So a president early in his first term is faced with a recession that includes a stubborn unemployment rate. What does he do? Why he calls a conference on unemployment to bring together business, labor, and political leaders to figure out what should be done to solve the problem by urging cooperation and planning rather than competitive, market-driven solutions.
Obama? Nope, Herbert Hoover. Not only several as president in 1929, but also as Secretary of Commerce during the 1920-21 recession. In the 1920-21 case, it was all a lot of hot air as none of his plans went into practice and the economy recovered reasonably quickly.
The 1929 case was a different story, as it was out of a series of such conferences that emerged the promises to maintain nominal wages in the face of falling prices. Those promises were sufficiently kept to drive unemployment up even higher, eventually to the 25% range that characterized the depths of the Great Depression.
Thankfully nothing that bad seems to have come out of this week's conference, but given the current administration's Hoover-like distrust of private enterprise as well as its Hoover-like track record, perhaps it's only a matter of time.
Easy to sit on the sidelines and throw barbs. Where's your ideas?
Posted by: mcalarry | December 04, 2009 at 11:54 AM
Yeah, Steve. It is easy for you to sit on the sidelines and throw barbs at President Hoover. But where are your ideas to get us out of the Great Depression?
Steve’s response, “Step 1: Build time machine…. Step 2: Set time machine for 1929…. Step 3:….”
Posted by: Tom Dougherty | December 04, 2009 at 12:07 PM
There is a little of the maintain-nominal-wages approach today in the refusal to lower the minimum wage.
Posted by: Mario Rizzo | December 04, 2009 at 12:49 PM
I, unfortunately, hold citizenship to the two countries which seem to be implementing the worst macroeconomic political policies in the history of modern political economy: Spain and the United States.
I recently moved to the United States from Spain, and I can attest to just how bad the employment situation is in Spain. Worst of all, it's about to get worse, as the Spanish government colludes further with the unions. I moved to the United States to finish my degree and find a job (while I get my degree), but it seems that my days as an employed individual will soon be cut short.
Posted by: Jonathan Finegold Catalán | December 04, 2009 at 04:38 PM
Did anyone notice that some of the same idiots who designed and backed the stimulus are now being relied upon to come up with a new job creating scheme. The same P. Obama cheerleader stooges. Someone forgot to invite the Chamber of Commerce and other small business groups. I understand that small businesses are responsible for creating 6 out of every 10 jobs. Common sense says you invite the entity most capable of creating jobs! Jeff Immelt GE CEO, who has destroyed stockholder value is a key P. Obama advisor. If Immelt does the same for the USA as he has done to GE, we're screwed.
Posted by: Bob | December 04, 2009 at 06:42 PM
Any Econ 101 student would flunk the course if he showed the aptitude of this Administration regarding basic economics. It is likely most Americans have never taken an economics course, yet would be able to discern why recent economic policies, either proposed or already implemented, destroy jobs. Simple common sense or a modicum of “street smarts” is all that is required.
The President’s jobs summit to address the soaring unemployment issue was embarrassing. Apparently Obama is unable to pass Econ 101 and needed outside advice. Why we have Tim Geithner and Larry Summers and a host of other “experts” that could not educate the man is beyond comprehension. Is he so unbelievably ignorant? Perhaps it is his incredible arrogance that leads him to believe his silver-tongued teleprompter will enable him to “talk-over” his failed policies. Regardless, this “summit” was either an insult to the intelligence of the American public or a revelation of Obama’s intelligence.
The other possible hypothesis is that the President is so ideologically opposed to markets that he believes that all direction must come from Washington, more specifically him. If so, his knowledge of history is as bad as his knowledge of economics. This hypothesis takes us beyond the possibility of ignorance into the realm of stupidity.
Posted by: Monty Pelerin | December 04, 2009 at 07:02 PM
There's a good reason why the U.S. Chamber of Commerce was not invited to Jobs Summit: this was a jobs summit to figure out how to create AMERICAN jobs, not Chinese jobs or Mexican jobs or Indian jobs.
Posted by: The Beagle | December 06, 2009 at 01:05 PM
oh my!! i love you so much!!
Thank you so much.
Posted by: Hermes Picotin | April 09, 2011 at 02:19 AM