Road To Recession

It seems to me….

It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.” ~ Harry S Truman[1].

It should be very obvious to even the most conservative Republican that their basic core platform – cut taxes (only for the rich) and reduce spending on everything (except the military) – has consistently led to economic disaster. Unfortunately, they do not seem to have learned the lessons of history and remain unsatisfied with the damage they have inflicted upon our country.

The economists Alan Blinder and Mark Watson circulated a paper comparing economic performance under Democratic and Republican presidents since 1947[2]. Under Democrats, the economy grew, on average, 4.35 percent per year; under Republicans, only 2.54 percent. Over the whole period, the economy was in recession for 49 quarters; Democrats held the White House during only eight of those quarters.

Almost every recession[3] in the U.S. since World War II occurred during a Republican administration: Dwight Eisenhower (2); Richard Nixon (2); Gerald Ford (2); Ronald Reagan (1); George H.W. Bush (1); and George W. Bush (2) recessions. Under Democrats, no recessions occurred under John Kennedy or Lyndon Johnson and only one recession under Jimmy Carter – the briefest of the era. The U.S. national debt rose by 186 percent under President Reagan greatly exceeding any other President: GHW Bush 54 percent, Clinton 41 percent, GW Bush 72 percent, Obama 23 percent (as of 2015).

Republicans do little else but brag about the growth they will deliver, the services they will cut, and the abortions they will deny. They put forward tax plans that don’t add up or make sense and seldom let facts, math, or common sense inject a dose of reality. When this is pointed out to them, they yell, “Media bias!” They live in a bubble which facts do not penetrate and persist in the belief that Reagan was the patron saint of economic development even though outpaced by growth under President Clinton. Right-wing media perpetuates the myth and the donor class pays GOP candidates to keep up the lie that the policies they favor are good for everyone but them.

There are consistent similarities between the administration of Herbert Hoover, president from 1929 to 1933, and that of GW Bush. Both administrations certainly ended in economic crisis. Hoover thought American values of individuality and self-reliance were being destroyed by too much intervention or coercion by the government. He was also a firm believer in balanced budgets and unwilling to run a budget deficit to fund welfare programs (does this sound like the Tea Party?).

Prior to the start of the Great Depression, Hoover’s first Treasury Secretary, Andrew Mellon, proposed and enacted numerous tax cuts, which cut the top income tax rate from 73 percent to 24 percent. When combined with the sharp decline in incomes during the early depression, the result was a serious deficit in the federal budget (very similar to under GW Bush).

In June 1930, over the objection of many economists, Congress approved and Hoover signed into law the Smoot-Hawley Tariff Act that raised tariffs on thousands of imported items intended to encourage the purchase of American-made products by increasing the cost of imported goods while raising revenue for the federal government and protecting farmers (similar to protectionist barriers advocated by some recent Republican Presidential candidates). The depression however spread through much of the world and other nations increased tariffs on U.S.-made goods in retaliation, reducing international trade, and worsening the Depression.

It doesn’t appear conservatives have learned anything from the past. I’m not sure what it will take. While evangelical Christians always invoke God into their political platform, I’m skeptical God will intervene into economic crises of our own creation.

That’s what I think, what about you?

[1] Harry S. Truman was the 33rd President of the United States, served as a Senator from Missouri, and briefly as Vice President before he succeeded to the presidency on 12 April 1945 upon the death of Franklin D. Roosevelt.

[2] Allon, Janet. Krugman: Why Republicans Are Ferocious Liars About What Makes the Economy Work, AlterNet, http://www.alternet.org/economy/krugman-why-republicans-are-ferocious-liars-about-what-makes-economy-works, 2 November 2015.

[3] Madrick, Jeff. The Republican Presidential Recession Record, Huff Post Politics, 8 Oct 2011, http://www.huffingtonpost.com/jeff-madrick/the-republican-presidenti_b_147518.html.

About lewbornmann

Lewis J. Bornmann has his doctorate in Computer Science. He became a volunteer for the American Red Cross following his retirement from teaching Computer Science, Mathematics, and Information Systems, at Mesa State College in Grand Junction, CO. He previously was on the staff at the University of Wisconsin-Madison campus, Stanford University, and several other universities. Dr. Bornmann has provided emergency assistance in areas devastated by hurricanes, floods, and wildfires. He has responded to emergencies on local Disaster Action Teams (DAT), assisted with Services to Armed Forces (SAF), and taught Disaster Services classes and Health & Safety classes. He and his wife, Barb, are certified operators of the American Red Cross Emergency Communications Response Vehicle (ECRV), a self-contained unit capable of providing satellite-based communications and technology-related assistance at disaster sites. He served on the governing board of a large international professional organization (ACM), was chair of a committee overseeing several hundred worldwide volunteer chapters, helped organize large international conferences, served on numerous technical committees, and presented technical papers at numerous symposiums and conferences. He has numerous Who’s Who citations for his technical and professional contributions and many years of management experience with major corporations including General Electric, Boeing, and as an independent contractor. He was a principal contributor on numerous large technology-related development projects, including having written the Systems Concepts for NASA’s largest supercomputing system at the Ames Research Center in Silicon Valley. With over 40 years of experience in scientific and commercial computer systems management and development, he worked on a wide variety of computer-related systems from small single embedded microprocessor based applications to some of the largest distributed heterogeneous supercomputing systems ever planned.
This entry was posted in Alan Blinder, Andrew Mellon, Budget, Carter, Clinton, Debt, Debt, Deficit, Depression, Depression, Dwight Eisenhower, Economy, Eisenhower, Farming, Finance, Financial, George H. W. Bush, George W. Bush, Gerald Ford, Herbert Hoover, James E. Carter, Kennedy, Lyndon Johnson, Mark Watson, Military, National, Nixon, Obama, Obama, Protectionist, Reagan, Recession, Recession, Secretary of Treasury, Smoot–Hawley, Tariffs, Taxes, Taxes, Trade, Treasury and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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