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The Obama Watch
The New Adventures of Wonderboy
"That man has offered me unsolicited advice for six years, all of it bad."
So said President Calvin Coolidge of Herbert Hoover, his Republican successor. Coolidge derided Hoover as "Wonderboy," according to biographer Robert Sobel, "because he always seemed to want to change things." Silent Cal, who presided over a legendary golden age of economic growth that featured unemployment levels dropped to the two's and one percent range, had a dim view of what he saw as Hoover's propensity for intervention in all manner of things, including the economy. Coolidge died two months before the 1933 inauguration of Franklin Roosevelt, depriving history of his thoughts on the super-interventionist policies of the New Deal, many of which began with Hoover.
The Obama era dawns well elected on the Hooveresque mantra of changing things. Of a back to the future re-creation of Hooverism and, of course, the New Deal. At the news of Barack Obama's victory the stock market, an institution with a long memory, spent the next two days dropping 9.7%. According to Investors Business Daily it was the largest two-day drop since the market crash of October 1987.
"Wonderboy" is back, with Barack Obama reprising the role of Herbert Hoover.
Understandably, much attention is being paid to the fact that Obama is America's first black president. This is, without doubt, a proud and good moment for the country. It surely deserves a "well done" for getting past race. So too does the winner deserve a congratulations, Mr. President.
Yet in the end, the idea that Obama is the first black chief executive will soon fade in importance with the understanding he is very much America's 44th president. In a country that will have 220 years of presidential history behind it on January 20th, 2009, the new man inherits a wealth of presidential precedents that teach what works and what doesn't. Teachings that clearly conflict with the modern precepts of Obama's liberal political faith, a faith that upon examination is really nothing more than 1930s style politics.
The Coolidge-Hoover split underlines the point. Nominally both conservatives, the two in reality had very different approaches to the economy. Not for nothing did Ronald Reagan have Coolidge's portrait hung in the Cabinet Room. As economic historian Amity Shlaes thoroughly documents in her useful book The Forgotten Man: A New History of the Great Depression, it is well past time for another look at what has been the fundamental view of the economic turmoil that began with the stock market crash of October, 1929 -- eight months after Hoover succeeded Coolidge. Its relevance as the Obama administration begins to unfold amidst economic havoc frequently being compared to the Great Depression cannot be underestimated.
Hoover was an interventionist by nature, a trait Coolidge disdained, particularly when it came to the economy. As part of the liberal interpretation of the period, Hoover is always pictured as a dour devotee of "individualism." In fact, the only president other than Jimmy Carter (hmmm ) to come from an engineering background was, as Coolidge well knew, a champion of the idea of government intervention. Engineering the economy (Hoover was also mocked as "the Great Engineer") was but one of his preoccupations. Hoover's obsession, unsurprisingly, reminds of nothing so much as the 1990s Democrats manipulation of Fannie Mae and Freddie Mac, in the name of supplying millions with "affordable housing." Like Hoover, they were heedless of the dramatically negative consequences of their engineering.
Indeed, the recent sight of President-elect Obama stepping in front of reporters for his first post-election press conference backed by a small horde of summoned "economic advisors" is nothing if not Hooveresque. Ranging from the recession-inducing Governor of Michigan Jennifer Granholm to one-time Bush SEC chair William Donaldson (labeled by the Wall Street Journal editorial page as "a case study in feckless regulation," the team and Obama's emphasis on his consultations with them recalls Hoover's whirlwind activity in the days following the 1929 crash. In Hoover's case he feverishly consulted with everyone from the heads of Ford (Henry Ford himself) to Sears to the U.S. Chamber. Far from issuing lectures on individualism, Hoover repeatedly intervened in the economy in a fashion Obama seems determined to emulate.
SEVENTY-NINE YEARS distant from the 1929 kick-off of the Great Depression, it is increasingly apparent that the policies of both Hoover and FDR failed to derail the economic chaos that repeated intervention in the economy brought about in both the United States and the world. In the case of FDR, his efforts backfired further in 1937, causing yet another depression-within-the-Great Depression. Contrary to liberal myth generated by liberal historians, the Depression never was ended until World War II put an end to the trauma that began on Hoover's watch. Yet consciously or not, Obama has already signaled his consideration of Hoover and FDR's favorites, policies that we now know to have failed when they weren't busy making things worse.
From protectionism to a war on business to raising taxes to massive public spending that sucks up capital to the creation of make-work jobs for political purposes, Obama has in one form or another given the nod to them all. In particular, history records that Hoover's support of the Smoot-Hawley tariff bill and the 1932 Revenue Bill, which jacked taxes from 25% to 63%, proved disastrous.
Conservatives in particular should take note that the liberals of the 1930s not only sought to pin the blame for the Depression on capitalism gone wild, they insisted on prosecutions, particularly of utilities mogul Samuel Insull. Insull was acquitted, but the tone was set. One has to wonder whether the Obama Justice Department will be seeking to something along these lines for the same reason FDR did this -- to detract attention from the reality that the New Deal wasn't working in its stated goal of ending the Depression. It should be a priority for re-grouping Republicans to demand investigations of Fannie Mae and Freddie Mac, if for no other reason than to educate the public that we are where we are because of government -- not capitalism -- gone wild.
Once past the warm glow of Inauguration Day, busily implementing policies that have a notable historical record of failure, Obama faces the same problem as Herbert Hoover. Which is to say that a failure to act correctly courts a curt dismissal as yet another failed president. Another "Wonderboy" gone wrong. A man who, in the words of Coolidge, offered nothing but bad advice and then, installed in the Oval Office on his own, turned bad advice into bad policy.
Could Barack Obama turn out to be a replay of Herbert Hoover?
Yes he can.
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Kevin F Smith| 11.11.08 @ 9:18AM
"Understandably, much attention is being paid to the fact that Obama is America's first black president. "
Bullcrap! He is our nation's first half white, half black president.
Bob S.| 11.11.08 @ 9:56AM
Carter and Hoover may have come from engineering backgrounds (as I do), but they appear to have violated the 1st rule of engineering- "If it ain't broke, don't fix it!"
Bill Call| 11.11.08 @ 10:43AM
Are there any Republicans in congress willing to take talk about this theory on the talking head shows? Now is the time to create the meme of the Obamanation!
Roy| 11.11.08 @ 12:37PM
I'd say he's channeling Roosevelt. The parallels are spooky. Problem starts under prior administration. Prior administration loses control over congress in the previous midterm election and the next two years are a series of incoherent "compromises" that make things worse.
To the worshipful adulation of the media, the new guy is elected in a raw throw-the-bums-out reaction, and is immediately hailed as a savior(Nov 1932/today).
So what does he do? He does absolutely nothing to get rid of the mistakes his predecessor made(Hoover - tariff, Bush - bailout). He keeps them in place, and throws more things on top that make things worse(the stock market dropped sharply just knowing that Obama WOULD be president, before he'd even done anything). Due to a charming personality and to unstinting media worship, the public continues to blame things on his predecessor even as the economic problems go on for the next..7 years?
The economic problems are only brought to an end by the biggest war the world has ever seen(a war that came about in large part due to these very economic problems), which finally causes us to suck it up and work our way out of the Depression.
Is that where we are headed..? Sigh
Howard| 11.11.08 @ 1:22PM
The two fatal mistakes Hoover made were:
1. Raising taxes in the middle of a severe recession.
2. Restricting trade.
Does this sound a bit like B.H. Obama's platform. I think so
karen| 11.11.08 @ 1:32PM
None of this matters, unfortunately. Read the Perils of Populism in the Wall Street Journal today. And then realize that the MSM will do nothing but enable Obama and company. So, the combination of having a great deal of educated voters looking to liberalism instead of conservative ideas, and a media structure that also favors it means we have little hope of making an argument that will be appealing to young educated voters, which are the votes (and hearts and minds) what we need. It does not matter how bad things get - educated voters, will, stupidly (ironic, no?), go along with the liberal consensus.
saleboter| 11.11.08 @ 1:43PM
"Could Barack Obama turn out to be a replay of Herbert Hoover? "
I HOPE we aren't asking to CHANGE things back in a nfew years.
Stan Redmond| 11.11.08 @ 2:48PM
Methinks we hear "It's Bush's fault" more in the next 8 years then we ever heard during the past 8.
Doctor Right| 11.11.08 @ 2:57PM
Obama is NOT going to have an easy time as President.
If he governs from the HARD LEFT (his innate inclination), the economy will collapse. It may even collapse into another depression. The resulting calamity and unrest will result in the Democrats becoming extinct as a Party. In their wake will reappear the "Reagan Dems", who will abandon their Party like rats abandoning a sinking ship, and the ultra-left Socialist diehards who simply can't be reasoned with, and will remain lefties forever. The Republican Party has an opportunity to benefit greatly from this calamity if we play our cards right, stop acting like pussies, and call the Democrats out for the mess they've made. Unfortunately, for this to happen, too many will ened-up suffering.
If Obama decides he likes being President, and riding around on Air Force One, he'll pull a "Clinton", and tack to the middle. This means alienating his base, but he probably figures "Hey, who else are they going to vote for? Republicans??" (Funny, but I think McCain had similar thoughts about the Conservative base and democrats...). In any event, the economy could survive that scenario, and even make a decent recovery.
It's a darn shame, really, because a Reaganite Republican would revive this economy IMMEDIATELY with a swift round of tax cutting...
Wait and see...
Kevin| 11.11.08 @ 3:23PM
[Doctor Right ]...
It's a darn shame, really, because a Reaganite Republican would revive this economy IMMEDIATELY with a swift round of tax cutting...
Really, it's that easy is it? and IMMEDIATLY too.
Your professorial chair at Harvard awaits. I'm suprised they've not been knocking at your door already. How could they possibly ignore a man of such mind blowing insights?
Speedbump| 11.11.08 @ 3:51PM
Uhh, Kevin? It is indeed that easy...I suspect you need to study history...I also suspect you need to learn how to spell, too...
On another topic, please understand that Energy is Wealth, and Wunderkind wants to stop us from obtaining our own...this and a favorable tax situation would launch our economy into orbit...but if the economy improved, then we wouldn't need him for our hand-outs, now would we...
jr| 11.11.08 @ 5:11PM
Ditto K.F. Smith's comment about the first black president - that was Bubba. Whenever I read or hear someone say that the prez-elect is black and that is a good one for the US -- time to vomit. The implication - we have been racists, not Jesse Jackson, Pfleger, Wright, or Farrakhan. We will also get from Obama the FDR 2nd Bill of Rights.
ruth| 11.12.08 @ 1:04AM
Kevin, the best way out of our financial mess is growth--encourage it! So damn negative!
davod| 11.12.08 @ 9:13AM
The world, especially the USA, will be wonderful during Obama's reign. Why? Because the MSM will not tell the truth.
OBWON| 11.12.08 @ 11:09AM
The night before the election newsman Tom Brokaw in a conversation with Charlie Rich (PBS)was quoted as saying: There's a lot we don't know about Barack Obama". This quote by Brokaw was not meant to be mean or suspicious but was said as an honest observation. Forget the hype and the adoration, because it will take at least 6 months to a year before we really know who the real Barack Obama is and who he is sworn to serve (in his heart and mind). Only a 5.26% popular vote elected Obama and it will not take much on the negative side of his future actions to unseat him in four years. Barack Obama and his advisors are caught in the swirl of this economic cyclone and this crisis will keep them very busy in the nearterm. Energy prices and interest rates will stand in the way of a USA and World economic recovery. Behind the mask of confusion, world economics has been and is ALWAYS a struggle between the rich and poor("Let them eat cake" ie. Marie Antoinette), have and have nots. Inflation is the only enemy of the super rich and the inflation enemy of the super rich is a fair weather friend to the poor. If the system is to survive the rich companies and individuals will have to take a big hit of inflation. That big hit is to keep interest rates and energy prices low while the people regain strength, confidence and cash flow. The big question is if this can be accomplished without the loss of personal freedom that socialists always seem to attach to their version of supply side economics.
OBWON = obamawatchonline.net coming soon.
mnotaro| 11.12.08 @ 12:31PM
Wow, how sad...how incredibly sad...the MSM campaigned for Obama from the start...and why? They didn't even know where he stood on the issues...they didn't know anything about his advisors...but they pushed and pushed for a change...so tired of W I guess?? The MSM won this election for the liberal illuminati hands down!
Arkady| 11.12.08 @ 2:03PM
A very likely scenario is that Obama is the next Carter, not Hoover.
We will have to endure 4 years of economic disasters and leave no doubt, there will be an international crisis. There has to be, Joe Biden may be a gaff machine, but he knows what is coming! This is 1976 all over again.
Carner York| 11.12.08 @ 7:37PM
Yes, history does seem ready to repeat itself. I believe that this turn to socialism and the American's thirst for it proves the genious of our Founders. They knew how contrary to human nature their bold experiment was. I am amazed it lived as long as it did as I am sure they would be as well.
Red Neck| 11.14.08 @ 8:58PM
Where is the generation that voted for Carter then wised up? I'd love to add my voice. "BEEN THERE, DONE THAT."
Marc Jeric| 11.15.08 @ 3:15PM
Carter was an engineer? A "nukelar" engineer at that? When leaving Annapolis Academy in the bottom of the class, in the exit interview with Admiral Rickover, when asked if he did his best, Carter answered "no"; then the Admiral asked him "Why not?" Carter was so incredibly stupid that he wrote a book later on titled "Why not the best?" He was never allowed to step on a nuclear submarine and was reduced to an office where he scheduled shore leaves for those sailors. Real engineers are never that stupid - thanks to them we enjoy the best factories, the most innovations, and the best standard of living in the world - so far, provided that our Marx-inspired environmentalists do not put them out of business.
Ms. Know| 11.15.08 @ 8:15PM
Obama and the left-wing illuminati may want to change things, but the fact is it won't be that simple. I'm still waiting for them to admit they can't make good on the majority of their promises.
Red Neck| 11.16.08 @ 8:12PM
Jimmuh was not a nukelar engineer. He was a nucular engineer.