Rajjpuut’s guessing at least 60% of Americans (the vast UNinformed) might have felt great relief seeing the recent Newsweek cover saying “America’s Back!” (Hopefully, they didn’t waste their needed funds actually buying that rag.) The two best statistics in Newsweek’s favor are the stock market’s year-long climb and this month’s upswing in housing construction. You, however, as a reader of Rajjpuut's Folly, know that overall the real picture is not that rosy: unemployment is quite high; foreclosures and bank failures are rampant; deficits and national debt are growing semi-geometrically; two of the three American auto companies despite $100+ billion in handouts have NOT turned-around significantly; government size and scope are growing to dangerous liberty-endangering proportions; a new entitlement program Obamacare threatens to put the final nail in the coffin of American capitalism; unions are not interested in cooperating with management to return the nation’s products to competitive-price desirability; unions are not cooperating with states to help the states meet their own financial disasters; and most importantly, we have short-sightedly failed to cut taxes or decrease government spending. How far are we from financial Armageddon? Are we already there?
In actuality, we stand on the cusp of the disintegration of the American Republic as we’ve known it since 1776, the finest experiment in freedom and responsibility ever seen on this earth. For the first time in our history, one generation looks to pass on far less than it inherited from its American predecessors. The politicians have sold away our children's and grandchilren's future. The fiscal-cataclysm that brought us to this point, rather than abating still intensifies creating great distress for our citizens. This distress and the problems leading us to this point have been deliberately shrouded in mystery and dissembled (lied) about for the protection of those who caused the problem, thus the problems persist and intensify rather than improving. Rather than getting to the matter of in depth individual and collective guilt, let’s take a few brief paragraphs and allude to two different approaches to fiscal-downturns: the well-known “New Deal” and the virtually never seriously discussed “Get Government out of the Way” approach a.k.a. the Warren G. Harding “Invisible Depression Approach” . . . .
In 1920 the nation began suffering “the Unknown Depression” a.k.a. “the Invisible Depression,” one of countless such financial panics that the nation has endured in its history. This panic might have been part of the normal ebb and flow of the economy, those normal ups and downs found in all free markets. However, the situation was greatly compounded and exacerbated by the problems created by the end of the economic boom upon many industries and for the American farmer by World War I’s end and the return of the troops (jobless now) to American shores, and the difficulties repaying loans owed America by many nations almost ruined by the war, and the de-stabilizing effect of the so-called Spanish Flu pandemic which began in and around Ft. Riley, Kansas and killed at least 800,000 Americans and up to 100 million people worldwide. On the government front, President Woodrow Wilson was sickly and his wife actually ran much of the government continuing his progressive policies (feeling that the U.S. Constitution is a flawed and thus an insufficient instrument for dealing with modernity and is therefore, something which must be “progressed” beyond by current politicians so much wiser than the founding fathers). Wilson was replaced in 1921 by Warren G. Harding, a do-nothing president more excited by chasing White House staff women into closets than governing and certainly totally UNinterested in creating any grandiose government initiatives. Harding became known, somewhat unfairly it seems although the President is ultimately responsible for what happens on his watch, for the Teapot Dome Scandal (that emerged after his death) and little else. He probably should be remembered as “the nation’s greatest depression fighter.”
http://www.lewrockwell.com/orig4/powell-jim4.html
So as not to interrupt his Clinton-like oval office carousing, Harding largely kept his hands off the government making almost no serious expansions whatsoever in the structure or functioning of it. There was definitely a depression going on: gross national product plunged 24% from $91.5 billion in 1920 to $69.6 billion in 1921. The number of unemployed people jumped 133% from 2.1 million in 1920 to 4.9 million in 1921. Harding did make three changes, however. The first two changes were seemingly too small to actually matter, but they were important. The last change was huge and utterly inspired:
A. Wilson had (like Obama today) stopped all direct press conferences. Harding restored them twice a week and enjoyed personally dealing with the press’ questions. And the word historically is that he never dodged a question but sometimes clarified things later or asked for cabinet input or said “That’s one I don’t know, but I’ll find out, boys!”
B. Harding, from the first, explained to the press and to the people how the economy worked and constantly decried the negative effects of high taxes, government waste and government spending and interference (what Rajjpuut calls GSBs and GIBs – government spending and government interference boondoggles) on the nation’s productivity and economic health. Harding also championed a completely non-interventionist foreign policy as the best hope for peace. This was completely opposite to Wilson’s approaches. Wilson, as a progressive, had greatly multiplied the size and scope of government during his two terms even before the country entered WWI in 1917. He had promised to keep the nation out of war but as soon as he'd won re-election deliberately steered us into it; and then he'd gone gallivanting around Europe etc. trying to sell the world on a League of Nations (in other words Wilson was almost as huge an “interventionist” as Herbert Hoover, FDR and Obama).
C. Harding’s third change was the single largest lesson in economic history for America and its leaders in business and government ( a change which history books totally ignore and no one, therefore, learns from) . . . he slashed the national government to the bone! Tax cuts and spending cuts were huge. 1920’s $6.3 billion budget dropped to $3.2 billion in 1922 Harding’s first-full year controlling it.
Harding slashed taxes on corporate profits and “excess profits” dramatically as well. He established the General Accounting Office to provide oversight on government spending and waste and he stuck by his guns despite (his Secretary of Commerce) Herbert Hoover’s unceasing urging to help** the unemployed. The low point for federal taxes was reached in 1924. Federal spending reached its low in 1925. The federal government paid off debt, which had been $24.2 billion in 1920, and debt continued to decline and then small surpluses accumulated until 1930. The rebound was swift and almost painless and it ignited the single-most prosperous years in history “the Roaring Twenties” which Hoover’s progressive policies brought to an end and FDR’s ultra-progressivism expanded into a twelve-year depression only alleviated by putting 16 million men to work in the armed forces after Pearl Harbor.
Overall federal taxes decreased almost 40% in less than two years under Harding. As a result, wealth for private citizens increased tremendously. They came for the first time in large numbers to own automobiles, ice boxes and refrigerators, radios and often their own homes. Most rural citizens gained indoor plumbing and electric lighting for the first time. America for the first time became the haven for the world’s investors. The gold-backed U.S. dollar became the world’s default currency or international 'reserve' currency. Later, the true nature of progressive policies (a.k.a. theft) became obvious to our citizens and the world’s investors who would suffer the theft of much of the dollar’s value when FDR confiscated the nation’s gold and changed the exchange rate from $20.76 per ounce to $35 an ounce in an overnight inflation of 41%.
Harding suffered a stroke and died in early August, 1923, the sins of some of his cabinet were supposedly part of his legacy according to progressive historians. His real legacy is, however, that his Vice President (Calvin Coolidge) adopted precisely identical economic policies and the country thrived as never before until Silent Cal chose “not to run” in 1928 and the nation elected Republican progressive Hoover into office. Harding’s 18-month Depression compared to Hoover’s and Roosevelt’s dozen-year malaise stand as stark reminders of the benefits of government “staying out of the way.” Nevertheless, FDR got all the good press and Harding all the bad and the wrong model has been adopted today by FDR-admiring Barak Obama. Let us return to our present economic problem and its causes . . . but first a quick review . . . How exactly did Harding engineer such a stupendous turn-around? In a sentence: he cut government spending by almost 50% and cut taxes by 40% . . . our own predicament is so much worse that in a 21st Century Harding’s place, Rajjpuut would advocate a ten-year plan to maintain spending cuts of 60% and decrease taxes by 45%. Back to 2010 . . . .
Presumably, by now the full-truth about our present financial crisis clearly should have been 100% revealed to the people/voters and the congress and the world by an ever vigilant and conscientious press and honest able economists. However, the ever vigilant conscientious press . . . apparently no longer exists. However, honest and able economists are in short supply . . . certainly those of the Keynesian school which advocate inflation as a viable tool of mega- (and also totalitarian) government have proved themselves repeatedly neither honest nor able. The truth is NOT being revealed . . . why? The truth is not being revealed because it is in the IRrational best interests of the parties involved to keep that truth hidden. Ultimately the voters and the press bear a huge and enduring share of the blame and each would like to point the finger elsewhere. Most of the voters don’t want to be pushed away from their couch-potatoism and so they deny responsibility. The incredible failures of the press to not only NOT alert the public but to actually and willfully hide the truth from the public and present a slanted and self-interested viewpoint clearly verges on the brink of criminal in many cases with our most prestigious and honored newspapers, in particular bearing the largest responsibility (perhaps why they're all going as bankrupt in financial matters as they are in journalistic ones?). But ultimately, the sins of the press and of the voters pale in comparison to those of the politicians and, in particular to the culpability of the Constitution-Trashers and law-abusing legislators.
It is these anti-American Constitution Trashers and law-abusers that more than any other group that have brought us to this financial precipice. Today they are still alive in all the various ACORN clones fully-expecting that Obama’s bill for “reforming” American financial institutions will refund them . . . . Their sordid history should be known by every American but our left-aligned press has willfully refused to investigate the ACORN EVIL history and purposes or the history of the think tanks aiming to overthrow our government. It is these left-wing think tanks that latched onto the “greatness” of Alinsky and continued “perfecting” their vile thinking and processes with the Cloward-Piven Strategy which they used deliberately and purposefully (and bragged about their planning and using) along with their NWRO (National Welfare Relief Organization) they created to bankrupt New York City by 1975 and only missed by a hair of bankrupting the entire state of New York. Since 1977, they have been using the poor as unwitting footsoldiers in their attempt to bring down America and impose their dreary revolution upon us. Now under Obama, blessed by the ACORN-created sub-prime lending crisis . . . their goal is in view. Heaven will never forgive us, should we allow them to succeed.
Ya’all live long, strong and ornery,
Rajjpuut
** when told of a natural disaster in Texas, Harding refused to get involved and vetoed a $50,000 disaster relief bill (big money in those days), saying the bill would just “kill people’s normal charitable instincts." Sure enough state and local individuals and agencies raised over $200,000 to help the stricken area.
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