Economic Populism And Destructive Mercantilism.
It seems like a combination of 1929 and Jimmy Carter the worst and dumbest US President in history
. Economic populism; mercantilism and cultural marxism have taken over the US equivalent of a European socialist party. It is a certainty that if the US Democratic party wins, that the worst aspects of the Carter-Hoover/FDR years will reign.The 'Great Depression' only started 2 or 3 years after the stock market crash of 1929, and both events were caused by government incompetence. First Hoover and than FDR implemented and extended the following: reduction in trade; great increase in trade barriers; a doubling than a tripling of government spending; and a massive tax increases on income, corporations, and capital. When Hoover announced his plan in 1929 to increase government, punish profits, and radically reduce trade the markets sold off leading to the great crash in 1929.
Combined with high interest rates, and reduced money supply, the financial sector, facing contracting economic growth and limited liquidity started to collapse. The full depth of the collapse was not felt until 1932 but it started in 1929, on October 29 when the Dow lost 39.6%. The ultimate low did not come until July, 1932. By that time the market had lost almost 89% of its value.
In other words, thanks to government incompetence it took 3 years of pain to reach market lows.
In 1933 FDR took the gift of government created misery, to further double the size of government, impose new taxes and create German-like 'workfare' militia to dig holes, and build roads. The entire edifice of the US nanny-state was solidified during FDR's domestic disaster including inter-generational theft called pensions where the young pay for the old with money earning a very low or negative rate of return; social 'security' and health care. Government under Hoover and FDR created clients out of citizens.
Hoover and FDR's destruction of personal and national wealth was astounding. The stock market crash precipiated by inane government policies such as the Smoot-Hawley tariff act, which raised US tariffs leading to other nations to follow suit thereby crushing world trade, wiped out hundreds of billions of dollars of personal wealth. Hoover's and FDR's taxation of business likewise stole billions in income and profits which otherwise would have gone to business expansion, job creation and wages.
Fast forward to 1976 and the same insanity is viewed yet again. Jimmy Carter came to power after the Nixon scandal and widespread disappointment with his successor Gerald Ford. Carter's reflexive and pathetic instinctual policy? Using 'change' as a catch-phrase Carter imposes wage and price controls, raises corporate taxes [while lowering capital gains taxes], increases government spending by 30%, and engages in trade restrictions. This was Carter's 'change' program higher taxes, reduced trade, more spending and the gutting of the military.
When combined with the 1974 oil shock, the central bank's printing of money, and international trade and geopolitical problems, the result was entirely predictable. By 1980 US economic growth had declined from 3% in 1975, to 1%; unemployment had risen to 11%; inflation was at 12%; interest rates had climbed to 15%; and reduced corporate profits and disposable income. These factors destroyed corporate and private wealth and ensured that US stock indexes were flat during the 5 year period 1975-1980.
As one economic report during the early 1980s rightly stated: 'As it turned out, the recession which ensued was the worst in nearly 50 years. It was long and pervasive; very few industries were spared. The human impact was very high with three million jobs lost and an unemployment rate close to 11 percent. Meanwhile:
* business profits fell 27 percent;
* bankruptcies more than tripled;
* housing starts skidded 60 percent;
* car sales plummeted 40 percent
And this record says nothing of the foreign and military disasters of the Carter era.
Now fast forward to 2008. Populists and economic mercantilists like Hussein Obama and Hillary Clinton propose roughly the following: a 33% increase in year one in the Federal spending budget not including socialised health care; an increase of 30% or more in taxation on profits, capital and business; a repeal of various trade agreements; and the establishment of a government run agency to dominate the 15% of the economy which is health care related.
And this plan says nothing of the various designs in planning to drastically reduce military spending; appease various Arab and Muslim elements overseas; and transfer $65-100 billion more per annum to the UN for various global governance projects including poverty relief and 'management' of the human created globaloney warming crisis.
If the Democrats take the White House the result will be very predictable. There will most likely be a stock market sell off in the short term and if these market signals are ignored, and economic populism and mercantilist practices are not repealed, than a further deep stock market decline will follow. The history of 1929 and 1976 tells us this.
How this helps workers, the poor, the middle class or anyone else is truly puzzling. The only people who benefit from human manufactured 'crises' are of course the politicians and bureaucrats. More government, more programs, more 'caring' and more interventionism both domestically and internationally.
This is the real threat in 2008 we might have a situation where the worst policies of 1929-1939 and 1976-1980 are implemented and extended. If this occurs it will take a generation to fix and repair and there is no guarantee that will happen. Why anyone would support the illogical destruction of wealth and opportunity is beyond the ken of all but the most avid psycho-analyst of crowd behavior and mass delusion. Historical memories are short indeed.
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