Thursday, May 31, 2007

The Adventures Of Hillary Hood

On Tuesday, Hillary Clinton made a statement that said much to define who she is and what she stands for. From CBS comes the specific details:

Sen. Hillary Clinton outlined a broad economic vision on Tuesday, saying it's time to replace an "on your own" society with one based on shared responsibility and prosperity.

The Democratic presidential hopeful said what the Bush administration touts as an "ownership society" really is an "on your own" society that has widened the gap between rich and poor.


Putting politics aside for a moment and taking a close look at these particular words gives us all an opportunity to examine her political and economic ideologies, with some much needed scrutiny and tells us much about how an economic system might look like, under a Hillary presidency. I also think it's extremely important to note that this economic view is not much different than what we have expected from Democrats (in general) over the years, one that began in a troubled time known as the Great Depression (the New Deal) and was exacerbated by LBJ's "so-called" Great Society.

One thing we must all consider in this is, FDR inherited an economy with 25% unemployment. And while the causes of this tanked economy can be debated into eternity, the fact remains that something had to be done as a means of emergency intervention. If not, there was the strong probability that suffering was going to become even more widespread than it already had become. In no way was public assistance intended to become a way of life like many people have made it, in the years that have followed.

If we contrast the New Deal with the Great Society, we will see a very different set of economic circumstances. When LBJ and his staff of liberals were propelled into what was perceived at that time to be a mandate for economic change (as a result of the 1964 election), they immediately enacted tax cuts that were originally proposed by JFK before his death. The unemployment rate in 1964 was around 5.2%, not the staggering 25% left in the lap of FDR three years after the Stock Market Crash of 1929. (The rate in 1963 was 5.7%.) And while the Great Society promoted programs that many felt were needed at the time, there was a lot of pork that was unnecessary and many felt were a hindrance to the improvement of the lives of the poor and underprivileged.

It can be argued that with Johnson's program came even lower unemployment rates. Unemployment bottomed out in 1969 at a meager 3.5%. But with that low rate came sky-rocketing inflation (5.46% in 1969). In fact, from 1965 to 1966 the nation watched inflation grow from 1.59% to 3.01%. It almost doubled and right at the time when Johnson began implementing his welfare state. Coincidence?

Although Jimmy Carter was not known for his coined economic phraseologies like FDR and LBJ, many of his programs were deemed directly responsible for inflation topping out at 13.58% in 1980 and an unemployment rate of 7.1 %, in the same year. And if you were in the workforce at this time, you no doubt remember that your cost of living increases were nowhere near 13% annually. Add to this a prime lending rate topping out at 20% in early 1980, and you have the makings of an economic disaster.

So, looking at giveaway programs coupled with high tax rates intended to level the playing field for all, we see that the ideology being promoted my Hillary has already been tested and tried by many before her, with some pretty harsh results. At the times this country has leaned more towards socialist policies, people were not helped (as was the intention), but were hindered as an unintended consequence.

When the lending rate was high, so were the payouts by banks in savings, money markets, and CDs. This did not encourage growth, because it was more advantageous for a rich man to put his money into savings than it was to invest in a new enterprise that would create jobs and more opportunities for those that were part of the labor force. Instead of building a new business or adding on to an existing business or industry, it was stashed in a bank and only created wealth for the select few that had the money and capital to create and produce. (If that's not enough to convince you, consider the former Soviet Union and China. Neither could effectively meet the needs of their populations until after the economies were shifted towards free-market enterprise.) Add to that this concept: There are many that look at socialist programs as a means of enslavement and nothing more than a modern-day version of feudalism (not to mention Jim Crow), with the masses dependent on government for their well-being (and not the individuals, themselves). And quite frankly, from where I sit, I agree with them.

This is precisely why, I am not an active proponent of more government control, but less. I say this because from where I sit, the more government can control in our lives, the more we will depend on them. The more we depend on them, the more they will fail us. Therefore, with this in mind, we must ask ourselves this all-important question: With more control yielded to government and more dependency resulting from that yielding, coupled with less potential for freedom of opportunity/self-sufficiency, where else could we turn when that government fails us, if not ourselves?

Can anyone see why I am very wary of proposed wealth re-distribution as a commonly promoted theme, especially when there is a Democratic President and Congress serving simultaneously?

9 comments:

BEING HAD said...

I guess what we are really speaking about here is socialism. Europeans have had a semi-socialist world to live in for 90 years now and most like to say that life is more than livable. Certainly universal free health care and education might tend to elevate one's opinion of their country. But inevitably the real problems for the US will come from an ever widening division of wealth. The greater that gap, the more social discontent. My friend tells me that he needs $100 to go to a baseball game with his son. To me this would mean simply giving up baseball which also would mean giving up a chunk of life in America. These sorts of decisions will be made by more and more people every year. If Hilary is saying that the US needs to address this issue, I say she's right.

Greg said...

So, if Hillary gets elected, does this mean rich people like her will be sending me their money? Awesome!

Oh, wait. Why do I have the feeling she doesn't mean that, and in fact it means she'll be taking more money from me, and giving it to my lazy neighbors from the 4th generation of welfare recipients?

Mary Ellen said...

I think if Hillary is elected president, we can drag ourselves out of this hole that Bush put us in. Look at how her husband pulled us out of the Bush I mess. In 1992, 10 million Americans were unemployed, the country faced record deficits, and poverty and welfare rolls were growing. Family incomes were losing ground to inflation and jobs were being created at the slowest rate since the Great Depression.

During Bill Clinton's reign we had the highest rate of ownership on record, now with Bush, we have forclosures at an all time high, not to mention the housing market has plummeted.

He also turned our deficit into a surplus. What are the deficit numbers now?

Let's stick it to the Christian right...abortions were DOWN when Clinton was President. Bush's new faith based "just say no to sex" has been a miserable failure, yet he keeps pouring money into the program.

I can go on an on (much to the dismay of LA), but you get the picture. Giving tax breaks to the rich only help the rich. Trickle down economics doesn't work. It just makes the rich richer and the poor poorer.

Hillary is just trying to get us back on track so we can go back to the golden years of the last Clinton administration. Surplus, peace, prosperity and respect from country's around the world.

Hillary, if elected, will have her work cut out for her, that's for sure.

Mary Ellen said...

being had

My friend tells me that he needs $100 to go to a baseball game with his son. To me this would mean simply giving up baseball which also would mean giving up a chunk of life in America.

Yes, we must save baseball! What bothers me most about the situation with baseball is that there are no "cheap seats" anymore. Not to mention, it keeps the poor inter city kids from going, which would occupy their time with a healthy activity instead of hanging around or joining gangs. The heroes that they look up to are gangsta rap artists and gang leaders.

Not just that...but the cost of going to a museum in the city of Chicago is outrageous! The same with the zoo. There used to be free days, once a week, so those who couldn't afford it, could still enjoy and learn. Those have been abolished and the prices are so high, that it ends up costing a family of four $100 just to get in.

It has become an elitist society and it's getting worse. The things that would bring our poor communities more education and culture, have been taken away from them. It's very sad and I see it getting worse every year.

A.C. McCloud said...

I like to use the railroad analogy for this. Ironically it was Carter who saw the wisdom of deregulation in the late 70s after watching the Rock Island line implode on itself due to overregulation and a stifling, pigheaded union. Meanwhile Penn Central had become a boat anchor around the taxpayers' necks.

When the government moved themselves into strictly an anti-trust review board status things got better immediately due to the flow of private capital and the freedom to set rates and routes.

The analogy is that regulation only redistributes money and ideas, which tends to flatten everything.

Mary Ellen said...

a.c. mccloud

I'm not so sure getting rid of the unions is always a good idea. Ask any of the air traffic controllers who are working now. I heard an interview with one of them that said that the firing of all those controllers in the Reagan years and the disbanding of the union at that time has done some major long term problems. He said that there aren't enough controllers to take over for those who are retiring and it's going to hit the airlines really hard within the next five years.

I do agree, however, that some unions are useless...like the teachers unions.

A.C. McCloud said...

Mary Ellen, I've heard the shortage stuff, too, but believe me the air controllers have regenerated their union and it's pretty strong. Don't get me wrong they need one, but the PATCO guys in 82 totally blew it and therefore there's not a lot of sympathy from people I know. They get paid pretty well for HS grads--back then and now.

Mary Ellen said...

McCloud

I'm not sure if the level of their schooling should reflect the pay if the job itself is demanding and they took rigorous training to learn it. When you are responsible for keeping a bunch of passenger loaded planes in the air without them knocking into each other every single day...those guys deserve to be paid very well,IMO. I have a lot of admiration for them, they are the behind the scenes heroes.

As far as the situation when Reagan fired the air traffic controllers, I think that was one of the dumbest things he ever did, and believe me, I think he's done a TON of dumb things while he was President....Iran Contra, for example.

A.C. McCloud said...

I too have admiration for them, ME. Few can do their job effectively (I've known a few who didn't make it) and they deserve every penny. My problem is when they whine about it.

As to Reagan, he had few choices but to fire them. They picked the wrong president to push around and when push came to shove most other unions wouldn't support them because of their high pay levels and the public perception. It was their arrogant union leader who was the villain.