There’s been a significant amount of “chatter” suggesting President Barak Obama will implement the spirit of the New Deal policies of President Franklin Delano Roosevelt (FDR) in combating the economic downturn that we are currently experiencing.
As of today, corporate America has a black eye resulting from the corruption that was recently exposed. However, it goes without saying that the corruption was precipitated by government programs instituted many years ago that set the foundation for loose credit and investment practices that led to the economic problems we face today.
So, in a nutshell, both government and business are to blame, but is a New Deal along the lines of FDR’s social policy really the way to go?
Throughout his administration, FDR imposed high taxation on wealthy individuals and corporations, which inhibited virtually any ability for businesses to expand or even operate in certain cases. Additionally, when it came to the free market economy, FDR felt the need to impose strong wage and consumer price controls on businesses.
The National Recovery Administration (NRA) was set in place to force businesses to comply with certain wage standards and maintained a very pro union labor stance. Union labor wages increased, however reduced production output as a result of companies having to scale back their workforce in order to keep their business solvent. Workers were asked to do more with less and labor strikes became fairly popular, but businesses had limited options.
The NRA went so far as to dictate to companies what to charge for certain consumer goods which legally had to be adhered to and were strictly enforced.
For example, if a business could sell a widget for $10.00 and make a profit, but the government felt that the sale price of the widget should be $15.00, the business had to abide by the government price standard. This obliterated competition and held prices higher than what they could have been while burdening individual consumers.
As an adjunct to the NRA the Agricultural Adjustment Administration (AAA) was enacted. The act provided subsidies to farmers to actually reduce crop output despite the fact that many people were unemployed and hungry. Within a year the U.S. Supreme Court ruled this act to be unconstitutional.
Unemployment remained a constant problem throughout the period. To offset this, the government developed “make work” programs such as the Works Progress Administration (WPA) and the Civilian Conservation Corp (CCC).
Yet, the WPA who was committed to infrastructure building of roads and government buildings, met with lackluster success; experiencing schedule delays and cost overruns due to a lack of incentive on the part of the work force. If a project ran over budget or schedule there were no grounds for penalty because the government could not penalize itself on one of its own projects.
Consequently, workers of the WPA came to be known as the “We-Putter-Around” group. They received a “security wage”, meaning that regardless of their level of production or quality of work, they would be guaranteed a certain dollar amount at the end of the day.
The CCC faired no better in that while keeping young men busy draining lakes, building trails in national forests, and soil mitigation projects, their work created no demand on the manufacturing sector. It was simply work to keep them busy and earn enough money to survive.
With the onset and conclusion of WWII the economy underwent a drastic upswing resulting from the manufacturing demand that the war created. Government began to fade into the background due to a perceived lack of need on the part of society. Businesses re-tooled their lines to produce consumer goods, coupled with the technological advances that the war also created, and the economy took off like a rocket.
In retrospect, government intervention was needed at the beginning of the Great Depression as the population was shell shocked in facing such a rapid decline. However, long term and as the government demonstrated, it could take the economy only so far and at some point had to turn operating control back over to business to manage effectively.
The anti-business philosophy and policies of FDR did not help matters when it came to attaining full economic recovery, but only prolonged it by suppressing the ability of companies to effectively manage their operations. The government led effort did keep the heartbeat of the economy going on some level, but despite the make work programs unemployment still averaged 16% and in some periods reaching as high as 28%.
The state of the economy was persistently troubled, however more troubling was the stubbornness of the FDR administration. The notion being that government has to “rule over” rather than “partner with” business who, consequently were in a better position to advance the economy after the initial government stimulus.
Knowing what we know about the Great Depression, the obama administration has a golden opportunity to demonstrate some original thought and action.
He will need to acknowledge that government and business made some mistakes which led to our current situation and that furthermore, government remains only a short term solution and that at some point will relinquish control of the economy back to business.
This message would acknowledge our present situation, renew faith in our future, and most importantly diminish any ideas of having to live under a permanent authoritarian government rule.
By the way this message needs to be in writing – “So, President Obama, what’s in the stimulus package for 2009?”
Eric Kaad
http://www.articlesbase.com/economics-articles/obama-and-the-2009-new-deal-policy-749275.html
Is it just me or is Obama’s foreign policy an embarrassment?
Let’s see…first he appoints Hillary Clinton and has her begging to the Chinese to buy our bonds while ignoring the human right issues there.
We also have the Russians basically laughing at the ridiculous plan that Obama had to get them to help us with Iran.
Now we find out he doesn’t know who the president of France is and the muslim world is laughing at him
http://www.france24.com/en/20090303-moscow-rebuffs-secret-obama-deal-medvedev-missile-shield-iran
http://news.aol.com/political-machine/2009/03/23/obama-snubs-french-president-seeks-to-work-with-predecessor/
http://www.washingtontimes.com/news/2009/mar/22/supreme-leader-rejects-obama-olive-branch/
…it looks like Obama’s naivety is being exposed…
Funny how so many of you that disagreed answered within 2 minutes…how could you read those links? You are just blind followers that excuse anything that Obama does or does not do on what Bush did or didn’t do..
Its just you…and the sore losers on the Right. Funny how the Right never minded the Bush policies that made us international pariahs… funny how they suddenly care what Hugo Chavez thinks!
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Just you.
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Its not you.
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didn’t we all know going in that his foreign policy skills were severely lacking?
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You are definitely an embarrassment.
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He tries hard, however, has no experiences.
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It is just you.
Bush had the worst policy (if he had one at all).
…
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It’s just you. You right wingers are so obviously desperate.
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It is an embarrassment. He has no experience with foreign policy.
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It is not you. He is very naive and ignorant on this subject, and on many others as well.
~
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I am watching Glenn Beck right NOW!
Just thought you all might want to know…
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It’s not just you.
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Quiz him on Marx and you’ll get 100%.
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Yes, and obama himself is also. And so is his ugly wife.
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What he should be doing is pulling out all the troops from the Middle-East. We need a policy of non-interventionism just like the Republicans from the Old Right.
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No war = good
Pointless war based on false intelligence = bad
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I didn’t know that he had a foreign policy.
I’ll have to look that up on HuffPost.
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52% of the population were well aware of his foreign policy experience when they voted him to office.
Thanks geniuses!!
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thats why he has biden.
biden fills the gap (foreign policy) that obama lacks.
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It is just you and a closed mind, I feel sympathy for your kind.
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He is more of an embarrassment every week. That 60 minutes show was nothing short of ridiculous. We look like idiots for having elected him.
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I don’t hate the man – I just don’t like his foreign policy.
I lived in the Middle East for about a year and that peace video he sent to Iran WAS A FRIGGIN JOKE. He portrayed himself as too weak. WRONG idea. They have nuclear weapons now. The Middle East only respects stong men.
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I know…
He hasn’t threatened war with ANY of them! What kind of foreign policy is that!
Oh and if you had read the real news this week, the Fed bought our debt for the first time since the 60s. It’s basically like giving China the middle finger.
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Jimmy Carter redux.
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Nope,not you..It is.
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What do expect from a community organizer? This is what Democrats want us to aspire to be.
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Bush was beholden to the Chinese, too. China owns so much of our debt that we have no choice but to coddle them.
Frankly, I’d rather have a foreign policy based on communication and negotiation than one based on blowing everyone up who disagrees with us.
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Comparatively I think that if you were to quiz the previous administration they probably wouldn’t have known the president of the USA let alone France.
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It’s just you and Terrorist lover Dick Cheney
Dick Cheney is praying for a terrorist attack.
Mr. News
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he was left a huge mess and its going to take him time to clean it up. people may blame him for the mess but really he is just the poor guy left with it. & i would personally like to see you do a better job
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Its on;y you Obama’s Policies are Spot on.
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it is just you
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I think it is just you.
for the past 8 years the US has not had a foreign policy. Why do you think Colin Powell quit. he understood that the Republicans foreign policy consisted of Lies and Deceptions to the American people, in addition to rampant military force and threats.
some foreign policy, do what we say or we will kick your A$$
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It’ definitely not just you who’s embarrassed.
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Yes, it is you, especially if you get your "factoids" from the Moonie paper.
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It’s just you, and you are an embarrassment btw.
We violated international laws and you supported it. We start allying with other countries and you call that an embarrassment? Are you on weed?
0.0
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It’s not just you. He is embarrassing and a threat to our security as he has shown his weakness with terrorist nations. Remember this too (this was funny)…
http://www.youtube.com/watch?v=9sudCmrAsF4
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For one, who gives a rat’s ass if the muslims and russians are laughing at them. Why is that important? I was never an enthusiastic Obama supporter—but it seems to me that when the Russian President made those patheticly laughable macho posturing remarks to Czech republic about sending nuclear missles their way was far more lameass than anything Obama is doing. And don’t get me started on fundamentalist muslims. It seems to me Obama is only attempted to open up a genuine dialogue, and the other ones seem to be the babies that are not willing to do it—instead they just "laugh" at the prospect or whatever. Talk about nimrods.
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The world is laughing at our country. I just read an article where Cuba is calling us weak!
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http://news.yahoo.com/s/ap/20090323/ap_on_re_la_am_ca/cb_cuba_us_sanctions_2
Why should we be embarrassed by him kissing Russian, Iranian, Chinese & Mexican ass?
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No need to read the links he is doing well in the world and leaders like him.
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It’s just you. You’re an embarrassment. So’s the Washington Times, owned by Rev. Sun Myung Moon.
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Yes, and he is an embarrassment
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He has shown that we are weak country now, no one respects him or us. The rest of the world will do as they please. We are in some real troubled times, with out a leader. You cannot stumble your way around with foreign policy. The sheep still follow, And at the same time we are being swallowed up by debt and embarrassment. His cabinet and the nuts in Congress, makes me ashamed, that we sit here and do nothing. We need our government back in our hands not the fools on the hill.
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now you know he is the problem but we will have to clean it up
revolution is the answer
tell the libs to take a hike clean out the government and start fresh
put people in power that don’t want the job and make sure that they don’t rob us blind while doing it
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How would you rate DESERTER George W. Bush’s foregin policy follies?
At least PRESIDENT Obama is trying to un-f**k the mess the dumba$$ left him.
Now go take some Oxycontin & Viagra and play with some little boy’s weener like Rush does.
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