Tuesday, August 31, 2010

On your "macro" and "micros"...

I'm fine with your smugness... feel free to gloat, honestly. I'm not being contrary or argumentative when I say that I don't feel my political views have changed all that much.

If I had to point to one area where I think I've made the biggest shift (politically speaking), I'd say it was on the Second Amendment. When we first met, I was a firm believer in the "collective right" interpretation of the Amendment... but in making my arguments with you, I was forced (by no one other than myself) to research and read on the topics, and have come to the conclusion that it is absolutely and without question an "individual right", both NOW and WHEN IT WAS FIRST WRITTEN. Thank God the Supreme Court agreed with me...

When we first met, I understood the importance of lower taxes to a vibrant and growing economy... I had, after all, actually lived through the Carter Recession of '80/'81, and saw what the Reagan tax cuts did for my folks and my home town. In college, I had the benefit of an instructor that actually understood the theory of John Maynard Keynes and how it applied to American economic policy, and he was able to demonstrate (through historical examples) why and how it worked. He also demonstrated where almost every President since Keynes wrote his works failed to follow his theory completely... and this list started with FDR and ended with Reagan (who was still in office when I went to college). I feel that my understanding of American economic theory is very much in-step with such "New Deal" Presidents as Truman, Eisenhower, Kennedy and Ford... all of whom advocated lower taxes in strong economies to balance the cost of government spending with government revenue. Presidents that raised taxes in down economies to increase revenue and/or reduce deficits slowed a recovery or lengthened a cycle... this isn't something anyone can defend or oppose, it is simple historical fact.

As I have repeatedly said... repeatedly... FDR is one of these Presidents. FDR was a progressive President who wanted to increase the Federal government's ability to regulate and manage the national economy so that future recession/depression cycles wouldn't be as impacting or long-lasting as the one he was elected into the White House during. Like every President since FDR (and that includes Ronald Wilson Reagan), I feel that some government regulation of our national economy is a GOOD THING... or at the most minimalist level, at least the lesser of many evils. If the ability to dictate the amount of money in circulation at any one time, or the power to determine at what percentage rate interest is going to be applied to government loans by the Federal Reserve Banks keeps the rate of inflation at a more median constant than the wild ups-and-downs of a purely unregulated free market money system (thus avoiding the cycle of boom/depression/boom that the country experienced for the 110 years previous to the end of the Great Depression)... then that ability and power to regulate and manage is a GOOD THING, and I am in favor of its continued use and I'm still leery of its expansion.

When you write that "It is just as likely that allied (in the general sense of the word) world powers cleverly (perhaps too cleverly) linked their economies so as to prevent any one actor from going completely berserk. " you are simply saying that the New Deal policies were a success... because the government's ability to make this "link" with other economies equals greater government control of the national economy here at home. There is no clear demarcation between when the US stood alone as an individual economy amongst the world's many others... because there was no such period in our history. America has had an amazingly HUGE impact on the global economy since it was first settled by European powers four hundred years ago. If this were not so, then the British Empire wouldn't have spent the millions upon millions of pounds fighting to defend, maintain and then reacquire the "colonies" in the years between 1754 and 1815... nor would Napoleon have even considered selling all French colonial territories in North America to the up-start United States in 1803... nor would the Barbary corsairs have spent years of war and tons of gold fighting the fledgling US Navy over shipping and trade tariffs (what we call extortion nowadays). If you think that some savvy "secret" was arranged and maintained between the economic powers of the world in the post-war years, then that means that controls and regulations instituted during the New Deal era must have worked because we haven't had a depression since. You and I didn't institute those regulations, nor did the individual States... so it must have been the Federal government, and the Fed was following a New Deal outline from 1932 until 1981.

Where you and I differ (in my opinion, not yours) is that you see this vast and permanent expansion of Presidential powers during the years FDR was in office, while I can categorically state with sure and certain knowledge that the ONLY New Deal programs to remain entrenched within the Fed after 1945 were FDIC, SSI, and the SEC. Other "alphabet soup" programs had brief, unspectacular revivals over the decades since... but all were basically finished by the end of WWII, including WPA, the CCC, NIRA, and the FRA. The vast and permanent change that I see is in the focus of the American people in the years since swinging from self-reliance to dependency on governmental aid and assistance in times of trouble or need.

When fully one quarter of every able-bodied man (or working woman) is unemployed, and more than 50% of all home and farm mortgages have failed completely, there is a need for the government to step in and do something to stop the "bleed" and possibly to prevent the bleed from happening again... I believe this firmly, and I feel it is all the justification needed for what was done in the years between 1933 and 1940. When that same interventionist attitude is carried into the future, where no such economic hardship has ever happened again, I begin to question the rationale of those applying the same formulas and theories. This very clearly explains why I have a problem with the agendas put forward by Obama, Reid and Pelosi since 2006. In short, we haven't seen another Great Depression... so why try and fix what isn't broken?

As for your "Micro II"...

The Roosevelt Recession was just that... a recession lasting just over 9 months, where the national economy took a 7% header because the Congress wouldn't give the President the budget he wanted and spending needed to be cut to attempt a balanced budget. The indicators that I so frequently use to support my case show (in no uncertain terms) that the nation had recovered fully from the "depression" of 1929-1934... all GDP figures rising more than 8% a year, inflation falling from 14% to 5%, new business failures down a whopping 188%, and only unemployment was still higher than it was in '29 (but far lower than it was in '35).

If that 9 months of falling economic indicators needs explaining beyond the OBVIOUS reasoning that the hike in taxes coupled with the cuts in spending put a scare on the nation that bad times were coming again... then I would ask YOU a question: Why did Reagan see a fall in economic indicators after 1986, to the point where he had to raise taxes AFTER he had promised so loudly that cutting taxes was the answer to the nation's woes? Why wouldn't I be able to equate the failure of "Reaganomics" in '86 with the same indicators that you use to continuously argue that the '37 recession was a patent nullification of any good that may have stemmed from New Deal prior to '37? The answer is YOU CAN'T. Economies are fluid things, and to suggest that they aren't influenced by any factors OUTSIDE of White House control is asinine, isn't it? Reagan was FORCED to raise taxes by a Democratic Congress that played pure opposition politics with the White House in Reagan's second term... exactly the same thing that happened in FDR's second term when a GOP Congress forced a balanced budget down FDR's throat.

In all the times I have argued against the "St Ronald" image you routinely paint of Reagan, I didn't use the fact that he RAISED taxes as a point of order because I knew it was OUT OF HIS CONTROL... just as the budgetary fiasco of '37 was out of FDR's control. If Congress works against the stated policies of a President, and things go sour... how can that then be blamed on the President in question?

Isn't that like blaming Bush Jr for the fiscal woes of this nation AFTER the Congressional midterm elections of 2006, when Pelosi and Reid took over? Have we forgotten who actually SPENDS the money in this nation?

No comments: