It seems to me, we have learned nothing from the stagnationist policies that created the Great Depression, and so are repeating it. The policies that kept the US, and indeed the entire world, in recession for a decade led directly to the Second World War are being mirrored today, with the only exception being unprecedented monetizing of US debt by the Federal Reserve and aped by most of the rest of the economic powerhouses around the world. The economic stagnation has been only slightly mitigated by the flood of printed money flowing into the world’s economies, but the potential for economic disaster is greatly magnified. Had our economists learned a thing from their history books, they would be decrying the stagnationist policies of the US government, for causing such stagnation in the US economy and by extension the entire world’s. Our jobs, wages, retirement, children’s future and our very lives are all put at risk by the stagnationist policies of the US government.
When FDR was elected he ran on a platform similar to Calvin Coolidge’s laissez faire policies. Once Roosevelt gained power however he turned to the policies of Hoover instead. FDR increased regulation by orders of magnitude, just like Obama, taxes were raised by Roosevelt higher than they had been under Wilson, the same as Obama raised taxes on everything he could and is still raising taxes today, Roosevelt vilified business and the free market exactly like Obama has. The only place the policies of Roosevelt and Obama have differed are the price fixing that Roosevelt was so in favor of, and the money printing Obama has had the “benefit” of.
In US economic history there have only been three recessions that led to stagnation. The Great Depression, Stagflation of the 1970s and Obama’s New Normal. All of them had Progressive Presidents and all of those Presidents taxed, regulated and attacked the free market. They all poured sugar into the gas tank of the economy and then claimed the fault was the economy’s. All had a willing media to muddy the water so the American people couldn’t see what the real problems were. The policies of those three President’s, Roosevelt, Carter and Obama are the epitome of stagnationist.
Two of those periods of stagnation took the unseating of the President and new policies to be adopted to break the cycle of stagnation. Roosevelt’s Great Depression took the Second World War to shock the economy and the American people out of the malaise that builds up during extended periods of economic stagnation. When Roosevelt died and Truman took over, the policies of over taxation and regulation were backed off, and the economy roared to life. In the case of Jimmy Carter’s Stagflation, it took the laissez faire policies of Hayek, and put into action by Ronald Reagan, to get the economy going again. The economic rebound of the 1980s were in stark contrast to the economic malaise of Carter’s Stagflation. Obama’s New Normal is still underway and will take the removal of Obama and a wholesale overturning of his economic policies to get us and the rest of the world out of stagnation.
The Second World War was largely a result of the Great Depression. The economy was bad in the US but it was much worse in Germany under the Wiemar Republic. The blatant socialist policies fueled by money printing, coupled with the draconian reparations from the armistice of the First World War, destroyed Germany’s economy. The result was poverty, hopelessness and famine, which always leads to social unrest. In such a climate, the conditions are ripe for an autocrat to seize power, and in Germany in the 1930’s one did. Adolph Hitler used his Brown Shirts to distribute food to the hungry, medicine to the ill and hope to the hopeless, (just like Caesar did a few centuries earlier). This gained him the good will of the masses and they ignorantly flooded to him. The people of Germany didn’t take seriously Hitler’s rhetoric about world conquest, they only saw the fattened faces of their children. The result was the war and all the misery it visited upon the world and Germany.
The conditions are becoming ripe for a replay of that tragic war because of the stagnationist economic policies of Obama and the world’s leaders. The policies of Obama, like Obama care, eliminating tax deductions to businesses for plant and tool upgrades and burdensome regulations that make it impossible to make a profit, unless the firm has political favor and doesn’t have to compete in the marketplace and instead get’s it’s profits from the taxpayer… the list goes on and on. These are all stagnationist policies similar to Carter’s and Roosevelt’s. Stagnationist policies always lead to stagnation and stagnation always leads to social unrest. In a climate of social unrest the conditions are ripe for a maniac to seize power. Where the next psychopath will rise is only known to God, but that one will unless we change our path, is certain. With the proliferation of weapons of mass destruction the next world war will make the last look like a walk in the park. So, isn’t it time to stop the stagnationist policies, and return to economic policies that lead to growth instead?