Thursday, February 04, 2010

The New New Deal...

Barack Obama is fascinated with Franklin Delano Roosevelt. So much so that he believes that the way to rescue the American economy from it's current doldrums is to repeat the FDR example, in fact, to out-FDR FDR himself, and have the Federal Government spend every cent in sight -- and then start printing even more money to spend.

This was the driving principle behind the so-called Stimulus bill; a little pump-priming, in the form of government spending on everything from paper clips, to jock straps, to heavy construction equipment, would be just the thing. Flush with federal cash, the theory goes, the private enterprises who received all that Stimulus would then be in a better position to do things like expand operations and hire more workers, or invest that capital in new equipment and other improvements.

According to the Obamatards and the people who think like they do, it was exactly this sort of spending -- the sort the FDR championed -- that rescued America from the Great Depression.

Actually, that is revisionist history, and it's usually repeated by people who can't find their own bottoms with both hands and a road map.

The Second World War is what brought America out of the Great Depression, not the New Deal.

American industry only reached it's pre-Depression output sometime around late 1942, a decade after FDR took office, and right smack in the midst of a global war. The United States not only needed food, equipment and armaments -- but so did our allies -- and the only places these could be found were Philadelphia, Detroit, New Orleans and Chicago. Producing tanks, bullets and landing craft, under conditions of the federal wage and price controls implemented during the War, was much more lucrative than making pots and pans, chewing gum, or comic books was during peacetime.

Supplying the Allies to fight the goddamned Nazis and Japanese is what rescued the American economy. In one of those ironic tricks of history, it was also the very same war that kept it on top of the heap for the next 30 years; the United States was the only major industrialized nation that had not been bombed flat, invaded, or otherwise fought over in the Second World War. The War kept our industrial opponents out of the game for a generation, often more. The Europeans and Japanese had to rebuild much of their infrastructure and re-order their societies, and often faced labor shortages caused by the massive casualties they had suffered. Stalin made the decision to delay recovery from the War in order to devote capital and manpower to perfecting his police state, the development of nuclear weapons, and the Space Race. Whereas Europe and Japan emerged from economic chaos in the 1960 or 70's, Russia was still mired in it right up until the Berlin Wall fell.

But, they caught up nonetheless, and worse, new players have emerged: China, India, Indonesia, Vietnam, South Korea, that can produce just as quickly, far more cheaply, and with a similar level of quality. And they have spent massive amounts of money to build and maintain modern factories, while ours simply decay until some yuppie decides to recycle them as prime condo-lofts.

Unless Barack Obama is willing to invade another country, or butt in on someone else's war, the Old FDR formula will no longer work.

The global playing field is much too even now, and spending lavish amounts of cash in the hope of saving businesses who a) don't really have much of anything to sell, and b) don't have a huge, double-your-exports-overnight sort of demand for what little they do make, is simply a waste of money. Mostly because the recipients (the CEO's) are more likely to just take it and stick right in their pockets; they have no incentive to expand, and the rest of the New New Deal (Obamacare, Nationalization of the banks and private industry, highest tax rates on the planet) only scares them shitless about whatever future prospects they may be thinking about.

Obama needs to learn two lessons from the example of FDR (mostly about how wrong he was):

1) Wars lead to economic expansion and revolutionary technical innovations. If Obama really wants to "save" the American economy, then he can start one, or he could simply just stop treating terrorists like shoplifters and start slaughtering Muslims in numbers large enough to dissuade the others from strapping on TNT boxer shorts. A little less "War on Terror" and a lot more "War on the Source of Terrorists", and the economy will simply start humming as military orders pour in, and our industry starts finding new technologies to support the warfighters in bioscience, medicine, communications, weaponry, metallurgy, aerospace, and so forth. We'll also solve that Homeland Security problem while we're at it.

2) Social Security accounts for a significant part of current budgetary problems, and is one of the biggest factors behind today's soaring deficits. It pays out far more than it takes in as people live longer then they have any right to expect. That's when it's not being raided by successive Congresses who need to fund Belly-button Lint Museums in West Buttfuck, Montana, Establishing grandiose entitlement programs that ultimately cannot sustain themselves is a really bad idea. Expanding yet another (Medicare) to care for people who don't even pay taxes (like illegal aliens and 'The Poor'), is even worse.

The Economic supremacy this country enjoyed between 1942 and about 1980 had nothing to do with Federal Spending, or pump -priming, or the vaunted New Deal of the Sacred FDR; it was mostly accomplished because the rest of the industrialized world required a generation or two to recover from the Second World War. The rest of the planet was in smoking ruins, millions had died, after all. The days when American labor can squeeze ridiculous concessions from management -- simply because "American Made" was the only game in town, and business so lucrative, that Management was able to afford what amounted to Danegeld (extortion) to Union Labor -- are done. The rest of the world has recovered.

We have no industry, to speak of, that makes anything the rest of the world actually wants, or cannot make for itself. What little industry there is, is more or less either Federal Property (GM), or depends entirely upon the U.S. Government in some form for the majority of it's business (General Dynamics, Boeing, for example). Pump-priming doesn't work for these guys because the industrial model of 1930 is no longer operative.

I wonder when someone will get around to telling his Infernal Majesty that wishing to return to some golden age that never really existed is usually considered a Conservative trait, and that he should, perhaps put his kids' 5th grade history books down and get with the program.

FDR failed, but was rescued by circumstances. The sooner you learn that, the sooner you can admit to your mistakes and take corrective action, Mr. President.

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