Handling Depression

In 1936 Franklin Delano Roosevelt was running for re-election.  He had taken over four years earlier from a Republican President who had struggled for three years trying to contain a financial crisis. The unemployment rate through 1931 had risen steadily, mushrooming in 1932 till it topped 23%. 

The Hoover administration and the Federal Reserve did all the wrong things in 1930, which is now a part of US Economic History 101.  Motivated by business and financial interests (that had caused the birth of the Great Depression) Hoover’s policies vacillated between meager Federal programs in an attempt to spur growth and attempted policies to stabilize the currency for the financially powerful.  What ended up happening by the end of 1932 was a devastating contraction of the economy so deep that it resulted in deflation, the only such time that occurred in modern US history.

Once Roosevelt took office in 1933 the unemployment rate continued to rise during his first year as President, spiking to as much as 25%.  After his third year in office the unemployment rate had dropped in the 16% range, but by the time of the 1936 election it was creeping back up near 20%.  That was the economic backdrop that Roosevelt took to his bid for re-election against the two term governor from Kansas, Alf Landon.  In that election of 1936, where little the Federal Government had done showed dramatic improvement, Roosevelt won every state in the Union except Vermont and Maine and won the popular vote by almost 25 percentage points.  How did this happen and why under strikingly similar circumstances is Barack Obama just barely staying even with a truly hapless challenger?

The complexities of 1936 and 2012 are not identical.  The Nation economically was far worse off after 3 years of FDR than after three years of Obama.  Taking over the Nation at the beginning of the financial meltdown in 2008, the Bush and Obama Administrations, and the Fed did not make the same mistakes that Hoover had. The Emergency Economic Stabilization Act of 2008 and TARP the following year dedicated about $1.3 trillion to stop the financial collapse then bolster the American economy.  What it did at the very least was to halt the slide of unemployment and avoid the kind of financial quagmire that Roosevelt found himself in. At best it brought a full recovery to equity markets and helped major corporations to begin operating in the black almost immediately.  

Both FDR and Obama had to operate under fierce opposition from Conservatives.  In the 1930’s (also before and after for a time) Southern Democrats were generally more Conservative than Northern Republicans, so partisanship of political parties was less defined.  Both Presidents used the leverage of the popular desire for change to advance major social programs.  They were/are both extraordinarily articulate men and master communicators.  So what did Roosevelt do that Obama has not?

Roosevelt was willing to powerfully engage his opposition.  However, he did so as a declared champion for the people.  He willingly took on the risk of confrontation, but made the average American believe he was taking that risk for them.  He famously said; “I ask you to judge me by the enemies I have made”.  At the time it was a conflict between the haves and the have-nots, no surprise there, although he himself had substantial family wealth.  As a result he became a Populist President, won two more re-election bids with little opposition, changed the course of American society, and was the leader America needed as it engaged in global war.

Barack Obama’s failure to become a truly populist President has not been due to his policies and in spite of his numerous accomplishments; it is rather due to his misunderstanding of just what is a Populist leader.  In his book The Audacity of Hope, Obama essentially described a populist leader as someone who brings all people and divergent ideas together based on a belief that there is enough commonality among all Americans to bridge conflict.  Nice idea…wrong universe.  That Republicans chose to block his Administration for three years by simply saying no to virtually everything, only confirms that they read his book.

Franklin Roosevelt was not afraid to admit that the loyal opposition wanted him out, and that their desire to depose him was not a failure on his part.  In 1936 while campaigning for re-election he said; “Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred”.  He rallied such incredible support from a Nation wallowing in economic despair because he conveyed a sense that his fight was their fight even as he failed, while Obama is struggling to dissuade the Nation from feeling like his failures are their failures, even as he succeeds.

Post RNC Interview

Paul Ryan Interview
With Newsweek Magazine (NM)

NM:    Thank you Congressman Ryan for talking with us today.

PR:      (face in a Newsweek Magazine – suddenly looks up) Oh yes, my pleasure.  You know I just love this magazine.  Aside from its radical-Socialist, centralized big government, organized labor leaning, anti-individual, groveling American, business busting rhetoric…it really is informative…and pithy!! 

NW:    No, but thank you Congressman, we appreciate your views.  So now that you’re the Vice-Presidential nominee, and perhaps next January only a heartbeat away from the Presidency, how do you view this potentially awesome responsibility?

PR:      I owe it all to my mom…well, my mom and my beautiful, inspirational wife.  Actually, my mom and my wife and my great kids, who remind me every day that being a dad is what’s really important.  In fact, it’s the most important job you can have…unless, of course, you’re a mom…which is even more important because…well, you’re a woman, and being a woman is what it’s all about. Right?  I LOVE YOU WOMEN…I mean, Republicans love you women…

NW:    Regarding Medicare, you and Governor Romney have advocated a voucher system which you believe would solve the potential crisis that may occur with Medicare sometime over the next 20 years; however you have exempted people who are 55 and older, allowing them to remain with the current system.  If your voucher idea is such a good one, why do you suggest waiting ten years to implement it?

PR:      GOOD GRAVY, do you think we could get any of those old people to vote for us if we said we were going to be messing around with their precious Medicare next year?  A good venture Capitalist like the Mittster will tell you, ya gotta sell the idea first, take control, then go in to slash and burn.  But please, don’t misconstrue what I’m saying: we LOVE OLD WOMEN…especially the moms.

NW:    Congressman, some questions have risen regarding your qualifications, that you have virtually no foreign policy experience.  It has also been said that you are hardly known even in your home state of Wisconsin.  How do you respond to these critics?

PR:      (now with a cheese wedge hat on) No one can deny that I have been a significant presence in Wisconsin, have you asked my mom?  Hell, I managed to weasel them a ton of that TARP money…what do they want?  As far as foreign affairs…well, let me tell you this: from where I have stood in Northern Wisconsin you can see…Canada.         

NW:    Now about the serious issue raised by your friend and colleague Congressman Akin; you had sponsored a bill with Congressman Akin which sought to deny public funding of all abortions with an exception of, quote, forcible rape. Why did you use the term “forcible”, doesn’t the use of such an adjective imply there are other types of rapes that wouldn’t be exempt?

PR:      (cheese hat gone) Now let’s get this straight; a rape is a rape is a rape…end of story.  Although…that would be three rapes wouldn’t it?  That’s pretty darn forceful even without the adjective.  Anything less and I’d been inclined to call a...ahh…a “rip”, the progeny from which should be fully inclusive of rights under a rule of law from the moment of conception.  I’m proud of my record on this…and so’s my mom.  My mom loves women.  Did I mention that?  By the way…every picture you see of me standing arm and arm with Todd Aiken was photoshopped by radical Socialist Liberals. I don’t believe I’ve ever met the man.

NW:    You take a great deal of pride in your physical fitness program and have suggested that fitness makes you uniquely qualified to represent a new generation of young Americans.  Is that correct?

PR:      (now with shirt off – on his chest are the words I BUILT THIS)  It is incomprehensible to me that Joe Biden can give interview after interview with the  mainstream liberal media and never once has to mention anything about his fading hair transplants.  This (beats his chest) is real, and as rock solid as Mitt’s doo.  I think this (pointing at his body) is something the youth of America can follow.  Sure, Obama can play a little B-ball, but really…some people (leans in softly) are just born that way - you know what I mean. Anyway, I think this is what America is looking for, but don’t get me wrong…sure P90X rocks, but…I LOVE YOU FAT WOMEN!!

NW:    Very…ahh…nice Congressman.  Like Mitt Romney you have criticized the President for the Emergency Economic Stabilization Act and the GM/Chrysler bailout, yet you voted for both those bills.  How do you reconcile that with Mr. Romney who feels neither should have been passed?

PR:      (back to white shirt, no tie and oversized suit jacket) That’s simple; the Democratically controlled House and Senate originally submitted these bills written entirely in Ebonics.  By the time I and my other Republican colleagues realized that phrases such as: Got me a supakool layin' in da free-idge didn’t have to do border security it was…well, too late.  The Mitt got it right, of course. I believe he is fluent in both French and Ebonics.  Did I mention that Mitt LOVES ethnic women?

NW:    Actually no…I’m not even sure what that means?  Now a final question Congressman Ryan.  Governor Romney is a Mormon.  Do you see this as a potential problem with yours and his bid for what has always been a secular political office?

PR:      Not at all.  You may not be aware that when a baptized Mormon dies only they get to ascend to the highest level of heaven where each Mormon gets to have their own planet.  I can assure you that Mitt is not the least bit interested in this one and is perfectly willing to wait.  Let’s face it, Mormons love women, and Mitt Romney is no exception…even if he only has one.

NW:    Well thank you Congressman Ryan.

PR:      Thank you.

Hard Times??

We are experiencing something historic today in America and it has nothing to do directly with the economy.  Our Nation has succumbed to a kind of mass brainwashing engineered by those who, among other things, control the Republican Party.  I have no evidence regarding the Republicans other than what I witness every day. I accuse them (with bias) primarily because they are the direct beneficiaries of the brainwashing. 

Regardless, all corners of the general population, including media and pundits, now accept as conclusive that times…these times…are bad – end of story.  The Nation believes this because they are relentlessly told it is a fact.  They believe it even in the face of their own personal experience.  Further, by convincing the population that hard times are what we have and fear is the appropriate reaction, the proponents have wisely calculated that empirical statistics to the contrary won’t get in the way.

Today on ABC’s Sunday news program This Week, senior Obama advisor and one of the architects of Obama’s 2008 campaign, David Plouffe, awkwardly avoided commenting on the hallmark question made famous by Ronald Reagan and used repeatedly at the 2012 RNC: Are you better off now than when Obama took office?  His inability to respond had little to do with a loaded question and everything to do with an inability to expose fantasy.  He is as brainwashed as the rest.

He delivered what is becoming a tired line about how the President knows that times are hard and is committed to improving them. He should of said; “if taken from the time Obama’s policies began to take effect in the late fall of 2009, then hell yes the Nation is better off: out of a recession, large corporation profits at record levels, private sector jobs rising for two years straight, a first step taken toward universal health care, a stock market fully recovered, housing prices stabilized, a financial sector stabilized, an auto industry stabilized, a war ended, and Osama Bin Laden’s fookin’ head blown off”.  It is worthy to note that had McCain been elected President in 2008 none of that would have occurred, including Bin Laden.

Republicans point to unemployment as the key benchmark to prove that we are living in an economic black hole of despair. Some Economists estimate a "range" of possible unemployment rates. For example, in 1999, in the United States, the Organization for Economic Co-operation and Development(OECD) gives an estimate of the "full-employment unemployment rate" of 4 to 6.4%. This is the estimated "structural" unemployment rate, (the unemployment when there is full employment). In other words, the number of unemployed at those rates is driven mostly by the choices of the employees and not the lack of available jobs.  It also means that the true unemployment rate in July 2012 was not 8.3%, but rather something more like 3.3% (assuming average full employment at 5% unemployment).

Further, as stated over and over by Romney, Ryan, Fox News, Republicans, Republican pundits and probably brainwashed Democrats, they set the number of unemployed at 25 million.  This number was used more times than I could count at the RNC.  They get this number simply by multiplying the unemployment rate by the total US population.  Why doesn’t anyone (news media or Democrats or…well, just anyone) challenge these claims?  The Bureau of Labor Statistics set the 8.3% unemployment rate in July at 12.8 million unemployed workers, or 8.3% of total workers looking for jobs.  As the true unemployment rate is closer to 3.3%, the actual number of workers forced to be left unemployed by the economy is really 5.1 million, or about 1.5% of all Americans.  This reality however doesn’t fit with the drip…drip…drip of how incredibly bad your life is.

The problem today is not unemployment, it’s under-employment, workers feeling the lack of mobility that is characteristic of a slow growth economy.  Republicans endlessly claim that by injecting a hypodermic needle of cash into the rear ends of the wealthy, successful, “job creators” their entrepreneurial spirit will just have our economy taking off.  This, of course, is beyond ridiculous.  Would someone please ask Mitt Romney this question: If you get an additional $300,000 added to your many millions, just how will that result into more jobs than your other accumulated millions are already producing? The truth is that markets create jobs, and markets are created by people spending money. That includes the markets for public services.  Increasing our insane concentrations of wealth in this country only exacerbates the problem. 

The real question is how things get better from here. If I had a magic wand I would tax the bejesus out of the top 2% of the Nation’s wealthy, pour money into public services (not entitlements or defense) and eliminate the deficit.  The resulting demand would not only spur growth, stabilize the economy, eventually reduce the national debt, and increase revenues, but, ironically, would make the well-off even wealthier.  The top 2% already own more than 50% of the Nations non-residential assets…I don’t think they’d be suffering.  

I don’t have a magic wand, so the best thing that can be done in the short term is not to let Romney and Ryan get their Bush-like hands on the economy, and you start by praising the American people by what they’ve accomplished in just four years after exiting the asylum back in 2008.