Saturday, June 19, 2010

The Good News Is, We've Been Here Before

The bad news is, it will likely get worse before it gets better.

The parallels between the current economic situation and the economic crisis in the 1930's is remarkable. Also noteworthy is the similarity between the strategies employed by president elect and then president Franklin Delano Roosevelt and Barack Obama.

All of the following examples are cited from Amity Shlaes, The Forgotten Man.

  • The routine of targeting class enemies in the name of reform would become Roosevelt's hallmark (Shlaes 133).
  • Roosevelt reminded his listeners of the importance of the fact that "our last frontier" had long since been reached...growth would not provide for the poor; only redistribution (135).
  • On the matter of Roosevelt's election: Among the most pleased were the Soviet leaders. "Russians Hopeful of 'a New Deal,' ran the headline...from (the) New York Times (140).
  • In response to Hoover's appeal to president elect Roosevelt for cooperation on the banking crisis: But Roosevelt was not interested in cooperation. We will never know all of his motives, but it was clear that a crisis now could only strengthen his mandate for action come inauguration in March (142).
  • Comments from Tugwell, one of Roosevelt's adviser's on what the new administration's plans were: "Drastically higher income and inheritance taxes," among other sweeping changes (143).
  • The country indeed saw Roosevelt as a savior (145).
  • After a failed assassination attempt: "I have never in my life seen anything more magnificent than Roosevelt's calm," an investigator wrote later (146).
Hope ran high after Roosevelt's election and inauguration. The market's rallied.

Eventually reality set in.

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