During the campaign season Barack Obama’s souring rhetoric offered hope to all Americans. Since being sworn in the new president has become the commander and chief of gloom. The fact is that Obama’s rhetoric isn’t warranted. The nation isn’t facing the Great Depression right now. What the nation needs to hear is that this is a slowdown, they’re common, and it doesn’t require uncommon action. Instead Obama is using the slowdown for partisan political advantage. Let’s face it. The monstrosity that was just passed by Congress could have never been passed without the horrible press coverage of the economy and president’s never-ending gloomy statements. Bradley Schiller has an op-ed in the Wall Street Journal that hits the nail on the head.
Mr. Obama’s analogies to the Great Depression are not only historically inaccurate, they’re also dangerous. Repeated warnings from the White House about a coming economic apocalypse aren’t likely to raise consumer and investor expectations for the future. In fact, they have contributed to the continuing decline in consumer confidence that is restraining a spending pickup. Beyond that, fearmongering can trigger a political stampede to embrace a “recovery” package that delivers a lot less than it promises. A more cool-headed assessment of the economy’s woes might produce better policies.
Obama’s policies seem more like Hoover than FDR. When the stock market crashed in 1929 Hoover took an uncommon approach to a common problem. The economy normally contracts around every ten years. Unfortunately Hoover decided government intervention was necessary. Hoover’s policies of higher tariffs, taxes, and interests rates ended up turning a recession into an depression. When FDR became president he basically adopted many of the same politics. Is it any wonder why the depression lasted until the war?
The only thing we have to fear is the government itself. The nation has been on the road to bankruptcy ever since FDR. LBJ’s Great Society pushed us faster towards the brink and no politician has been able to change the course. Now the nation is facing a recession and the current leadership is using it as an excuse to pass the single most expensive project in the history of the nation. The stimulus package costs more (adjusted for inflation), than the Marshall Plan, the Louisiana Purchase, the race to the moon, the Korean War, the New Deal, and the invasion of Iraq. If you throw in the cost of TARP (and the glorious sequel coming soon) the US government will authorize more spending than all of those events combined plus World War II, and the Vietnam War. In other words this is the largest increase in government spending in the history of the Republic. Keep in mind unemployment is still in single digits. What is the justification for this drastic action?
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