Learning from History

Today we see the "Economic Crisis" and the effects it has had on government policy in the past year. However, I would like to look at the history of our country leading up to the Great Depression, to shed some light on our situation. In reading this article, by the Foundation for Economic Education, I noticed some keen similarities to today's economic situation, and today's government policy. Just read the section about the Reconstruction Finance Corporation, and perhaps replace the acronym RFC with TARP, and see if you see any similarities. From the same article, read this
"Roosevelt did indeed make a difference, though probably not the sort of difference for which the country had hoped. He started off on the wrong foot when, in his inaugural address, he blamed the Depression on “unscrupulous money changers.”"

Does this remind you at all of any of the rhetoric coming from the administration of Barack Obama? Look at this link from Bloomberg. An important quote to keep in mind...

“There’s almost no question that the economy is going to decline for some time to come,” said Summers, who served as Bill Clinton's last Treasury secretary. “Our errors are not going to be of standing back.”

Remember that the Depression of the 30's started under a REPUBLICAN administration, and continued through two terms of a DEMOCRAT president.

The American Recovery and Reinvestment act of 2009, otherwise referred to as the "Stimulus Package," has a large number of parallels to the New Deal.

Look up the London Economic Conference of 1933, and compare and contrast to the G20 conference in London RIGHT NOW.

Notice this as well. Recognize that $1 dollar at the time is approximately equal to $13.92 in today's dollars.
"In the first year of the New Deal, Roosevelt proposed spending $10 billion while revenues were only $3 billion. Between 1933 and 1936, government expenditures rose by more than 83 percent. Federal debt skyrocketed by 73 percent."

Also, recognize that the federal debt today is already above $9 trillion. You can't expect the debt to increase by quite an extraordinary figure. Also, we're in the fourth month of the New New deal. Spending for this New Deal has already reached about the revenue for this year.

Look at this quotation from the same article...
"Perhaps the most radical aspect of the New Deal was the National Industrial Recovery Act, passed in June 1933, which created a massive new bureaucracy called the National Recovery Administration. Under the NRA, most manufacturing industries were suddenly forced into government-mandated cartels."

Now, watch in the coming months as many manufacturing companies are either forced into government ownership, or ask for it, as in the case of GMC.

More parallels can easily be drawn, but the most important of all are between Mr. Obama himself to Mr. Roosevelt. The article states this about Mr. Roosevelt,
"Washington was rife with both fear and optimism as Roosevelt was sworn in on March 4, 1933 — fear that the economy might not recover and optimism that the new and assertive president just might make a difference. Humorist Will Rogers captured the popular feeling toward FDR as he assembled the new administration: “The whole country is with him, just so he does something. If he burned down the Capitol, we would all cheer and say, well, we at least got a fire started anyhow.”"

Does that sentiment remind you at all of how America feels right now? About our economy? About our President?

I fear, my friends, that we are in the midst of a very similar chain of events as we saw start in 1929 and ending in the early 50's, this time starting in 2007, and ending who knows when. There will be higher unemployment, expanded socialism, and war. If you haven't read the article I've been referencing, please do. Please hope and pray with me that I'm wrong. That we're not headed into another Great Depression, followed by World War III, followed by another cold war. As has been said, those who do not learn from history are condemned to repeat it. I don't think we've really learned. And it sure looks like we're repeating it to me.