Those two terms are not mutually exclusive but it sometimes seems that way. This week, Phil Gramm got his tit in a wringer for saying that the economy is not in recession. It doesn’t matter that his statement is true. George Will commented on that feature of politics today on This Week. Amity Schlaes, whose book on the Great Depression should be required reading for all politicians, weighs in on the subject today. The Democrats are following a successful playbook, however. George Mitchell, Senate majority leader at the time, managed to produce and prolong the 1991 recession by filibustering capital gains tax cuts, long enough to win the 1992 election for Bill Clinton.
Posts Tagged ‘recession’
Truth and politics
Sunday, July 13th, 2008Economics
Wednesday, April 9th, 2008Those who have studied economics know that data is the most important part of any consideration. Talk is cheap. Data is all that counts. In that spirit, I offer this small contribution, which explains in one word the basis for estimates of our economic condition.“Our economy is the healthiest it has been in three decades.” (President Bill Clinton, State of the Union Address, January 23, 1996)“The bottom line is that this administration is the owner of the worst jobs record since Herbert Hoover.” (Senator Charles Schumer, Press Release, March 7, 2008)The difference ?
President’s Party Affiliation
1996-Democrat 2008-Republican
How to make a recession into a depression
Monday, April 7th, 2008UPDATE: Nancy Pelosi has taken another Smoot Hawley step by blocking a vote on the Columbia trade agreement. The FARC Caucus in the Democratic party is still strong.
The White House has a comment about Pelosi and her rule changing.
MORE EVIDENCE: The Columbia FTA is important to Caterpillar which has 50,000 union jobs, but you’d never know it.
There is an unending debate about just why the Great Depression occurred. We have had financial panics ever since the colonies declared independence. Severe ones occurred in 1893 and 1907. There was a severe recession after World War I.
One school of thought believes that the Glass-Steagall Act, that set up the Federal Reserve Bank, was responsible because the Fed panicked and contracted the money supply just when the need for capital was greatest. Amity Schlaes, in her book The Forgotten Man, believes it was the ill-advised actions of Hoover and Roosevelt that tipped us over the edge. Everyone, however, agrees that the Smoot-Hawley Tariff, which Hoover signed in 1930, was a big part of the problem.
One thousand twenty-eight economists in the United States, organized by Paul Douglas, Irving Fisher, James TFG Wood, Frank Graham, Ernest Patterson, Henry Seager, Frank Taussig, and Clair Wilcox, and representing the “Who’s Who” of the profession, signed a petition asking President Hoover to veto the legislation (New York Times, 5 May 1930)
Now, we have the other political party demanding a similar economic measure that will have similar effects on world trade. Fortunately, John McCain is speaking out against protectionism but a President Obama, in spite of his advisers, may do a Hoover and worsen the coming recession precipitously.
Santayana famously said, “Those who do not remember history, are condemned to repeat it.”