Many, including oui, feared that President Obama would be the second coming of President Jimmy Carter.
Mea culpa; mea mas culpa.
After his speech earlier today, President Obama is coming across as the rebirth of Herbert Hoover.
History tells us that President Hoover’s inaction was one of the major causes of the depth of the Great depression.
History is written by the winners. FDR was a winner, and Hoover a loser. Hence, FDR, the activist FDR, was a winner, one of the greatest presidents in American history, and President Hoover, the inactive Hoover, is one of the worst.
The truth is slightly different. President Hoover did prime the pump, albeit not to the extent as President Roosevelt.
Yet, President Hoover was constrained by the economic orthodoxy of the time. He signed the Smoot-Hawley Tariff and substantial tax increases in 1932 (with the highest rate of 64%), both of which are universally viewed as turning a recession into a depression. He also inaugurated public works projects, but clearly not to the extent of President Roosevelt.
President Obama believes in protectionism and tax increases.
The great British economist, John Maynard Keynes, proposed the Keynesian solution to economic slumps – spending tremendous sums of public funds to prime the pump and trigger the multiplier effect.
President Roosevelt took Keynes to heart, as well as increasing taxes. He engaged the American people. Remember, his theme song was “Happy days Are Here Again.”
Of course, he didn’t fix the Great Depression. World War II and the post-war spending binge set off the great American economic recovery, coupled with the reality that the European countries and Japan were economically crippled.
President Obama’s speech today proposed no new solutions, but was mostly a regurgitation of his talking points - extend the payroll tax cut, unemployment benefits, and infrastructure investment to prime the pump, while raising taxes.
The $870 billion Stimulus Bill was supposed to put America back to work with “Shovel Ready” jobs, but it was primarily a public employee union subsidy. He invested his political capital in Green Jobs and Keynes.
The Stimulus Bill failed, and the President exhausted his stimulus goodwill with that bill. The progressive Agenda failed.The voters in 2010 rejected it.
President Obama could be bold. His original economic team of academic superstars has bailed on him. Keynes failed. The Treasury Department has done all that it can. The Fed has exhausted existing remedies. The Obama Administration has run out of options, except to print money.
President Obama must be bold or he will lose reelection. He should recognize that Obamanomics has failed, and shift course. One attribute of FDR was flexibility; he was not wed to any one program.
President Obama is a tried and true progressive, weaned on Tax the Rich and Spread the Wealth. He is a community organizer who believes the government is the source of money. He knows that Labor is due its due.
He never understood that the wealth of America was built on cheap energy (oil, gas, and coal) and entrepreneurism. He forgot that he was elected on the stock market collapse and the subsequent economic collapse.
What he promised today was Hoover – steady on the status quo.
The people must know that the President is with them. President Roosevelt's Fireside Speeches resonated with Americans. President Obama took no responsibility and exhibited no leadership.
Crisis is the test of leadership. President Hoover did not step up. President George W. Bush was not perceived to step up. Leadership must look America in the eye – not rotate between teleprompters. Leaders must offer hope and inspiration – not blank words and talking points. The American people do not want to hear a broken record.
His acolytes responded to Standard and Poor’s downgrade of America’s credit rating as a political issue. They attacked S & P, blamed it on the Tea party, which Vice President Biden called terrorists, with the Treasury Department telling the major banks to ignore S & P, and that the credit agency made a $2 trillion computation error.
S & P downgraded today the debts of several federal agencies, such as Fannie Mae and Freddy Mac, as well as insurance companies, such as Warren Buffett’s. The nation’s debt is not $14 billion, but much more when one considers the federal guarantee of loans, such as Fannie and Freddy and the Federal Home Loan Bank, guaranteed federal student loans, and who knows how many more.
President Obama quoted Warren Buffett as questioning S & P’s downgrade. Let us remember that Buffett’s company. Berkshire Hathaway, controlled Moody’s, the major credit rating agency that along with S & P and Fitch’s missed the housing debacle.
Unless the economy turns around quickly, President Obama will have a primary opponent and be a one term president whose legacy is worse than Carter’s and Hoover’s.
President Obama’s response to the economic crisis is to schedule two fund raisers tonight. His job is paramount. That tells it all.