He wants to be the next FDR…

September 1, 2009

…But maybe President Obama is instead the next Herbert Hoover? Studying the policies pursued by the Hoover Administration in the wake of the 1929 crash, UCLA economist Lee Ohanian found that a strong recession became the Great Depression because of Hoover’s pro-labor, statist interventions:

Pro-labor policies pushed by President Herbert Hoover after the stock market crash of 1929 accounted for close to two-thirds of the drop in the nation’s gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression, a UCLA economist concludes in a new study.

“These findings suggest that the recession was three times worse — at a minimum — than it would otherwise have been, because of Hoover,” said Lee E. Ohanian, a UCLA professor of economics.

The policies, which included both propping up wages and encouraging job-sharing, also accounted for more than two-thirds of the precipitous decline in hours worked in the manufacturing sector, which was much harder hit initially than the agricultural sector, according to Ohanian.

“By keeping industrial wages too high, Hoover sharply depressed employment beyond where it otherwise would have been, and that act drove down the overall gross national product,” Ohanian said. “His policy was the single most important event in precipitating the Great Depression.”

The findings are slated to appear in the December issue of the peer-reviewed Journal of Economic Theory and were posted today on the website of the National Bureau of Economic Research (www.nber.org) as a working paper.

The article goes on to point out that Hoover’s exact solutions are not likely to be followed by President Obama. However, Ohanian argues, the disastrous results of Hoover’s interventions illustrate what can happen when government pursues hasty, ill-advised policies. Everything Hoover tried only made things worse.

And while Obama may not follow Hoover’s exact policies, we are seeing the same hasty, ill-considered rush to “do something:” the trillion-dollar pork fiesta stimulus bill; the Waxman-Markey cap-and-trade “greenhouse gas” bill; and now the health-care bill aimed at nationalizing 1/6th of the US economy. Anyone of these is bad enough; in combination, the effects on the US economy would almost certainly be horrific.
I’d go a little farther than Ohanian in his article and argue that these kind of large-scale statist interventions, whether in terms of wage control and job-sharing like Hoover or massive Keynesian deficit spending like Obama, are doomed to fail because a free market economy is too complex and has too many factors to successfully control, manage, or direct. In fact, if one looks at Hoover’s predecessors, Presidents Harding and Coolidge, one sees the right way to handle a sharp recession. Treasury Secretary Mellon advised cutting government spending and lowering taxes to free up capital in order to stimulate business, and then let the natural forces of the market economy heal itself. Which it did, bringing the US out of the sharp recession of 1919-1920 and laying the groundwork for a decade of prosperity. (And which was repeated with greater success by Ronald Reagan in the early 80s.)
Articles like this one and Ohanian’s earlier research showing that FDR’s corporatism lengthened the Depression by seven years, as well as longer works of history such as Amity Shlaes’ The Forgotten Man, are important revisionist works for two reasons. First, they dispel forever the notion implanted in popular consciousness by liberal historians and economists, that Hoover was a laissez-faire president with a do-nothing attitude toward the economy, a view used to justify the interventionist approach. Far from it, in fact: Hoover was very much an interventionist, and FDR continued and expanded several of his policies.
The second reason is that these researches present convincing evidence that the received wisdom about the Great Depression, that FDR’s policies pulled us out of it and that government intervention can fix an economy in crisis, is just plain wrong. Indeed, by 1939 the New Deal was clearly a failure and Treasury Secertary Morgenthau said (quoted in an article by Mark Levey):
By 1939 Roosevelt’s own Treasury secretary, Henry Morgenthau, had realized that the New Deal economic policies had failed. “We have tried spending money,” Morgenthau wrote in his diary. “We are spending more than we have ever spent before and it does not work. . . . After eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
In fact, only the military draft in the face of World War II broke the back of unemployment in the US, by pulling five million men off the streets.
Obama’s an educated man: maybe he should look more closely at his predecessors’ experiences before following further in their footsteps.
(via Jonah Goldberg)
LINKS: More at Hot Air.
PS. Sorry for the bad formatting, but something in this post is killing the spaces between paragraphs. Angry
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The clock is ticking on Charlie Rangel

September 1, 2009

Byron York in the Washington Examiner:

Rep. Charles Rangel has been in the House since 1971. He’s as old bull as you get in the Democratic hierarchy, and he waited through 12 long years of Republican rule to take over as chairman of the Ways and Means Committee in 2007. Along with Speaker Nancy Pelosi and fellow Democratic power brokers Henry Waxman and Barney Frank, Rangel is playing a key role in the effort to push the president’s health care, environmental, and financial initiatives through the House.

Last week, we learned that Rangel filed a grossly misleading financial disclosure report for 2007 — failing to report at least half a million dollars in assets.

It turns out Rangel had a credit union account worth at least $250,000 and maybe as much as $500,000 — and didn’t report it. He had investment accounts worth about the same, which he also didn’t report. Ditto for three pieces of property in New Jersey.

Beyond that, we’ve learned that Rangel has failed to report assets totaling more than $1 million on legally required financial disclosure forms going back to at least 2001.

The news comes on top of revelations last year that Rangel didn’t report — and didn’t pay taxes on — income from a villa in the Caribbean. In that matter, the Internal Revenue Service gave him sweetheart treatment; Rangel paid about $10,000 in back taxes but was not required to pay any penalty or interest.

Corruption is a bipartisan problem, but, while the Republicans waded in it, Democrats like Rangel have dived into the deep end and gone snorkeling. That clock is ticking down to 2010, and the Republicans should take advantage of this opportunity while they still have time.


Holder knew. Did Obama?

September 1, 2009

Yet another entry into the Idiot’s Guide to Why Eric Holder Should Be Impeached:

WASHINGTON – Attorney General Eric Holder warned his Scottish counterpart in June that the man convicted of blowing US-bound Pan Am Flight 103 out of the sky could get a hero’s welcome if allowed to return to Libya, according to the head of a group representing the families of victims.

Holder’s warning to Scotland’s justice secretary, Kenny MacAskill, came nearly two months before the bomber, Abdel Baset al-Megrahi, was released from a Scottish prison and greeted by a cheering crowd on his arrival in Libya last week.

Notes prepared ahead of Holder’s June 26 conversation with MacAskill were provided to the Associated Press by Frank Duggan, president of Victims of Pan Am Flight 103 Inc. Duggan said a Justice Department official read him notes that Holder used during the conversation.

Duggan also provided notes of a July 9 teleconference between MacAskill and some victims’ relatives, an emotional exchange in which family members told stories of their loved ones and implored MacAskill not to return Megrahi to Libya.

So AG Holder went through the motions with Secretary MacAskill over the release of one of the Lockerbie bombers -who killed 180 Americans– warning him that he might get a hero’s welcome in the land that sent him on his murderous mission.

And then he did… just what, exactly? This news raises more questions than it answers. Did Holder stop here? Did he raise the matter with the Home Secretary in London? Did he take it to his boss, President Obama, and did the President of the United States contact the Prime Minister to demand that Meghrabi, who blasted an American passenger jet out of the sky,  stay in jail? If not, why not?

Or did the Administration even care that Whitehall was cutting a true blood-for-oil deal?

These are questions that demand answers, not that we can expect the Obama-worshipping mainstream media to ask them.

Passing thought: While the UK was in this for the oil, could this also have been payback for releasing the Uighur terrorists to Bermuda?

(via NRO)

UPDATE: Why do I think Attorney-General Holder should be impeached? Forget his career prior to office; the Senate passed him knowing full-well about his role in the Marc Rich pardon and his involvement with corrupt former Illinois Governor Blagojevich. But, after becoming AG, he has tolerated the violation of voting rights in Philadelphia, launched a clearly politically-motivated investigation into the CIA, and likely been behind the dropping of the federal corruption investigation of New Mexico Governor Bill Richardson, a major early Obama-backer. Any one of these could warrant an impeachment investigation; taken together, and in the wake of this latest revelation,  they demand it.

RELATED: Thomas Sowell on AG Holder and the suicide of the West:

But getting other people killed so that you can feel puffed up about yourself is profoundly immoral. So is betraying the country you took an oath to protect.


Religious freedom for me, but not for thee

September 1, 2009

In Egypt, an American ally where Coptic Christians are regularly oppressed and persecuted, controversy over the treatment of non-Muslim minorities has arisen anew after the issuance of a fatwa (a ruling on Islamic religious law) that prohibits the building of new churches or donating money to build them, comparing them to “a nightclub, a gambling casino, towards promoting the alcohol industry or for building a barn for rearing pigs, cats or dogs.”

[Dr. Naguib Gabraeel] went on to inquire “So what is the Shari’a position to what was mentioned especially concerning the will of a Muslim to donate for the building of a church or a monk’s cell? If the answer is prohibition, aren’t these houses where the name of God is mentioned? Is not Christianity a recognized religion according to the Egyptian constitution? There are also a lot of wealthy Copts and Coptic businessmen who donate towards the building of mosques.”

The Fatwa Council replied affirming the correctness of what came in the textbook and issued a Fatwa on September 10, 2008 (document number 1809), which is also published on its official website.

To highlight the reason for this “sin” the Fatwa went on to state: “Salvation in the Christian religion is the belief in Jesus as Lord, where Muslims fundamentally disagree on it. Muslims believe that Issa [Jesus in Arabic] peace be upon him, is a slave of Allah and His Messenger, and that Allah is one. He begets not and He is not begotten and there is none like unto Him. So if it is seen that one sect has deviated from this absolute Monotheism, then according to that person’s own religion he is forbidden to donate for the erection of buildings where Allah is not worshiped alone.”

According to Mohammed el-Maghrabbi, deputy chief of the Faculty of Law, and author of the controversial textbook, what he wrote is a principle agreed upon by all Islamic jurists. He added that a will, if devoted by a Christian for building a Church, is forbidden and sinful and is considered in Islam as separation from God. So it is also illegal if a non-Muslim wills his inheritance towards building a Church or a Synagogue.

This Fatwa has shocked many as it classified churches with nightclub, gambling casinos, and places for rearing pigs and dogs, which are considered ‘unclean’ animals according to Islam and Muslims.

The article later reports that Dr. Gabraeel called on Grand Sheikh Tantawi, the head of Al-Azhar University in Cairo, which is the acknowledged center and intellectual leader in Sunni Islamic thought, to seek a clarification from him. Sheikh Tantawi then caused a ruckus of his own by denying the fatwa:

On August 19, 2009, a delegation from EUHRO, headed by Dr. Gabraeel, paid a visit to Al-Azhar Grand Sheikh Mohamed Sayed Tantawi, who said that the Fatwa was wrong and untrue and that Muslims can make voluntary contributions to build churches, as a church is a house for “worshiping and tolerance” and that “Shari’a does not prevent Muslims from donating to the building of a church, as it is his free money. He also affirmed that Al-Azhar does not object to the “unified law for building places of worship.”

Tantawi added that building churches should be left to the Christians and Muslims are not allowed according to Shari’a to interfere in other faiths, “because religion, faith and what a person believes in is a relationship between him and his God.” He also called on the Grand Mufti Ali Gomaa to hold the five jurists who issued the Fatwa accountable.

Other Islamic scholars were quite upset with the Grand Sheikh, and with reason: the prohibition against building or repairing churches and synagogues is fundamental to Islamic law, being a part of the Pact of Umar, a deal made between the second Caliph, Umar, and subjugated Christians. Christians agreed not to:

1. Build “a monastery, church, or a sanctuary for a monk”;
2. “Restore any place of worship that needs restoration”;

(…)

10. “Publicize practices of Shirk” – that is, associating partners with Allah, such as regarding Jesus as Son of God. (This is the argument of the fatwa-issuers. -Phineas) In other words, Christian and other non-Muslim religious practice will be private, if not downright furtive;
11. Build “crosses on the outside of our churches and demonstrating them and our books in public in Muslim fairways and markets” – again, Christian worship must not be public, where Muslims can see it and become annoyed;
12. “Sound the bells in our churches, except discreetly, or raise our voices while reciting our holy books inside our churches in the presence of Muslims, nor raise our voices [with prayer] at our funerals, or light torches in funeral processions in the fairways of Muslims, or their markets”;

Follow the link to read the whole thing. It’s enlightening. In essence, Sheikh Tantawi was going against the decree of one of Muhammad’s own companions, one of the Rightly-Guided Caliphs. One wonders if he sincerely believed this, or if his statement was “political,” meant to avoid another Muslim-Copt riot.

Regardless, this contretemps over Coptic churches is another example Islam’s compulsion to seek supremacy over all other faiths and of the incompatibility of Islamic law with Western democratic liberties.

LINKS: The site of the U.S. Copts Association. More from Jihad Watch.