“We can only hope that the government’s cure doesn’t further sicken the patient,” Johnson wrote in his annual update on Fidelity’s performance over the past year.
“During the ’30s, Congress - with guidance from the president and the same kind of good intentions - shifted the country’s cash flow away from productive businesses to government make-work projects, which most likely prolonged the Great Depression,” wrote Johnson, arguably Boston’s most powerful business executive. MORE...
Our Government should emulate another US President. The one who was responsible for the roaring 20's. He should emulate what so called scholars claim was one of worst presidents. President Harding.
Instead of bailing out failing businesses, expanding government, and redistributing taxpayer money with a "stimulus" plan, Harding responded by cutting spending and removing burdensome regulations and taxes. During his campaign, he argued, "We need vastly more freedom than we do regulation." In stark contrast with the Bush-Obama response of ever-more government spending and debt, Harding had federal spending cut in half between 1920 and 1922 and ultimately ran a surplus.
As a result, the recession that started in 1920 ended before 1923. Lower taxes and reduced regulation helped America's economy quickly adjust after the war as entrepreneurs and capital were freed to create jobs and push the economy to recover. Harding's free market policies lead to the Roaring Twenties, known for technological advances, women's rights, the explosion of the middle class, and some of the most rapid economic growth in American history. Still, he is ranked as one of the worst presidents by many in academia's ivory tower. MORE...
Sounds an awful lot like what President Reagan did to get the nation out of the recession of the 1970's.
Why do we keep balking at what actually works, has worked, and always seems to work. If President Bush the Congress would have just listened to men like Ron Paul, the current recession would have been a lot less painful as it is becoming.
I once wrote on this blog that we are not going to go into a depression and that this is no where near the worst economic times since the great depression. At that time, I was hopeful that Washington would get it and we would end the madness with TARP. I am losing my optimism, thanks to the FDR like approach our Government is adopting. FDR and Hoover joined forces to turn a recession that was smaller than the one of 1920-21 into the worst depression this nation has ever faced. The hard economic times came AFTER the federal Government got involved. Contrary to popular belief, Herbert Hoover did not sit back and do nothing about the recession and the 1929 stock market crash, he attacked it with big government programs such as the National Credit Corporation (NCC), to lend money to other banks experiencing difficulties, and when that didn't work, he created the Reconstruction Finance Corporation (RFC) to provide liquidity to, and restore confidence in the banking system. Does this sound familiar? Eventually, the RFC began making small interest loans to all manner of failing businesses. Banks, railroads, and other business were bailed out with the effect that they either went bankrupt anyway, or they were burdened with debt throughout the 1930's and were effectively stifled. The RFC also began bailing out states for unemployment relief to fund public works projects.
"We might have done nothing," then President Hoovert said in 1932. "That would have been utter ruin. Instead, we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic."
The result was that the "great contraction" of 1929-1933 became the Great Depression.
Oh if only Herbert Hoover had done nothing. If only he was as bad a president as Warren Harding, our grandparents would not have suffered under the crushing depression created by Hoover and prolonged by Roosevelt.
So, watching all of what is happening, I am positive we are really headed for some awful times. It's the great contraction of the 21st century. Our Government seems to be pushing us into the Great Depression of the 21st century.
When will we ever learn from what actually works?