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Jan 20, 2009

An Hystoricle Day

An Hystoricle Day
01/20/09 - DocsOnTheWeb by Shrodingers Cat

Cat sees our current political and economic situation unfolding as it did in 1930, and for the same reason: government manipulation of the economy on a massive scale. The government just won't stand back and let the people (free market) clean up the mess.

[edited] You see, history seems to be repeating itself, and it is like watching a train wreck, knowing beforehand it was going to happen but unable to stop it.

Hoover was a meddling Republican president who felt he "had to do something" to help the economy of 1929 and 30. He consulted key business leaders and came up with the brilliant ideas of keeping wages high at a time of declining prices and profits for companies, ensuring increased unemployment. He increased taxes (top rate went to 63 percent) increased government subsidies to industry and agriculture, and increased tariffs.

He said, "We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of the Republic". (Not my kind of fiscally responsible conservative) That quote sounds awfully familiar... Then came the great FDR (BHO)
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The irony is that our problems have been created by a runaway government program to make big houses available to everyone, able to pay or not. The government agencies that did this are called Fannie Mae, Freddie Mac, and the bond ratings agencies.

They pretend to be "private companies" while operating with government guarantees, government appointed boards, government appointed executive officers, government political pressures, and government "oversight" that encouraged them to borrow as much money as the entire US debt at the time, and distort the housing finance markets.

Now, we are being sold government programs to "fix" the problems, maybe, by spending $1,000 billion at a time.

See "We Guarantee It".

The last part of the post reports a parable of politics, performed in a third grade classroom.

[edited] Jamie and Olivia were picked to run for the top spot. Both candidates were good kids. I thought Jamie might have an advantage because he got lots of parental support.

The day arrived for their speeches. Jamie had specific ideas about how to make our class a better place. He ended by promising to do his very best. Everyone applauded.

Olivia's speech was concise. "If you will vote for me, I will give you ice cream." She sat down. The class went wild. "Yes! Yes! We want ice cream." She surely could say more. She did not have to. A discussion followed. How did she plan to pay for the ice cream? She wasn't sure. Would her parents buy it or would the class pay for it? She didn't know. The class really didn't care. All they were thinking about was ice cream.

Jamie was forgotten. Olivia won by a landslide.
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