Monday, February 23, 2009

President Obama and The President Carter Effect - Deja Vu

In regards to the current economic crisis, first and foremost, lest we forget, history has a way of repeating itself, second – if one has lived through the 1970’s, one is sure to be currently experiencing déjà vu. The fear and drumbeat of the media, from the current issue of Harper’s Bazaar, which features articles such as “Cost Per Wear”, a piece on shopping for high end clothing and accessories, one cannot currently afford, as an “investment”, to the constant drumbeat of economic experts on every news outlet crying “the worst economic crisis since the Great Depression!”, has most American’s in a state of anxiety over the future. A look at the past, however, and a calculator (to adjust for inflation), will go a long way towards assuaging fears, and allowing one to understand that the nation has been here before, gotten through it, and basically, with a lot of discomfort, came out just fine.

In the last term of his Presidency, Jimmy Carter’s budget was 739.3 billion dollars ; using the historical data to adjust for inflation, that figure (at a 95% increase since 1982), represents over 1.4 trillion dollars. President Carter also experienced a deficit,
The Carter deficit was caused by a somewhat bloated budget (i.e. “stimulus), which led to an increase in taxes, specifically a 50 cent per gallon hike in the fuel tax and higher taxes for corporations (making Wall Street nervous).

There were cuts in the budget, of course, specifically the military.
The nation experienced a steep rise in unemployment, as well as a housing/savings and loan bailout that allowed for a 10 billion dollar “fund” for Savings and Loans (banks), to invest in older neighborhoods.
In addition, we've bailed out Detroit before - under Carter, with with
Chrysler receiving 1 billion dollars in U.S. back loans.

Obviously, some of Carter’s programs did not turn out as expected; that said, the media at the time, did not push headlines at the populace which screamed “Great Depression”, nor did the President, which may have led to a feeling of “safety” and hope for those who took the bus to stand in the unemployment lines for hours on end. (Just a note, many of those who were working were on that same bus, due to the high 26% interest rates on used cars, and the lack of available credit.)

Therefore, one has to understand that the President (Obama) is in a situation that is, indeed, strained, and he is working with a Congress that is of like mind. Additionally, like Carter, he lacked experience coming into the position, so one would think that those who voted for Obama would allow for a period of adjustment. Herein lies the difference between 1979-1980 and 2009 – impatience and a lack of historical reference (Social Studies taught in lieu of History for the past 30 years is part of the problem); individuals expect hope and change to be immediate, and the “masses” are not seeing much hope, or for that matter the “change ($)” that were expected. The leap to judgment, without the knowledge that we’ve been here before, is causing a backlash of finger pointing, that has accelerated a decline in approval ratings (those pesky polls, and without George Bush to blame (and it goes without saying, the former President will be brought into conversation), the judgment will be upon the current administration. Fair, hardly, however, one must understand that without knowledge of governing coupled with a lack of historical reference, the reaction (to the economic crisis) is what should be expected.

A note from Massachusetts: Due to the Financial Crisis and the cost of administering the state MCAS, students in the state of Massachusetts will not be tested on History.


Chuck said...

I've said it from the beginning, the paralells to Carter are stunning


-Lack of understanding of the economy

-lack of foreign policy

-elected because of popularity

Good news is, what did Carter ultimatley gives us? Reagan and 12 years of Republican rule.

Tina Hemond said...

Chuck, it goes without saying - those who have lived through the Carter Years, we're well aware of what an Obama Administration was prone to do - of course, some were blind to the 70's, some were blinded by the 70's and those who were educated after the 70's - have no clue.

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