Truman Cut Spending Big Time In 1945. The Economy Boomed.

Speaker John Boehner, wake up.

Arnold Kling, here:

When World War II ended in 1945, President Harry Truman faced a problem. Public opinion called for a rapid demobilization that would bring the boys home as soon as possible. But the Keynesians who were gaining prominence in the economics profession warned that a rapid decline in government spending and the size of the public work force would produce, in the late economist Paul Samuelson’s words, “the greatest period of unemployment and dislocation which any economy has ever faced.”

Thankfully, Truman ignored the Keynesians. Government spending plummeted by nearly two-thirds between 1945 and 1947, from $93 billion to $36.3 billion in nominal terms. If we used the “multiplier” of 1.5 for government spending that is favored by Obama administration economists, that $63.7 billion plunge should have caused GDP to fall by $95 billion, a 40 percent economic decline. In reality, GDP increased almost 10 percent during that period, from $223 billion in 1945 to $244.1 billion in 1947. This is a rare precedent of a large drop in government spending, so its economic consequences are important to understand.

What Obama and Granholm Have In Common: Forward To State-Capitalism

Shikha Dalmia calls what former Michigan Governor Jennifer Granholm did in front of God and everybody at the Democrat National Convention a "political pole dance", for Reason.com here:

But even more bizarre than Granholm’s convention appearance was that she was invited to make one in the first place. She was arguably the worst governor of her time who, during her eight-year term, took Michigan’s teetering economy into her firm hands and gave it a good, hard push off the cliff.

On her watch, the state's ranking in per capita GDP plummeted to 41st place from 24th. Michigan became the only state to suffer a net out-migration during the past decade, and its credit rating was repeatedly downgraded.

But since unemployment is the topic of the day, how was Granholm’s job-creation record? Worse than Katrina-struck Louisiana’s. Unemployment jumped from 6.8 percent when she was elected to 14.1 percent at its peak in 2009 – although some believe it reached as high as 15.2 percent. 

Granholm has never looked more marvelous, but pace Dalmia, Granholm's appearance wasn't bizarre.

There has been much commentary saying as much, as if Granholm's performance was like some sort of meltdown, something almost crazy and beyond the realm of understanding, not unlike Howard Dean's a few years ago.

But from the point of view of ideology her selection and presentation made perfect sense. Like the true believer of a religion, Granholm's emotional display was characteristic but superfluous. It was the content of her remarks which were significant because they were entirely in keeping with the blindness of the ideological mindset of the new old liberalism which calls failure success. Indeed, today's liberalism thrives on failure in order to succeed, and the more failure it has the more success it has. The rightness and success of the bailout of GM, the substance of Granholm's paean to Obama, isn't a bug of this new old ideology, it's a feature. Obama himself has said so. And he's now on a mission to spread the government control of business around, not just the wealth:

“I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.

Therefore consider Jennifer Granholm as the prophet of the new religion, and indeed its forerunner.

Like Michigan's devastated GDP under Granholm, America under Obama has settled into dramatically lower GDP compared to the post-war average. It has descended to almost European proportions, which evidently was the whole point of Obama's 2009 European apology tour. It was as if he were announcing that under his leadership America was going to stop being the leader of the free world and become just like them, anemic and dependent social welfare states. At 1.7 percent currently, GDP in America has indeed been cut down to size, to less than half of the decades-long average of 3.5 percent. Meanwhile nearly one in six Americans are classified as poor, and almost half of all households receive some form of direct government assistance. Is it any wonder Europe wants Obama reelected?

Like Michigan's exodus not just of population but of businesses fleeing the dreaded "single business tax" under Granholm, the nation's only value-added tax, for the first time in living memory there has been a sudden appearance of wealthy "global" Americans actually renouncing citizenship to escape the growing worldwide reach of the Internal Revenue Service's Gestapo-like intimidation of foreign financial institutions, which no longer want the trouble of doing business with Americans. Talk of finding and going to a "back-up country" among the smart set is an alarming sign that the kind of people we need to attract the most in order to grow our economy are instead repelled by the political class' increasing repression of capital and its hatred of the rich.

Like Michigan's downgraded credit rating, America under Obama lost its gold-standard AAA rating, formerly probably the single most recognizable synonym for the country's reputation in the world as the one most likely to pay its bills.

And like Michigan's long period of unemployment under Granholm, America's 43 consecutive months of unemployment at 8.1 percent or higher under Obama speak for themselves.

One might even say that Jennifer Granholm in her eerie way prepared the way for the coming of the (slum) lord. It's only fitting that she should announce his second coming. 

All of this failure is success because it keeps Democrats in power. That's why Gov. Jennifer Granholm's appearance wasn't bizarre. Her governorship epitomized the failure of America under Obama.

And so the ideologues do rejoice, because it's all intended. Forward, to state-capitalism.

With "You Didn't Build That" Obama Revealed We're No Free Market Economy

Barack The Builder-Thief

Consider Sheldon Richman, here, emphasis added:

"What we have—and have had for a long time—is corporatism, an interventionist system shot through with government-granted privileges mostly for the well-connected–who tend to be rich businesspeople. This system is maintained in a variety of ways: through taxes, subsidies, cartelizing regulations, intellectual “property” protections, trade restrictions, government-bank collusion, the military-industrial complex, land close-offs, zoning, building codes, restrictions on workers, and more. As a result, people can get rich at the expense of the government’s victims. Even some who have prospered apparently by market means have actually done so through government intervention, such as transportation subsidies and eminent domain. Wealth can be transferred in many ways besides welfare and Medicaid, some of them quite subtle. Most transfers are upward."

Obama's flub in "you didn't build that" wasn't some supposed expression of disdain for free-market capitalism, but rather a too-open affirmation of the collusion which exists in America between government and business, a collusion redolent of the fascism of an earlier era.

The line was supposed to be, before it blew up in his face, a gentle reminder to his peeps that they owe their continued success to his stewardship of this system of corporatist largesse. 

In stating the obvious Obama has let the cat out of the bag and proven himself an unreliable leader for the game of charades we call the free market economy. He let his guard down and opened a window on this uncomfortable truth about America, that in economics we consider our advocates of free market capitalism analogous to the preachers of fundamentalist Christianity. It's a free country and that's all well and good, as long as you're not really serious.

Obama's mistake is that he said all that out loud. He can be replaced.

(image source)

The State-Capitalist Quotation Of The Day Comes From Elizabeth Warren

Elizabeth Warren provides the state-capitalist quotation of the day, as seen at this link:

“We've got bridges and roads in need of repair and thousands of people in need of work. Why aren’t we rebuilding America? Our competitors are putting people to work, building a future. China invests 9% of its GDP in infrastructure. America? We’re at just 2.4%. We can do better.”

Oh, if only Obama were the head of China, things would be so much better . . . here!

Adam Smith: Crony Capitalism is a Powerful Force Against Freedom

From Sheldon Richman, here, quoting Adam Smith:

"The proposal of any new law or regulation of commerce which comes from this order [that is, 'those who live by profit'], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

Smith grew up under mercantilism and knew well of what he wrote. America grew up largely under mercantilism and its cousin, Hamiltonian-Lincolnian corporatism. In this respect advocates of the freed market should embrace Smith’s understanding of political economy: that a powerful force against freedom emanates from where they might least expect to find it.

Libertarian Swine on David Mamet

A nice Jewish boy realizes he's no longer a brain dead liberal and what do the libertarians find to complain about?

Readers on both sides of Mamet’s current political stance can take issue with his social conservatism. He is, among other things, an unbending proponent of traditional gender arrangements.

Political conservatism presupposes social conservatism, as Phyllis Schlafly pointedly argued here in the wake of the ObamaCare debacle, the most baneful affect of which was the neutering of the Hyde Amendment.

Libertarianism couldn't stand athwart a toy train and yell stop.  

Kish meir Yiddische Tuchus.

Much Touted CBS Poll Never Asked About Scanners Exposing Nakedness

So says Jacob Sullum in a story exposing the tendentious claims made by the TSA and the servile media who defend the backscatter scanners and the groping:

The TSA likes to cite a CBS poll conducted a few weeks ago that found 81 percent of Americans support the new scanners. But the pollsters did not mention that the scanners reveal passengers' naked bodies.