In the Great Depression, President Herbert Hoover raised marginal tax rates to 63%, and went on a deficit spending binge. He also signed the Smoot-Hawley tariff, which helped turn a recession into the Great Depression by triggering a trade war with other countries.
Obama is on the same path. His deficit-exploding $800 billion stimulus package blocked 97 Mexican truckers from U.S. roads. That NAFTA violation “caused Mexico to retaliate with tariffs on 90 goods affecting $2.4 billion in U.S. trade.” The CBO admits that the stimulus package will actually shrink the economy in the long run.
Yesterday, Obama praised the House’s passage of a bill to impose a 90% tax on bonuses at banks that received federal funds. He did so even though some of those banks are healthy and accepted federal TARP money under federal pressure so that unhealthy banks that also took TARP money would not be stigmatized. The bill passed in the furor over bonuses that AIG, being bailed out by taxpayers, paid to its employees. (Republicans only wanted to block the bonuses at AIG, which is a major donor to liberal politicians like Obama and the corrupt Sen. Chris Dodd (D-CT); Democrats successfully extended the tax to major companies receiving TARP money).
And it goes on form from there….
The point is that, like Hoover (and George W. Bush to be completely honest) Obama is presented with an economic crisis, and his first response is to increase taxes and spending and engage in trade practices that lead to trade barriers.
For Hoover, it led to Depression and defeat.
What will Obama’s fate be ?
H/T: Shaun Kenney
March 26th, 2009 at 12:31 pm
The notion that Obama can be likened, in any way, shape or form, to Herbert Hoover is laughable, absurd, misinformed and frankly disingenuous.
The precipitating factor that got our nation, and by enlarge the world economy, into this pit was the greed of a small percentage of mortgage financiers who engaged in risky lending and others like those at AIG who were involved in the credit default swap racket insuring and bundling these toxic assets and bad loans.
What enabled all this?? Radical deregulation of the financial sector under the watch of the Bush administration mostly. As hard as it is for Libertarians and radical free-marketers to hear and accept, when you let big business make the rules and “self-regulate” greed takes over and the bubble may inflate for a while. However, as we have learned the hard way as a nation, it WILL burst, like it has, and when it does the fall has the risk of cascading collapses throughout the economy.
Obama, in his first 65 days in office, has dealt effectively with the financial crisis, by enacting much-needed stimulus and relief to stem the bleeding- nearly 4 million hard-working Americans lost their jobs last year. He has proposed comprehensive health care reform that will dramatically reduce waste and cost; he has proposed centrist education reform policy that will hold students, teachers, and parents accountable for achievement results, and link funding and compensation to not only need but also results.
He has also proposed comprehensive clean energy reform that is long overdue that we desperately need to break our dependence on foreign oil. His administration is accomplishing all this within the first 100 days while also dealing with a major global financial crisis inherited from his predecessor that is unparalleled in scope at least since the 1930s.
In addition, Hoover’s downfall was largely that he CUT spending rather than making sound investment in STIMULATING the already reeling U.S. economy resulting in millions more losing jobs and an already rigidly locked, ailing economy to decline further and faster.
This is, in every way, the exact opposite of Obama’s approach. It is disingenuous, however, to try and pin the fact that we have probably not reached the bottom yet on Obama. An economic catastrophe like this is not caused overnight, and also cannot be corrected overnight.
A lot of the toxic assets, bad loans and other dubious investments are just beginning to come due- estimates are that there may be even more mortgage defaults next year when a whole other wave of risky adjustable rate mortgages increase in rate as scheduled, before the economy and housing markets begin to rally substantively again in 2010.
There are already signs of hope from Wall Street as well- almost immediately after Treasury Secretary Geithner announced the fiscal recovery plan recently, there was a soaring rally in the Dow and the market finished dramatically up for that day for the first time in a good while.
Get out of here with the garbage of trying to compare Obama to Hoover. That is the biggest bunch of malarkey I have heard in quite some time.
April 8th, 2009 at 12:49 pm
[...] with these incontestable facts, found in newspapers and government reports, an Obama-phile simply asserted that everything I said was false, and that Hoover caused the Great Depression by cutting government [...]
April 8th, 2009 at 5:10 pm
[...] with these incontestable facts, found in newspapers and government reports, an Obama-phile simply asserted that everything I said was false, and that Hoover caused the Great Depression by cutting government [...]