Tuesday, November 22, 2011
Politics Corker Slapped as Hypocrite, Booed and Heckled at GM Announcement
Posted by Jeff Woods on Tue, Nov 22, 2011 at 8:24 AM
In a fundraising email, state Democratic Party chairman Chip Forrester ridicules Corker for going to Spring Hill and tosses in Gov. Bill Haslam and Congressman Scott DesJarlais for good measure. President Obama and Democrats in Congress are responsible for the loan to the auto industry, Forrester says.
So who was on hand Monday to soak up credit for the Democratic jobs bump? Republicans.Sen. Bob Corker, who fought tooth and nail to derail the automaker rescue package, Governor Bill Haslam, whose good friend Mitt Romney would have allowed Spring Hill's plant to shut down forever, and Rep. Scott DesJarlais, who has led the assault on Medicare and common sense investments that create jobs and opportunity for the middle class.
Can you believe these guys?! Taking credit for successful Democratic initiatives — that they clearly oppose — is the worst kind of political posturing.
It's upsetting that some politicians said Spring Hill auto workers weren't worth the time and fixing the American auto industry wasn't worth the money. If politicians like Sen. Corker, Rep. DesJarlais and Gov. Haslam had been in charge, there would be no American auto industry and Spring Hill would be a ghost town.
Autoworkers booed and heckled Corker in Spring Hill. According to the AP, retired autoworker Don Lockhart confronted Corker after the ceremony about the senator's stance on organized labor. "You don't know what you're talking about," Corker told him.
Comments (55)
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I have no respect for Rep. DesJarlais, at all, so his behavior doesn't surprise me, but I would have expected better from Sen. Corker.
like
dislikeI was there in Spring Hill yesterday, the republicans did not lift a finger to help the auto industry and working men and women! The republicans talk about small business and how it will jump start the US economy. What will Jump start the economy is jobs that pay a living wage and that could be found in manufacturing jobs which can be brought back from overseas.! Most companies dont pay a living wage by choice and collective bargining can make that happen. Dont fool yourself thinking that the transplant auto factories would pay what they do if they werent worry about their workers organizing.. So they pay! WARRIOR QUEEN
So, it's alright to save GM with TARP funds but not alright to save the world's financials with TARP funds? And you think GM has repaid the TARP funds? It hasn't. GM used money in a bailout rescue fund (taxpayer money) to partially repay what the government has invested in the company. GM's problems were solely labor/management - an onerous union contract - that should have been reworked. It wasn't and now the taxpayers own something like sixty percent of GM through the purchase of stock and we'll never get our money back because the price of the stock will never hit $53 again. And as long as we do own GM we have to fund their union retirement. Plus it's an outrageous contract that has total compensation -wages, health insurance, retirement - of $157,000 per year (not in Tennessee, so far) and will fuel inflation as the rest of the country tries to keep up. Compare that to the TARP bailout of Wall Street where the money has been repaid with interest. The OWS crowd should be an OGM crowd demonstrating against the union leeches.
"So who was on hand Monday to soak up credit for the Democratic jobs bump? Republicans"
Democratic jobs bump?
Forrester is an economic moron - no surprise since he's a liberal democrat.
No action of any government on earth has ever created so much as a single job on an overall net basis.
Government doesn't create wealth out of thin air. It has to take it from someone before it can give it to someone else. And that is always a zero sum game.
Business doesn't create wealth out of thin air, either, Gilbert. It has to take it from customers.
Business doesn't "take" anything.
It is a VOLUNTARY exchange of value for value.
Home Depot can't make you pay for somebody else's lawn mower.
Gilbert, you are so right, the government can't create jobs, even though the federal government is one of the largest employers in the nation and even though back in the Great Depression programs like the CCC and WPA put over 8 million people to work and even though investing in our nation's infrastructure could cause the companies they contract with to hire new employees you are so right, the government can't create jobs and all of those people I just mentioned should understand that they are actually unemployed bums who are nothing more than welfare frauds.
Of course businesses exist to do nothing but create jobs, profits be damned! Even though it is in a business' best interest to have as few employees as possible so they can maximize profits and even though the vast majority of job losses our nation has experienced in the past few years were private sector jobs and even though corporations are recording record profits and still not using that cash to hire new employees any fool can see that ONLY the private sector creates jobs. We are so lucky to have so many altruistic business people who are willing to sacrifice profits and take stupid risks in an economy with such limited and just create jobs like crazy!
You are also right about the government not being able to create wealth out of thin air, those stupid liberals! They should understand the government can't do this because NO ONE can do this, wealth creation is a zero sum game! When wealth goes up for some it goes down for others and the government should stop trying to take money from the wealthy cause they don't have time to deal with that crap, the wealthy are too busy in their own zero sum game taking wealth away from the middle class and the poor. I feel so sorry for them getting picked on all the time by the government they are trying their best to control completely.
"Home Depot can't make you pay for somebody else's lawn mower."
Sure it can. Most businesses factor lost sales/defaulting customers into the price of goods and services.
Dear Gast,
GM's financial problems had very little to do with its employees but more to do with the financial institutes and bad mortgage loans made through GMAC. Another casualty of the government mandate to give everyone mortgages even those who could not afford them. GM's workforce only accounted for less than 10 percent of GM's debt obligations.
Back to the article, Bob Corker had no business being in Spring Hill for this announcement. The arrogance and audacity of this man who would have just as well let this plant, all the workers, the suppliers, and a local businesses go under is unfathomable and I for one will not be voting for him in 2012.
Another waste of our money for an inferior product that cannot make it without subsidies.
Democrats are continually for spending other people's money for boondoggles for union cronies, political donors and loser green projects. And they act like those are positive programs! Nothing but a series of scams with a disastrous end-game that is already being played out.
Corker should have stayed miles away from this event. He will be tarnished by association with those stealing our money.
@BuyAmerican: GM owed $30 billion to the union's retirement fund. That's only ten percent of the total? I wouldn't think so. It's good to see somebody else who recognizes the role government mandates played in the fiasco.
@kilted: You make sense...only to yourself or somebody else trying to excuse the excesses of our government. Business is a service or product exchanged for money. Government thrives from the taxes generated by the process. Government does not generate funds to pay for itself, private enterprise creates those funds. Our system has created the greatest country ever and you're not happy with that and want some sort of change. The problem with that is that every other form of government has been tried and ended up sucking our dust economically. Our poor people have cell phones and big screen TVs for heavens sake. The only thing guaranteed in this country is if you get some girl pregnant Uncle Sam will pay to feed the kid, the money coming from the taxes of rich people and corporations. So there you go. Perfect.
@BuyAmerican, again: I seem to remember GM shuttered the Saturn plant before the meltdown. It was no politician's fault. The quality of the Saturn cars was much hyperbole (not that they were a bad car) and gradually the buying public realized they were nothing special. Advance Auto wouldn't even change the battery on a Saturn after they set off a few airbags in the process.
Gast, thanks for commenting on my post, however, if I can make a humble suggestion, the next time you comment on something I say could you please make your comments relative to what I have said? You see, if you actually read what I wrote you will see that I never said that the government generates its own funds, all I did was respond to the ridiculous claim that the government can't create jobs when anyone who knows anything at all about the economic history of our nation can plainly see that the government has created a tremendous number of jobs. I acknowledged that taxation is a zero sum game but I also mentioned that wealth creation in the private sector is also a zero sum game, something that those who benefit from the game seem unwilling to admit.
Our system has created an economic powerhouse, no doubt about it, the question is,what does "our system" mean? It can't mean the system of today which through reductions in taxation on the wealthy and massive reductions in regulations on business since the 1980's has brought us to the worst economic crisis since the Great Depression. So if today's system isn't "our system" then maybe it was the system of increasing regulation and top income tax rates of up to 95% that we had from the end of WWII through the 60's that is the system you are talking about. This of course was the "our system" under which we saw income grow for every economic class in the country and under which we enjoyed the longest period of sustained economic growth in our nation's history.
I am thrilled when I hear tea party supporters talk about taking our country back because I figure they must be talking about taking our country back to the good ole days of the 1940's and 1950's when we had high taxes, increasing business regulation, strong unions, and our country grew into an economic super power. I would love to go back to "our system" but for some reason you keep supporting "their system" where wealth is redistributed from the middle class and poor to the wealthy and individuals overseas. History plainly shows that supply side economics works great, for a limited time, and for a very limited number of people. History also shows us how to get out of the economic crises we are currently in, but people like yourself keep arguing for actions that will only send us deeper into this hole we have dug for ourselves. So I guess the question is, gast, why do you hate America so much as to want to destroy our economy?
You assume that all auto workers are democrats!!! Corker was booed because he is a low down hypocrite !!! He is a blood sucker that did not want the auto industry (Spring hill) to succeed.. We went to town hall meetings in Franklin to voice are opinions when the whole thing with the economy went bust, Corker was the speaker and he attacked the folks from spring hill and laughed in are faces and then wants the jump on the band wagon when we get new product.. Ask him what he has done about free trade since he has been in congress to level the playing field between imports and domestic car builders? One other thing i worked for G.M for 30 yrs and the bell out money did not contribute one dime to my retirement!!!!!!!!
Davidlongfellow, where to start? First of all, GM is not an inferior product. Both GM and Ford fare very well in JD Power and other quality surveys, and have generally outperformed even Nissan over the last decade. You're operating from a 1980's mindset that those cars wouldn't make it to 100,000 miles. And by the way, if it wasn't for the Japanese government bailing out Toyota in the seventies, that company wouldn't be around today. The simple fact remains: GM's problems were poor decisions by management, not union contracts (most foreign makers also have unions). Toyota took losses for years on the Prius because they had the foresight to see that rising fuel costs were going to put a crimp on the sell of huge gas guzzling SUV's and pickups. And they ended up running big profits on that car as Detroit scrambled to catch up. GM and Ford were making the vast majority of their money on pick-ups and SUV's, while Toyota and Honda were making huge investments in the Prius, the Civic, the Corolla, etc. And Buy American is absolutely right about the finance arm of GM (the same thing happened with Ford).
Another factor nobody is mentioning is GM and Ford had these huge portfolios that were competing against each other- did GM really need Pontiac, Chevrolet, Buick, Olds, the GM brand, Saab, Hummer, and some others I'm forgetting. Ford was getting killed with it's Premier Automotive Group. Both companies have streamlined and dumped most of their brands and are healthier financially for it.
Secondly, don't kid yourself Davidlongfellow, Republicans also are big on spending other people's money, usually in foreign misadventures. They've also got their own cronies and political donors/lobbyists. If you can't see that, you're a blind partisan.
How much of our stimulus money went to the "left" side of the swamp? And overseas? Much or most of it, apparently.
Anyway, nontransplanted Maury Countians still have to leave the county to get a living-wage job, unless they're working in the medical field or the schools or for government. Zach Wamp's Defense Corridor idea would have helped us greatly, I think. Coupled with the high-tech training that would serve people other than laid-off GM workers still drawing significant income and benefits from GM/us. Their workers are treated like royalty by the state while others are ignored. GM has lied to and cheated Maury County, you know. Documented. And we have subsidized this company's operations and their transplanted workforce every step of the way.
"Gilbert, you are so right, the government can't create jobs, even though the federal government is one of the largest employers in the nation and even though back in the Great Depression programs like the CCC and WPA put over 8 million people to work "
And that didn't create so much as one single additional job on an overall net basis.
"They should understand the government can't do this because NO ONE can do this, wealth creation is a zero sum game!"
Nope.
Only deliberate wealth redistribution by government is a zero sum game.
"Of course businesses exist to do nothing but create jobs, profits be damned!"
Businesses exist to make money for the owners - just as they should.
And by the way, attempting to create jobs isn't any of the business of government and neither is deliberately redistributing wealth. It's not pursuant to any ennumerated power delegated to the federal government in the text of the Constitution as is required by the 10th Amendment.
Liberals labor under the mistaken notion that they have a "right" to a job (and healthcare and all sorts of other material goods and services regardless of ability to pay).
You have the right to be left alone by the government unless you have actively done something to harm someone else - and that's it.
"Sure it can. Most businesses factor lost sales/defaulting customers into the price of goods and services."
Ha! Ha! Ha!
That's not the same thing at all.
Gilbert, I, and I think most people in our country, would be thrilled if the government would be allowed to create jobs right now even if they didn't create any additional jobs on an overall net basis. No reasonable person would expect the government to create additional jobs over the number of jobs we had at the start of this crisis. But reasonable individuals would realize that even if we only got a quarter of those jobs back the additional money in people's pockets would spur demand that would then force the private sector to start hiring again and put us on our way to a real recovery.
But you are wrong about your claims about the government not creating any additional jobs on an overall net basis. If you have ever been to Gatlinburg you have seen a prime example of this. During the depression the Great Smokey Mountains National Park was created from donated land and land bought by the federal government (the first time federal funds had been used to purchase land for a national park). Then CCC and other government workers were sent in to create the infrastructure needed to turn this wilderness into a park that could be enjoyed by the average person. In 1934, the year of the park's creation, the town of Gatlinburg received 40,000 visitors. In 1935, the very next year, Gatlinburg received over 500,000 visitors. Along came the hotels, the shops, the restaurants and of course the jobs. Then came the economic growth in Pigeon Forge and other towns in the area. So while the government programs in the GSMNP only added a few thousand jobs at most to the economy these programs directly led to the creation of more jobs than we could possibly count, in fact, these programs in the 1930's are still creating jobs today. Nothing in our economy happens in a vacuum and if we would allow our government to do what it can to create jobs it wouldn't create enough to fix our problems, but it could move us towards the solution we need. We have been in this situation for years now and the private sector has done nothing to fix it. Since they have failed it is time to try something else, something else that we know has worked in the past.
Regarding GM's 'profitability.' it should be remembered that in order for the government to 'save' the company, the corporation's bondholders got massively screwed. The unions, who's restrictive work rules and inflated benefit demands helped undermine GM's profitability and competitiveness, got off far better. It is easy to be profitable when you can walk away from your debts.
I also note that the Obama Administration seemed to have a change of heart since it altered the agreement with Solyndra to ensure that its major stockholders {and Obama contributors} got to be first in line among the creditors in the bankruptcy filing. I applaud them on their change of heart, even if it was less of a miracle and more of a payoff.
@ Gast. I really think you are mistaken on why GM shuttered the Saturn plant. Saturn was way ahead of it's time which is evident in the technologies developed during it's run is technology that is even now being used and implemented in other car companies, even the foreign car companies. There is so much you obviously don't know about Saturn Corporation and the politics that were involved. It is amazing how many Saturn's' are on the road even today, and how many people would love to be able to once again purchase a Saturn. My first Saturn lasted well over 350,000 miles and my current Saturn has almost 100,000 miles on it. GM's mistake was moving Saturn away from its birthplace in Spring Hill and bringing Saturn back under the GM way of doing things. Saturn truly was "a different kind of car company for a different kind of customer."
Also, the Saturn plant wasn't shuttered, it became Spring Hill Assembly and Saturn production was other facilities. The VEBA account was actually a cost saving measure for GM and they will have saved billions of dollars once it is fully in effect. The 10 percent I referred to was the current employees whom the media demonized. Also it should be mentioned that if it wasn't for the unions the "foreign" plants now here would be paying nowhere the wages they are paying today. It is interesting to note that those wages have decreased since this has all transpired.
"But reasonable individuals would realize that even if we only got a quarter of those jobs back the additional money in people's pockets would spur demand that would then force the private sector to start hiring again and put us on our way to a real recovery."
Government spending doesn't create demand. It cannot put any more back into the economy than it took out of it to finance that spending.
"But you are wrong about your claims about the government not creating any additional jobs on an overall net basis"
No I'm not. Government spending in one industry or area simply reshuffles capital on a political basis and thereby prevents it from being used elsewhere.
"then maybe it was the system of increasing regulation and top income tax rates of up to 95% that we had from the end of WWII through the 60's "
No one ever paid anywhere near 95% of their income in taxes during the 1950's. There were far more tax shelters in existence in those days than there is now. The effective tax rate is what counts - not the nominal tax rate.
The boom time after WW2 didn't have anything to do with high tax rates, regulation or any other government initiatives. It primarily had to do with the fact that the industrial base of most of the rest of the world had been blown to pieces by the war. Furthermore, the war killed somewhere between 55 million and 75 million people - most of them non-Americans.
That means a lot of human capital was wiped out as well. The communist powers of the Soviet Union and China expanded their control of Eastern Europe and Asia and took even more countries out of the competitive arena. It took a long time for the rest of the free world to rebuild and even longer for those in the communist grip to wriggle out of it to any degree,
The United States was temporarily advantaged by an absence of competition for goods sold abroad and at home until the rest of the world recovered. That situation is gone now and it's not coming back. The 1950's style of corporate paternalism was a result of that anomoly. It did not existed before the war and it's not going to exist going forward
@Kilted: As far as the government creating jobs in the Great Smokies by improving access, it looks like the government opened a path for the private sector to create jobs, just like our national highway system does. And it would be fine if they could do it again and get out of the way but so far all we've gotten is boondoggles like Solyndra and before that the housing bubble caused by the government trying to do too much, which, when it burst, destroyed the world's economy with toxic securities derived from government's interference with normal business practices. The trouble with the government running anything is that it's hard to remove the boneheads from the bureaucracy. Private business can't afford to have them around and so they are removed. Makes a big difference.
I'm sorry, BuyAmerican, but you're the first person I've ever heard defend Saturn based on their products, and I've never heard anyone pine over wanting one. Ahead of their time? Parts-bin engines and transmissions from GM slapped on global platforms designed by Opel? Plastic body panels? Center-stack gauge clusters? What about Saturn was ahead of its time? Don't get me wrong, I don't wish to bash Saturn or you... I'd just like to know which technologies you are referring to because I think most people will agree GM had too many product lines full of almost identical products all competing with one another, most of which needed to go long before the financial meltdown.
This recent announcement was like so many others concerning this
plant, a few jobs now and mostly promises that may or may not
actually happen in the future! One of GM's most modern plant and
it carries the status of "Flex Plant". Meaning they will use it only as
absolutely necessary, but don't expect anything on a permanent
basis! We were doped on this plant from the very beginning with
this facility bringing in other employees from across the country with
locals getting only janitorial and a few other menial jobs.
Would the presence of Al Gore and Mike McWhorter at this announcement
been more acceptable to the author than the current Elected Officials?
"We were doped on this plant from the very beginning with
this facility bringing in other employees from across the country with
locals getting only janitorial and a few other menial jobs."
This may (or may not be) true but it is irrelevant. Yes, there are a lot of people from Michigan in the area now that moved down because of the Saturn plant. Whether the bulk of the higher paying jobs go to long-time locals or not, it's still good for the overall economy there. If locals are qualified for the jobs, they'd probably get hired. So I don't see your point. And I don't know if Gore had anything to do with Saturn moving down here in the first place, but he never actively acted like Saturn was a thorn in his side, so it probably would have been more acceptable.
Dear ender75,
I respectfully disagree with you on your assessment of Saturn. It has been amazing how many people I have met across the country who have told me they have owned a Saturn and would very much like to own another one. And as I said before before I have been well pleased with the one I have owned. I do not disagree that GM was overloaded with car brands and that you didn't know when you purchased a car as to whether you were getting a Buick, Oldsmobile or a Chevy, but you definitely could tell which cars were Saturn. My first Saturn was an 1993 SL2 which we owned until 2009 and all we ever had to do to it other than regular maintenance was put a new alternator on it at about 300,000 miles. This car is still running today and we sold it when it had well over 350,000 miles on it. All you need to do is go back and look at things Saturn has done and the awards they earned to know this was a car and company that had high potential.
As to the comments about how the people here in Tennessee were duped, well you only heard what you wanted to hear. GM told the people from the beginning that they would hire from within the company first. In fact this plant could of and should of been built in Portage, Michigan. One of the things that bother me about people commenting on all these people from is Michigan is that people came from all over the country. Many folks relocated here from Wisconsin, Missouri, Texas, Alabama, New Jersey, Illinois, Ohio, and Delaware just to name a few. Saturn Corporation did many wonderful things for this area, helping their community. Believe me, I know many Saturn workers who would have loved to have remained where they were instead of relocating to Tennessee, but back then just as it is today, you go where the jobs are.
I had the opportunity to talk to probably 100 Saturn workers several years ago who moved here from Mich. All, and I mean all, said they would never return to Mich.
BTW, I see GM is stiffing the feds for cleanup money they were supposed to pay for "toxic" sites up north. It's fed money anyway so maybe it does not matter.
As for Corker, it is apparent watching TV he has become a very popular guest and obviously very smart with an exceptional business sense. Some booing by union thugs might be a compliment.
"@kilted
Also, TVA."
Government-provided infrastructure first creates the jobs that build and maintain the infrastructure, and then the infrastructure itself provides a framework to facilitate the creation of other jobs. I'm really surprised. I thought everyone already knew that.
Min,
You are correct that government-funded infrastructure is necessary for increased private sector economic activity. Everyone does know that. But it is equally true that expenditures by government can never create economic growth or generate sufficient revenue to pay for themselves or to create new wealth.
Put simply, New Deal-like public jobs cost X {cost of labor and equipment etc}. The idea that taxation {income and sales} can return anything more than a small percentage of X is absurd. That is the economic equivalent of believing one has developed a perpetual motion machine.
So yes, let's fund infrastructure for sure. But the idea that government employing people in order to restart the economy by increasing consumer spending {the New Deal and the first Obama stimulus} is a dangerous myth.
BTW, the New Deal did not end the depression, Adolph Hitler did. Because of Adolph a lot of people found work.
LAWN MOWER FROM HOME DEPOT? Don't buy one there! They have no service, parts or support at all! Go to a "MOM & POP" Lawn mower place...oops never mind, they don't exist anymore...Home Depot put most all of them all out of buisiness! And you can't afford one anyway because you don't now make enough moo la!
"Government-provided infrastructure first creates the jobs that build and maintain the infrastructure, and then the infrastructure itself provides a framework to facilitate the creation of other jobs. I'm really surprised. I thought everyone already knew that."
It's isn't government created infrastructure that creates private sector prosperity, it's the other way around. The very first dollar that government ever spent on anything came from a tax on wealth that had already been created by the private sector. The same thing goes for the last dollar it's spent and every single one in between.
The TVA didn't "create" anything. What it did was TRANSFER resources from other areas to the TVA covered area. That prevented those resources from being used in private capital investment elsewhere. People who point to some government activity and claim it has "created" something like to focus on the receiving side of the transfer and pretend that the paying side doesn't exist. There is no proof that the resources deployed throught the TVA generated more economic prosperity than would have been created elsewhere by those same resources if they hadn't been spent by the government.
Roads and other infrastructure are only of value if there is some other instrinsic economic reason why that particular road or other function is needed. The government could build a six lane highway through the middle of Death Valley but that wouldn't cause any towns to magically spring up along it.
Government no more gets "credit" for jobs at private sector companies that use roads than Boeing gets "credit" for jobs at Federal Express because Fed Ex uses Boeing planes to operate it's business.
Gilbert,
Another way of making your first point is that government infrastructure responds to the needs of the changing economy. In other words, the Erie Canal and the Transcontinental Railroad were not built so that new trade and new markets might flourish bit to assist existing trade and markets to more effectively flourish. The opposite view is getting the cart before the iron horse, so to speak.
I do disagree with your analysis of TVA however. Remember that there was a dearth of investment capital during the Depression. The most viable option for the FDR administration was to use bonds for construction {like many New Deal projects}. Rather than add these to the federal debt, public authorities were created to sell bonds for specific projects {the Triborough Bridge in New York City being the largest single project in the East} with a plan for the bonds being repaid by revenues from the profits of the projects. In the case of TVA the decision was made not to end the program once the bonds were paid off. In any case, it is not accurate to say that the federal government took resources from other investment options. Private capital bought the bonds.
For a great explanation of the process, and how it could be manipulated, check out Robert Caro's 'The Power Broker: Robert Moses and the Fall of New York City.'
"The most viable option for the FDR administration was to use bonds for construction {like many New Deal projects}. "
That is begging the question of whether the government should have been engaged in (or had any Constitutional authority to engage in ) any of those so-called "New Deal" programs to begin with.
"In any case, it is not accurate to say that the federal government took resources from other investment options. Private capital bought the bonds. "
And if there had been no govt backed TVA issued bonds, that capital would have been invested elsehwere. The government certainly did take capital away from other investment options.
Gilbert,
A quote that extremists on all sides of the Constitution should remember comes from Mr. Justice Robert Jackson in a case involving free speech and incitement to riot.
"The choice is not between order and liberty. It is between liberty with order and anarchy without either. There is danger that, if the court does not temper its doctrinaire logic with a little practical wisdom, it will convert the constitutional Bill of Rights into a suicide pact."
In the case of New Deal, there was an imminent prospect of radical social upheaval. No citizen is required to obey a government that says "To a gas chamber, go!" Put differently, if society condemns one or ten or thousands or millions to intolerable conditions, why should those people feel any responsibility to that society? FDR understood that the only way to avert that situation was to give people hope and enough help to survive until conditions improved. The idea that the American economy could have achieved the same is absurd since the only way to achieve the needed growth involved increasing international trade, something that was not possible in the 30s.
To be sire, once the Depression ended {thanks to WWII}, it would have been wise to eliminate aspects of the New Deal that left the federal government in control of huge sections of the economy. But getting us through the Depression without the New Deal would have been highly unlikely.
As for the issue of the bonds, the decision to purchase them was made by financial institutions like banks and investment houses. To the extent that bonds for public authorities were seen to be safe yet lucrative, the investors would seem to still prefer them over other investments. For a project like TVA, regional development was not something that could be achievable by one project so it was designed to go on. I would be interested to see if it were possible to sell TVA now that the Tennessee Valley is economically developed.
"In the case of New Deal, there was an imminent prospect of radical social upheaval. No citizen is required to obey a government that says "To a gas chamber, go!" Put differently, if society condemns one or ten or thousands or millions to intolerable conditions, why should those people feel any responsibility to that society? FDR understood that the only way to avert that situation was to give people hope and enough help to survive until conditions improved."
Gas chambers?
What in the world are you talking about?
The Depression had nothing to do with gas chambers and FDR's New Deal meddling, along with that of Hoover before him was what CREATED the great depression to begin with.
The monthly unemployment statistics after the stock market crash of 29 had started going down before the government started meddling with Hoover signing the Smoot-Hawley tarrifs into law, raising taxes, etc and then they started going back up again. FDR just made it worse with his New Deal meddling. His only talent was in being an effective con man in selling the notion that he was "saving" people when in fact he was actively condeming them to prolonged economic misery.
Gilbert,
That line "To a gas chamber, go" comes from a review of Ayn Rand by Whitaker Chambers in National Review. While Chambers had a different meaning, my take on the phrase is that some people believe that we must accept destruction in order to preserve the literal word of the Constitution regardless of the crisis we face.
FDR's illegal efforts to involve America in WWII before Pearl Harbor fall into this same category of action. Unconstitutional, to be sure. But absolutely correct in helping save Great Britain and the West.
Just because employment got a 'dead cat' bounce doesn't mean the Depression was being overcome. As I said, there was a global depression that dried up America's markets so we were a long way from regaining a valuable level of economic growth. That would require a dramatic rise in exports as we saw after the war.
"While Chambers had a different meaning, my take on the phrase is that some people believe that we must accept destruction in order to preserve the literal word of the Constitution regardless of the crisis we face. "
It is merely your contention that we were facing "destruction" in the first place.
"Just because employment got a 'dead cat' bounce doesn't mean the Depression was being overcome"
Every previous economic downturn in the nation's history ended without massive government intervention. The Great Depression was the longest one and the first one where government engaged in massive levels of economic intervention. That was no coincidence.
As I said. it was Hoover's and FDR's interventionist policies that CREATED the great depression in the first place.
The notion FDR ended the great depression is set in stone; no need to revisit that. JFK was another great president; why that is is not at at all clear. He only governed 1000 days with the debacle atthe Bay of Pigs to show for it. Do not mentuion the Missle Crisis, hardlly an accomplishment. Now, BHO has governed 1000 days and has damn near wrecked the country. He is considered very smart, a great leader but,I'm afraid all will admit there has been some slippage lately.
Gilbert,
I think that the US was facing potential social collapse. The election in 1936 of a demagogue like Huey Long was not impossible nor was organized violence against the establishment by the desperate.
You are correct about previous depressions but all previous depressions were the result of purely internal economic conditions. We still had a thriving international trade {the Depression in the 1890s or were not dependent of that trade {like the Depression of 1836}. There was no way out of the Great Depression until international demand was revived after 1945.
"The notion FDR ended the great depression is set in stone; no need to revisit that. "
It is not set in stone, John. It is only set in liberal orthodoxy.
FDR's own treasury secretary, Henry Morgenthau, admitted the New Deal was a failure in 1939. He said "We have spent all this money and it does not work.".
International trade?
It was the government itself that killed international trade when the SmootHawley tarrifs were enacted and sparked a trade war.
In fact it was government's meddling attempts to "manage" the economy that were the cause of the whole thing in the first place - including the stock market crash of 1929. That was the result of ham handed Federal Reserve monetary policy attempts to reign in the stock market and causing it to crash.
FDR's Keynesean spending accomplished nothing because Kenynesean ecomomics never accomplishes anything. It is just flat out a bogus economic theory.
Boneheaded economic interventions by our own government and other governments were what caused the great depression and created the economic conditions in Europe that enabled Hitler to come to power in Germany. There wouldn't have been a World War 2 at all if they hadn't done so.
Like it or not GM, FDR's legacy will live on and I think set in stone is as good a way as I know to make the point. Unfortunate, but that is what the little ones learn at every school, every day.
We are enjoying a little hoo-doo economics now, aka Keynesian And, I must add, poorly understood by the chronic posters here but well acccepted since the Moor is still in the WH.
Gilbert,
Of course the Smoot Hawley tariff made things worse because America's economy was heavily dependent on exports and the Hoover Administration failed to recognize that we would be the big losers in a trade war.
You are incorrect about the stock market collapse. By 1929 the market was being driven by leverage built on leverage. People were buying on margin using assets that were themselves financed on margin. That is an unsupportable system which inevitably goes 'Boom.'
One only has to look at the last major bubble boom. Easy mortgages caused an unprecedented rise in home equity. Rising housing prices allowed home owners to leverage their increased equity into massive new spending. The mass of new mortgages allowed banks to sell securities based on the new mortgages and the loans on existing home equity. Leverage got piled on leverage. In the US leverage reached 30 times real value. In Europe 40 times was not uncommon.
There was a vast creation of illusory wealth. Millions of jobs existed only because of the degree of leverage. And it had to come to an end with the obvious consequences.
So to with the stock market collapse in 1929. Leverage built on leverage built on leverage requires people to have more confidence in the system than is justified. Once people realize that the house is built on sand, the rush to safety leads to collapse.
In both cases the major failure of government was to prevent the creation of unsustainable leverage. Had stock purchasers before 1929 been required to put down 10% in cash for purchases rather than buying more stock with only more stock as collateral, there would not have been a massive collapse. Similarly had the federal government before 2008 restricted the leverage on assets like home mortgages, we would not have suffered the collapse we did.
The reason governments don't like to take such precautions is that leverage allows for economic growth even when other factors are stagnant. But it is an illusion that cannot last.
"?One only has to look at the last major bubble boom. Easy mortgages caused an unprecedented rise in home equity"
The primary cause of the rise in real estate values was the federal reserve pumping up the money supply trying to "manage" the ecomony out of the last boom that busted - the tech stock boom. Everything else that happened was a deriviative of that.
And that is the same thing that happened in the 1929 stock market crash. The federal reserve had pursued an easy money policy that created an asset bubble in stocks and then it ineptly tried to reign it in by clamping down on the money supply precipitating the crash.
"In both cases the major failure of government was to prevent the creation of unsustainable leverage"
The major failure of government has always been trying to manage the economy or any aspect of it at all to begin with.
It isn't even physically possible for anything to ever be superior in any way to a pure free market. Which is why there has never been so much as a single instance in human history where the case has ever been proven to be otherwise.
"Like it or not GM, FDR's legacy will live on and I think set in stone "
Well you can think it all you want but you are wrong.
As I said before, it has never been anything other than liberal orthodoxy.
Books like "The Forgotten Man" by Amity Shlaes have blown the "New Deal" myth to pieces.
