Friday, September 10, 2010

Obama's sad timing

Jonah Goldberg: The Next Hoover

As Goldberg says, Obama was going to be the reincarnation of FDR, the guy who, after years of horrible tax cuts and running down the government by the nasty conservatives, and in the midst of another great, and maybe final crisis of capitalism, was going to come in and get taxes back up where they belong, introduce all kinds of peachy Initiatives, Programs, Departments, Authorities, Bureaus, and what have you, and just generally bring sexy back -- in the shape of a big, fat, greasy state.

But the problem with this fond scenario is its timing. It's not just that, as Goldberg points out, we've been there done that with "New Deals", and they don't seem quite as shiny any more. It's that, when FDR finally became President, in March 1933, almost three and a half years had passed since the stock market had crashed, and he was thus insulated from any responsibility for the Depression's endurance. His predecessor, on the other hand, had only been in office some eight months when the economy started going south, and he was the one, despite subsequent liberal mythology, who initiated a number of Programs, Committees, government Corporations, and what have you -- not quite on the scale of the New Deal interventions, but remarkably similar in form and spirit -- to try to fix things. None of it worked, of course, but that wasn't really the problem, since none of FDR's interventions worked either -- no, the problem for poor Hoover was simply that he was the guy who had to fail first, and therefore got all the blame.

So, while the crisis this time didn't exactly start in Obama's term in office, it started closely enough that Obama can't really get any insulation from the policies that fail to fix it. Marx remarks somewhere, citing Hegel,  that "all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce." What compounds the farce in this case is the fact that the real personage being imitated by Obama isn't the left-liberal hero-figure of FDR but rather that sad old fall-guy, Herbert Hoover.

UPDATE: John Steele Gordon, on the Commentary blog, also has some Hoover comparisons, in this case  more to do with actual policies than just timing.


  1. none of FDR's interventions worked either.

    Debatable and would require quite a bit of historical and empirical research to verify, either way. The recovery programs like WPA put people back to work. The economy slowly returned (helped greatly by WWII). The New Deal wasn't perfect but rather superior to the robber baron capitalism of Coolidge and Hoover. And the New Deal regs arguably kept financiers from gambling with secured funds (at least until the Gingrich-Clinton era)--they stabilized things. That might not please JP Morgan Jrs but Ma and Pa Kettle are better off.

    Marx's point on history repeating itself-- "the first time as tragedy, the second time as farce."--applies to right-wing buffoons at least as much as it does to liberal bureaucrats--so, Nixon and Reagan as tragedy, Bush I and II as farce, if not theatre of the ridiculous.

  2. The details are debatable, certainly, but I don't think anyone would try to say that FDR and his New Deal fixed the Depression. In fact, it seems to me increasingly evident that, for all its hyperactivity -- largely because of its hyperactivity -- the New Deal likely prolonged it. Just one aspect of that may well have been the attempt to tell financiers and bankers how to manage money -- as though Morgan & co. didn't have a better grasp on that than the academic amateurs of the Roosevelt Administration. So, despite the fact that it's been an icon of liberal faith for some three generations now, I doubt the New Deal will survive as a model of how governments should behave in a financial crisis. And the current Administration seems just to be adding another nail in that coffin.

  3. as though Morgan & co. didn't have a better grasp on that than the academic amateurs of the Roosevelt Administration.

    They didn't. JP Morgan and Co. may have known that less regs was most likely better for their business--at least until the market crashes ala '29. But they're not economists. One routinely notes this conflation of economics and business practices. Not the same, regardless what "Trickle-down" types insist. What's good for the society at large is not always good for the corporations and financiers .

    And I don't think you understand what the regulations implied. The New Deal meant security for the mortgages of many Ma and Pa Kettles. Once those funds were made available to JP Morgans, AIG, G-sachs, etc--starting even with FHMLC if not before--, the market became far more volatile. Property values fluctuate (and this can be verified). At the same time, the lenders freed up by relaxed regs can make loans to anyone they want to.

    It's a rather complex issue, and I don't claim to be an expert in it ---yet at any rate the recent mortgage crisis shows what happens when the finance boys get their way. Lets not forget the crisis and subsquent Bailout--a massive fucking swindle, pardon my french--was bipartisan, which is to say the Demo. leaders are as tied to finance capital as GOP, regardless of what Goldbergs try to say. Palast wrote some decent stuff on this.

  4. ... the recent mortgage crisis shows what happens when the finance boys get their way.

    Ah, no, as I've said, it shows what happens when the politicos muscle the finance boys to get their way. Which, then, the finance boys are content enough to accommodate, since they can figure there's a good chance of a govt bailout or other form of rescue if things go south.

    Same thing was true in the 30's -- markets of all sorts do fluctuate, but that's the only way they ever correct. If you don't let them correct, you get an economy in a permanent stall -- which it was in, until global war blasted them out.

    And then there's Palast, J? Next you'll be citing the Works of Mikey Moore, or, worse yet, Chomsky. At least Marx and his followers had a brain.

  5. Palast is a journalist, not academic. He presented the crisis/bailout issue in compact form, with quite a bit of research. And he's Sounds like fairly traditional democrat (tho' the Beck/Foxnews types generally consider that marxism...then Palast's about like Ben Franklin compared to some dimwit like Beck Limbaugh et al)
    not quite a Marxist.
    Chomsky on the other hand is an academic. Not my guru. He has criticized some aspects of marxist-statism. His political writing may not be Keynes or something, but he had a few interesting things to say, especially on 'Nam and Reagan era skullduggery.

    Orthodox marxist Im not, but be assured no marxist would approve of your pro-laissez-faire-libertarian views. The great depression demonstrates what happens when finance capitalism --and speculation--proceeds unchecked and unregulated (as do many recent economic disasters, including the bailout). Marxists want centralized planning, far beyond that of New Deal demos .


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