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FROM THE PHONE BOOTH: The Smallest Space in  Hollywood

	FINEFROCK

Lies, Damned Lies & Lester Thurow:
Hooverizing Returns
by Steve Finefrock - Hollywood Forum [scriptwriter] 4/17/08

Lester Thurow, leftwing economist, gets it right sometimes, and even Right.  His observation that capitalism’s true reign began in 1798 with James Watt’s commercially viable steam engine hit the technological-force nail on the head.  That seminal year before Washington’s death saw the shift to capital investment to replace raw labor as the keystone element to the rising Industrial Revolution.
 
Thurow has many vested interests in which he’s invested emotionally and intellectually and ideologically: FDR was a saint, Hoover the devil, government is nifty no matter how large and idiotic, and liberalism is the salvation of mankind [or is it personkind?].  Recently he analyzed the oil price and dollar-fall dilemma in combination with the housing crisis, arguing for a three-sided solution which Bush likely would not undertake.  His kicker line: “We have Herbert Hoover when we need Franklin Roosevelt.”

Oh, heavens forgive his pathetic, pathological lie – FDR screwed up the struggling American economy for over a decade, besting Hoover’s admitted errors by four or five logarithms. Milton Friedman long ago deconstructed the myth of the Great Depression’s cause, proving the insane trifecta of Hoover and then FDR brought about it’s ‘great’ quality when it might have been merely a brief, if intense, recession.
 
But Thurow can’t admit that inconvenient truth, and is in the habit of bringing the bogeyman Hoover into the formula – something of regular diet in my political adolescence, shoved down my throat by parents and other ‘oldsters’ who bore scars of the Depression, and bragged their unqualified adoration of FDR.  As that crisis developed, the newly-minted Federal Reserve slashed the money supply – believing that the pre-collapse ‘bubble’ was caused by too-easy credit, thus erroneously concluding that the ‘solution’ after the fall to was tighter money. Friedman long since has slashed that lie into tiny shards. He even got a Nobel Prize for that effort.
 
Congress, at the behest of liberals and conservative members, passed a restrictive trade barrier, the Smoot-Hawley Tariff, which shut down international trade like a Great Wall of China.  And taxes were boosted, with government growing and sucking all available capital to ‘create’ jobs in the public sector – a process begun during Hoover, initiated mostly by congressional Dems, and continued with glee by a dozen years of FDR dominance.  That trifecta caused a serious recession to metastasize into the Great Depression.
 
Thurow ignores, or maybe doesn’t know, another useful factoid about FDR’s supposed ‘solving’ the crisis: the lowest point of economic activity came not in his first year, with a slow-but-steady recovery thereafter, or in his second year or his third or fourth, but in the latter part of the first year of FDR’s second term. December 1937 was when the rising sound of war drums in Europe began to turn things upward, a year after he’d been re-elected under the premise of supposedly solving the crisis. Hitler saved us from Rooseveltian economic idiocy.
 
After Hoover was sent into obscurity, the economy continued to falter, and fall, with a brief and tiny uptick in spring of ’36, giving the false impression of ‘turning the corner’ and then it all fell down again, but only after FDR had gotten his record-setting landslide re-election.  The transition from Hoover’s last year, during the contested campaign with FDR, reveals the dastardly bastard which was Roosevelt.
 
The bank holiday of historical fame was first pursued by Hoover, which the silly fellow thought he could legally initiate only with Congressional authority.  You’ve heard of the Imperial Presidency?  It didn’t start with Hoover – he begged the democrat-controlled Congress for the authority to close the banks before rationally reopening them upon certification of stability. That authority was refused, so he urged in late summer of that election year of 1932, that FDR use his gravitas with the dems to get the authority.
 
No deal – and after the election, with FDR the president-elect, Hoover again all but begged FDR to persuade the democrat Congress to pass the law, so the bank crisis could be managed quickly. This was after six long, suffering months of opportunity had passed. No way, said FDR – for this fiery financial fire was to keep burning until he, the Savior of Hyde Park, was made the designated Fire Chief. All those thousands of banks burned for nearly a year, while the election process fiddled FDR into wearing the hat of fire chief. And how did FDR acquire the bank-holiday authority, on the very inaugural day when he took the oath?
 
By mere executive order – simply writing the authority for himself, giving no consideration to Congress to create the legislation granting his awesome national financial powers. That folks was the initial belch of the monster known as the Imperial President.
 
Who thereafter continued to screw things up enormously – taxing wealth away from those who might re-start existing businesses or start new ventures, and then those companies who kept some rare, precious dividends in the bank, for later use when things might present a restart opportunity, were excoriated by FDR and his willing accomplices in the media and intellectual communities, for ‘hiding’ their cash reserves. You see, if the left-over revenue of profits after the corporate profits are taxed are then distributed as dividends, FDR’s minions get a ‘second bite’ of that apple by next taxing the shareholders’ income as individual income tax due on the same profits already taxed.  So, FDR instituted an “undistributed dividend” tax so he could get that second bite in any case. The Greedy Hand of government, as described by Thomas Paine, at work with eager glee.
 
We need an FDR instead of a Hoover, Mr. Thurow?  Hoover made some mistakes, but only three years’ worth – FDR cranked out a dozen years of stupidity, and only Hitler’s reactivation of the European economy by war threats saved our bacon.  Thus giving the historians, political scientists and economics perfessors of liberal stripe the opportunity to give credit where only deficits existed.
 
A fire chief who cynically, deliberately, knowingly allows the fire to burn until only he can get full credit is no hero – but if such a leader’s clansmen control the history books it’s possible to morph the derelict chief into a legendary savior. Winston Churchill noted why he expected to be treated well by history – by writing it himself.  FDR wrote nothing, for he had thousands doing his dirty work, washing his soiled undies and throwing mud onto Hoover. I’d thought Hoover was passe as a shibboleth of the left – clearly Thurow just had to wave that old, tattered bloody shirt one more time.
 
While we don’t need Hoover, we really, REALLY, REALLY don’t want anything remotely like an FDR – this crisis will pass, if left unhampered by socialist schemers. But, put FDR’s inheritors into the fire chief’s hat, and the nation’s finances will burn brighter than all those banks which FDR allowed to turn into ashen heaps from June ’32 until he grabbed executive-order power in March of ’33.  Nine months’ gestation of burning banks – is that what Thurow would advocate as the ‘solution’ to today’s problems?
 
Yep – for he’s first, foremost and forever a SOCIALIST. Before he’s an economist. Before he’s an American. Just like FDR. ExileStreet

copyright 2008 Steve Finefrock

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