Not everyone knows history as in-depth as others. Some only get an inkling of our past and those some rely on what's termed “common knowledge” for conversation. Tidbits like the stock market crash created the Depression or that Hoover was a free marketer. When asked to explain how they know this, they defer to the higher ups who taught them or told them. The ever-dwindling knowledge of history leads to our current predicament: the passing of the “stimulus” package.
Faking history for political gain is not a left-wing or right-wing trait. Politicians of all stripes, colors and animal symbolism tweak or outright massacre history to get their agenda made into law. In today's case, its been the Democrats and the left who have fudged history so badly that it is a complete one-eighty of reality. To get a $800 billion dollar “stimulus” package past a skeptical public, one has to make that public believe that government spending in a time of recession works and that free market solutions will only lead to more misery. The Dems and the left link today's problem with the Great Depression, a free market President Bush with free market President Hoover (in reality, both believed in harnessing the government for economic ends) and the prosperity of the late 1940s with the stimulus package's spending (the 1940s had war spending, the Dems want social spending). On their faces, these comparisons are false because the “common knowledge” history they are based on are false.
For example, today's credit crisis was a gradual downturn that began with the decline in the national housing market. That downturn was accentuated by the government mandated practice (Community Reinvestment Act) of lending to high-risk, minority borrowers looking to get a home. In turn, those high risk borrowers were given interest rates and/or mortgage plans in accordance with there bad/lack of credit. Adjustable rate mortgages and interest-only loans dominated the housing market and those mortgages were then turned into securities by the banks and traded (an idea, while free market in principle, is just stupid). When the high risk borrowers turned out to be exactly what their credit score said they were the market slumped. Those defaulted loans made those traded securities worthless, and the banks that hedged their books on those securities went down as well. For the most part, the Great Depression began as a unusually hard recession, but was amplified. Not by greed. Not by capitalism. In fact, it was government. The Smoot-Hawley Tariff Act leveed heavy costs on imports. In retaliation, the world did the same. World trade died, money dried up and the global economy shrunk. Not because of free flow of capital, but of government restriction of it.
Contrast this history with the “common knowledge” pontificated by our dear Congressional Democrats and the media. Speaker of the House Pelosi attacks Wall Street and invokes the myth capitalism broke America. Congressman Barney Frank, the man behind the financial regulation committee, calls Wall Street bonuses bribes when, as Congress's financial honcho, he should know that Wall Street firms pay their employees through a meritocracy, with yearly bonuses taking place of commissions. Even President Obama railed on the country's financial core for its immorality and blamed free markets at the same time his nominations for Health and Human Services and Treasury have major glitches in their tax payments. All this sounds a little bit populist and little less historic.
One can't be blamed for thinking the Democrats are trying to take advantage of our state-amplified downturn to light a populist fire. The “stimulus” package has more to do with expanding government, the biggest cause of our current position and a Democratic baby, than with economic growth. When there is more money going towards broken entitlement programs than small business tax cuts; when there is more money going to Washington renovation than to corporate tax cuts (our corporate taxes are one of the highest in the world), there is certainly something very rotten in Denmark.
There will come a time in American history when a radical shift is needed. During the Cold War, it came under the name of Ronald Reagan, confrontation and offensive liberty. With our concerns more focused on ourselves than our external Islamist enemy, we need to have a radical shift in perspective again. We can no longer hold ourselves up with a dollar losing its value due to our debt. We can no longer live on promises of paying back the future generations. We can no longer try to keep ourselves afloat on half-baked pseudo-economic theories (I'm looking at you, Keynesians!) that promise to keep us exactly where we are with little consequence.
To live through adversity, you must lose something.
To escape the fire, you must get burned.
To be able to prosper economically, you must first scrape the dead ideas and dead industry from your nation and then fuel growth with free-flowing capital. You can't do that by bailing out California's irresponsible legislature or rolling back every reasonable welfare reform made by Newt's Republicans.
The only way this “stimulus” and its base idea gain traction is by someone or something taking advantage of a lack of education and using it for their political ends. This is exactly what the Democrats have done with the public school system's failure to educate its wards in accurate history. I learned what I have from using my own to feet to take me to the local library or to the book store so I could buy books recommended by actual economists (check out Amy Shales) and actual historians, not by failed comedians-turned-mouthpieces. I used my common sense and an open mind to revise my world view. I did not cry like a baby when the “common knowledge” perceptions drilled into me by mothering teachers and politicians were challenged.
I, like any self-respecting independent human being, learned.
All it takes is the idea that politicians and pundits are wrong.
I don't think that's a concept that's hard to understand.
Eugen Joseph Weber, The Hollow Years - At Amazon, Eugen Joseph Weber, *The Hollow Years: France in the 1930s*.
6 hours ago