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During the economic downturn from roughly 1929 to 1939, Franklin Roosevelt implemented a raft of anti-capitalist, anti-growth policies, from wage controls to higher taxes to simple badgering of businesses (especially utilities). The result was that Europe emerged from the depression sooner while Democratic economic policies turned what could have been just a bad recession into the Great Depression.
The Obama Administration suffers the same fatal conceit as all socialists, namely the belief that their policies will work where similar policies have failed because now they have the right people, smarter people, implementing them with the latest scientific methods. It is the fundation and the fatal flaw of progressivism to believe that any bureaucrat or any committee of bureaucrats can replace the functions of free people making their own decisions within a free (or at least mostly-free) market.
So it is no surprise (at least to me, though probably to Obama) to see the following Wall Street Journal headline: “Europe Recovers as U.S. Lags“. According to the article, “Germany, Europe’s biggest economy, grew at an annualized pace of 1.3% in the second quarter, while France, the region’s second-biggest economy, expanded at an annualized rate of 1.4%. Both countries recorded contractions for the previous four quarters, and bounced back earlier than other advanced economies including the U.S. and the U.K.”
Now I don’t want to overstate the case, because Europe’s strength was based on France and Germany; other parts of the continent are still struggling. And of course there were some different issues among the different economies, with more leverage in the US and UK than in France and Germany.
But I don’t want to understate the case either, with France and Germany being Europe’s largest and most important economies.
In the midst of the worst economic downturn during the lifetime of most Americans, Barack Obama is supporting tax hikes, massive increases in the cost of energy, extremely intrusive regulation of the private sector and outrageous government ownership of private enterprises, and, of course, a government takeover of health care – an industry which represents more than 1/7th of the entire US economy.
It’s no wonder that businesses are retrenching, scared to hire or expand, or even to start up.
It is often said that those who do not know history are doomed to repeat it. All the more tragic is the fate of those who do know history but believe they can outsmart it this time.