Category Archives: Media Criticism

Why The New Deal Didn’t Work

This is an important point:

The New Deal prolonged the Great Depression because of not one but a combination of misguided policies that made it harder for employers to create jobs and harder for consumers to buy things. Keynesian commentators talk as if FDR made a single key mistake, like not incurring big enough budget deficits. This ignores the tripling of the tax burden during the New Deal period (1933-1940). Also ignored is the fact that New Deal spending was mainly paid for by the middle class and the poor, because the biggest revenue generator for the federal government was the excise tax on beer, cigarettes, chewing gum, and other cheap pleasures disproportionately enjoyed by the middle class and the poor. Moreover, several New Deal laws made everything — especially food — more expensive when Americans desperately needed bargains.

There’s a lot more.

Notions that the New Deal didn’t work because they didn’t do enough of it (particularly based on the absurd notion that the war was “the New Deal on steroids” which was why it did) are just the kind of rewriting of history that I was talking about.

[Update on Tuesday morning]

There are few things I enjoy more than dealing with history-challenged simpletons who stupidly assume that because one doesn’t accept the gospel that FDR Saved Us From The Breadlines, that one must therefore think that Herbert Hoover was (in the parlance of the times) the cats pajamas, and that if we’d only stuck with his (non-existent) laissez-faire policies, all would have been well with the world. Larry Kudlow had a guest on his show who made this idiotic assumption last week, when he talked about Larry’s “hero,” Herbert Hoover. Kudlow quickly put him in his place (as I did here with my own idiot in comments). It’s the same (or at least related) pigheaded mindlessness and false choice that causes people to foolishly assume that because I’m down on Democrats I must be a Republican.

[Update a couple minutes later]

Michael Barone, on the real lessons of the Great Depression. Of course, those pushing “stimuli” don’t want to learn the real lessons, because it would remove much of the justification for their efforts to grow government and take over more and more of our lives as individuals.

[Bumped to Tuesday morning]

A Trip To The Museum

We went over to the Holocaust Museum today. I’d never been, but never had much desire to — I’d read my fill of that history years ago. It’s not so much that I found it disturbing as simply a waste of time that I could spend looking at museums in which I was more interested. But Patricia wanted to, and one of the reasons that I love her is that she did, and so we did. As I expected, there was little unexpected for me in the permanent exhibit on the upper floors, but in the basement is space for temporary exhibits. One that opened a couple weeks ago (ten days after the White House had a new occupant, though I’m sure that was just a coincidence) was on Nazi propaganda. Now that, I found disturbing.

This is the image that greets you at the beginning of the display.

The placard that accompanied it said that one of the elements of convincing propaganda, to appeal to the masses, is a powerful image combined with a simple message. It helps even more, apparently, if it is done in the style of socialist realism, like this.

Farther on in the display, it discussed how Goebbels and the other Nazi propagandists were enamored of new communications technologies, using the gramophone as an example. If they were operating now, they would no doubt be fascinated by Web 2.0.

A few steps later, I came across the following striking quote, by a woman in Germany who had attended one of Hitler’s rallies:

How many look up to him with touching faith! As their helper, their saviour, their deliverer from unbearable distress…

I was so relieved that I live almost eighty years later, and that our society had grown beyond that kind of primitive thinking — that the president is responsible for the personal well-being of every citizen, and every sparrow that falls in America, like a demigod. I mean, obviously, any responsible leader today, confronted with such idolatry would use it as a teachable moment about the nature of our Republic, rather than basking in the worship, as Hitler did, to gather more raw unchecked political power unto himself.

I also found interesting the description of how the Nazi authorities encouraged and organized public rituals, ceremonies, meetings and other public events. I could see how this kind of activity might solidify public support behind otherwise less politically palatable notions felt important by the state.

Of course, one of the most disturbing tactics, used not only by the National Socialists, but also the fascistic international socialists in the Soviet Union, was the continual rewriting of history to glorify the state, and make it out to be the victim of past failures and treachery, and misguided policies. Some of the examples they gave were almost as though modern leaders were continually talking, fantastically, about how we got into our current economic problems through deregulation and tax cuts, and (non-existent) laissez-faire policies, rather than overspending and overregulation, and continuing government interference in the free market, often at the behest of corporations.

Finally, during the war, one of the hallmarks of the Nazi regime was to control the flow of information to the German citizenry. I hadn’t realized that they actually built specialized radios whose sensitivity was so weak that they could only pick up German government signals, but generally not overseas views (such as the BBC). They viewed clandestine listeners to foreign broadcasts as traitors to the state, undermining the war effort. I’m certainly glad we live in a nation where such attitudes would be odious, to both Congress and the President.

All in all, it was a relief to leave the museum, and walk back across the mall toward the White House, secure in the knowledge that such things could never occur here.

[Update a while later]

We’re all fascists now (part II).

And try to figure out which chapter of the story we’re in.

[President’s Day update]

The administration is no longer issuing denials on the Fairness Doctrine. I guess when the campaign did it last summer, it was, you know, “just words” to get elected.

But I’m sure they mean well. They just have to keep their options open in case some people don’t follow the leader’s sage advice to “not listen to Rush.”

[Update a few minutes later]

What I find fascinating is how the BDS-afflicted had to doctor the photos of President Bush to push their conception of him as a fascist dictator, yet the Obama promoters did it to him with no apparent sense of the irony of what they were doing.

These folks seem to have had their sense of irony excised at birth.

Will The “Stimulus” Really Stimulate?

Economists say no:

“I think (doing) nothing would have been better,” said Ed Yardeni, an investment analyst who’s usually an optimist, in an interview with McClatchy. He argued that the plan fails to provide the right incentives to spur spending.

“It’s unfocused. That is my problem. It is a lot of money for a lot of nickel-and- dime programs. I would have rather had a lot of money for (promoting purchase of) housing and autos . . . . Most of this plan is really, I think, aimed at stabilizing the situation and helping people get through the recession, rather than getting us out of the recession. They are actually providing less short-term stimulus by cutting back, from what I understand, some of the tax credits.”

It won’t slow them down, of course. Because it’s not really about “stimulus.”

As a commenter over at Instapundit noted a few weeks ago, a government providing stimulus is like an ugly and uncoordinated person performing a lewd dance. Even if the intent is to stimulate, the effect is exactly the opposite.

[Afternoon update]

The shock doctrine:

Last year the US economy was hit with one shock after another: the Bear Stearns bail-out, the Indymac collapse, the implosion of Fannie Mae and Freddie Mac, the AIG nationalisation, the biggest stock market drop ever, the $700bn Wall Street bail-out and more – all accompanied by a steady drumbeat of apocalyptic language from political leaders.

And what happened? Did the Republican administration summon up the spirit of Milton Friedman and cut government spending? Did it deregulate and privatise?

No.

It did what governments actually do in a crisis – it seized new powers over the economy. It dramatically expanded the regulatory powers of the Federal Reserve and injected a trillion dollars of inflationary credit into the banking system. It partially nationalised the biggest banks. It appropriated $700bn with which to intervene in the economy. It made General Motors and Chrysler wards of the federal government. It wrote a bail-out bill giving the secretary of the treasury extraordinary powers that could not be reviewed by courts or other government agencies.

Now the Obama administration is continuing this drive toward centralisation and government domination of the economy. And its key players are explicitly referring to heir own version of the shock doctrine. Rahm Emanuel, the White House chief of staff, said the economic crisis facing the country is “an opportunity for us”. After all, he said: “You never want a serious crisis to go to waste. And this crisis provides the opportunity for us to do things that you could not do before” such as taking control of the financial, energy, information and healthcare industries.

That’s just the sort of thing Naomi Klein would have us believe that free-marketers like Milton Friedman think. “Some people stockpile canned goods and water in preparation for major disasters,” Klein wrote. “Friedmanites stockpile free-market ideas.” But that is exactly what American left-liberals have been doing in anticipation of a Democratic administration coming to power at a time when the public might be frightened into accepting more government than it normally would.

As is often the case when the left accuses the right of something (lying, racism, hate), Naomi Klein’s thesis is simple projection.

Is This Any Way To Run A Government?

Is it reasonable to expect the peoples’ representatives to at least read the bills they vote on and pass, let alone comprehend them? Jimmie at The Sundries Shack has done the math:

Let’s start with two generous assumptions: that the bill remains at 1,434 pages, and it gets in the hands of your member of Congress at 8 PM. Let’s also assume that there are about 350 words on each page

In order for anyone to read the entire bill in 13 hours, they’d have to start the very minute they got it and read over 1.8 pages a minute every minute, without a break. They’ll be clocking in at a reading speed of 640.5 words per minute at that rate. If anyone needs a potty break, they’d better take the bill with them. Forget eating.

By comparison, the average human reads about 200-400 wpm if “reading for comprehension”. You only hit 640 wpm if you’re skimming the text (and the top end average skimming rate is 700 wpm and the comprehension rate drops dramatically).

Now, let’s face it, it’s not exactly unheard of for legislators to vote on legislation they haven’t read, but usually there is at least time for their staffers to get a gander at it.

This is the biggest political travesty of my lifetime, and (unfortunately) I’m no spring chicken. Which of my commenters is going to attempt to defend this?

[Friday Update]

Hope! And Change!

It stands to reason that perhaps the most basic obligation members of Congress have is to know what they are voting for. And this is doubly true on a spending bill of this unprecedented magnitude. It’s also worth noting that President Obama campaigned on pushing for explicit transparency measures in Congress. John Dickerson at Slate helpfully pointed out what Change.gov says about legislative transparency:

End the Practice of Writing Legislation Behind Closed Doors: As president, Barack Obama will restore the American people’s trust in their government by making government more open and transparent. Obama will work to reform congressional rules to require all legislative sessions, including committee mark-ups and conference committees, to be conducted in public.

Just a few weeks in office, and we already have the President enabling and encouraging one of the least transparent processes imaginable to muscle through an $800 billion spending bill. Does the administration think this amounts to change, or should I wait for them to get their new website, worsethanever.gov, up and running?

I guess we’ll just have to wait. I guess it was “just words.” Just like the words about “going through bills, line by line, and eliminating wasteful spending.” Anything to get elected.

Have these people no shame?

[Bumped]

A Random Question

If a census recording had occurred on George Bush’s watch, and he had the process bypass the Secretary of Commerce and report directly to Karl Rove, what would the New York Times have to say about it?

[Afternoon update]

Judd Gregg has withdrawn from being Commerce Secretary, according to Fox News, and will stay in the Senate. I guess he didn’t like the thought of being treated like chopped liver when it came to the census. Another black eye for the administration’s cabinet appointment process.

[Update a couple minutes later]

“I have found that on issues such as the stimulus package and the Census there are irresolvable conflicts for me.”

[Friday morning update]

Rick Moran:

The issue of the Census director reporting directly to the White House means that Gregg, as commerce secretary, would lose control of one of the major programs in the department. By, in effect, politicizing the Census, the Obama administration is throwing down the gauntlet and risking an all out war with congressional Republicans over the fruits of the national head count; redistricting the 535 congressional districts to reflect changes in population and the allocation of billions in federal spending. . . . Is this the real reason that Gregg decided to withdraw? Perhaps he felt he was being set up to be the front man for a Census that could cripple the Republican party for years to come and wanted no part of it. We may never know.

It doesn’t really matter. I’m just glad that he came to his senses.

[Bumped]

[A couple minutes later]

Byron York:

After he looked into it more, he said, ‘Whoa, this was a mistake.’” Plus this: “At the very least, the Census issue would have made for a very uncomfortable confirmation hearing. Gregg’s fellow Republicans on the Senate Commerce, Science and Transportation Committee would certainly have asked him what he thought of a plan that would move control of the Census from professionals in the Commerce Department to Rahm Emanuel, the hyper-partisan White House chief of staff. What would Gregg have said? It was the stimulus problem all over again; Gregg couldn’t have said what he believed, but he probably couldn’t have brought himself to support the president, either.

Still waiting for all the outrage in the press about politicizing the census. Not holding my breath, though.

Goodie

Iran will have enough fuel for several Hiroshima-level bombs by the end of the year.

I should note that their ability to put a satellite into space isn’t quite as concerning to me as it has been portrayed by some in the news. Though we had ICBMs before we had launch vehicles, it doesn’t follow that having a launch vehicle implies ICBM capability. It’s actually a lot easier, from a guidance standpoint, to put an object into orbit than it is to hit a target precisely. Also, warhead and entry vehicle technology is a completely different beast than a launcher, so simply having throw capability doesn’t mean that you have all of the pieces in place. In addition, it’s one thing to build a bomb — it’s another to make it small enough to be able to loft it around the world.

Of course, none of this is of much consolation to Israel, because it’s a lot closer, and I would imagine that the Iranians are indifferent to how precisely they can kill hundreds of thousands of Jews.

Avoiding Hoover

Jim Manzi has a good post on the real implications of this disaster wending its way all too quickly down Pennsylvania Avenue.

What I find most appalling about it are the perverse incentives and moral hazards that it sets up. Buy more house than you can afford? No problem, the taxpayers will prop you up and keep you in it. Spending more than revenue in your state capital? Don’t sweat it, we’ll just steal money from other states so you can keep it up.

It is punishing the prudent and rewarding the irresponsible. And when you set up a system like that, you’ll get a lot less of the former and a lot more of the latter behavior. At some point, Atlas will shrug. I don’t know how far off we are from it, though.

[Update a few minutes later]

Welcome to the Great American Handout.

“Thugs Ransacking My House”

Well, Arnold Kling certainly isn’t mincing any words:

“I think about the stimulus as an economist but I feel it as a father. Barack Obama is destroying my daughters future. It is like sitting there watching my house ransacked by a gang of thugs. That’s how I feel, now back to how I think.”

As noted if you read the whole thing, this isn’t a “stimulus” plan. It’s a grow-government-and-make-us-all-increasingly-dependent-on-it plan. The welfare provision alone is proof of that.

That Seventies Show

It’s the return of malaise.

More confidence building, from the “indispensable” tax dodger who is now in charge of collecting our taxes:

Where was Geithner the Technocrat when you needed him? Because that is just what the markets need right now: a detailed, technocratic explanation of the way forward. This might have been the clincher as far as investors are concerned: “We are exploring a range of different structures for this program, and will seek input from market participants and the public as we design it.” In other words, “We have have concrete and high detailed plan to develop a concrete and highly detailed plan. We’ll get back to you.”

Oh, and it would be nice if he could do all that without painting such an unremittingly bleak picture of the economy. But more important is to change the mark-to-market accounting rules that are needlessly driving the financial system into the ground. Former FDIC Chairman William Issac has told the Securities and Exchange Commission that every money center bank in the 1980s would have gone bust had they been forced to sharply write down the value Latin American debt: “If we had followed today’s approach during the 1980s, we would have nationalized nearly all of the largest banks in this country and thousands of additional banks and thrifts would have failed. I have little doubt that the country would have gone from a serious recession into a depression.” Sound familiar?

And along with that change, how about embracing the private sector as the surest path back to prosperity? Cut corporate taxes. Suspend capital gains taxes. Indeed, one reason why Geithner may have been so vague about the bank rescue plan is that ultimately the plan may entail such high government borrowing that announcing it now would have derailed the current $800 billion Obama stimulus plan.

And wouldn’t that be a shame?

Speaking of cutting corporate tax rates, what would really help would be to simply eliminate them. A simple reduction in rate does nothing to reduce the high costs of bookkeeping and accounting that are made necessary by the need to sort out taxable deductions from other expenses. I’m sure that this is a huge drag on the economy (though it would still exist, unfortunately, for individuals). Eliminating the tax completely would free up vast amounts of corporate wealth for more productive activity.

[Mid-afternoon update]

Well, people do laugh at clowns:

The laughter was at its height when Obama officials explained that the White House planned to guarantee a wide swath of toxic assets — which they referred to as “legacy assets” — but wouldn’t be asking Congress for money. Rep. Brad Sherman (D-CA), a bailout opponent in the fall, asked the officials to give Congress the total dollar figure for which they were on the hook. The officials said that they couldn’t provide a number, a response met by chuckling that was bipartisan, but tilted toward the GOP side. By guaranteeing the assets, Geithner hopes he can persuade the private sector to purchase a portion of them.

Financial messes like this are fundamentally a crisis of confidence. The Dow plunged 400 points after the news conference. I think that the Geithner pick is turning out to be a disaster, on multiple levels.

[Another update]

More thoughts from Megan McArdle:

I don’t envy Geithner his position. But he’s known this was coming for months. I expected a little more than telling us that he wanted to spend a lot of money to help banks clean up their balance sheets. We knew that much already.

I’m glad I don’t have his job, but I wish that someone else did. And the buck stops with the man who appointed him.