George W. Bush is going out as Herbert Hoover with last-minute efforts to save the financial system, but who will voters ask to play FDR and offer them a New Deal?
The Administration is asking Congress to enact what, according to the Wall Street Journal, may look "like the Reconstruction Finance Corporation, a Depression-era relief program formed in 1932 by President Hoover that tried to inject liquidity into the market by giving loans to banks and other businesses."
It didn't work back then until after Democrats won in a landslide and took more drastic government action. In that crisis, politicians stopped worrying about socialization and stepped in to save the economy.
The ideologues now will be howling, but John McCain and Barack Obama have to stop talking about tinkering with the "fundamentals" and start offering reality to the people they are asking to vote them into the White House.
The first worldwide reaction to today's news is encouraging as stock markets in Europe and Asia are posting "huge gains" in response.
But the devil will be in the details, as Paul Krugman observes: "Today’s U.S. political system isn’t going to follow Andrew Mellon’s infamous advice to Herbert Hoover: 'Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.' The big buyout is coming; the only question is whether it will be done right."
Showing posts with label Herbert Hoover. Show all posts
Showing posts with label Herbert Hoover. Show all posts
Friday, September 19, 2008
Saturday, December 22, 2007
A Backward Presidency
George W. Bush started out to be Ronald Reagan, morphed into Richard Nixon and, toward the end, is starting to resemble Herbert Hoover.
The shanties, shacks and cardboard shelters in communities spawned by the Great Depression and known as Hoovervilles are showing up in 21st century America as a result of the sub-prime mortgage crisis that has doubled foreclosures of homes in the past year.
"Between railroad tracks and beneath the roar of departing planes," Reuters reports, "sits 'tent city,' a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.
"The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis."
Not only are homeowners being dispossessed, but tenants are, too. A California realty firm estimates 20 percent of foreclosures are on homes bought as investment properties. Even after paying their rent, tenants are getting little notice before being evicted.
As former Federal Reserve Chairman Alan Greenspan takes most of the heat for not foreseeing the crisis, Paul Krugman points out the Bush Administration's share of the blame:
"Consider the press conference held on June 3, 2003--just about the time subprime lending was starting to go wild--to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw...
"Two months after that event the Office of the Comptroller of the Currency, one of the tree-shears-wielding agencies, moved to exempt national banks from state regulations that protect consumers against predatory lending."
After weakening the patchwork of federal agencies to let banks run wild with loose loans, Bush, like Hoover, is responding with government action that is too little and too late. A Treasury Department plan to freeze mortgage rates has been deemed a failure even before it is in place.
It's a little like watching a lowlight reel of the 20th century being played backward at warp speed.
The shanties, shacks and cardboard shelters in communities spawned by the Great Depression and known as Hoovervilles are showing up in 21st century America as a result of the sub-prime mortgage crisis that has doubled foreclosures of homes in the past year.
"Between railroad tracks and beneath the roar of departing planes," Reuters reports, "sits 'tent city,' a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.
"The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis."
Not only are homeowners being dispossessed, but tenants are, too. A California realty firm estimates 20 percent of foreclosures are on homes bought as investment properties. Even after paying their rent, tenants are getting little notice before being evicted.
As former Federal Reserve Chairman Alan Greenspan takes most of the heat for not foreseeing the crisis, Paul Krugman points out the Bush Administration's share of the blame:
"Consider the press conference held on June 3, 2003--just about the time subprime lending was starting to go wild--to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw...
"Two months after that event the Office of the Comptroller of the Currency, one of the tree-shears-wielding agencies, moved to exempt national banks from state regulations that protect consumers against predatory lending."
After weakening the patchwork of federal agencies to let banks run wild with loose loans, Bush, like Hoover, is responding with government action that is too little and too late. A Treasury Department plan to freeze mortgage rates has been deemed a failure even before it is in place.
It's a little like watching a lowlight reel of the 20th century being played backward at warp speed.
Wednesday, July 18, 2007
New Kind of Washington Wake-Up Call
With their sleeping cots and general disarray, Senate Democrats are evoking images of protests past against an unresponsive government. Granted that demonstrations of old were not by elected officials, the symbolism is familiar.
In 1932, with World War I veterans starving during the Depression, more than 10,000 came to D.C. and camped out, demanding the bonus that had been promised them. They ended up being rousted by the Army under the command of Gen. Douglas MacArthur who ignored President Herbert Hoover’s order to go easy. Generals were feistier then.
In 1969, a quarter of a million peaceful protesters against the war in Vietnam converged on the nation’s capital, holding candlelight vigils until morning. “I do believe,” Sen. Ted Kennedy told them, “this nation is in danger of committing itself to goals and personalities that guarantee the war's continuance.”
The dramatic difference this time is that anger and frustration are directed, not against the government, but by one branch of the Washington power structure against another.
Only a President with the insensitivity and arrogance of George W. Bush could have driven the Congress of the United States to such expression of enraged impotence. Even Herbert Hoover was incapable of that.
In 1932, with World War I veterans starving during the Depression, more than 10,000 came to D.C. and camped out, demanding the bonus that had been promised them. They ended up being rousted by the Army under the command of Gen. Douglas MacArthur who ignored President Herbert Hoover’s order to go easy. Generals were feistier then.
In 1969, a quarter of a million peaceful protesters against the war in Vietnam converged on the nation’s capital, holding candlelight vigils until morning. “I do believe,” Sen. Ted Kennedy told them, “this nation is in danger of committing itself to goals and personalities that guarantee the war's continuance.”
The dramatic difference this time is that anger and frustration are directed, not against the government, but by one branch of the Washington power structure against another.
Only a President with the insensitivity and arrogance of George W. Bush could have driven the Congress of the United States to such expression of enraged impotence. Even Herbert Hoover was incapable of that.
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