We've been in office, what, 2 1/2 , three weeks? We've passed the most major sweeping comprehensive legislation as relates to economic activity ever in a three-week period of time.Chief of Staff Emanuel is absolutely correct. But, is it enough or too much. That is the question.
I would have presented the below anonymous quote at Left in Lowell, given their recent discussions of the economic situation and the Stimulus Plan. However, ever since they rehosted the site, I have been unable to post comments. I have tried a number of things, but nothing is working for me. So, I am making a Blog Post of my own for the following comments from an economics PhD and current economics professor:
It certainly looks like we are going to have to re-learn the 1930s lessons (and have not yet begun). Although John Maynard Keynes was British his homeland did not put the prescriptions from his General Theory of Employment, Interest and Money into effect. British employment figures began to come back about 1936.None of this is to take away from the contributions of the WPA and other organizations to the betterment of the People of the United States. The Civilian Construction Corps (CCC) employed millions of men during the depression and helped us prepare for World War II. In fact, due to a clerical error, for a couple of years my source of commission was listed in the Air Force Computer System as the CCC.
President Roosevelt signed on the Keynes' ideas yet US employment did not respond until the build up for WW II (1938 was, for the US, about the same as 1933). Then we put not quite 10% of the total US population in uniform and a great many more into the industrial base needed to support a military of that size fighting a world war. Were we to do that today the US military would have somewhere north of 25-30 million troops.
The 1930s were a time of desperation, with the Depression being part of the problem. In addition, farm foreclosures were combined with the dust bowl. Arkies and Oakies fled to the West Coast. My daughter-in-law's grandparents were from both Arkansas and Oklahoma and settled in Central California (Big Creek).
Then there were the political problems of the time, including WWI Veterans who marched on Washington to get their promised Veterans Bonus early, to help them through the Depression. Governor and then Senator Huey Long (memorialized in the Robert Penn Warren historical novel, All The King's Men) was expected to opposed President Franklin D Roosevelt. The Huey Long program as described in Wikipedia is as follows:
Long created the Share Our Wealth program in 1934, with the motto "Every Man a King," proposing new socialist wealth redistribution measures in the form of a net asset tax on corporations and individuals to curb the poverty and crime resulting from the Great Depression. To stimulate the economy, Long advocated federal spending on public works, public education, old-age pensions and other social programs. He was an ardent critic of the Federal Reserve System's policies to reduce lending.If Senator Huey Long had run as a third party candidate in 1936 he might have endangered Roosevelt's chance of victory. Can you say President Alf Landon? Governor of Kansas, Alfred Landon was a Liberal Republican of the Teddy Roosevelt mold. He was the only Republican Governor to be reelected in 1934.
But, the question remains, what is the path out of the current economic troubles?
- We know that people need jobs.
- We know that the Housing Market is in trouble, to include many evictions of people with nowhere to turn.
- We know that credit is tight, which means that innovative new ideas are not being launched as businesses--thus not creating new jobs.
- We may remember what happened in the German Weimar Republic with its rampant inflation.
- We have been told by Nobel Laureate Paul Krugman that the Stimulus Package is not nearly enough to pull us out.
- In an earlier opinion piece Dr Krugman had suggested it is only a third of what we really need to achieve a Keynesian recovery.
- We have the British example from the 1930s, where they pulled themselves out of the Depression well before we did.
- What we don't know is what is the best path out of this situation.
As an aside, if Senator Chuck Schumer isn't worried (NB Sound involved) about a billion dollars of pork here and a billion dollars of pork there, neither he nor we should be too worried about this or that bank executive making a million dollars.What we need to be doing is working to ensure credit is available to companies taking the risk involved in starting a new product line or ramping up production in an old one. They will need to borrow money and that means that someone has to loan it to them.
We can be writing checks to citizens who are unemployed, but if some of that money doesn't find its way to businesses, old and new, and into the investment accounts of those businesses, we are going to be in this economic mess for a long time.
Is $787 Billion, followed by another $1.5 Trillion, the answer? I am not convinced. There is no doubt in my mind that, like in the 1930s, the American People are looking for the Federal Government to do something and to then explain it. Senator Chuck Schumer notwithstanding, while the American People favor the Stimulus Package, there are not overwhelming numbers in favor of this approach, although after the package is signed the poll numbers might go up from the low 50s.
But, in the end, it is about economics and not poll numbers.
Here is a comment from France, pointing out the structural problems in the current economic crisis and calling for a solution that involves increased international control. I do not favor some of his solutions. I don't believe there is sufficient global concensus on things like human rights and economic policies.
Regards -- Cliff