A Failed Fisking Of Pat Buchanan

Journalist, Presidential Speechwriter, Rabid Isolationist, Lover of All Labor Unions, and Anti-Free Marketeer Pat Buchanan has written a column entitled "Obama's Choice: FDR or Reagan".

Hmmmmm.....I'll be needing my Fisking tools....
Scalpel - thanks.
Laptop - got it.
Righteous Indignation - I've got plenty.
Various History Websites - check.
My copy of "The Forgotten Man" by Amity Shlaes - Here it is. First edition.
Chainsaw - yep.
Let the Fisking begin ! Here's Pat Buchanan:

Barack Obama, it is said, will inherit the worst times since the Great Depression. Not to minimize the crisis we are in, but we need a little perspective here.
The Great Depression began with the Great Crash of 1929. By 1931, unemployment had reached 16 percent.
By 1933, 89 percent of stock value had been wiped out, the economy had shrunk by one-third, thousands of banks had closed, a third of the money supply had vanished, and unemployment had reached 25 percent -- among heads of households. And in those days, there was no unemployment insurance, no Medicare, no Medicaid, no Social Security, no welfare.

Nothing I can argue with there, although I can't find a reference for 89% of stock value being wiped out.

FDR's answer: vast federal spending, tough new regulations on business and higher taxes -- like Herbert Hoover before him, only more so.

Not much to attack there, either. But curiously absent from this analysis? The Smoot-Hawley tariffs. As soon as economic times got tough, Little Herbie Hoover signed something called the Smoot-Hawley tariff bill, which raised taxes on any goods imported into the U.S. That prompted all of our neighbors and trading partners to do the same, in a misguided effort to "protect" their own manufacturers. The result? No one traded with anyone. The only way to wealth is through the market, and the market died.

Next time you hear or read someone like Pat Buchanan or Tom Tancredo wanting to put up more trade barriers, remember that disaster. (To read an old post of mine that I'm rather fond of, click here. I was trying to explain the exact location of Tom Tancredo's head.)

The Depression lasted until war orders from the Allies brought U.S. industry back to life. Before 1940, not once did unemployment fall below 14 percent. In May 1939, Treasury Secretary Henry Morgenthau testified:
"We are spending more money than we have ever spent before, and it does not work. ... I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. ... I say after eight years of this administration we have just as much unemployment as when we started ... and an enormous debt, to boot."

I'm seeing that Morgenthau quote all over the 'Net, but haven't found a source for it. But if he didn't say it (Morgenthau was an FDR appointee) he could have done so and remained truthful. It just doesn't seem like something an FDR loyalist would say.

Politically, the New Deal was a smashing success, with FDR's landslides in 1932, 1934 and 1936 virtually wiping out the GOP.

As the cliche goes, "Anyone robbing Peter to pay Paul can always rely on the support of Paul." Especially when Peter is still wearing diapers and can't vote.

Yet, economically, the New Deal was a bust, failing utterly to restore prosperity. Despite the indoctrination of generations of schoolchildren in New Deal propaganda, that is the hard truth.
Consider, now, how Ronald Reagan responded to the economic crisis of 1980, the worst since the Depression. In the "stagflation" of that Jimmy Carter era, interest rates had reached 21 percent and inflation 13 percent.

I bet somebody out there can help me out with this question.... Has EVERY economic crisis (recession) since 1929 been called the worst since The Great Depression? Do politicians like to hype the situation so that we can Loot The Children® to line our own pockets?

Reagan's answer was the tight money policy of Fed Chairman Paul Volcker and across-the-board tax cuts of 25 percent, while slashing the highest rates from 70 percent to 28 percent.
While unemployment hit 10 percent in 1982 and Reagan lost 26 House seats, in 1983 the tax cuts kicked in.
From there on out, it was boom times until Reagan rode off into the sunset, having created 20 million new jobs. "The Seven Fat Years," author Robert Bartley called them.

That's pretty much how it happened. Too bad that Reagan spent money like a Hollywood Cowboy with Alzheimer's. Which, come to think of it, he was.

Reagan had followed the lead of Warren Harding and Cal Coolidge, who had cut Woodrow Wilson's wartime tax rates of near 70 percent to 25 percent, resulting in "The Roaring '20s," a time of unrivaled prosperity.

Ahh yes. Harding and Coolidge. The laziest presidents, with the best economies. Mommy Party Messiahs don't get the same results. Could there possibly be a correlation?

The JFK tax cuts of the 1960s, also a Reagan model, were equally successful.
Harding, Coolidge, JFK and Reagan all bet on the private sector as the engine of prosperity. All succeeded. Franklin Roosevelt bet on government. And the New Deal failed. It was World War II that pulled the United States out of the Depression ditch of the 1930s.

NOT TO MENTION THE FACT THAT WE STARTED TRADING WITH GREAT BRITAIN IN A BIG, BIG WAY, TARIFFS BE DAMNED, SUPPLYING THEM WITH EVERYTHING THEY NEEDED TO CONTINUE FIGHTING THE DAMN NAZIS. That may have helped a little, Pat, you protectionist clodhopper....

Comes now the financial collapse and economic crisis of 2008, inherited by Obama, with 40 percent of all stock values wiped out in a year, foreclosures pandemic, and unemployment near 7 percent and surging.
In crafting his solutions, Obama seems to be brushing aside the Reagan, JFK and Harding-Coolidge models, and channeling FDR and the New Deal Democrats.
Already staring at a $1.2 trillion dollar deficit for the year ending Sept. 30, about 8 percent of the entire U.S. economy, Obama intends to add a stimulus package of $700 billion to $1 trillion, yet another 5 percent to 7 percent of gross domestic product. The resulting deficit would be twice as large as Reagan's largest, 6 percent of GDP, which was the largest since World War II.

Wait a minute....wait a minute....didn't we already spend something like 700 Billion channeling FDR and the New Deal Democrats when we bailed out Wall Street? Wasn't that supposed to solve the problem? Or could it be that the Obama candidacy was paid for by Wall Street, and that first 700 billion was merely in exchange for services rendered? And now we've gotta go back to the well for the real bailout? I have a warped admiration for Loot The Children® policies as much as the next person, but even the four-year-olds are starting to figure this thing out, and are starting to protest.

And how is this Niagara of money to be spent?
Hundreds of billions will go out in checks of $500 to $1,000 to wage-earners and individuals who do not even pay taxes. This is much like the George McGovern "demogrant" program of 1972, where every man, woman and child, if memory serves, was to get a $1,000 check from the U.S. government.
Other hundreds of billions will go to shore up state and municipal spending. Other hundreds of billions will go for "infrastructure" projects, another name for earmarks, which is a synonym for pork.

Yeah, the "infrastructure" projects are a synonym for pork and earmarks. But I kinda like Obama's idea of unemployed stockbrokers and investment bankers working on the roads, building bridges, leaning on their shovels, and taking a lunchbox to work.

Now, as Obama does not intend to raise taxes, at least now, he is going to have to borrow this near $2 trillion from foreigners or U.S. taxpayers, or the Fed will have to create the money.

Foreigners will give Bernie Madoff money before they give us any more money. Foreigners will loan money to Somali pirates, in hopes of a quick turnaround on their investment, before they loan us any more money. They might seriously consider the plight of that nice Christian lady in Nigeria who wants to get her money out of the country, but they're not going to loan us any more money. Foreigners will give money to the winos lounging outside of Convenience Stores who "just need a little money for gasoline so they can get home" before they give us any more money.

So The Fed is going to print the money. Count on it.

Undeniably, this will have an impact upon the economy. But what will that impact be?
Where in history, other than World War II, is there evidence that such a mass infusion of spending restored prosperity?

Well, when my daughter was playing blackjack on our recent cruise ship vacation, she lost more than half of her allotted gambling funds on the very first night. By putting more money at risk, she was able to restore prosperity. Eventually. It could've gone either way. She's a big girl now, and it was her choice. What if I'd bailed her out after the first night? I could belabor the analogy by guessing that she might've kept the money instead of putting it at risk again, much like the banks are doing now with the first 700 billion that The Children® loaned them.

Obama and the Democrats are taking a historic gamble, not only with their careers but with the country. If this monstrous stimulus package, plus the trillions in hot money, do not work; if the two ignite rampant inflation, rather than real growth, we are all out of options. The toolbox is empty.

I prefer to see the toolbox as half-full. There's still a chance that Somali pirates will attack Pearl Harbor.

And what will follow may truly resemble the 1930s.

Or a very well-funded Jack Sparrow movie.

I apologize for the total failure of this Fisking. Things are in a sad state when I find myself in general agreement with Rabid Isolationist, Lover of All Labor Unions, and Anti-Free Marketeer Pat Buchanan.