We are also embarking on another election, where the grand buffet of presidential ideas is rolled out in front of us. The only problem is that there are two buffets, each with items on it whetting our palette, but we can only choose from one.
Our recession is much like the one which began in the 1920's, so I figure my first stop should be there.
The year is 1923, WW1 is over, President Warren G. Harding Republican has died and Calvin Coolidge is his Vice Presidential predecessor (August 2, 1923-March 4, 1929). See if you can tell the similarities between, what has been in the past and what is happening right now.
During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.
An average of 600 banks fail each year.
Organized labor declines throughout the decade.
Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.
By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.
By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929. www.hyperhistory.com
Calvin Coolidge was as cool and laid back in the government as his name implied. He took a laissez-faire approach to government, that less government was a good thing for America. He felt the government should not interfere with, or regulate the money making capability of the free market. Does this sound like anyone you know? I hope the dinger went and you said Bush. Not, I need a beer this is getting so daunting, Busch, but our President.
The contrast between what was transpiring in 1923 and the last 7 years of our own is, well, not much except for the good stuff, like the exploding manufacturing market. This time around we do not have that. We have only had 11 bank failures this year. We have also had our first takeover of Fannie Mae and Freddie Mac, by the government since they have been in the public market, directly related to financial deregulation by the government. This is an obvious reflection of how bad we are doing right now.
So let's move on to 1929. Coolidge has now retained a presidency as long as our constitution would allow and Herbert Clark Hoover, Republican takes office as president (March 4, 1929-March 4, 1933). The Great depression is on America's doorstep and everyone points the finger at Hoover. Well I know God made the planet in 7 days, but I don't think anybody can stop a recession in 7 months. It would be the same as your neighbor Bob stopping a speeding locomotive by standing in front of it, can't happen.
Hoover tried to combat the Depression with volunteer efforts and government action, none of which produced economic recovery during his term. The consensus among historians is that Hoover's defeat in the 1932 election was caused primarily by failure to end the downward spiral into deep Depression, compounded by popular opposition to prohibition. Other electoral liabilities were Hoover's lack of charisma in relating to voters, and his poor skills in working with politicians. www.wikipedia.com
Once again; does this sound like anyone we know? I hope you are thinking John McCain, who holds upwards of 90% of the same views as President Bush and inconsequently bottles beer for Anheuser-Busch. Alas, you will remind me that Hoover did not have a feisty knock 'em out with her good looks or her double-edged sword of a tongue, Vice Presidential hopeful by his side.