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WHY OBAMA WILL DEEPEN THE DEPRESSION
self | November 11, 2008 | Charles Meek

Posted on 11/11/2008 6:17:52 AM PST by grumpa

WHY OBAMA WILL DEEPEN THE DEPRESSION

By Charles Meek Austin, TX

There are at least 5 reasons why Obama will deepen the depression.

(1) President Obama will institute policies that will prevent wages from dropping to market rates. This is exactly what Herbert Hoover and his successor Franklin Roosevelt did in the 1930’s. Such policies by Hoover and Roosevelt dramatically increased the unemployment rate. By preventing wages from adjusting to market forces during the Depression, businesses were unable to afford to keep people employed. As a result, the unemployment rate skyrocketed to 25%. Barack Obama is of the same ilk, and he will not be able to resist policies that keep wages, and thus, unemployment higher than the free market would dictate. In this cycle, an unemployment rate between 10 and 15 percent is a very real possibility.

(2) He will raise capital gains taxes. We are in a period when capital is desperately hard to come by. Great American companies are begging our own government and foreign sources for capital. Raising the cost of capital by raising the capital gains tax rate is exactly the opposite of what we ought to do. It will choke off capital and deepen the depression. In addition, every notch upward in the capital gains tax rate will bring a notch downward in the stock market. Every notch downward in stocks will add more fear and will keep Americans from spending to support the economy.

(3) Obama and his pals in Congress will raise taxes not only on the upper echelon but also on the middle class. He has promised free health care, free college, free child care, free this and free that. Guess what. There is no free lunch. The working class will be hit with higher taxes along with the employer class. According to the National Taxpayers Union, Obama’s fiscal agenda will cost $344 billion per year. This agenda will force higher taxes on everyone. Herbert Hoover dramatically raised taxes in 1932 during the Depression. Economists now recognize this as perhaps the biggest tax blunder in American history. This sucked money out of the productive economy and sent the economy into a death spiral. The handwriting is on the wall; Obama will repeat the mistakes of the Great Depression.

(4) Obama’s policies will skyrocket the federal deficit. It is clear that his spending priorities far outweigh his revenue enhancements. Under normal circumstances, our economy can handle more debt during a recession. But in a period of asset deflation and credit contraction which began when debt was already too high, to balloon the deficit further is to risk the very foundation of our economy. His spending policies will expand the already incredible deficits created by the Bush TARP program. The risk is worldwide loss of confidence in the US government and its debt and a potential collapse of the bond market.

(5) Obama is committed to spending huge amounts of money on uneconomic ventures—such as the auto industry and solar energy. The American auto industry is hopelessly uncompetitive against the Japanese manufacturers. In large measure because of the monopolistic power of labor unions, American manufacturers suffer a $1500 per car cost disadvantage. Throwing more money at the problem will not help unless the unions capitulate—an unlikely event. Government loans to the auto industry will never be paid back. It is a black hole. As for solar energy, it will account for only around 5% of the U. S. energy needs by 2020. And it is multiples more expensive per kilowatt hour. Every dollar spent by the government to support this industry, like other government wasteful spending, is money down a rat hole. And no doubt, Obama will find many other uneconomic projects to support.

These things will be explained to President Obama. But he will reject them because of his ideology. Obama is a left-wing ideologue. Other Democrat presidents have been fairly utilitarian. But not this man. Nothing will stop Obama from pushing leftist/socialist economic policies on our country. And the results will be disastrous.

Mr. Meek can be reached by email at cmeek01@msn.com.


TOPICS: Your Opinion/Questions
KEYWORDS: depression
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To: indylindy
But, I thought Obama was going to pay for my gas and mortgage?

No, you misundersood him.

He said YOU are going to pay for MY gas and mortgage.(not sarcasm)

21 posted on 11/11/2008 6:37:03 AM PST by airborne (Adversity doesn't build character. It reveals it!)
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To: Doofer

OBAMA WILL DEEPEN THE DEPRESSION................he’s certainly deepened mine............


22 posted on 11/11/2008 6:38:42 AM PST by Red Badger (Hey! Look on the bright side! At least Joe Biden is out of the Senate!..........)
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To: blam
How does a middle-class family prepare for a depression?

Your best bet is to live in the country, where you can hunt for food, and be away from the government food lines/riots/predators.

23 posted on 11/11/2008 6:39:20 AM PST by airborne (Adversity doesn't build character. It reveals it!)
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To: grumpa

This should have been posted throughout the media sphere before the elections.

Can we do a recall? This emotion election is a disaster and a fraud, and Ideological it is.

Mass nationalization of the American way of life, a giant gulag, is going to be Obama’s answer. Then total blind obedience and smart assessments like these will be banned. Blind animals for eyes for his messianic orders only it will be. Until it all collapses.


24 posted on 11/11/2008 6:39:41 AM PST by JudgemAll (control freaks, their world & their problem with my gun and my protecting my private party)
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To: blam

the Mormom church has several ways to help you get prepared

http://www.providentliving.org/channel/0,11677,1706-1,00.html


25 posted on 11/11/2008 6:39:47 AM PST by boxerblues
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To: airborne

LOL! kinda *snort*


26 posted on 11/11/2008 6:41:18 AM PST by dforest (Is there any good idea out there that Obama doesn't lay claim to anymore?)
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To: All

when do we rename this site thedailykos2.com?


27 posted on 11/11/2008 6:41:28 AM PST by Big Guy and Rusty 99 (If Benito Mussolini was IL DUCE, Barack Obama is ILL DOUCHE!)
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To: MrB
Then, she had the audacity to say that wealth redistribution was “Christian” - denying that there was any force or coersion involved in government redistribution.

She must have a different version of the Bible than I do:

...and Jesus said to the rich man, "Go and steal everything that you can from all your wealthy friends at the point of a sword and redistribute it all to the lazy and undeserving." And the rich man went away rejoicing and praising Him for he was very wealthy...............

28 posted on 11/11/2008 6:43:04 AM PST by Red Badger (Hey! Look on the bright side! At least Joe Biden is out of the Senate!..........)
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To: grumpa

Don’t forgot what may be the most onerous policy of all-his cap and trade fetish and commitment to make us compliant with the Kyoto treaty.

This could be the worst of all of his disastrous policies.


29 posted on 11/11/2008 6:43:14 AM PST by Brett66 (Where government advances, and it advances relentlessly , freedom is imperiled -Janice Rogers Brown)
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To: grumpa

Per CNBC today: ‘This market will test or go through the bottom’ (allegedly a DOW < 6,000).


30 posted on 11/11/2008 6:46:12 AM PST by pabianice (HOW)
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To: grumpa
Another misunderstanding of how DELATION works.

As anyone could have asked me, I interviewed my grandfather about how Roosevelt cut postal worker's pay, and I interviewed my father about how that affected the family and his entry into the world of work. He noted that the next door neighbor had been a tool and die maker earning $28 per hour at Ford. Within weeks he was earning $28 per week, and even then the company couldn't keep that activity going in Indianapolis. Letting wages fall to "market levels" when the market is $0.00 was tried and found wanting by the participants.

Here's what you have to keep in mind ~ as currency increases in value (which is what it idoes with inflation) ~ there comes a point where it's more advantageous to keep it under your mattress than to deposit it in a bank (and remember when banks were closed under Roosevelt?), or to spend it on goods and/or services now when you can wait a few weeks and buy those things much cheaper.

It also becomes more advantageous for manufacturers to hold a cash position in a declining market for their products than to produce more products and gain the productivity improvement inherent in the "economies of scale".

Compounding the deflationary cycle Congress passed and Herbert Hoover, or was that Hobert Heever?, imposed the Smoot-Hawley Tariff on the nation. This was a tariff so punitive that even if you could find an otherwise unavailable product manufactured abroad you would be punished for your act with a high tariff.

Roosevelt did nothing about the Smoot-Hawley tariff. It's bad effects weren't mitigated until WWII, and then only in part. It literally took until January 20, 1981 with the inauguration of Ronaldus Magnus to finally get a guy in charge of the US government who understood international trade and basic concepts of "lowest cost producer" advantages to buyers.

The Great Depression was far less about monitarism and taming inflation than it was about restraining trade and punishing productivity in deflationary monetary regime.

31 posted on 11/11/2008 6:47:41 AM PST by muawiyah
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To: Red Badger

I said that Christian charity was voluntary,

and redistribution is done at gunpoint. Of course, the truth of this statement is appalling, but logically unassailable.

However, in typical liberal fashion, the statement was vehemently denied without any logical counter-argument.


32 posted on 11/11/2008 6:48:00 AM PST by MrB (The 0bamanation: Marxism, Infanticide, Appeasement, Depression, and Thuggery)
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To: grumpa

Yes, Obama is ARROGANT and he considers himself to be so superior, as do all MARXISTS. Therefore, he will still implement his radical agenda to RESHAPE America the way he wants it.

He considers himself exempt from all historical record because not even history will argue with his agenda.
Up tho this point, Obama has used all of Saul Alinsky’s “Rules For Radicals” principles outlined in his manifesto. Right to the very letter.


33 posted on 11/11/2008 6:49:14 AM PST by PSYCHO-FREEP (WHAT? Where did my tag line go?)
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To: Doofer
The Obama Depression has been underway since the day he got the nomination. That's when his threats to commerce, industry, manufacturing, trade and people's jobs became real.

The financial panic that followed was his doing.

34 posted on 11/11/2008 6:49:39 AM PST by muawiyah
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To: grumpa

http://www.usnews.com/blogs/capital-commerce/2008/9/18/4-ways-to-turn-a-recession-into-a-depression.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/08/17/AR2008081702079.html


35 posted on 11/11/2008 6:50:30 AM PST by downwdims (If Peace is the answer it must be a stupid question)
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To: MrB
You always have to remind your Leftwingtard friends and family members that ALL taxes are collected at the barrel of a gun.

Even if you come across willingly, the gun is there just in case you make a mistake in your math.

36 posted on 11/11/2008 6:52:34 AM PST by muawiyah
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To: MrB

I have found that, in discussions with liberals, that logic and reason have no effect. However, sarcasm and satire DO have an effect, and there’s a reason. If you ridicule their position thru satire or sarcasm, it somehow triggers their thought process to see their position from a different point of view. Just plain arguing of your point of view, even though present with logic and reason, steels their resolve in resisting you argument. But, if their point of view is exaggeratedly brought to its logical conclusion via satire, then they can “see” its effect for themselves without you having to lead them by the hand.............


37 posted on 11/11/2008 6:54:25 AM PST by Red Badger (Hey! Look on the bright side! At least Joe Biden is out of the Senate!..........)
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To: Red Badger

re: satire, ridicule, and sarcasm

It comes down to “the devil cannot abide scorn”.

Libs defend an evil, anti-God ideology. This is why they cannot handle derision or ridicule.


38 posted on 11/11/2008 6:56:52 AM PST by MrB (The 0bamanation: Marxism, Infanticide, Appeasement, Depression, and Thuggery)
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To: MrB
Libs defend an evil, anti-God ideology. This is why they cannot handle derision or ridicule.

That is why it's such an effective tool. I cannot understand why more conservative do not use this tool. It works so effectively.............

39 posted on 11/11/2008 6:59:26 AM PST by Red Badger (Hey! Look on the bright side! At least Joe Biden is out of the Senate!..........)
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To: MrB; Red Badger
Starbucks just discovered DEFLATION. Their earnings just fell to a penney a share.

They thought they were going to get 13 cents a share.

In a deflationary regime profits are the first to go!

Still, you'll probably be able to replenish your feed stocks for less than it cost you to make and sell the stuff, so there is "that kind of profit", but it has an abrupt end when all your suppliers go out of business! (Bwahahahahaha)

I bet the Commies down in Brazil are sweating now.

40 posted on 11/11/2008 6:59:41 AM PST by muawiyah
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