Sunday, August 17, 2014

Comparing and Contrasting Obama and FDR Failed Policies (Part II)

Both Obama and FDR sympathized with Russia. FDR was the first and only president to recognize Russia. And both FDR and Obama were pushed around by Russia leaders. Stalin got his way following WWII (Because Russia got to police elections in Eastern Europe therefore Communism spread and the Cold War started) and Putin invaded Ukraine without any fear of retaliation from Obama. Putin also pulled the wool over Obama’s eyes with the chemical weapons treaty between the U.S. and Syria.

The economic model followed by most socialists is Keynesian economics or massive government spending with no regards to deficits. Most Keynesian followers do not believe that deficits can cause economic distress. But this too has been rebuffed by modern history when the Greece economy collapsed in 2010 and several other European Union countries needed bailouts to avoid economic collapse. Obama’s deficit spending has been more than every other President combined. FDR doubled the Hoover budget in his first term. Neither man may have truly understood Keynesian economics (FDR meet with John Maynard Keynes several times and admittedly did not understand him), but they did understand how to spend taxpayer money.

Obama passed a massive spending stimulus (American Recovery and Reinvestment Act) worth nearly 1 trillion dollars in an effort to create jobs. About 100 billion of that money was spend on alternative energy source markets. FDR created dozens of social work programs. A few of the popular ones were the Civilian Conservation Corps (CCC), Public Works Administration (PWA), Works Progress Administration (WPA), National Youth Administration (NYA), Tennessee Valley Administration (TVA), National Recovery Act (NRA), and Resettlement Administration (RA) to name a few. Sure, some good came from these programs – for instance, bridges and government structures still have the CCC emblem on them today. But many of the jobs created by government sponsored bills are only temporary. Worse yet, waste and fraud are also an issue. Obama only created one job for every 3 million dollars spent. Much of the money spent on green companies did not invest in technology, but instead picked winners and losers in the industry. Many companies squandered billions and went belly up. And many of the companies invested in by the Obama administration had CEOs who gave to the Obama campaign. Hence, spending was not strategic; it is based merely on a quid pro quo basis.

Obama’s American Recovery and Reinvestment Act and FDR’s National Recovery Act (NRA) where similar in one regard – they created more uncertainty and ambiguity in the private sector. The laws were thousands of pages in length and the interpretation was not clearly understood. In fact, the NRA law was longer than every other law in history – combined! Obama’s other major laws were no different such as the Affordable Care Act (ObamaCare). They were long and convoluted which created more uncertainty which is never good in troubling times. As Nancy Pelosi said about ObamaCare “We have to pass the law to see what is in it”. Unfortunately, the more Americans learned about the law the more they disliked it. And when uncertainty and ambiguity happens, banks and businesses are not going to spend money to expand businesses and create jobs.

One of the biggest mistakes President Hoover made in an effort to tame the recession was to pass the Smoot-Hawley Tariff. This raised a tariff on agriculture goods to historic levels and the result – U.S. exports fell by 40% over the next couple of years. Why? Other countries retaliated against this type of protectionism. This is one thing FDR understood and he eliminated all harmful tariffs. This would be a lesson one would think Obama would have learned from history, but Obama is a protectionist president. Obama continually preached about tax penalties for companies that move jobs overseas; tax subsidies for companies that keep manufacturing jobs in the U.S; energy independence; and increasing tariffs on China such as their solar panels. Obama campaigned against trade agreements; he blamed NAFTA for much of America’s economic woes. But eventually, President Obama did succumb to pass a few trade agreements.

1 comment:

  1. The powerful figures Obama has opted to emulate is certainly very telling. In my humble opinion he chooses his heroes not for whatever perceived good they did for the nation but for the extent to which they were able to socialize the nation and transfer power from the people into the hands of the gov't. The ability to get more control over people and their earnings is what Obama really respects.