Monday, February 16, 2009


It has been interesting to watch the idea of temporary bank nationalization move from the fringe to mainstream acceptance, with even Republicans like Senator Lindsey Graham conceding that it may be necessary.
People snickered when I suggested, during the election, that a Republican may act in a more progressive fashion than a Democrat. Well, it's happening. Not all Republicans are waking up -- not by a long shot. But a few are starting to open their eyes. And Obama still snoozes.
If you want to see what it really takes to boot the economy out of a debt trap, look at the large public works program, otherwise known as World War II, that ended the Great Depression. The war didn’t just lead to full employment. It also led to rapidly rising incomes and substantial inflation, all with virtually no borrowing by the private sector. By 1945 the government’s debt had soared, but the ratio of private-sector debt to G.D.P. was only half what it had been in 1940. And this low level of private debt helped set the stage for the great postwar boom.
So there's Obama's solution: Start a war.

Wait. That move didn't work out so well for Dubya, did it?


Anonymous said...

thanks, joseph, for connecting some important dots!

Anonymous said...

In those years there were no new cars to borrow for, your gas and meat were rationed, and about all you could spend your money on were War Bonds and Camel cigarettes to send overseas. Evidently you don't need a war for the same scenario.

I like the nationalization debate. We can look forward to some hospitals failing and being nationalized. Universal, single-payer health care looms because money talks.

Anonymous said...

Maybe a war is not necessary, A Marshall plan like program might do the trick as well.

Anonymous said...

I know Graham has voted for some outrageous bills, but he actually gave this quote about Dorgan's book, "Take This Job and Ship It":

"If you're tired of seeing good American jobs shipped overseas in search of cheap labor, you're going to appreciate this book. Senator Dorgan and I have joined forces in the Senate to fight the trade policies of a weakening America. His book offers real solutions that can strengthen our country."

Not exactly something you would expect to hear from a Republican.

old dem

Anonymous said...

Talking isn't action. Republicans are in little condition to act on anything, save for their voting for something that is not now on any agenda. When and if a Graham or King votes for nationalization, then they may be said to have done something.

Likewise, conversely, Obama's supposed 'doing nothing' isn't good analysis. It may very well be extremely smart politically not to get ahead of himself, talk in hypothetical terms, before something is planned and ready to go. GOPers can talk off the top of their head about many things that would be unwise for a president to talk about -- they are not in power, not in the majority, and not in any position to make something stick.

The tendentious interpretation of BHO's remarks as calling for a big war on the scale of WW II as a stimulus package seems backwards to me. Rather, I think he was mentioning the well-known and acknowledged effects of the war effort to bolster the credibility of massive 'public works' programs for the purpose of solving economic bad times.

Pre-existing animus toward a person does not generally lead to accurate interpretations of their statements or actions, IMO.


Anonymous said...

My apologies. I took the unattributed quote to be something Obama said. Instead, it was from a Paul Krugman NYT piece.

Do we presume Krugman to be calling for a world war? Or rather an immense public works program budgeted on that scale?


Bob Harrison said...

Perhaps, the GOPers are acting out of a sense of desperation-- radical socializing steps may be necessary to save any segment of a capitalist economy. Otherwise capitalism sinks under a tidal wave of laisse-faire free-market deep shit.

Anonymous said...

These are much better comments than the original post.