Obama Should Reject New Deal Ideas
President Obama needs to take a stand--he needs to realize that Franklin Roosevelt's New Deal did not stop the Great Depression. The Great Depression ended because of World War II spending and investment. What FDR did correctly was fix the banking system and make it safer for consumers to store their money and not have to worry about getting the money back.
FDR created the FDIC; it's a corporation that secures your bank deposits for up to $250,000. FDR tried to fix the banking system so that it has more regulation--this was a good idea.
What FDR did wrong was the New Deal. This was public funding for infrastructure and public works projects. What did this do? Well, the ingenious plan was to basically take taxes from investors and small businesses and create a government funded "job" so that skilled educated workers can go to the park and use a shovel to feed their family. Of course, that may be somewhat exaggerated but that is the essential idea.
Some parts of the New Deal, such as the ending of prohibition and the gold standard helped us. Other parts of the New Deal, such as public works made the problem worse.
Economists agree that unemployment would have been lower if certain public works and industrial policies of the New Deal were not enacted. Some of the details of the 1930s economic policies will make anyone sad--especially African-American tenant farmers who were treated unfairly during the time.
The Securities and Exchange Commission (SEC) and even Fannie Mae at first were good ideas. However, deregulation by Democrats and unchecked problems directly created by Fannie Mae resulted in the current Housing and Financial market crisis of 2008--Fannie Mae was created by the New Deal.
The SEC, with corrupt lobbyist-loving leaders like Barney Frank made it possible for Fannie/Freddie to go unchecked and the market to collapse.
The New Deal was a socialist program, but at the time it was thought that it might have been necessary because people wrongly assumed that Herbert Hoover caused the Great Depression and market crashes.
What we forget about socialism is that government can be as corrupt if not more inefficient and corrupt than companies. At least companies have to have standards in order to keep up with the competition and regulations--government has no risk or hesitation.
This is why conservatives talk about small government and how much they oppose big government. Because government cannot be easily controlled and it is harder to fix.
President Obama needs to realize this. He needs to realize that his own government can be corrupted and it could seriously hurt the people he says he serves.
If he cares about the people, he will listen to Rush Limbaugh questioning him about the idea of New Deal policies.
Rush explains that he does want Obama to fail if he enacts socialist or collectivist policies.
There is nothing wrong with this.
Remember, the press, citizens, and even radio talk show hosts like Rush Limbaugh SHOULD criticize the government. Otherwise, who will make sure government is doing its job for the people?
Don't assume that government cannot be corrupt, lazy, or careless. Doesn't matter who the leader of the government is--Republican or Democrat--the media and the people have a responsibility to question and criticize them.
Obama talked about "repairing infrastructure" and "public works" in one of his videos for change.gov around 3:30 mark; Obama seemed to suggest that repairing infrastructure would create lots of jobs? Our infrastructure is fine.
http://www.youtube.com/watch?v=cTDln2f0GvQ
It is unbelievable that Obama suggested so many outrageous policies during the campaign. I can't believe so many voted for him. It's like people don't read anything.
I think people do not pay too much attention to details but more about professional appearance and messages--rather than specific policies or promises.
If it weren't for WW2 the depression could have lasted well into the 1940s. The question is about this one trillion dollar initiative of the Obama administration is how deep it will delve into future taxes and how the positive results, if any, will be able to offset the long term costs that will inevitably accumulate. It is sad but true that in an economic situation like this, the surest way to recovery would be that something would happen that is so drastic that it would force companies, banks, and investors to shelve economic woes in favor of a greater and all-encompassing objective.
Another point is that today a plant that produces electrical energy and desalinated water to supply several major cities by co-generation methods can be run with less than 100 workers. These workers are not unskilled, most of them have vocational degrees if not Bscs. The same is true for other plants; its not like the 1930s where it would take in excess of 1000 people working in such a plant since the majority of industrial processes today can be run in automatic standby mode from the CCR. I speak from my work experience. Even if such plants were up scaled with a basis of 100 or 500 the amount of people hired would not increase in simple proportion and furthermore with the drop in consumer spending such an upscale would be extremely unprofitable for the suppliers. Upgrading and expanding of industrial plants would not, in my opinion, solve unemployment nor would it be able to offset its cost by increased productivity. Back in the 1930s perhaps it would work but given the technological advances of today which were designed to increase production with less labor input such measures are not profitable. I can say that almost all industrial engineering research has been geared towards more production with less input of energy and labor, this has been the trend since the 1940s. To make federal buildings more energy efficient to save 2 billion dollars per year is an expensive endeavor and it takes time. I don't know why he chose to include this in his agenda. New deal type measures might have some, I say again, some positive benefits in an industry that still relies on a vast amount of unskilled labor but today with the majority of industrial processes employing skilled labor such a measure would benefit those who already have degrees and not those who do not. Perhaps in a new country in Africa such measures might work out but for sure not in a fully automated industry whose modus operendi is out-put with less input. WW3 would not be advisable either since given the current situation of Mutually Assured Destruction and level of technology the old days of Army Groups numbering more than 150,000 infantry with supporting arty and armor is gone forever; there would be no more mass conscription and the cost of war would be too great; a state of the art fighter aircraft in WW2 like the P-51 Mustang cost about as much as a Cadillac. I think that in a time like this the government should focus on saving money rather than on spending more. It is best to let the Invisible Hand take over for while with minimal government intervention. A good thing though would be to take less taxes for now, as was suggested by Republicans, rather than to embark on New Deal projects.
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