CapitalistMarks

Lessons from the Great Depression. What Obama can learn.

Posted on 04. Jul, 2009 by scott in Social commentary, economic daydreaming, political munglings

This essay is the third, and I think the final, installment on the efforts towards change that are being spearheaded by President Obama.  By now you should realize that BHO is doing too much too fast.  I have spent the last week underscoring this and hopefully it has sunk in.

However, there is more.

The current issue of TIME has a cover article titled “What Barrack can learn from FDR.”  There are several well thought essays inside and they include excellent points.  Primarily about the wonderful and enduring things FDR accomplished for American society.  They are all worth reading.

However,there are several negative things that can be taken from the FDR experience during the Great Depression and TIME seems to ignore them.

One is that taking on too much at a time and trying to force legislation through too fast can be disastrous ( I would bet that most congressmen NEVER read most of the bills they vote for).  The second is that mistakes will be made and therefore the President and Congress need to be confident enough to recognize, admit and act on their mistakes (this is something I really worry about with our current bunch of knuckleheads back in D.C.).

We’ve already seen evidence of these problems.  It doesn’t take a rocket scientist to recognize that the stimulus package that was ram-rodded through by Obama has been a dismal failure in the area that counts most: unemployment. Nearly $800 billion committed and the #1 problem to the average American is just getting worse.  We were assured, by Obama,  that unemployment would stay below 8% if the stimulus package was passed.  Today we are at 9.5% and climbing.  More money was needed to create jobs immediately. This is generally accepted by everyone now but we still aren’t acting to address the problem like FDR did — thousands upon thousands of jobs for the unemployed that provided longlasting benefits to the country.  People with jobs spend and spending pulls the economy out of the recession (consumer spending is 70% of our entire GDP . . . and don’t forget that!).

The lessons BHO should learn include the great programs FDR managed to push through that are enduring legacies of our political and economic system.  The important part here is that he didn’t get them all at once . . . it took years. How they came about is as important as the fact that they were passed!  Are you reading BHO?

Let’s look at a few.

The FDIC, important agency/legislation to protect American’s savings was passed in 1933.  Still running strong and VERY important to our economic health.

The SEC, an important agency assigned to monitor and protect American’s investments through better disclosure and other methods, was not created until 1934.  Still running strong and VERY important to our economic health.

The FHA which protected mortgage lenders and homebuyers was not created until 1934.  Still running strong and VERY important to our economic health.

The NLRB (National Labor Relations Board) which provided better employer-employee relations (think about unions here) was not created until 1935.   Still running strong and VERY important to our economic health.

The Fair Labor Standards Act which provided wage stability and minimum wages (especially to low-end workers) was not passed until 1938. Still running strong and VERY important to our economic health.

These are all important agencies and programs that have made The United States a ‘more perfect union.’  They were not all created in the vaunted first 100 days of FDR’s service.

Note the years they were accomplished.  These important legislative accomplishments took all of FDR’s first term and much of his second.  It takes time to create viable and lasting legislation.  The good stuff always takes time!

Here is where Obama should learn a most important lesson.  DO NOT TRY TO DO TOO MUCH TOO FAST!  Take your time and get it right.  Don’t expect to push through generation altering legislation in a matter of weeks.  This is doubly true for legislation that is hundreds of pages long as a result of ‘pet’ language being added by congressmen with blinders on their eyes.  Any legislation that is too long and too complicated to be read in a one hour sitting is WRONG from the start. That should be an article of faith for Congress.

What to do?

First prioritize, Mr. Obama, and I will give you some hints.  Employment, employment, employment.  Then, decent healthcare for every American.  Then good, life-changing, education for everyone (once they are healthy).  Then energy independence.  More to come as time evolves the problems.  And don’t forget to stay on top of the other ‘always there’ political/economic issues while doing this (strength of the $, trade imbalances, immigration, the environment, national defense etc. etc.).

FDR did not accomplish all he did in his first 100 days, or his first year, or his first term.  He was there trying to get things done for a long time.  Gosh, wasn’t he the only President to be elected to THREE terms (a horrific violation of the incredibly important two term limit for EVERY office in the land principle I forever advocate).

Pick your battles Obama.  Pick them one by one.  Let’s just see what Congress can get done.

And nobody believes our greatest minds are in congress so make sure you do what FDR did and get the BEST experts together on any issue and come up with viable alternatives to choose from.  Remember no new law over two pages long . . . and written in english that a fifth grader can understand.  Otherwise it is just lawyerly ego and jibberish that is going to be challenged in court for decades and mean nothing to the general public.  As part of this keep a ‘court’ of the ten best economists from around the WORLD on retainer.  They will advise of warning signs and such and you should really listen if there is ever a majority opinion because that is as rare as a purple diamond when you are dealing with economists.

Enough said on this matter.  It has taken all week to get this done.  I hope those who read this will agree and recommend this as reading for 10 others who will then do the same.  If this continues within a few months Capitalistmarks will become the clearing house for intelligent and worthy solutions to most of our problems.

We the people can and should take our country back.  A grass roots movement can do this.  But you have to care for it to work.

It is up to you now, dudes.

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By the way, if I don’t hear from you with your own ideas I am assuming you agree with mine.  And if that is the case you should be telling others read and participate.

thanks for the foto to flickr’s egadapparel

Tags: FRD, Great depression, President Obama, stimulus package