Wednesday, February 4, 2009

Orson Swindle: Featured Blogger

"It's like deja vu all over again"
...Yogi Berra New York Yankee
Baseball Hall of Fame

The Obama and House Democrat "economic stimulus" package is a train wreck looking for a place to happen. Should it be passed by the Senate and signed by the President, that "place" will be on the shoulders of future generations of Americans.

If past is prologue, our experiences tell us the package will do far more harm than good by growing government, raising taxes and wasting money. Once in place, a larger government will be difficult to trim.

The Pelosi-Obama package is primarily a huge expansion of government and Democrat control of that government. There is little immediate stimulus in the package. It is a payoff to many who supported Obama and the Democrats in last year’s election. Unions, special interest groups and existing government programs will benefit, not to mention a thinly veiled list of non-stimulus and wasteful earmarked appropriations for Democrat members of Congress. Didn’t Obama tell us that earmarks would be resisted in his new world of “hope and change”?

Hundreds of economists have attempted to remind the President that this kind of spending does not work. It did not work to pull the country (and the world) out of the Great Depression in the 1930s, nor did it work for Japan in the 1990s. The New Deal of President Franklin Roosevelt and The Great Society of President Johnson gave us much larger government, higher taxes and government controlling more and more of our lives.

In their well-propagandized pledge to listen, to welcome Republican ideas and work together, House Speaker Nancy Pelosi and the President have deceived the public. It sounded good; but apparently, they really did not want to hear nor did they want the input if it differed from theirs. As the President said recently, “I won.” So much for working together. The obscene House stimulus bill received no Republican votes for good reason.

As Assistant Secretary of Commerce for Economic Development for President Reagan in the late 1980s, I dealt with the aftermath of a dreadful “ economic stimulus” package by another Democrat Congress and President of the late 1970s. The Economic Development Administration, a creation of the Great Society programs of President Johnson, was expanded during the Carter Administration from a relatively small (hundreds of millions), highly questionable agency to one of over $6.5 billion under the “Local Public Works” economic stimulus program. It was a disaster, an enormous and shameful waste of millions of dollars.

That experience three decades ago ought to serve as a painful reminder of what government should and should not do. This kind of stimulus does not work. Overcoming the Carter Recession and ineffective economic policies required tax cuts, downsizing government and a strong leader and president wise enough to do it, and that was President Ronald Reagan.

Yogi Berra’s quip is so appropriate today. Have we learned nothing?

Each day the President speaks of dire consequences if Congress does not quickly approve the Democrat stimulus package (perhaps before we all figure it out.) The familiar Obama talent for appealing to emotions rather than reality is in full swing.

For certain, we have economic problems as credit tightens, consumers trim spending habits and hunker down in fear. Under the cover of addressing these serious problems, Obama and the Democrat congressional leadership seek to change the economic and social structure of our country, a structure that will be more socialistic with them in charge. They want to overpower wisdom and experience with the emotions of fear and their promised “hope and change”. Those who elected Obama are now being asked to pressure Senators for quick passage.

If Obama succeeds in this charade, be very concerned.

No Republican Senator should vote for this stimulus bill. You can help them to understand the lessons of yesterday’s experiences and be steadfast rather than give in to the emotional ploy of today. They need courage. America, speak on!

Submitted by ASO member: Orson Swindle

Orson Swindle served for eight years with the Reagan Administration, the last four as Assistant Secretary of Commerce, and recently, over seven years as a Commissioner at the Federal Trade Commission. A career Marine Corps officer and fighter pilot, he was a prisoner of war in Hanoi, Vietnam for over six years.


Megan said...

This is a great! needs more articles like this!

"H" said...

What worries me most is how this debt will affect the opportunities my baby daughter will have when she becomes an adult. It's hard enough to afford to raise a family now -- how will her generation possibly manage with all this debt dumped on their shoulders? We need to speak on the consequences of this debt to our children in vivid terms.

Tom said...

Courage is exactly what the leaders of this country need. The courage do what's right with only the best interest of the country in mind. The courage to cast votes without the intent of personal interest or gain. The courage to lead as true leaders do: by example! Political service should be a sacrifice not a stepping stone.

Anonymous said...

H - If the plan is executed properly there will be a return on investment that covers the debt over time. Historically, as a percent of GDP the debt has been at higher levels than what is proposed.

As the government invests (stimulus)or put monies back into businesses through tax cuts or direct cash infusion it will force growth of companies and incomes of workers. This further is impacted by taxation and eventually as the economy corrects itself the deficit will be reduced.

The Reagan Administration found the correct balance between low taxes tax revenues and reduction of government employment that allowed one of the greatest economic periods we have seen thus far and further paid off the debt of previous big government administrations.

Leadership needs to understand history and what has worked and not in the past. The media uses the term "Unprecidented" when refering to our current environment. Truth is we have seen similar issues in the past that has been followed by similar actions from the government. What they do need to look at is what works and what does not.

My greatest hope is that Paul Volcker has learned from the past. As Greenspan's predecessor, he was part of the transition from big government to Reaganomics. History clearly shows what works!

"H" said...

Anonymous, I agree that debt isn't so disturbing if it actually stimulates economic growth. But this "stimulus" won't do that. Government can't "force growth of companies and incomes of workers" as you suggest (unless you're talking about full blown socialism where companies are owned and run by the government). Cash infusions don't create long term jobs. The refund check most people got last year did nothing to help our economy, and it won't work this year either. And government spending did NOT get us out of the Great Depression -- it prolonged it. The big problem here is that Obama and the Congressional Democrats think that government spending is the point of a stimulus bill, which means big debt with very little in return.

Anonymous said...

H -
We are at some level on the same page. Your point of forced growth we call "pushing the string".

As for the refund checks, they are a short term boost for about a quarter and typically reflected in earnings of Walmart and Target.

Many talk of the Great Depression and attempt to parellel it to today, yet there are differences: Governments around the world were fragmented due to competing socioeconomic ideologies spanning from free-market capitialism to communism or facism. There was no active FED to regulate rates or FDIC to guarentee deposits. We have a tremendous tool kit to work from in today's world, including a Global response to interest rates.

I am not pro-socialism or pro-big government...just Pro-America! Only long-term tax cuts that allow you and I to decide what to do with our monies rather than Uncle Sam will work. And bye the way...government should not be the employer of choice to Americans!

I am sick with the new administrations massive stone throwing over the past few months to come to the table today with NOTHING of substance. What bothers me more is that I know that tucked into these Bills is every little pork project that Democrats have wanted for the past 10 years.

The challenge in todays world, the traditional tools can not cure the influenza.

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