Thomas Sowell – Obama's Economic Policy



you argue in the housing boom and bust that a lot of the thinking that implicitly and in times X explicitly underlies the Obama administration's approach to the current economic crisis arises from Franklin Roosevelt's New Deal and I quote you the advocates of Obama Obama's policies quote cite Franklin Roosevelt's New Deal as a model close quote why what is it about the New Deal that permits people to cite it as a model with a straight face eight decades after it was enacted because of the widespread belief that it was the New Deal which saved the country and got us out of the depression and in the mine it wasn't in politics what matters is not what the facts are what matters is what people believe because people vote on the basis of what they believe and not on the basis of what the facts are all right this is in my judgment this is critical this is one of the most important aspects of this marvelous book the housing boom and bust you right Tom quote the larger question that remains as relevant as ever eight decades after the enactment of the New Deal was that the failure of the free market that led to the massive unemployment which persisted throughout the 1930s or was the Great Depression prolonged by the government interventions that were intended to shorten it close quote and your analysis is as follows well but there are a lot of ways of going at this one is to look at look at the sequence of events and we can look at look at this sequence in October 1929 the stock market crashed two months later unemployment peaked at nine percent over the next several months the unemployment began to subside irregularly down to six point three percent by June of nineteen thirty so eight months after the stock mark crash we have not yet hit double digits and unemployment June 1930 when it's 6.3 percent the government intervenes first the phrase real intervention on a massive scale under Hoover the smoot-hawley tariff which were designed to reduce unemployment by restricting imports in the United States so that more these goods will be built in the United States by American workers it sounds good a thousand economists from the leading universities around the country signed a public appeal to Congress and the president not to pass this bill that it would not do what they said it would do it would not reduce unemployment it would in fact lead to retaliation that would make it harder for Americans to sell their goods in other countries as often happens no one paid the slightest attention the bill was passed and within five months after the bill was passed we had double-digit unemployment for the first time this is from a bill designed to lower unemployment and when hit and this time it did not subside it never fell below double digits for the entire remainder of the decade of the 30s not even for a single month not all of it was the hot smoot-hawley Tariff when FDR came in in 33 he then put in the National Industrial Recovery Act he put in the Agricultural Adjustment Act he put in the Wagner Act he issued more presidential executive orders that all subsequent presidents throughout the remainder of the 20th century so the government intervened on a massive scale and yet the unemployment never came down below double digits for the entire decade so we get the stock market crash Thomas solo quote shortly before the Obama administration took office the man who would become President Obama's chief of staff rahm emanuel said quote you never want a serious crisis to go to waste close quote why do you find that significant because it means that the crisis is presenting them with an opportunity to do things they wouldn't be able to do otherwise and that that's how he sees it and everything that has happened since the new administration indicates that that's how the administration has a whole season so the crisis is providing an opportunity for President Obama and his supporters to do what they would have liked to do yes would otherwise have been unable to just as in the case of the New Deal that the New Deal is most of the key people in the New Deal were for big government intervention long before there was a stock market crash it's just that the stock market crash gave them an opportunity to step in it's another parallel is that people are talking about all these hype he's highly intelligent people with whom the president has surrounded himself in Washington FDR surrounded himself with highly intelligent people that is no guarantee of anything except brilliant rationalizations for failure in some cases if you look at the stimulus package the one thing it is not done is stimulate a fire to the bailout money for the banks the banks were lending a certain amount after the bailout about money the banks were lending less suppose I mean a stimulus means that he's not depending just on the government's own money being spent producing the result that this will stimulate others in the economy it is not money money the circulation of money the speed was money circulation the economy fell to the lowest level in 50 years it fell during after the stimulus yes business reduced its investment by oh like 25 or more percent so that if you're looking in terms of what actually happens rather than words that are used what actually has happened show is no such stimulation as they as they are talking about you

Maurice Vega

36 Responses

  1. This is so true, in 1945 the Attlee government was elected in the UK and Churchill said they would need a gestapo like organization to pull off their nationalization policies.

    But in actual fact they did have it, thanks to WWII the government already had emergency powers, and so had that gestapo type organization to do what they did which in retrospect was enormous harm, as things like the NHS have taken on religious like status, despite being total failures. Yet they kicked out of office by the people that you think benefited the most the working class but the real beneficiaries were the bureaucrats they got to run the show and the working class who were fed up with austerity, because at least the then socialists did believe in balanced budgets so the working had to do without their pre-war luxuries, yet the following Tory government didn't reverse the policies for fear of losing future elections,. its a conundrum that plagues the UK to this day, the working class want freedom to spend their own money and have someone else pay for their health care, the bureaucrats pretend they can have it.

  2. "Most men, when bowled over by the truth, get up and brush themselves off just as if nothing had ever happened" – W Churchill. Dr. Sowell seems to be an exception!

  3. If the liberal media gave Dr Sowell the attention and respect that he deserves the Democrats would lose millions of voters in an instant.

  4. what matters aren't what the facts are but what people believe – no truer words EVER SPOKEN, this man is required reading. Genius.

  5. @5:02
    "Surrounding yourself with highly intelligent ppl is no guarantee of anything.
    Except in some cases the Brilliant ways for rationalizing the reasons for failure."

  6. The difference is 1 group wants to live off the toil of another group, by force if nessasary. That is the core problem of all things going on in the US and the world. The second is over-population of non-producing people.

  7. DemoCRIPS and ReBLOODlicans: No More Gangs in Government Paperback– May 28, 2013
    by  Jesse Ventura (Author), Dick Russell  (Contributor)

  8. "Oh this guy agrees with me and he's black so he must right." – this entire comment section

    By the way, conservatives should actually look up liberalism. Half of them jerk off to the ideals of liberalism they just don't know it.

  9. Mr. Sowell is very dishonest so called intellectual.  He blames "new deal" for the housing bust of 2007-08.  How stupid Mr. Sowell is OR how he is just a phony Republican Intellect .

  10. Smoot Hawley destroyed the US economy in 1930 because, at the time, the US was the biggest exporter in the world. That is not the case today, nor did they have globalism to deal with then. As the biggest customer for imported goods in the world today, we call the shots. Tariffs hurt exporters. We're not net exporters now, by a long shot.

  11. why isnt basic economics taught in highschool? we wouldnt have that many liberals and dreamers NOR INCOMPETENT CONSERVATIVES in power around. the blame goes to both sides though mainly on liberals.

  12. I have never read about so much absolute waste in government as i have read about with the obama government

  13. The only time the government should be involved at all is if people's rights are threatened.If someone tries to harm you, there's law enforcement and a judicial system to punish them.If an outside entity attacks America, the military defends the people.After that the government shouldn't be involved.If the Stock Market crashes, let it recover on it's own.If we are in a recession, let the free market fix it.Government, butt out!

  14. In politics what matters is what people believe, not what the facts are. people vote on what they believe.

    Case in point, the communists would not have been able to defeat the Nazi's if they moved democratically.

  15. History imposes constrains on free market utopianism. Capitalism as an ideology now seeks to escape the decline of red herring conservatism & takes up a sort of pseudo populist economics in its place. Libertarians seek to defend the existing class structure, with a newer sort of political demagoguery in the person of Ayn Rand & a fresh myth in Capitalism the yet to be achieved ideal. Democracy is now offered as the arch enemy of Capitalism and the creation of an unrestricted free market Utopia

  16. You could never had him as President – you have to be joking !! – He is too smart – he would make most of the politicians in congress look as stupid as they are !!

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