This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/18/2009
Obama Makes History By Using History to Create Fear
The $ 787 billion stimulus bill that President Obama signed into law will clearly be noted in history. The fact that he used history, by wrongly comparing our current situation to the Great Depression, most likely won't. The point here is simple: cooler heads prevail. Passing a bill fueled by fear might not be the best idea. The fact is that we are in the middle of an economic crisis. In 2008, we lost 3.4 million jobs or 2.2% of the labor force. The financial sector is in trouble and everyone is wondering which bank will fail next. Things are not good. If this were to continue for some time, could we end up in a situation similiar to that of the 30's? Sure, but do the current signs predict this? That is not clear. What is clear is that the Obama administration has no qualms about using fear to rush legislation through the democratic process. In 1930 durring the begining of the Depression, the labor force contracted by 4.8%, in '31 it went down by 6.5%, and in '32 it shrunk 7.1%. In 1933, thousands of banks failed. The point is our current situation isn't quite there yet, and saying we are on the brink of another episode of the Depression is less than truthful. Machiavelli felt that fear was a good tool for a ruler to use. Hovever, I am unsure if he ever considered the economic consequences. Fear may cause a decline in conusmer confidence which would hinder any type of recovery. Comparison of 1930's to 2008-09.
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4 comments:
I think this point is well-taken.
It isn't clear yet that this recession is as bad as 1981-2 or 1973-5. Yet, to people in favor of the stimulus package, the favorite comparison is 1929-33. It doesn't follow, but there aren't that many people talking about this.
This makes me think. Why don't we talk of the later recessions? We all assume that the Great Depression is the be-all-end-all type of recession, and I assume it was in fact worse, but why must we ignore the 70's and early 80's? Perhaps there is something completely different in its structure that makes it the greatest, and the others taboo. Carter talked of dire times during his administration, but that was just a little oil. Is it the times, or is it the man on 1600 penn. ave. that we care about?
First of all I believe Mr. Obama is a brilliant politician. In these volatile times he has managed to position himself as the head of government of the most powerful nation on earth. How did he accomplish as much? He exploited American fear and promised a new hope. His policies and platforms were not necessarily better than those of his opponents but he was successful in utilizing these unsure times to accentuate the American Public’s fear. This isn’t the first instance in which Presidential candidates have won elections by assuring a new hope or a promise of change and interestingly enough, each instance came at a time of economic crisis. FDR, Reagan, Clinton and now Obama have all ridden the coattails of “CHANGE” in an economic crisis to ensure them the white house. When I run for president I’ll be sure to do so in an economic recession then I won’t necessarily have to know any more than my competitors as long as I can create the illusion of change and hope.
Change is funny thing. Those to slow to embrace good change can be left behind, and those who embrace bad change can get badly burned. The trick is knowing when to embrace and when to withstand. I am not claiming to know when to do so,yet I am hesitant to embrace change based on such poor reasoning and logic.
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