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forums and found it worth thinking about and just a tad scary.
It was titled: Obama=Herbert Hoover.
Get ready for DOW 1,000 or lower.
What will President Obama do? His instinct, reinforced by an overwhelmingly Democratic Congress, will be to roll out all of the old leftist plans. Yet, by the time he takes office in January, it is likely President Bush will have used every New Deal palliative the mind of man and Henry Paulson could possibly devise. None will work. The stock market has only lost more than 20 percent of its value in a two-day period in the years 1929, 1987 and 2008. In 1929 and 2008 the government responded with all of its tools – which for Hoover included the Federal Reserve, jaw-boning business on wages and state governments on welfare, massive federal building and reclamation projects, a forced Federal repatriation of 500,000 Mexicans to open jobs for Americans, and a massive national tariff to encourage purchase of U.S. products, as well as the RFC - and the economy kept getting worse.
What about the third major crash? Following 1987s so-called Black Monday, which actually had a sharper decline than 1929, President Reagan did nothing – and the economy quickly healed. He did “nothing” under the economic logic that markets cannot go up until potential buyers think prices have hit bottom. Mellon was right in 1929, Reagan was correct in 1987 and “leave it alone” was right after Reagan’s first recession in 1981 too. It is the only other alternative. It works and fast enough to recover politically.
After Mr. Bush has exhausted all possible New Deal-like solutions and $2 trillion to pay for them, what more could President Obama do? In 1932, Hoover ran for reelection by promoting his many governmental regulatory actions to quell the Depression and Franklin Roosevelt campaigned on balancing the budget, hard money, including the gold standard, and decentralizing programs to the states. As we all know, after taking office Roosevelt switched 180 degrees and went in the exact opposite direction toward even more government control.
Might President Obama make the same diametrically opposite turn but this time following Mellon and Reagan to let the market run its course? With limited funds available to him in an economic downturn and a looming entitlement crisis - and no idea of what else to do - avoiding the Hoover fate for simple political survival might just produce a marvelous conversion! We will soon see just how much change the President-elect is really ready for. Stranger things have happened. Just ask Herbert Hoover about FDR.
What if President Obama does not change? Why, he gets to play Herbert Hoover and it will be happy days are here again for the Republicans quicker than one can bat an eye.
I'm not a fan of George W-- and I am a fan of Bill Clinton-- but you know what, this was germinating on Clinton's watch. He encouraged deregulation, and Bush kept the easy money policies going following the bust of the tech bubble. Bush was against the bailout... and so were many Republicans... but the Dems rammed it through.
People are looking for one person or one party to pin this on, and it doesn't work that way. A lot of what has happened has been in motion for a long time. Bush didn't start it, and Obama won't magically make it go away. A Democratic Congress has been calling the shots for the past two years, so if ever we had a two-party screwup, this is it. Being unrealistic about how we got here and how we're going to get out is pointless. The reality is, both parties are to blame and both parties will have to work hard to dig us out. People who expect Obama to cowboy in and fire that silver bullet will be sorely disappointed.
Actually, no, if you want to micromassage it, he was against it at first, in theory. Then he was talked into it, got on board for whatever reason and pushed it.
But... whatever. That wasn't my point. I was looking at it from a big picture perspective.
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