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On October 25, 1929, the day after Black Thursday, one of the days signaling the start of the Great Depression, where the Dow Jones lost 9 percent of its value in a single day, Republican President Herbert Hoover announced to the American people: “The fundamental business of the country… is on a sound and prosperous basis.”
Sound familiar? In perhaps the biggest political gaffe since then, just three days ago on September 15, 2008– on the very day now being referred to as ‘Black Monday’, where the Dow collapsed by over 500 points– John McCain, seemingly channeling the restless ghost of Herbert Hoover, declared: “I think still — the fundamentals of our economy are strong.”
The parallels are so frighteningly uncanny that one can’t help but be reminded that history, when forgotten, does repeat itself. In fact, it appears to repeat itself nearly word for word.
And the wheels of irony don’t stop churning there. September 15th wasn’t the first Monday to earn the ghoulish title of ‘Black Monday’. In fact, that title originally belonged to October 19, 1987, where the Dow Jones collapsed, as it did three days ago, by over 500 points, which ended up signaling the start of a massive recession in the late 80’s and early 90’s.
Despite the eerie echoing of McCain and Hoover being quoted side by side, and despite the pun-worthy reminder that nobody likes Mondays, the ominous connections between these three days are perhaps best put into perspective by their most startling relationship. Namely: all three of these events happened at the end of long-held Republican administrations.
In the case of Black Thursday and the eve of the Great Depression, Herbert Hoover was the fall guy for 8 years of previous Republican rule. Republicans Harding and Coolidge held the presidency from 1920-1928, instituting many similar economic strategies as have been implemented by Republican administrations in modern times. Of course, the collapse which occurred in October of 1987 rests at the end of a Reagan administration which had unprecedented economic control, instituting policies occasionally referred to as “Reaganomics”, and which focused on massive deregulation and deconstruction of the social programs created by Franklin D. Roosevelt in the 1930s. Roosevelt’s social reformation was called “The New Deal”– which is what incidentally pulled the country out of the Great Depression. Should we be surprised by an economic collapse instigated by a removal of Roosevelt’s policies?
Reaganomics were, of course, the primary economic inspiration behind the policies of the Bush Administration of the last 8 years, which has unfortunately led us down another doomed road, perhaps already signaling yet another Great Depression.
History has been very clear here: Every time Republican and conservative economic policies are implemented, the results are worse than disastrous: they’re catastrophic. And yet, at frequent historical turns, the American people continually get swindled by the right wing rhetoric. The myth of ‘trickle-down economics’ and the utter destruction of oversight and regulation has never worked.
In a political season supposedly themed by “hope” and “change”, it’s remarkable to me just how closely recent events are paralleled by mistakes and economic blunders of the past. Even in the midst of a monumental economic collapse, John McCain has the naivete to announce that the fundamentals of the economy are still strong. Yes, well, the conservative principles which he extols are certainly still firmly in place. But is anyone honestly still being fooled? Those principles have been convincingly falsified by history again and again.
This time, let’s remember history.
Perhaps the most succinct way of describing the conservative agenda of the last 80 years is that it exists entirely to deconstruct, demolish and disintegrate the reforms brought forth in Franklin D. Roosevelt’s “New Deal” in the 1930’s. In fact, if you were to outline the conservative agenda, you could just list all the reforms brought forth from the New Deal and then think of the exact opposite. Better yet: take that list of New Deal reforms and just cross them all out. The conservative agenda essentially doesn’t have a plan of its own; it exists only to tear down the plan set forth by the New Deal.
If we recall, the New Deal was put forth in a brave attempt to thwart the pummeling economy during the Great Depression. It was a sequence of reforms aimed at giving relief to the poor, stabilizing our financial systems, and protecting the middle and working classes from uneven distributions of wealth. The immaculate success of the New Deal in saving the American economy was not just a shining example of vision and leadership, but its success also demonstrated the utter failure of everything conservatism stands for.
Thus, conservatives have been vengefully dismantling the New Deal at every opportunity since its inception, and as a result they’ve just about put us back into another Great Depression. See, the real result of conservative economics is a total annihilation of the middle class, a radically uneven distribution of wealth between rich and poor, and complete deregulation of corporate plunder. Essentially, conservative economics aim for the same conditions which brought forth the Great Depression itself.
And this diabolical agenda is all hidden under the overarching banner of “privatization”. Conservatives want to privatize everything, which basically just means they think our social programs would function better if their primary goal was in turning a profit rather than serving their purpose in the public interest. Unfortunately, this economic strategy, the simplistic naivete of laissez-faire economics, has been proven disastrous for the public interest at every turn, and for good reason. Privatization shifts the interest away from the public and instead aims at the interest of shareholders and CEOs. It’s such a proven failure that the conservative loyalty to these economic principles can only mean one thing: they’re more interested in making a buck than in serving the public interest.
The latest example of all of this has been the recent debacle over bailing out mortgage giants, Fanny Mae and Freddy Mac. In reporting the event, what the media has seemingly failed to tell is the backstory. Fanny Mae, or the Federal National Mortgage Association (FNMA), was originally a government invention, one of Roosevelt’s– a nationalized program birthed right out of the New Deal. Its purpose was to help prospective homeowners to get loans and to put an end to the escalating list of foreclosures which exploded during the Great Depression. Before the New Deal, there were no long-term, self-amortizing mortgages. Thus, the New Deal is essentially what allowed the home-owning middle class to stay afloat. Most Americans today would not have their mortgages, or their homes, if it wasn’t for this program.
The system worked like clockwork for 30 years. Home-ownership rates flew through the roof, as did the American economy out of the Great Depression. But in 1968, Fannie Mae was “privatized”, and Freddy Mac was created out of Fannie Mae in 1970 under the same principle. It took a couple of decades, but we’re seeing the failed consequences of this privatization today. Basically, it’s what happens when any public program is privatized: the program’s true purpose gets perverted so that a few insiders can get very rich.
In short, here’s how it worked with Fannie Mae and Freddy Mac: Under private management, it went from an explicitly government-backed agency in the interest of the public to a privatized bottleneck in the interest of turning a profit for its insiders at the risk of the public. See, now that our government is bailing out the mortgage giants (a necessity at this point), the debt is being covered by the taxpayers, since it is their welfare which was always being risked. In other words, even while a privatized Fannie Mae and Freddy Mac were reasonably stable over the last 30 years, the risks were always held by the public. This allowed insiders to take risks (and rake in the profits from those risks) and make irresponsible gambles which is what ultimately led to the collapse of these companies, and the American housing market, which we’re seeing today; the likes of which we haven’t seen since the Great Depression.
Basically, privatization meant that the insiders could take all the profit, while the public takes on all the debt.
For instance, Fannie Mae CEO salaries remained stable, and ridiculous, even as the mortgage crisis reached its heights. Daniel Mudd, the CEO of Fannie Mae, received $11.6 million in salary, stock and other compensation for 2007. Richard Syron, CEO of Freddie Mac, took home about $18.3 million last year. Freddie Mac even paid for a number of other perks for Syron, such as a car and driver, a home security system, travel costs for his wife, even $100,000 to pay his lawyer to negotiate his employment contract with the bank. [1]
This is the same thing that would happen if we “privatized” Social Security, and all of the other programs created out of the economy-saving, job-saving, middle class revival that was the New Deal. Unfortunately, conservative legislatures and executives have so corrupted so many of these progressive, successful social programs, which we all rely upon for our modern standard of living, that the future looks as dismal as it does. Not even the public seems to understand the vast harm this conservative agenda stands to cause them. For the most part, the public seems seduced by the naive mantra of “privatizing” our government programs.
If the bail-out of Fannie Mae and Freddy Mac demonstrates anything, it clearly shows the absolute failure of privatization.
The public needs to open its eyes in its own interest and stand against the bastardizing of our society by the gluttonous hand of privatization. The choice for our next President is very clear given this conundrum: If John McCain is elected, it’s been hinted that the top financial guy is likely to be former Senator Phil Gramm, perhaps one of the biggest proponents for reckless deregulation and privatization the Senate has ever seen.
Don’t be fooled: The conservative banshee of “privatization” is just a ploy to replace Roosevelt’s New Deal with a Raw Deal.
You’d think the Republican Party could find at least one competent female to be the Vice Presidential candidate; there’s got to be at least one viable, upstanding, experienced Republican woman who could exemplify the values of her party. You’d think. But as we now all know, in a transparent attempt to swing female supporters of Hillary Clinton, the GOP has instead chosen Alaskan Governor Sarah Palin.
We already know Palin is anything but experienced. Her only qualification in public office prior to being Governor of Alaska (a position she has held for only 20 months) was as Mayor of a town with less than 10,000 residents. But what we didn’t expect at first was that she’d be a perfect portrait for Right Wing hypocrisy too.
Now we also know that Palin, who has been billed as an almost-virginal, family-oriented crusader against sex education, and a proponent of abstinence until marriage, hasn’t even had much success with that platform within her own family. In near comedic fashion, only days after her Vice Presidential nomination was announced, it was discovered that Palin’s 17 year old unmarried daughter, Bristol, was 5 months pregnant.
At every turn, instead of exemplifying the values the Republican Party would like to portray, Sarah Palin seems to represent a complete parody of those values.
John McCain’s campaign must have considered Palin’s cavernous downsides before choosing her as his running mate. The question then remains, given these downsides, what were those campaign strategists thinking? How could Sarah Palin, of all possibilities, be their best candidate?
Well, the only explanations I can muster up are either that McCain is poorly organized and didn’t do his research (a poor prospectus for his qualifications as Commander in Chief), or perhaps the nomination of Sarah Palin represents a proverbial “freudian slip” for how Republicans really view the role of women in politics. That is, Palin embodies the Right Wing, “Fox News” strategy for employing women: so long as you’re young and attractive, people will tune in to watch, regardless of the substance. It doesn’t matter if you’re young and inexperienced. It doesn’t matter if your family life portrays perfectly the failure and hypocrisy of Right Wing “family values”. All that really matters, so assumes the Republican strategy, is if you’re a woman. Palin is so underqualified to be Vice President that her nomination is a near-perfect parody of this Republican facade.
To be fair, it’s possible that the GOP thought they were nominating Tina Fey:
But unfortunately, Tina Fey (who is more popular, doesn’t have any pregnant unmarried children, and is probably more intelligent than Sarah Palin) is a Democrat. Go figure.
