Do state and local layoffs in the teeth of a bad recession sound like good policy to you? Me, neither.
With unemployment near 10% (and the broad U6 measure over 16%) Republicans and Blue Dogs have found their inner Herbert Hoover: they think this is a jolly time for state and local governments to lay off cops and schoolteachers in the name of “fiscal discipline.”
Barack Obama and the Democratic leadership on the Hill disagree. Tell me again there’s no difference worth voting for; I didn’t understand you the first hundred times.
Author: Mark Kleiman
Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out.
Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken)
When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist
Against Excess: Drug Policy for Results (Basic, 1993)
Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989)
View all posts by Mark Kleiman
23 thoughts on “Barack Obama v. Herbert Hoover”
Rather like a hangover IS the perfect time to stop drinking, even if some 'hair of the dog' would make the headache go away.
Don't quote Keynes to me, we're not in Keynesian territory, which assumes there are actually surpluses run during the good times, to pay off the borrowing during bad times. This is more like the amphetamine junkie hitting the wall, and thinking another hit is what he needs.
Economies are crashing around the globe from excess borrowing, and you think it's the perfect time to push the national debt even higher, rather than stop before we join them?
Question for Brett: When your house is on fire do you tell the fire department, "please don't come over, the furniture might get wet?"
Brett Bellmore wrote: Don’t quote Keynes to me, we’re not in Keynesian territory, which assumes there are actually surpluses run during the good times, to pay off the borrowing during bad times.
And we never will be, if the GOP ever has anything to say about it. Like all (other?) problems, the GOP views a surplus as an argument supporting large cuts in taxes on the wealthy.
I'll never understand the attempt to make an analogy between personal finance and that of an entire economy. The two are fundamentally different in numerous ways, yet rhetorically the pyrrhic victory always seems too tantalizing to pass up.
The fundamental differences between government and private borrowing allow a government to get further in over it's head before the crash, but they don't prevent the crash. And they actually argue against government borrowing, most of the time, since outside of wars, government rarely faces expenses that it couldn't cover out of current revenues. Very unlike a family borrowing a couple times it's annual income to purchase a house, and then paying it off over several decades. Our government's current behavior would be more like a family putting the payments for one credit card on another, while borrowing to get a big screen TV.
Even a war ought to be financed out of current revenues, if it's not going to be over is a short while.
Plus the Republicans reappointed Ben Bernanke to the most important economic job in the country of chairman of the Fed even though he has made it clear he values fighting hypothetical future inflation way above fighting current very high unemployment. When we will these unemployment fighting Democrats stand up to Republicans like Barack Obama and … um, wait … what were we talking about again?
Oh, there's a difference all right. No denying that. And I fully expect the President to be as successful with this as he was pushing for the Public Option on Health Care that he ran on, but then seemed to get the vapors or something. Mark, the man had a chance to be something more than a GOPer Lite. No one, absolutely no one, thought he (we, who supported him with our time, money, and arguments) would get everything. But Barack Obama was in the strongest position he would ever enjoy in the Winter of 2009. Rather than use his position of strength he tried to make nice with the opposition, an opposition that was never going to come around. This was obvious to everyone in the country but for a few Obamabots and his top White House counselors. As for the "Look, we never really had the wherewithal to do what I campaigned for" all we have to do now is look at Blanche Lincoln, who will very probably get her comeuppance in November but is in position to lose only because the Administration and its proxies (The Big Dog chief among them) went all-in for her.
Yes, Brett,we were running surpluses in good times. Then the Beloved Leader and Alan Greenspan and the Club for Growth and the Republican leadership in Congress gave us the tax cut of 2001. It's been downhill from there.
"[Keynesianism] assumes there are actually surpluses run during the good times, to pay off the borrowing during bad times."
No. Keynes argued that the apt policy response to economic downturns was to reduce interest rates and invest in infrastructure. The fact that policymakers previously failed to save up a surplus "during the good times" is a sunk cost.
So tell me, if there's a dime's worth of difference, why Obama and Clinton, and leading DC leaders, went out of their way to trash unions and support the worst of the Blue Dog Democrats in Arkansas, and telling black voters in Arkansas to support that scorpion Democrat…Your argument makes sense except when it doesn't…
I think the "v" in the title of the post should be changed to "is", to get the relationship right. I understand that Mark needs to misunderstand and misrepresent the history of the Great Depression for his partisan purposes, but the rest of us needn't play along. Ineffectual governmental measures to fight an economic downturn are what makes a Hoover a Hoover, and what makes Obama a Hoover. The New Deal didn't end the Depression, and the stimulus plan replayed a second time won't give us private sector job growth. But failure is failure all the same, and unfortunately that's what we're seeing play out.
Mark, I have enjoyed watching the back and forth over Obama on this blog and think both sides have a valid point. I would like to point out however that a healthy percentage of these complaints aren't directed at Obama but at congress. Their numerous capitulations and seeming indifference are what required Obama to go begging in the first place when they didn't renew these benefits. If some of that anger gets ends up getting deflected onto Obama it's because people don't want to wait until election day to voice their disapproval and Obama's about the only person capable of spurring them into any immediate action. I think he wrongly believes that healers and bully pulpits don't mix but they do, depending on what you choose to use them for.
If I were to agree with your side in all this I would still be forced to say that policy is not politics, and Obama has handled to politics of the past two years horribly. If he wastes this rare and unique opportunity progressives will never forgive him. I do however think that some of the anger we're seeing on the left is actually them being angry at themselves for failing to go from campaign mode to govern mode. They were caught flat-footed when Obama started veering right (happens to the best of us) and are trying to change all that and start organizing. Whether or not they can pull it off before the midterms is another matter.
and btw… thomas… when you say this:
"I think the “v” in the title of the post should be changed to “is”, to get the relationship right. I understand that Mark needs to misunderstand and misrepresent the history of the Great Depression for his partisan purposes, but the rest of us needn’t play along. Ineffectual governmental measures to fight an economic downturn are what makes a Hoover a Hoover, and what makes Obama a Hoover. The New Deal didn’t end the Depression, and the stimulus plan replayed a second time won’t give us private sector job growth. But failure is failure all the same, and unfortunately that’s what we’re seeing play out."
Does it bother you that every major economist has spent the past hundred years saying the exact opposite about the Great Depression? Why on earth would someone abandon their views for yours?
"Yes, Brett,we were running surpluses in good times. Then the Beloved Leader and Alan Greenspan and the Club for Growth and the Republican leadership in Congress gave us the tax cut of 2001. It’s been downhill from there."
Riiiight, Mark. That's why the national debt rose every year of the Clinton administration: Because we were running surpluses.
Among the crimes of government are accounting practices which, if used in the private sector, the government would ruthlessly prosecute.
Mark, your link leads back to this blog. Aren't you trying to link to some external article?
This is an odd post for a blog that claims to be "reality-based" and claims that people are not entitled to their own facts. The facts about Hoover show that he was not wedded to "fiscal discipline"–during his term spending increased 50% ($3.1 billion to $4.6 billion) and the US govt went from running a large surplus to running an even larger deficit. Moreover, Hoover would have been against layoffs as being typical of the "liquidationist" policies championed by Mellon.
The figures come from Table 1.1 of this document: http://www.whitehouse.gov/omb/budget/fy2008/pdf/h…
Yes, Hoover was John the Baptist to FDR's Jesus.
No doubt public employees, whether law enforcement, secondary school teachers, or state college professors, prefer politicians who defend their jobs to the last tax dollar extracted from private earnings or borrowed from a central bank that creates the money out of thin air, diluting the value of all pre-existing money.
Increasingly, many of the rest of us prefer politicians who aren't bought and paid for by "crony capitalists" or rapacious public employee unions. For the moment, such politicians are rare and mostly get 'bought out' even if they enter the political arena sincerely planning to keep their promises. Perhaps they will remain rare, due to inconsistent voters who don't mind seeing the public employee RIF but will fight to the last to preserve their Social Security, Medicare, and other "entitlement" benefits. By the time they realize how they have been flim-flammed by official "cash accounting", it will be too late for them, but perhaps later generations will learn from their catastrophe. Look at Japan and watch the Eurozone as they gurgle down the drain. You're next.
A more interesting view (because closer to reality):
Barrack Hoover Obama
Ridge Runner says:
"…. from a central bank that creates the money out of thin air, diluting the value of all pre-existing money."
The thing that bugs me the most is that I should be able to rip off people like this for enough money to retire on.
From a Michael Tomasky article over at democracyjournal.org:
"It’s worth noting, for example, that the second act to become law under the New Deal, after the Emergency Banking Act, which was a progressive piece of legislation, was a conservative bill, the Economy Act. It cut salaries of government employees and benefits to veterans, the latter by 15 percent. Arthur Schlesinger, in The Coming of the New Deal, writes that literally an hour after signing the banking act, Roosevelt outlined this bill to congressional leaders, saying the next day and sounding more than a little like some Robert Rubin progenitor had been whispering in his ear: "For three long years, the federal government has been on the road toward bankruptcy." (And maybe one had: Schlesinger notes that Roosevelt’s budget director, Lewis Douglas, was certainly no Keynesian.) Just imagine Obama having tried something like that, alienating both veterans and AFSCME within a week of taking office. The Economy Act was opposed by many liberals in the House, so FDR turned to conservative Democrats and Republicans, who passed it."
I think that helps demonstrate exactly how slippery the Hoover comparisons are. They've never been about facts, because most people who mention Hoover don't know anything about the facts, or like to pretend they don't.
JR, really, every major economist disagrees with what I said above? That'd be a surprise to most of them.
"Riiiight, Mark. That’s why the national debt rose every year of the Clinton administration: Because we were running surpluses."
I know numbers aren't your game but check them out here:
Benny, you might want to, you know, actually read the things you link to. See Table 7.1. There's a column for "Gross Federal Debt", and as Brett says, the total increased every year.
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