low of 300,000 new homes. The previous all time lows were recorded last
November, December and January. It means that for every new home built
in America this year fifteen existing homes will be foreclosed upon.
The
Federal government's $8,000 tax credit for first-time home buyers
caused sales to rise by 29 percent in the worst market ever known. It
made things look better than they really were. It gave a comforting
illusion that things weren't so bad and times weren't so hard. The
program is estimated to cost $12.6 billion for a four-month rise in new
homes sales and that's not much bang for the buck as the sales numbers
were revised downward in each of the last three months. Home prices
fell 9.3 percent to where the average home value equals its 1993 level.
The
answer Congress debated was a call to expand the program to allow
incomes as high as $300,000 to qualify. The program had run through the
fodder of all those who could afford to purchase a new home. This year
fifteen million cars will be scrapped but only eleven million new
vehicles will be sold. These numbers are staggering; it is nothing less
than an economic Pearl Harbor.
Barack Obama inherited these
problems in this economy but his answers have been to tinker in the
margins. His solutions have been the solutions that big business would
have chosen had their been no Barack Obama.
be beyond the concern of a National Administration which can think in
terms only of the top of the social and economic structure. They have
sought temporary relief from the top down rather than permanent relief
from the bottom up. They have totally failed to plan ahead in a
comprehensive way. They have waited until something has cracked and
then at the last moment have sought to prevent total collapse."
Franklin Delano Roosevelt
I quote FDR not to rub Obama's nose in
it but only to point out the similarity of Obama's policies to those of
FDR's opponent, Herbert Hoover. Hoover wasn't a bad man; he didn't have
two heads or breathe fire. Hoover was a Quaker, his cabinet would
exercise on the White house lawn in the morning and then have a
breakfast of fresh fruit and juice. In his spirituality he genuinely
believed it to be wrong for the government to intervene to help the
poor. His political beliefs held no such qualms towards assisting big
business. He just thought that big business and corporations knew more
about the economy and had a vested interest in repairing it.
The
crisis Hoover faced was ten years in the making and Hoover didn't cause
it. He just couldn't fix it because he couldn't move outside his own
beliefs. He would have agreed with Obama on the $786 billion bailout.
Not too much, too much is worse. Hoover read the statistics about
Americans living in ditches and holes in the ground and he was
profoundly troubled by them. It's one thing to read about the hungry
and suffering while it is another thing to actually know these people
or to miss a meal yourself. In the Washington fishbowl the water is
always just right.
When the Obama administration guided GM and
Chrysler into bankruptcy the car companies had come to Washington
looking for loans similar to the Chrysler bailout in the 1980s. It was
the Republicans who pushed for bankruptcy and the Democrats in Congress
who were against it. The Republican position prevailed, decided by
Obama's car czar. The right wing press screamed that Obama had
nationalized GM when the opposite was true. GM had privatized the
government.
Bankruptcy was beyond their wildest expectations.
The car companies were allowed to void union contracts, supplier
contracts and dealer contracts. Thousands of non-union middle mangers
were ejected from this speeding juggernaut and landed on the roadside
without a job, without healthcare and without a retirement package.
Sorry, that contract is gone. Many union retirement programs were
shifted to the public pension guaranty program, or in other words from
now on the tax payers would pay GM's retirement obligations.
This
program caused tens of thousands of job losses but it was not based on
mean-spiritedness, just on the belief that if you assist the banks and
corporations they will turn the economy around. The Obama program to
take gas guzzlers off the road was actually a program that Ford Motor
Company had tried during the last depression. Ford would buy your Model
T and crush it when you came in and bought a new Model A. Ford realized
with the glut of used cars on the road in a falling market buyers could
pick up a bargain on used cars. So Ford wanted to sop up the oversupply
of used cars, but the program didn't work because there were so few
able to purchase a new car.
The Obama administration spent three
billion dollars to sop up the oversupply of GM and Chrysler leased cars
coming back to the lots each month. The beneficiaries were GM and
Chrysler, and those with jobs, money and credit to buy new cars. The
benefits to the unemployed and the struggling were nothing as the used
car shopper faced higher used car prices.
The healthcare
debate was won handily by the health care industry. The financial
reform legislation offers Americans financial protection from inside
the Federal Reserve. Consumer protection will now be led by a private
corporation.
It was these same thought processes that prompted
Obama to lift the moratorium on deep water coastal oil drilling. He
campaigned against it and apparently had no idea that the original
moratorium was put in place after an identical accident. He placed his
trust in big corporations. He knew that the MMS was a defective
organization but he trusted to big oil that everything would work out
fine.
Despite campaigning against nuclear power the President is
now in favor of it and wants to build more nuclear plants and put up
nine billion dollars in government guaranties to help industry along.
He calls it alternative energy now, and when he says his administration
has spent more than all others on alternative energy he's talking about
nuclear power where a leak or a blowout could depopulate a state.
In
a similar circumstance FDR set the TVA into motion building hundreds of
dams across the southeastern United States. There was survey work, road
construction, contracts to supply concrete, lumber, steel, trucks,
drills and hardware. And when it was finished the byproduct was cheap
electricity and a competitive advantage for industry. The TVA strung
thousands of miles of electrical lines far past the distances big
business thought were profitable. Whole new industries sprang up and
the region prospered to levels undreamed of a generation before.
When
the TVA began to sell off these dams the same Republican leaders who
once called them boondoggles now stood in line to bid on these money
makers. Rural farmland was transformed into recreational property.
Marinas sprang up and then boat shops then restaurants and hotels and
then cities which required more roads. Not fifty miles from here are
lake front properties selling for over a million dollars that barely a
generation ago were scrub land.
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