The history lesson Obama has ignored

[Donnachaidh]

http://www.salon.com/books/history/index.html?story=%2Fpolitics%2Fwar_room%2F2011%2F08%2F04%2Fobama_keynes_fdr

:snip:

Just under three quarters of a century ago, a group of conservative economic advisers close to Franklin Roosevelt informed the President that they were worried about the rapid rate of growth in the US economy. Since 1933, when FDR took over at the height of the Great Depression, the economy had been expanding steadily, at an average rate of 14 percent per year. Schooled as most of these advisors were in the tenets of economic orthodoxy (which called for cuts in spending during an economic downturn), and unsure of the effects of the Keynesian-style deficit spending that the administration had been engaged in under the terms of the early New Deal, the President was advised to cut the budget, reduce deficit spending and tighten the money supply as a means to stave off inflation. Heeding their word (and no economist himself), FDR did just that.

The results were an unmitigated disaster.

Thanks to the Administration’s decision to move away from the increasingly Keynesian policies it had been following — policies that saw the unemployment rate fall from a high of 25 percent in 1933 to 14 percent by 1937 -- FDR launched one of the sharpest economic downturns in American history-the so-called "Roosevelt Recession" of 1937-38. In just a few short months, the GDP declined by 13 percent; industrial production by 33 percent; wages by 35 percent and an estimated four million people lost their jobs. No fool, FDR quickly reversed himself and went back to Congress to seek a massive stimulus bill to put people back to work and repair the damage to the Depression-era economy. Within three months growth had returned and the economy was back on track.

More at the link --

[alsame]

1. Krugman talked about this last night on Countdown. There is

a precedent to follow, we just aren't doing it.

[jpak]

2. Obama did not make a decision to move away from Keynesian policies - the Teabaggers did

FYI

[Doctor_J]

4. And Obama agreed at first to "meet them half way", then

ended up meeting them 98% of the way. He never once, himself or via a spokesperson, took the case to the American people for resisting teabag economy.

[jpak]

6. I can read and you are wrong

try again

yup

[bvar22]

7. When you LEAD with...

..agreeing to slash Government Spending (in a Recession!!!), and putting Social Security & Medicare On the Table,
that isn't Taking you case to The People.

The People overwhelmingly support raising Taxes on the RICH,
and leaving "Entitlements" alone.
Telling The People to "Eat Peas" while the RICH are enjoying an extension of their Tax Cut is a hard sell.
Blue Link


Who will STAND and FIGHT for THIS American Majority?
You will know them by their WORKS,
not by their excuses.

[RaleighNCDUer]

8. That he put anti-Keynesians in charge of the economy is just

an unfortunate coincidence.

I'm sure.

[PufPuf23]

9. POTUS Obama did not appoint a single Keynesian to an important

role in his administration.

Geithner, Summers, Bernanke et al are all Chicago School neo-liberal economists.

The models they work concentrate wealth (and political power), create artificial bubbles, and have failed repeatedly.

[jpak]

10. Yeah - the Stimulus Package was not "Keynesian"

or do we forget these things

I think we do

yup

[PufPuf23]

12. The stimulus package was a mix of Keynesian and neo-liberal

eg shovel ready jobs and tax cuts to the wealthy (supposedly to invest but that is hoarded to cherry pick failed assets).

The Keynesian part of the stimulas was far too small and the tax relief to the wealthy (and "too big to fail" financial instituion bailouts) were counter productive to the minor Keynesian effort that was no more than lip service to actual money flows.

POTUS Obama hired neoliberal economists and financial "experts" (Geithner, Summers, Bernanke, et al) that by neoliberal ideology and the evidence of their careers are anti-Keynesian and the policies and priorites have reflected this choice and failure.

Now with the debt ceiling debacle, POTUS Obama has has locked the USA (and our World impact) on a trajectory of less jobs and wages regardless the automatic "deficit solution" or an up down vote from the Committee of Twelve. This is not even good politics.

I didn't forget the stimulus, I just saw it for what it was at the time and wish I was wrong now. The stimulus should have been bigger and the tax cuts were counter productive. I could show you on a blackboard with chalk. Yeah yup. Some of we are superficial.

[Cali_Democrat]

3. K&R

[Doctor_J]

5. I think it's been clear since about March 2009 that aObama is not FDR

in ideology or in leadership.

[upi402]

11. NRA used to stand for "National Recovery Act"

Now it stands for "Nevermind Reality Asshole"