commerce clause, among other things, to increase government control of the economy. Mr. Obama will have no such problem.
This is the key point, FDR basically had to build this Liberal bastion of regulatory bodies from the ground up. Until this point, the control the government extended over the economy was minimal and that attitude had lasted for the better part of a hundred years, until the Depression. Obama, on the other hand, has sixty-five years or so of regulatory growth and institutions to build upon. With no opposition in Congress the overwhelming size of regulatory bodies and laws he can create would change the landscape of the American economy for generations. I guarantee it will have free marketers going into convulsions just at the mere thought.

Also pointed out early in the WSJ article is the fact that we are not in the crisis that was being experienced in 1933. There is a great deal of potential for it to collapse and go the way of the Depression, but we are not there yet. Unfortunately, Congress and Senator Obama are already planning on trying to spend their way out of this. This is stereotypical Liberal behavior to economic misfortune, throw money at it till it goes away. Stimulus packages will not stimulate anything other than a want by people to get another check from the government.

When it comes to these stimulus packages, I think we forget sometimes that they are a loan that Congress is making to us on our behalf. It has to be paid back sooner or later. I fail to see how incurring more debt will solve any of our current problems. It was carrying to much debt that got us here in the first place, so we want to enable the problem further?

Part of the more successful attitudes that FDR demonstrated during the Depression years was fiscal responsibility. He and those around him made a Herculean attempt to control spending so they could stimulate some growth in the economy. Albeit the increase in manufacturing for WWII is probably the most notable reason we pulled out of the Depression but his fiscal conservatism did play a major role. However, based on the stimulus package approach I do not think we can expect Obama or Congress to adopt this frame of mind. I only hope and pray that someone wakes up and realizes trying to correct one extreme with another usually ends in further disaster.


"Happy Hunting!"


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