The Great Depression and the New Deal – Comparison Current Economic “Crisis”

The Great Depression was brought about by several factors including a breakdown of the Gold Standard a system whereby governments “back” their printed currency with gold. In the late 1800’s, Democrat William Jennings Bryan, a Congressman ran an unsuccessful campaign for the Presidency against William McKinley, based on removing the Gold Standard. The Gold Standard Act was repealed in 1933, under President Franklin D. Roosevelt.

The Market Crash of 1929 followed another depression in the late 1880’s, the nation’s spirits were high after World War I, spurring investments and “stocks” were traded without any regulation. When the market crashed in 1929, consumers became reluctant to invest, credit was available, and the Federal Reserve banking regulations were not effective. This led to bank failures - in the first 10 months of 1930, 744 US banks failed and 7 billion dollars in deposits had been frozen (Bank Holiday). As the failures continued (9000 banks total), borrowers did not have time to repay loans, construction ceased, and those banks that did survive instilled strict lending practices. Simply put it was currency with no backing, a subsequent lack of credit, and panic from the consumer that drove the country downward.

The fix was the “New Deal”, a program devised by President Roosevelt that put American’s back to work – the unemployment rate was at 25% - his stimulus included infrastructure projects that allowed able bodied American’s that did not have a job, to build highways, women were put to work in factories making low-cost clothing. He instituted social security for those too old to work, and all programs he instituted were thought to be “temporary” – once the economy righted itself, the “dole” would end.

F.D.R. must be doing 360’s in his grave.

How does today’s economic crisis and the subsequent “American Investment and Recovery Act”, compare to that of the 1930’s? It is true that there has been an economic downturn, specifically regarding Wall-Street; however, the market has not “crashed”. The effect of the lax lending practices of major banks required by Federal laws, effectively led the default of loans and subsequent foreclosures in the housing market. Fannie Mae and Freddie Mac, government “banks” for all intents and purposes, were the first to go under; and as larger private banks bought the “toxic” assets from failing institutions, they too needed a bit of aid from the government. Consumers are, right now, reluctant to make major purchases, and several banks have been closed, but the scope and the numbers are not sufficient to make a valid comparison between the two economic crises. The intent of the TARP was to free credit, however, without oversight, some banks who received funds did little to nothing to ease the credit necessary to keep retail and other sectors moving and layoffs followed. The panicked reaction of both the Bush and Obama administrations further exacerbated the problem. It had not, however, reached the proportion of the 1930’s – enter the Stimulus – indeed there is some job creation (short-term) in the bill, however, most of it is special projects otherwise known as “pork” – additionally, the creation of bureaucracies to oversee programs have created jobs with the Federal Government. There is tax breaks included, for those not currently paying taxes, and those paying taxes are receiving so little ($13.00 per week), that it would not fill a gas tank, let alone, instill consumer confidence. Temporary work programs serving all facets of the nation’s economy intended to alleviate a high rate of unemployment (a true New-Deal approach), is not included in this Act.

Now the question remains, as there are few valid comparisons between the 1930’s and today, will the Administrative Panic of 2008-2009, insure that the nation will slump further, with little to no tax relief for individuals and corporation that drive the economy? That remains to be seen – however, should this package prove to drive the middle class taxpayer to the brink, political fortunes of those who took the New Deal out of scope, and made the decisions this past weekend I the Senate, may end up poisoning an entire Political party.

Stimulus – No Transparency equals Democrats Lying or A Recipe for Republican Revival

Photo from AP Photo by J. Scott Applewhite from DailyLife.com

Transparency in Government, the much touted “change” that Obama supporters heartily cheered about, appears to have disappeared in light of excuses regarding “a need to act fast” (or: Chicken Little: “The Sky is Falling”). A downloadable copy of the bill that was in the House is still available on-line, yet the Senate Version, to which Pelosi promised to give a 48 hour public window (transparency), is not yet online, and was not online in time for the late, Friday the 13th, Senate Vote. What this means, in plain English, is that the Senators who voted for that Act, had no clue as to the contents. There was insufficient time to read the bill - and those Partisan Democrats who signed off on this Act, did so blindly.

Regardless of a string of broken promises in less than two months of the new administration, the Stimulus appeared to be a panic driven act, that greedy and ideological legislatures, taking advantage of the hue and cry a nervous and apparently inept White House (not the public), added untold sums of debt through the addition of pet projects that, for all intents and purposes, could have been shelved for a later date, until the economy stabilized. What prompted the addition of pet programs and projects having nothing at all to do with stimulating the economy, rather creating bigger government (37 new bureaucracies at last count), is anyone’s guess, but, with those legislatures that live and die by the polls, it is a good bet that had they not acted now to add their favorites, they may not get another chance.

An outline of what this “Act” contains, is available at The G.O.P. House, however, this is an incomplete list due to last minute add-on’s that took place in the Senate – the details however, are bone-chilling to anyone who has ever balanced a checkbook, or had to use fiscal restraint in order to: fill a gas tank, pay the mortgage or buy groceries (average working Americans). These line items (from the G.O.P. House link above) are noted as Questionable or Non-Stimulative Spending; and include some worthy programs, however, those are questionable only due to timing, and the others are outright waste.

Questionable or Non-Stimulative Spending:
• $50 million for the National Endowment for the Arts
• $2 billion for the Neighborhood Stabilization Fund, providing funds to organizations such as ACORN, which has been accused of practicing unlawful voter registration in recent elections
• $10 million for the inspection of canals in urban areas
• $100 million for grants to small shipyards
• $198 million to authorize payments to certain Filipino veterans from WWII
• $300 million for the Energy Efficient Appliance Rebate Program
• $2 billion to support the manufacturing of advanced vehicle batteries
• $1 billion for Community Development Block Grants
• $1.3 billion for Amtrak, including $450 million for a new rail security grant program not included in either the House-passed or the Senate-passed bills
• $300 million for federal procurement of plug-in and fuel efficient vehicles
• $8 billion for a High Speed Passenger Rail Program, after the House did not include any funding for the program and the Senate included $2 billion, which will fund at least one project from Las Vegas to Los Angeles
• $15 million for historic preservation at historically black colleges and universities
• $170 million for the National Oceanic and Atmospheric Administration to research the causes, effects, and ways to mitigate climate change
• $200 million for Americorps and other paid "volunteerism" programs
• $400 million for NASA to accelerate climate research missions
• $5.5 billion for federal buildings (GSA), including $4.5 billion to convert federal buildings into "high-performance green buildings" and $450 million for a new headquarters for the Department of Homeland Security.
• $210 million for a new grant program to modify and upgrade local fire stations
• $142 million for the Coast Guard to alter or remove 4 obstructive bridges
• $25 million for the Smithsonian Institution for maintenance backlogs
• $1 billion for expenses in conjunction with the 2010 decennial census
• $650 million for Digital-to-Analog Converter Box Coupons
• $1 billion for a Prevention and Wellness Fund, which can be used for sexually transmitted disease (STD) education and prevention programs at the CDC
• $500 million to replace a 30-year old computer system at the Social Security Administration
• $500 million for a health professions training program-funding which an earlier committee report said were allocated because "a key component of attaining universal health care reform will be ensuring the supply of primary care providers."

On February 4th, Rasmussen polls reported that a mere 37% of the general public supported the Stimulus Bill, subsequent emergency polling by White House media source CBS showed a conveniently sharp increase in support for the Bill. Which begs the question: “Did CBS confine its demographics to Congress?”

Should the general public’s feelings regarding this lack of transparency, pushed through on a Friday night, massive spending boondoggle, be in line with Rasmussen, then the haste with which those ideologues voted is clear. They hope that their constituents’ will either forget they voted “Yea”, or that somehow, this will work in time to save their Senate and Congressional behinds. The clock is ticking. What is most amusing is the headlines accusing the Republicans of not cooperating on the Stimulus – giving Republicans in every Congressional district possible ammunition in 2010. It will, at the very least, be difficult for those in the dog house with their constituents to explain how on earth George Bush prevented them from voting “No”. Many may not care a whit, counting on the time-tested voting blocks of African-American’s, Hispanics and Catholics to carry them blindly to another term – that said, there have been some recent changes over at the G.O.P. that may change minds, specifically in those demographics that are considered “owned” by the D.N.C. (See aggressive new R.N.C. Chair Michael Steele, who happens to be Catholic (a much sought after large voting block), African-American, and a technology savvy and likable guy.

In other words, the press and those Democrats in the Congress and Legislature who blindly followed Pelosi and Reid down that yellow-brick road laden with ideological, partisan future debt will play a hand in the fastest turn-around of a party’s fortunes in modern history. The public is aware, and even the proposed Fairness Doctrine, will not keep those suffering in the trenches (taxpayers) from voting. One has to remember that when Reagan clocked Carter (Massachusetts voted for Reagan twice), it was without: talk radio or Fox News – it was word of mouth and disgust with the Democrats out-of-control spending and a weakening economy (never mind those foreign policy debacles) that brought changes to the nation, first the White House and then both houses.

This Massachusetts Conservative understands that history has a funny way of repeating itself, and fully expects a very interesting and competitive 2010 election. The season has begun in the Bay State, with names already floated to replace Massachusetts Governor Deval Patrick (D): Scott Brown, Brad Jones, Karyn Polito, Michael Sullivan, Lou Evangelidis, and Bruce Tarr .

Given the fact that Massachusetts does tend to vote when over-taxed, (50 plus percent of the electorate are “unenrolled”) any one of the aforementioned would be able to give Patrick the boot in 2010. This trend may go towards the Senate and Congressional seats that will be up for re-election in 2010, including Ted Kennedy’s – the newly elected Mass. G.O.P. chair Jennifer Nassour, is of like mind with the Party Chair, Michael Steele, who, upon gaining the Party Chair, made the statement that his “friends in the North east” will no longer be abandoned. At that time, neither Steele, nor Nassour had the benefit of the press branding Republicans as anti-stimulus and the subsequent distrust of the bill by those that vote, on both sides of the aisle. This current administration may go so far as to change many once-safe “Blue” states – “Red”.

To read the last version available (House version) as of 7:47 am on Valentine’s Day 2009: visit: The Library of Congress which will give you a link to download the last version directly from the Congressional Printing office. The PDF is 1400 plus pages long, and, when one cuts through the “legalese”, the sheer amounts devoted to non-stimulating projects, boggles the mind. In addition, it was hinted at that this version, was not final, and that more was added behind closed doors (hence, no public notice and an inability of a Senator, even had it been Clark Kent, to read through the pages in time to make an informed decision for their constituents.

Image from: Patriot from patriot.eponym.com

Hero of the Week: Rep. John Boehner (YouTube Video of his House Speech 2/13/09)

G.O.P. – Ramps Up To Rock the World Wide Web

With the burgeoning importance of the world-wide web, including social networking sites, as tools for political parties – the Democrats are generally known to be tech savvy; using websites like Face Book and MySpace to reach younger constituents to get out the vote, or support policy. The use of the web and compatible technology (SMS) was critical to the campaign of Barack Obama, and the ability to raise funds and awareness though the web played a significant role in his election. (Including a little help from his friends at Google) - What was touted in the press, of course, was the superior use of the web by the Obama Campaign, however, tech savvy Republican’s using any means possible, including sms, and twitter, managed to hold sway in the Capital in a protest over Speaker Pelosi’s childish vacation maneuver to avoid hearings on critical energy bills – House Republicans managed to get their message out – using the web – and the Speaker ultimately returned to put the House in Session.

The G.O.P. House has now unveiled the new G.O.P.gov, an easy to navigate, fast loading, portal for G.O.P. legislators and their constituents. With the election of Michael Steele, the RNC website is growing some legs, all in time for the 2010 elections. How important is the web to Republicans? The new Massachusetts Party Chair, Jennifer Nassour, through the use of the web, is putting a face on the Massachusetts Republican Party – Ms. Nassour is using Face Book and Twitter, and plans a revamp of the State GOP site. She also uses the media to her advantage, with her name appearing in articles regarding state budget issues. Why is this important? Equal time – to get in front of the voters – the 12 million registered republicans understand that the Party has a chair, and it won’t hurt that news form the G.O.P. is now reaching the 51% of the electorate in the state that decides each election (the “unenrolleds”). With Steele promising his friends in the Northeast some much needed attention for the national party, a tech savvy State GOP chair, and a populous that has grown weary of the new administration before the first 100 days, 2010 may see a shift in house seats in the Bay State (including the Governor’s office).

The more political consumers are allowed to interact with their legislatures and state or national party's through every available means, the better that candidate or party will fare. The G.O.P. is turning the corner on technology – now the question is – will the Democrats be able to meet or exceed their constituent’s expectations, or will those moderate Democrats find it much easier to connect with a G.O.P. candidate or legislator?

You Tube Introduction to New GOP.Gov below.