THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume XIII, Issue # 237, September 25, 2011
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
THE FINANCIAL ADVICE OF EXPERTS:
THEN & NOW
By Alan Caruba
THE AMERICAN ECONOMY & U.S. GOVERNMENT ECONOMIC & FISCAL POLICY: THE GREAT DEPRESSION OF THE 1930S
-- SUBSEQUENT RECESSIONS -- IMPORTAN FACTORS THAT WILL DETERMINE HOW LONG THE CURRENT RECESSION LASTS? --
THE RELEVANCE OF THE 2012 PRESIDENTIAL & CONGRESSIONAL ELECTIONS TO ACHIEVING ECONOMIC RECOVERY IN THE
U.S.A. -- THE SIGNIFICANCE OF SUCCESS IN REDUCING THE SIZE & GRASP OF THE U.S. CENTRAL GOVERNMENT
FULL STORY:
“I see nothing in the present situation that is either menacing or warrants pessimism…I have every confidence that there will
be a revival of activity in the Spring, and that, during the coming year, the country will make steady progress.” That’s what
William Mellon, the U.S. Secretary of the Treasury, had to say on December 31, 1929. The Great Depression would last until
1941, when the U.S.A. entered World War Two.
“Could we have a crash a la 1929? The flat answer is no.” So said Dr. Pierre A. Rinfret, a noted economist, writing in
Time magazine on October 5, 1987 and, on October 19, 1987 — instantly dubbed “Black Monday” — the Dow Jones
average plunged 508 points.
Despite the pronouncements of Presidents and pundits, it was the December 30, 1929, edition of Variety, a newspaper
for the entertainment industry, that got it right. The day after the crash, its headline read, “Wall Street Lays an Egg.”
All through history, the opinions of “experts” have been subject to revision and derision. The Internet has simply multiplied
our access to a multitude of opinions. It behooves us all to pick our experts very carefully. A good track record is always a
good sign, along with a healthy measure of common sense.
As the economies of the U.S.A. and several European nations totter on default, it is essential to draw on lessons from the
past. The most obvious lesson is that the governments of the U.S.A. and the Europeans have been spending far more than
they can tax or borrow.
Decades since the 1980s, all these governments have spent huge amounts of money, wasting billions on “alternative”
sources of energy in the name of global warming or climate change. All have stayed busy before and since the end of World
War Two consolidating power in the U.S. federal government and, more recently, in the European Union.
President Herbert Clark Hoover, on whose watch Wall Street crashed in 1929, generally gets the blame, but five years earlier,
in an address to the annual meeting of the U.S. Chamber of Commerce, Hoover said, “The test of our whole economic and
social system is its capacity to cure its own abuses,” warning that, “If we are to be wholly dependent upon government to
cure these abuses, we shall, by this very method, have created an enlarged and deadening abuse through the extension of
bureaucracy and the clumsy and incapable handling of delicate economic forces.”
“The clumsy and incapable handling of delicate economic forces.” Spoken nearly 90 years ago!
What a perfect phrase to describe what the American nation has been passing through as Congress, during the last days of
the Bush administration and during the pass two and a half years of the Obama administration, has demonstrated.
The financial crisis of late 2008 was the result of the actions of two government “entities” -- Fannie Mae, created in 1938, and
Freddie Mac, created in 1970. Both government entities intended to stimulate the housing market by securing the loans made
by banks for the purpose of giving everyone, including those who could least afford it, the opportunity to own a house. By
the time the crisis hit, they jointly owned more than 50% of all U.S. mortgages.
The failure of Communism in the former Soviet Union (1922-1991) should be proof enough that government ownership of
property and the means of production is one of the all-time bad ideas of the last century. A modified version exists in China,
with other versions existing from North Korea to Cuba. All depend on oppression and coercion.
The irony, of course, is that the Great Depression was extended by Hoover’s successor, Franklin Delano Roosevelt, who
believed that expanding the role of government was the best way to bring the Depression to an end. Instead, the
Depression, experienced as well by European nations in the wake of World War One, gave rise to totalitarian governments
and World War Two.
There is a reason that President Barack Obama’s approval ratings, along with those of Congress, are at record lows. Most
astonishing is the fact that, when Obama took office, the Democrats controlled both houses of the national legislature, the
U.S. Senate and the U.S. House of Representatives. Even more astonishing, President Obama pursued the same failed
programs of FDR, most famously sponsoring a multi-billion dollar “stimulus” bill, along with taking over General Motors and
Chrysler, ginning up a Cash-4-Clunkers program, and discovering belatedly that there were few “shovel ready” infrastructure
projects.
By 2010, the voters returned political power in the House of Representatives to the Republican Party, largely on the basis of
newly minted “Tea Party” candidates. Obama’s Congress had rejected his proposed budget, and the nation has been
operating with “continuing resolutions” to fund the central government's activities, while a massive battle has been fought
over raising the debt ceiling for the same purpose. A farcical congressional “super committee” has been told to cut a trillion
and a half dollars out of government spending.
The economic advisers that Obama brought into the White House have all departed, with the exception of the U.S. Secretary
of the Treasury, Timothy Geithner. The various government departments continue to spend millions authorized by the
Congress every week or engage in dubious “loan guarantees” which give every indication of being a series of Solyndra
scandals.
Despite the increasingly absurd assertions of the President, it’s not just corporations, large and small, making decisions
about the current and near-term future American economy. It is the vast body of Americans who are deciding what to
purchase, whether to expand their business by hiring or not, whether to invest in stocks or gold, and thousands of other
individual decisions by which the real economy is shaped.
It is their decisions that determine how long the recession lasts, not the official pronouncements about when the last one
“ended” or a new one begins. Economists of a Conservative point of view know what must be done and should be listened
to, but they are not advising this President, nor guiding the government’s decisions.
In the midst of this latest of many financial crisises at home and abroad, the campaign for the next presidential election has
begun. Much depends on who John Q. Public elects to the office. Much depends on the long, hard slog to reduce the size
and grasp of the federal government.
Will the wisdom of “the crowd” prevail over the present “experts” affecting the economy?
Stay tuned.
--------------------------------------------------
© Alan Caruba, 2011
LINKS TO RELATED TOPICS:
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
Fiscal Policy: Taxation & Government Spending
The American Political & Cultural Left:
Liberals, Statists, Socialists, Marxists, & Other Leftists:
The Democratic Party, Academia, & the Mainstream Media
Alan Caruba's commentaries are posted daily at Warning Signs, his popular blog -- and thereafter on dozens of other
websites and blogs. His monthly report on new books is posted at Bookviews.
A business and science writer, Caruba is the Founder of The National Anxiety Center, a clearinghouse for information
about "scare campaigns" designed to influence public opinion and policy.
Return to Top of Page
Go to the WEBSITE INDEX
Return to Beginning of
THE PROGRESSIVE CONSERVATIVE, USA,
Public Issues & Political Controversies
Return to Beginning of
THE PROGRESSIVE CONSERVATIVE, USA
Most Recent Articles
Return to Beginning of
THE PROGRESSIVE CONSERVATIVE, USA,
Volume XIII, 2011
Return to Beginning of
THE PROGRESSIVE CONSERVATIVE, USA,
Subject Matter Highlights
Return to POLITICAL EDUCATION Homepage
CONTACT & ACCESS INFORMATION
This is not a commercial website. The sole purpose of the website is to share with interested persons information regarding civics,
civic and social education, political science, government, politics, law, constitutional law and history, public policy and political
philosophy and history, as well as current and recent political developments, public issues, and political controversies.
POLITICAL EDUCATION, CONSERVATIVE ANALYSIS
POLITICS, SOCIETY, & THE SOVEREIGN STATE
Website of Dr. Almon Leroy Way, Jr.
Government, Politics, Public Policy, Legal Issues, Constitutional Law, Government & the Economy, Cultural Values, Foreign Affairs,
International Relations, Military Defense & National Security, Geopolitics, Terrorism & Homeland Security, American National Interests,
Political Systems & Processes, Political Institutions, Political Ideologies, & Political Philosophy
INDEX FOR THE ENTIRE WEBSITE
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
Cultural, Military, International, Strategic, & Geopolitical Issues
Conservative Government Ensures a Nation's Strength, Progress, & Prosperity