Copyright by John T. Reed — Sign up here for free email updates

I suspect some readers will think the title of this article is preposterous.

Hear me out.

On page xv of the Introduction to Burton Folsom, Jr.’s recent book New Deal Raw Deal, Wall Street Journal Senior Economics Writer Stephen Moore said,

The Democrats’ current laundry list of “new” New Deal programs” from cap and trade anti-global warming regulations, to 52 percent marginal tax rates, to socialized health care, to $300 billion of new spending programs every year appear to be almost intentionally designed to torpedo the U.S. economy...if we adopt this “new” New Deal, the economy will almost certainly crater.

Obama’s White House Chief of Staff Rahm Emanuel famously said,

A crisis is a terrible thing to waste.

On March 6, 2009, Secretary of State Hillary Clinton said,

Never waste a good crisis ... Don't waste it when it can have a very positive impact on climate change and energy security

Please also note that climate change and energy security have absolutely nothing to do with ending the recession, indeed, spending money on such things during a recession is the kind of thing that can turn the recession into a depression.

If a crisis is a terrible thing to waste, then it must also be a thing that Emanuel, Hillary, and Obama want to last as long as possible and to be as severe as possible.

The non-partisan Congressional Budget office says Obama’s plan will hurt the economy over the long term.

Here is a quote from a 5/16/39 column by Walter Lippman about radicals within Franklin Roosevelt’s New Deal government. Lippman was an extremely influential national columnist. There has not been any comparable person since him.

The radicals, on the other hand, are...primarily interested in reducing the power of corporate business men, and the heart of their program is...precisely those deterrent taxes and those restrictive regulations which limit private initiative...they would rather not have the recovery if the revival of private initiative means a resumption of private control in the management of corporate business. Thus they cling to taxes which do not come anywhere near to yielding enough revenue to balance the budget because those particular taxes paralyze the financial power of the rich and well-to-do... The radicals regard the [government] spending as a substitute for recovery and as a means of altering the balance of social policy.

In the Obama administration, specific damage to the economy comes from:

• raising taxes on small business owners, estates, and on capital gains
• expand business decisions made by government bureaucrats and reduce the number of business decisions made by businesspeople
• remove more of health care from the private sector and put it into the government sector
• place a 15% to 20% carbon sales tax on gas and electric that will hit every American
• all but abolish private lending to students and replace it entirely with government lending
• end deferral of taxation on profits of U.S. companies abroad
• increase taxes on companies that search for oil and gas
• raise taxes on manager of hedge funds and private-equity funds
• various protectionist provisions
• limiting executive compensation at companies that receive bail-out money, thereby driving the best managers to companies not subject to such limits*
• constantly talking down the economy
• leaving the credit markets in a state of constant uncertainty by not coming forth with a plan to normalize them
• ignoring a federal law that prohibits FNMA and FHLMC from lending more than 80% of the value of a home without private mortgage insurance; now they have to make loans of up to 105% of of value without private mortgage insurance, in other words, worse subprime loans than the FNMA ar FHLMC ever made before

* A reader asked why executives should get bonuses when their companies lost money and stock value. Performance pay should be paid, when promised or warranted, to employees who beat the agreed-upon benchmark for measuring performance. The benchmark should not be one that would trigger bonuses because the whole market went up through sheer good luck. Similarly, executive pay should not be reduced when the company’s performance falls in terms of earnings and/or stock price, if the entire stock market and all companies suffered similar downturns through no fault of the executives. Bonuses should only be paid to employees who beat the benchmark. For example, if the whole market goes up 5% and the stock price of the company in question goes up 15%, the executives responsible for the extraordinary performance should get bonuses to reward their past success and to discourage them from leaving the company. Similarly, if the stock price of all similar companies went down 12% and the company in question only went down 5%, the executives responsible for the better-than-average performance should receive bonuses for the same reasons. In other words, execs should not be rewarded for the wind at their backs or punished for the wind in their faces, but they should receive bonuses for going faster than the wind at their backs or for not going backwards as fast as the wind in their faces made others go.

The Wall Street Journal said Obama’s plan is a “declaration of war on America’s capitalists.” Unless you are a Marxist, you know that America’s capitalists are the source of America’s world-leading prosperity. There are only a couple of countries that have no capitalists, namely Cuba and North Korea. They also have no prosperity.

Some will say that Obama obviously does not want a depression because he wants to be re-elected and he could not be re-elected if the economy is bad in 2012.

Oh, really? Have you ever heard of Franklin D. Roosevelt? He was elected president in 1932 at the bottom of the Great Depression. He blamed everything on his predecessor, Herbert Hoover, and on Wall Street, where the stock market crashed in 1929.

Roosevelt used the emergency of the Great Depression to get the most radical changes in the U.S. government in history through Congress.

None of it worked. See my brief article on what Roosevelt’s Treasury Secretary Henry Morgenthau said in 1939, seven years after Roosevelt took office. To put it succinctly, Morgenthau said none of the New Deal worked. It all failed. Unemployment stayed in double digits throughout the peacetime portion of the Roosevelt administration. If you want more details on that, read New Deal Raw Deal or a number of other books on the Depression.

So, when Roosevelt’s policies failed and the economy stayed in the Depression, did he lose the next election?

Are you kidding? He was elected to four consecutive terms, the only president ever to do that. It freaked out the nation so much they outlawed it with the XXII Amendment to the Constitution on 3/21/47, two years after Roosevelt’s death. To this day, the only federal term limit is the one that prevents another Roosevelt.

I suspect that Obama thinks he can use the current Depression to get the XXII Amendment repealed and serve four or maybe more terms as president. In the meantime, he appears to be ecstatic about his ability to slip all sorts of laws into various emergency packages thereby turning the U.S. into a socialist country whose main priority is to pay reparations to blacks (e.g., repeal of the Welfare Reform Act that Clinton signed and that everyone, even liberals, agreed worked great; expanded Pell Grants) and to enact as much socialist ideology into law as possible.

Former Democrat House leader and two-time presidential candidate Dick Gephardt once exulted that,

Every time the Dow goes down 100 points we pick up another seat in the House.

Here is a pertinent comment from Dick Morris:

The most rational explanation for Obama's puzzling conduct -- sabotaging his own program by way of his own rhetoric -- is that he truly wants to be forced to nationalize the banks in pursuit of his ultimate goal of a socialist economy.

Obama has to oppose nationalization today in order to achieve it tomorrow. He has to show the country and the world that he is doing all he can to help the private sector to sort things out with government help. He must ostentatiously invite the hated demons of Wall Street to join him in rescuing the banks in order, later, to say that he did his best to avoid having to take over the banks.

Obama said through a spokesperson that he does not pay attention to the day-to-day movements of the stock market.

How about the week-to-week or month-to-month movements? It hasn’t mattered how often you look at them since you were inaugurated. It’s almost always down and down overall on a net basis since inauguration.

Gephardt and Obama apparently think the stock market is nothing but a gauge of how many contributions the Republican Party will get in the next election. They want it to go down. It’s a Republican thing, and it helps sell the “Crisis! Crisis! Crisis! Catastrophe!” story that, in turn, enables Obama to slip more socialist date-rape-drug type provisions into the back of the various bail-out and “stimulus” laws.

Once upon a time, the stock market was a Republican thing. No more. Now it’s the retirement money of most Americans.

I think Obama doesn’t care about it because it keeps giving him a thumbs down. He is a one-trick pony and that trick is bullshitting the public. The market, however, is smarter than the public. They look at the numbers. They are betting their own money on their analysis, not just popping off from a bar stool at the corner tavern. If the market ever turns up, there is no doubt that Obama will take credit for it.

The Obama administration has a number of respected economic minds including Geithner, Volker, and Summers. There is NO WAY any of them are blind to the fact that Obama is deliberately trying to run the country into a Depression and that his economic policies are anti-recovery. If those guys have any integrity, they will promptly resign in protest over what Obama is doing to the nation. Apparently, they are more interested in being administration big shots than they are in integrity or the financial health of the nation.

Obama has been studying Roosevelt’s playbook and adopted Roosevelt’s tactic of making scapegoats of businessmen and the rich.

Hoover, like George W. Bush, made a mess of responding to the initial drop in the stock market. But the vast majority of the pain of the Great Depression stemmed from the disastrous New Deal policies including protectionism, price fixing, government interference in the free market, crop price supports, etc.

However, to this day, the American people believe Hoover was entirely responsible for the Great Depression and Roosevelt saved America from it.

Tell me again how Obama doesn’t want to be Roosevelt with regard to prolonging and deepening the recession.

If there had not been a prolonged Depression, Roosevelt would have been just another president. Obama wants to be Lincoln, Roosevelt, and Kennedy all wrapped up into one. He thinks the American people will be at least as dumb regarding Obama’s actual performance as they are about Roosevelt’s. I am afraid he’s correct.

I appreciate informed, well-thought-out constructive criticism and suggestions. If there are any errors or omissions in my facts or logic, please tell me about them. If you are correct, I will fix the item in question. If you wish, I will give you credit. Where appropriate, I will apologize for the error. To date, I have been surprised at how few such corrections I have had to make.