Obama Campaign Eerily Like 1936

Discussion in 'Politics' started by pspr, Oct 30, 2011.

  1. pspr


    While Republican presidential candidates are looking forward by proposing variations of a flat income tax, President Obama’s tax-the-rich campaign strategy is looking backward—to Franklin Roosevelt’s 1936 reelection campaign. FDR won his reelection, but the American people lost: Roosevelt’s new taxes on business and the “economic royalists” gave us the “Roosevelt recession” of 1937-38.

    By August of 1935, Roosevelt had achieved some of his signature pieces of legislation: a new entitlement program known as Social Security, banking reform, pro-union reform, infrastructure expansion and massive transfers of wealth to the poor and middle classes. Sound familiar?

    FDR also ran up federal spending significantly: from 6 percent to 9 percent of the economy.

    However, FDR needed more revenue to support his big-government schemes. More importantly, he needed a villain to explain why, given the passage of his New Deal legislation, government spending and regulations, the economy was still struggling.

    So he proposed raising taxes on the rich, which he dubbed a “Wealth Tax.”.............

  2. Ricter


    "Roosevelt Recession"


    By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill.[1] The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.

  3. Lucrum


    Sounds like the price of Keynesian economics.
  4. pspr


    Another distortion of the truth by Ricter. He conviently didn't post the next paragrph explaining the truth about the 1937-38 Roosevelt Recession. Here is the inconvient truth.

    Unemployment jumped from 14.3% in 1937 to 19.0% in 1938.[2] Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels.[3] Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.

  5. It's an intriguing parallel. As can be seen by a recent chart of the biggest monthly gains in the history of the markets, most of them occurred in the 1930's and....2007,08,09 and this past month.

    To point out the obvious, the biggest monthly gains are typically going to occur in longer term bear markets.
  6. Ricter


    Lol, the second paragraph elaborates on consequences of the first. Had I been cherry-picking I would not have provided the link.

    You are so out of your depth it's not funny.
  7. jem


    so you think the cutback in some govt jobs program caused the unemployment rate to spike up like that -- and it caused all the other problems.
  8. Ricter


    Of course it did. Just as it would again if the automatic spending cuts go into effect, which is why you have republicans arguing like Keynes at the moment, re military spending. The irony is so sweet.
  9. jem


    I think you have to examine what causes slack in demand.
    I will bet you will see the it had a lot more to do with Europeans changing consumption habits and preparing for war.

    We were a big exporter back then.

    However had obama and the dems created jobs improving our infrastructure rather and the garbage spending and handouts they have created... I am sure we would be in much better shape.

    Lets have a WPA and fix bridges and water systems and national parks. Instead of all these people get free handouts.

    workfare not welfare
  10. pspr


    I think the only safe bet is to cap government spending at 2008 levels. Allow the economy to eventually grow it's way out of the debt as a percent of GDP. Cuts at this stage of slow recovery could prove counter productive but the existing spending could be channeled into much much more productive areas than Obama wants.

    Its pretty obvious government spending as it is today can't get the economy growing. It is counter productive to increase spending.

    It is new regulation, new threats to business from government and threat of new taxes that are killing the recovery.
    #10     Oct 31, 2011