Monday, September 7, 2009

Barack Obama accused of making 'Depression' mistakes

he said it:

H & C

Barack Obama accused of making 'Depression' mistakes

Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan.
By Edmund Conway

Published: 9:55PM BST 06 Sep 2009

History repeating itself? President Obama has been accused by some economists of making the same mistakes policymakers in the US made in the Great Depression, which followed the Wall Street crash of 1929, pictured Photo: AP

His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says.
There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history, says the new pamphlet, published by the Institute of Economic Affairs.
In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years.
The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows."
Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further. Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."
The paper, which recommends that the US return to a more laissez-faire economic system rather than intervening further in activity, has been endorsed by Nobel laureate James Buchanan, who said: "We have learned some things from comparable experiences of the 1930s' Great Depression, perhaps enough to reduce the severity of the current contraction. But we have made no progress toward putting limits on political leaders, who act out their natural proclivities without any basic understanding of what makes capitalism work."
The authors of the pamphlet, Charles K. Rowley and Nathanael Smith, give their views.

Kind of creepy and sad. You'd think a leader would try to avoid following the steps of my country but I guess sometimes its hard to learn from other's mistakes.



Anonymous said...

The good thing is that, unlike Argentina, America is unlikely to sit back and take it. Cults of personality rarely get very far here, and people are already starting to realize that Obama is not only an empty suit but an empty brain. He's doing the same things FDR did, and they won't work yet again. Unlike FDR, he doesn't have the people behind him, people so desperate they are grasping at straws.

This time, the policies are likely to cause a revolution. America has a long tradition of rebellions against arbitrary power. If unemployment reaches 60 percent or so, the wheels will come off, and an insurgency will form. The latest iteration of the militias have a highly developed NCO command system, according to rumors. That could mean a real rebellion.

One thing we have that FDR and Peron didn't have to deal with is the internet. It is now very difficult to hide the truth. Obama wants "emergency" powers to pull the plug on the internet, which shows you how worried he is. When Nepal pulled the plug on telecommunications, it was a short road from there to a total revolution and the fall of the Nepalese monarchy.

Don Williams said...

1) In fairness to Obama, he is trying to fix a catastrophe that occurred on the Republicans' watch.
The 2004 Annual Report for the Joint Economic Committee of Congress is hilarious to read, given subsequent events. Some economists were trying to warn Congress that Greenspan was building an asset bubble -- only to be dismissed with airy handwaving by the Republican Chairmen -- Rep Saxby and Senator Bennett.

The 2006 Report is even more hilarious -- it notes concerns that real estate is falling, but then quotes Alan Greenspan's assurances the the worst of the real estates problems were "behind us".

Of the 12 Trillion in federal debt, 9 trillion was personally approved by the signatures of the last three Republican Presidents -- allegedly fiscal conservatives.

The point is -- you can not believe politicans of either party.
Former CEO of Goldman Sachs, Hank Paulson , was US Treasurer who handled the bailout last fall. Since then, unemployment has soared to 9.7 percent. However, Goldman Sach' stock has also soared -- from $50 per share in March to roughly $160 per share recently.

Don Williams said...

And by the way --healthcare reform in the USA? Ain't gonna happen. Word coming out is that it is just a means for the Democrats to shake down the Insurance and Drug Companies for a few $Million in donations.

As they say in poker, Read 'Em and Weep, Rubes.

Patrick said...

As if that wasn't the plan all along. Its not evident but its not far fetched either, to consider that Argentina 2001 was a test case for the global eventuality.

I see in this country the shadow of America's future. Argentine middle class workers have psychologically opted out of the system a couple of generations ago. Tired of working to pay the elite and the entitlements class, its easier to just say "fuck it, I'm going to get by on the minimal effort and try to enjoy life." That's my impression of Argentina as a society, and it is already happening at an accellerating pace in the USA.

Pete said...

I'm no financial expert so I'd like to point your readers to another website "". The writer's (Eric deCarbonnel) great-grandfather was the founder of Citibank. Eric was going to follow in his footsteps (banking and finance) and discovered the US (and most of the world economy) was one big ponzi scheme. The game is about over and his recent post is a rough draft of the future article to show how the financial turmoil will completely unravel the US economy (are you sure you want to move here?:) Anyway, also wanted to say that I loved your book and your website...between you and Eric, (and the author of Prudent Squirrel's newsletter 'Chris Laird') I've taken preperation very seriously and am overwhelmed of just how 'impowering' the experience has been. Not going crazy...about 6 months of food stock for me and the family, a few guns (would love to buy more but can't afford) and getting a home security system. But, back to the original article, Barack is not making mistakes...I don't think fixing the economy is on his agenda. A failing economy is the excuse for a power grab, money grab, etc. We don't need the 'help' of the government in our economy. The whole concept of the US government at its creation was only to provide for PHYSICAL security (military against foreign threats and a police force against domestic threats) so the people could live their lives the way we choose. Only if we can go back to that mentality as a people will we any true hope for our future. Thanks again for everything!

Edith said...

Ferfal it's not a mistake they are following the same mistakes your Country made.

It's all planned as yours was planned.

Anonymous said...

It's not a mistake . Their doing it on purpose.

RealityCheck said...

Thanks for your Blog Ferfal. I've learned a lot. I started one in the U.S. to help us in the suburbs cope with change.

Wasa Bista said...

This trouble has been brewing for decades and is not really Obama's fault. A return to real laissez-faire capitalism (no gov't intervention even in bad times) is probably not possible, so regulation is needed. But more importantly, the President doesn't seem to grasp the enormity of the problem. More borrowing, taxing and bailing out won't work. If the world loses faith in the greenback, the effects on the USA and the world economy will be too horrible to contemplate.

BulgarWheat said...


you assume that obama actually wants to fix things. He has to tear this country down so that it can be rebuilt the way he wants to rebuild it.

We're in trouble now.

Anonymous said...

How strange that Obama gets all the criticism trying to clean up the Republicans mess. George Bush Jr. was allowed to nearly destroy US financial health for the sake of 'the war on terror, throwing 1 500 billion into Iraq. But when Obama wants to put a fragment of that amount into free healthcare, and everyone is in dismay about it.

I know the solution; Obama should just say that his decisions are based on destroying AL QAEDA, once he does that I bet that no one will dare to criticize his policy.

Idahoser said...

"...You'd think a leader would try to avoid following the steps of my country..."
Yes, a leader would. Wish we had one.

I'm afraid a great many people are going to be very surprised at all the things that "flat will not happen here" which are already happening.

There are a great many people- not a majority, but enough that you can look around and find them- who for some reason support this administration. Very few understand it's goals and approve; most simply refuse to believe their eyes, and assume we all just don't really understand. They refuse to accept that they've elected their own doom, and will reelect it in the event the ACORN mission hasn't yet made votes irrelevant (doubtful). And we made this possible with "Compassionate Conservatism". Remember that, if you are ever again in a position to actually vote; the lesser evil is still evil.

This country has lost it's battle with the cancer of communism. It is here. There's no prevention anymore, too late. We can only hope to save something for the renaissance, but the Dark Ages are coming.

Edith said...

Bush and Obama along with all the globalists come from the same hand picked stock!

Divide is the name of the game ....has been for decades with the false left/right paradigm. Get out of the matrix and step back and watch the game. Fighting on either side helps move the world closer to global takeover because you'll get the "third" way...the dialectical synthesis of the two opposites.

vdavisson said...

He's not trying to avoid the mistakes of the past. Obama hates the United States, capitalism and our society, and wants to destroy us.