Marshall Auerback: Worse Than Hoover

By Marshall Auerback, a portfolio strategist and hedge fund manager. Cross posted from New Economic Perspectives.

It’s actually a bit over the top and unfair to compare Barack Obama with Herbert Hoover – unfair that is, to the memory of Herbert Hoover. The received image of the latter is the dour, technocrat who looked on with indifference while the country went to pieces. This is actually an exaggeration. As Kevin Baker convincingly argued in his Harper’s Magazine piece, “Barack Hoover Obama”, President Hoover did try to organize national, voluntary efforts to hire the unemployed, provide charity, and sought to create a private banking pool. When these efforts collapsed or fell short, he started a dozen Home Loan Discount Banks to help individuals refinance their mortgages and save their homes. Indeed, the Reconstruction Finance Corporation, which became famous for its exploits under FDR and Jesse Jones, was actually created by Hoover. Often tarred with the liquidationist philosophy of his Treasury Secretary, the establishment of the RFC was, as Baker suggested, “a direct rebuttal to Andrew Mellon’s prescription of creative destruction. Rather than liquidating banks, railroads, and agricultural cooperatives, the RFC would lend them money to stay afloat.”

Hoover’s tragedy lay in the fact that whilst he recognized the deficiencies of the prevailing neo-classical laissez-faire nostrums of his day, he could not ultimately break with them and accept that the economic tenets which he had grown up with were deficient in terms of dealing with the huge unemployment challenges posed by the Great Depression. By contrast, Roosevelt was himself instinctively a fiscal conservative throughout much of the early stages of his political career (and campaigned as a gold standard man during the election of 1932), but ultimately had the vision (or, at least, excellent political instincts) to recognize the need to cut himself off from the dogma of the past and try something new in a persistent spirit of experimentation. Not everything FDR did worked, but his lack of rigid ideology and his bold spirit of economic experimentation ultimately did much to reduce the scourge of unemployment, even though such policies brought him into significant conflict with the economic royalists of his day.

Barack Obama’s style of governing largely reflects an acceptance of the status quo. His “economic experts” also reflects this preference. As Baker argued, “it’s as if, after winning election in 1932, FDR had brought Andrew Mellon back to the Treasury.”

To the extent that he displays any kind of radicalism, it is to roll back the frontiers of the New Deal and Great Society, in effect gutting the Democratic Party of its core social legacy. This assertion will no doubt inflame the diminishing Obama supporters, who insist the president would never cut Social Security or Medicare, that he’s merely been exploring every possible route to a deal with the GOP. But the evidence increasingly suggests otherwise.

Perhaps, as’s Joan Walsh suggests, the president sincerely believes that the intense polarization of American politics isn’t merely a symptom of our problems but a problem in itself – “and thus compromise is not just a means to an end but an end in itself, to try to create a safe harbor for people to reach some new common ground”. One finds further support for this view within Barack Obama’s own writings. A major theme of his 2006 book The Audacity of Hope is impatience with “the smallness of our politics” and its “partisanship and acrimony.” He expresses frustration at how “the tumult of the sixties and the subsequent backlash continues to drive our political discourse.”

There appears little question, then, that the President values compromise, indeed appears to enshrine it as the apex of all great Presidencies (ironically citing Lincoln’s compromise on slavery as a perfect illustration of this ideal). But the problem with Walsh’s supposition is that the President’s accommodation with his political enemies, his apparent infatuation with a “third way”, suggests that he is being forced to compromise on a particular set of ideals and principles which he has hitherto embraced dearly.

But what is this President’s ideal? The only time in our national discussions where Mr. Obama has evinced any kind of passion has been during the debt ceiling negotiations. He has, since the inception of his presidency, elevated budget deficit reductions and the “reform” of entitlements as major transformational goals of his Presidency (rather than seeing deficit reduction as a by-product of economic growth). As early as January 2009, before his inauguration (but after the election, of course), then President-elect Obama pledged to shape a new Social Security and Medicare “bargain” with the American people, saying that the nation’s long-term economic recovery could not be attained unless the government finally got control over its most costly entitlement programs (

In other words, Obama has been on about this since the inception of his Presidency. Recall that it was Barack Obama, NOT the GOP, who first raised the issue of cutting entitlements via the Simpson-Bowles Commission. The President has also parroted the line of most Wall Street economists as he has persistently characterized our budget deficits and government spending as “fiscally unsustainable” without ever seeking to define what that meant. One of his earliest pledges was to cut the deficit in half by the end of his first term, in effect paying no heed to the economic context when he made that ridiculous assertion.

In essence, the debt ceiling dispute is not forcing a compromise on this President, but is instead is viewed by him as a golden opportunity to do what he’s always wanted to do. That also explains why he won’t ask for a clean vote on the debt ceiling, why he has ignored the coin seignorage option, and why he has persistently avoided the gambit of challenging its constitutionality via the 14th amendment, even though his Democrat predecessor has already suggested that this is precisely what he would do: Bill Clinton asserted last week that he would use the constitutional option to raise the debt ceiling and dare Congress to stop him (

It also explains why President Obama remains infatuated by bigger and bigger “grand bargains”, which seem to take us further away from averting the immediate economic catastrophe potentially at hand, which is to say national default. The Administration, then, is not going for a bipartisan compromise, but going for broke on something which the President apparent holds sacrosanct. In reality, true compromise would start with the notion of a clean vote on the debt ceiling or, at the very least, a minimal series of spending cuts that would avert the immediate risk of a default, whilst creating less deflationary pressures.

Have you actually seen the President ever get angrier than he was at his press conference announcing the collapse of the negotiations on the debt ceiling extension? Not even on health care “reform” can we ever recall seeing Obama this engaged, and manifesting something close to real emotion as he has here. That does suggest something beyond mere political calculation; it hints at core beliefs.

And to what end? Neither he, nor the Congress appear to recognize the downward acceleration in GDP triggered when the spending limits are reached if the automatic stabilizers are disabled because they are no longer funded as a consequence of the debt ceiling limitations (again, a LEGAL, rather than operational constraint – the debt ceiling reflects an UNWILLINGNESS to pay, rather than an INABILITY to pay).

So spending will be further cut, debt deflation dynamics will intensify, sales will go down more, more jobs will be lost, and tax revenues will collapse even further. Which will set the whole process off again: more spending is cut, sales go down more, more jobs are lost, and tax revenues fall more, etc. etc. etc. until no one is left working. All are radically underestimating the speed and extent of the subsequent damage.

Unlike President Hoover, who inherited the foundations of a huge credit bubble from the 1920s and found himself overwhelmed by it, this President is worse. He is, through his actions, creating the conditions for a second Great Depression because of his misconceived belief that too much government spending “crowds out” private investment, and takes dollars out of the economy when it borrows. And therefore, goes the perverse logic, when the government stops borrowing to spend, the economy will have those dollars to replace the lost federal spending.

And so after the initial fall, Obama believes, it will all come back that much stronger.

Except, that as my friend Warren Mosler insists, he is dead wrong, and therefore we are all dead ducks.

As Warren notes, have you ever heard anybody say ‘I wish they’d pay off those Tsy bonds so I could get my money back and go buy something.’?

Of course not! Notes Warren:

Treasury borrowing gives dollars people have already decided to save a place to go. Dollars that came from deficit spending- dollars spent but not taxed. If they were spent and taxed, they’d be gone, not saved.

Treasury bonds provide a resting place for voluntary savings. They are bought voluntarily. They don’t ‘take’ anything away from anyone.

For example, imaging two people, each with $1 million. One pays a $1 million tax. The other doesn’t get taxed and decides to buy $1 million in Treasury bonds. Pretty obvious who’s better off, and who’s still solvent and consuming.

Someone please explain this basic economic tenet to the President so that he can effect a genuine compromise, not a destructive “grand bargain” which will suck trillions of demand out of a still fragile economy. The predictable result is of his current stance is that, even as he claims to recognize the interlocking nature of the problems facing us and vows to “solve the problem” once and for all via a “grand bargain”, Obama is in fact tearing apart most of the foundations which were tentatively initiated under Hoover, but which came to full fruition under FDR. If he continues down this ruinous path, $150 billion/month in spending will be cut. Such economic thinking isn’t worthy of Mellon, let alone Herbert Hoover.

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  1. attempter

    More whitewashing of this vile criminal. How agonizing and tortuous is the path from Obama cultism to partial realization of his true nature! It always seems to remain partial. In the end Obama will still always have some thwarted “good intentions” left over. It’s like Zeno’s Paradox: You walk halfway across a room, then halfway again from there, and halfway again forever; one never does reach the opposite wall.

    the president sincerely believes that the intense polarization of American politics isn’t merely a symptom of our problems but a problem in itself.

    This is true only in the sense that Obama’s a totalitarian who believes that any dissent from the corporate party line is “a problem in itself”.

    That’s of course the only polarization that exists anywhere: Between the kleptocracy and the people.

    But this post strongly implies the Big Lie that there’s any substantive “polarization” within the kleptocracy itself, between “Republican vs. Democrat”. It also implies that Obama believes in such a polarization. But Obama’s a pirvately self-identifying Republican who thinks he can lead Democrats to embrace the Republican line, and so far he’s been successful at that. So where in his mind could that kind of “polarization” exist? He doesn’t think there’s any policy difference between the two.

    There appears little question, then, that the President values compromise

    Only Orwellian “compromise”, namely that the citizenry submit to the liquidation of their society, that human beings submit to the depredations of subhuman filth. That’s invariably what Obama and the MSM mean by terms like “compromise” and “sacrifice”.

    The evidence record proves all this with absolute clarity. So why do we still have these mushy halfway-exposees and partial analyses? Why the endless psychological analyses when Obama’s actions are perfectly intelligible politically? Because of indelible elitism. In the absence of the mythical “better elites”, commentators are forced to temporize in their condemnations of the existing ones, however vile.

    1. LeeAnne

      “Because of indelible elitism. In the absence of the mythical “better elites”, commentators are forced to temporize in their condemnations of the existing ones, however vile.”

      This is a great statement -so true. I have believed for some time that they are indeed ‘forced …’ if they want to stay in the game -make a living, get paid. And, staying in the game doesn’t mean that they have to attract a bigger audience. No, its more like writing a company company newsletter.

      Like the young man forced to resign at MSNBC who claims that his ratings were going up, but he was forced to quit because his employers required a different tone.

      The audience doesn’t matter. We don’t need no ratings. Only the company line matters. The bottom line is taken care of in other ways. You think you have an independent voice? Thank again. You don’t seem to know who’s really paying you.

    2. LeeAnne

      Dylan Ratigan is the only exception I know of. Someone who made a commitment to real reporting on the financial scene. I hope he’s succeeding. Last time I noticed he was.

    3. Doug Terpstra

      Dead on target again, attempter, right out of the gate. This persistent rationalization of evil is exasperating.

      Auerback is right about Joan Walsh, a see-no-evil liberal who earns a good living affecting her pleasant maternal forbearance on TV. “We’re all good people and want the best for everyone, can’t we all just get along? Obama is weak but forgivable”. She tilts her head, sighs and smiles wistfully, saying in effect her serial killer son will surely straighten up in his next term.

      But Auerback does almost the same — tougher, but just as exculpatory: yes, Obama is wrong—dead wrong, and we’re all seriously screwed because of it — but he still means well after all. He “values compromise” to a fault. Okay, so he’s a war criminal, assassin, torturer, and robber, but he really wants to do the right thing for all of us, he’s just confused and getting bad advice. He starts wars only for security; he tortures only for humanitarian ends. Sure he wants seniors to eat cat food but only because he thinks it’s nutritious and builds character.

      The dead and decomposing liberal class still keeps trying to reanalyze Obama’s pedestrian sales-pulp-fiction (Audacity and Dreams) in order to somehow understand this complex genius and rationalize his liar-lawyer pathology (father abandonment issues, mixed-race confusion, etc.), and so they unerringly pardon his rank dishonesty and crimes.

      Marshall writes: “In essence, the debt ceiling dispute is not forcing a compromise on this President, but is instead … viewed by him as a golden opportunity to do what he’s always wanted to do. . . And to what end? . . . All are radically underestimating the speed and extent of the subsequent damage.”

      To what end? is a good question. And are all these cagey vipers, including Geithner, Bernanke and all, in DC really underestimating this? Did Greenspan not see the bubble? Is another great depression really an unintended consequence of misguided good intentions?

      When do we recognize manifest evil and publicly call it out? IMO this is a grand and wicked game of Shock Doctrine, calculated to impose banana republicanism on the Homeland, toward the concentration of absolute power.

      For compulsive predators, we’re a soft and irresistible target, and Obama is their point-bait coyote, the perfect Trojan black horse. He is not a coward as Nader called him recently; he is not Wall Street’s useful idiot, a bungling fool, an inept negotiator or premature capitulator. IMO, he is a criminal sociopath, a serpent in the apple tree on par with the original author of confusion, the Father of Lies, the Great Deceiver himself.

      I suspect that he is so expert at fooling so many for so long because he is a narcissistic sociopath, a false prophet with a messiah complex who’s typically drunk his own Kool-Aid. Like Machiavelli, Sun Tzu, or megalomaniacal villains of history, he believes that calculated deception and violence for a worthy cause, elevation of the elite (like himself) to absolute power over feckless little people, is a morally worthy mission. Thus he can deceive with “theatrical earnestness” the way Antebellum plantation masters believed their own delusions, with bible-thumping certainty,—that they were uplifting Black slaves from their own heathen natures, saving pagans from eternal damnation. So Obama, the anti-messiah, has finally returned the DLC-DNC party to its Dixiecrat roots — in blackface.

      Hudson offers a more realistic assessment of Obama.

  2. Sandra

    We have to stop comparing Obama to these iconic American figures. Obama is an opportunistic corporatist. There is no there there.

    1. Rex

      I’m beginning to wonder if we are still giving Obummer too much credit. Common view seems to be trending toward he’s a manipulative scumbag.

      Maybe he is really just dumber than we give him credit for. What if the guy really just has a giant vacuous hole where his economic knowledge should be? Maybe he brought in advisers like Timmy because he really didn’t know any better and he still can only spout what’s been poured in.

      Now that I think about it, he kinda does have an appearance that could work for a ventriloquist’s dummy. — Nah, couldn’t be.

      1. Jardinero1

        Yes, that is my view.

        People who appear to be intelligent, like Obama, frequently aren’t. People who don’t appear intelligent, like former President Bush, often are. Especially in the south, it is the smartest people in the room who play dumb.

        The former group are dangerous because the Peter principle starts to work very quickly on them; we see this with Obama. The latter group, like Bush, if they are the slightest bit conniving or have malicious intent; can be fantastically dangerous.

        1. RA

          I find a lot of the wailing to be laughable. Obama is extremely smart but he doesn’t know anything about economics. That doesn’t make him stupid. Most economists don’t know anything about economics either.

          Right wing economics have won the day. His role model is Clinton. He’s attempting to steal Republican ideas for political gain and follow the direction of Wall St on the economy because those are the experts. It’s really that simple. That inevitably results in a drift to the right.

        2. Yves Smith Post author

          Obama is an authoritarian narcissist, an ugly combination.

          He also seems unaware of the limits of his knowledge. That can render many otherwise intelligent people stupid in their decisions and actions in their blind spots.

  3. Z

    Gee, it’s almost like he’s doing damn near everything he can to piss off his base and make him unelectable. And wouldn’t that be a shame if he was deemed unelectable and would “have” to drop out … for the good of the democratic party, of course (oh, he cares so much about the party) … and then would have an excuse to go on to his ultra-lucrative post-presidency speaking tour and not have to be in the hot seat as his deplorable policies play out for the next 4 years.

    And what about obama makes anyone think that he has any ideology … gives a fuck about anything else but himself? Do you really think he gives a damn about this country? That he truly believes that what he does … his shared sacrifice that in the end only falls on the poor and middle class … is good for this country? And what else could he reasonably come up with to disgust his base more than cutting ss?

    Fuck his words … they don’t mean shit. Fuck his empathy … he ain’t got none. Everyone should pull their head out of their ass and at least consider the possibility that he doesn’t want to run … he doesn’t want to be president any more … and he’s looking for an excuse … creating one actually … for him to walk out the door to a very lucrative and stress-free post-presidency life, but he doesn’t want to make it so transparent that he fucked over 99% of this country for 4 years … after the lowlife lied and misled them into believing he wanted to change this country for the better … to serve the petey petersons of the world so he could cash out for his own personal benefit.

    Wow, is that really that unfathomable? That maybe … just maybe … he’s been playing 81-dimensional chess AGAINST US?!


    1. Wasabi

      I hope you’re right that O will step aside after seeing the unemployment rate stick above 9% this December or so, but I doubt his handlers would let him do it. He’s very useful to the plutocracy. A Repub president could never persuade Dems to cut SS, Medicare, and Medicaid and all sorts of other essential programs. A Repub president could never get away with suggesting to American workers that they need to win the future by not expecting any wage increases for at least the next ten years or that barely half-decent medical insurance policies are “Cadillac” policies that need to have a lot more holes drilled in them or else be taxed. A Repub President could never persuade congressional Dems that “the fundamentals” are more important than employment or economic growth. A Repub president could never have gotten away with saying, as O did in his big April speech, that FDR did the right thing by cutting the budget in 1937. As many have said, Obama is the perfect Trojan Horse for the plutocracy, so it seems unlikely his handlers will let him quit, even if he wanted to. Just imagine the damage he could do during four more years!

      1. Z

        No doubt that he has been extremely valuable to the plutocrats … more so than a republican president at this point … his fundraising attests to that. But, I don’t think that obama has any true loyalty to anyone or anything but himself and he’d much rather not carry water for them for another 4 years and become the fall guy … deservedly so … for the deplorable policies that he has helped put into effect, much of it which he drove. And he’s far from stupid and knows where this is all headed: a lot of pain and suffering for tens … maybe hundreds … of millions of people. His shiny veneer that has captivated and deceived so many foolish people isn’t gonna survive that and he’s going to lose a lot of popularity, which is very important to a narcissio-path like him.


    2. JTFaraday

      I’ve always said that Obama is all about Obama, that due to the legacy of racism in America, he’s been surrounded by enablers all his life who’ve told him that his own *personal* success is the very definition of *social* justice itself. Hence, the very ambitious goal of becoming the first black president, and he didn’t need any other rationale than that.

      Having built presidential ambitions in the pre-crisis go-go years, and having the immediate example of Bill Clinton, who quite obviously cut deals with then Treasury Secretary Robert Rubin that facilitated the aquisition his personal wealth, Obama’s second goal was always to follow up on Clinton’s first act and beceome the 2nd president to get rich off the US presidency.

      What Clinton arguably discovered in office– with substantial legal fees hanging over his head, no less–Obama always had as a master plan. That this is not the go-go 90s and that the country is in extraordinary crisis on multiple fronts has evidently not deterred Bam.

      The shame of it all is that there is NO way that Obama would not have gotten wealthy off the presidency if he had continued to be popular with the US public. So, Obama’s fully *chosen* route to personal wealth is all kinds of unfortunate.

      1. KFritz

        Not an admirer of any of the folk under discussion. My very loosely formed impression is that Clinton’s $ comes fr/ book sales, personal appearances, in a word celebrity. Do you have some reliable sources to prove that his retirement will be funded by sweetheart finance deals courtesy of Rubin?

  4. Z

    He got the glory and the thrill of winning the election to become the 1st black president and I suspect that’s all the narcissio-path ever really wanted as far as the presidency is concerned. He certainly doesn’t look like he’s enjoying himself right now. I think he’s ready to cash out and is trying to create a scenario where he becomes a untenable candidate. He also wants to maintain his celebrity appeal so he’s going to try to posture as the adult of adults that was just too good for dc … that dc and its partisan politics let down this honorable … GAG … man and now he has to walk away. What a shame: he’ll be walking into a much more lucrative, less stressful and freer life. He wins, while he helped make sure 99% of the country lost. This is not only a terrible person; this is a terrible human being.


  5. Linus Huber

    Why do we have such high debt levels? No one seems to ask that question but only jumps to the answer that we need to accumulate more debt.

    Well, the high level of debt has been enabled by the manipulation of the interest rates by the Central Banks the world over. If a decent return of interest would have to be paid on debt, the mountain of debt could have never reached these unsustainable levels. All present actions by governments intend to increase the insustainable mountain of debt further. One might ask why they do this?

    The answer lies with their personal interest: They will lose those nice positions of influence with all the perks associated with it. Just go along with the ponzi scheme and play along is the mantra and enjoy the benefits as long as possible.

    The game is over once the market will enforce higher rates of interest due to concerns of solvency (not liquidity). Once it start it will go fast.

    1. JasonRines

      Good comment Linus. Marshals’ analogy of bankers now and then is wrong. Mellon wanted to liquidate the malinvestment, especially his own favored banking sector. And he never got to try it in any event. FDR seemed to reach compromise with the bankers on the New Deal. My opinion is this compromise extended the malinvestments, particularly in commodities speculation as was seen in rise of prices between 1935-1937.

      As an aside some may find interesting. My neighbor just turned 95. I asked her what the difference was between this depression and the last. She said basics cost more this time around.

      1. Ransome

        I think the strategy of higher commodity prices was to support the producers who were over producing and bankrupting themselves as demand fluctuated world wide. Farmers were paid subsidies to not grow crops to increase prices. There was a court case around 1940 about a farmer, Roscoe Filburn, that was growing extra food for his own consumption. He lost because the intent was for him to buy food on the market to support prices. The industrialists wanted to support the commodity producers since they bought the heavy equipment sold by them.

        There were several Agricultural Adjustment Acts beginning in 1933 that were an attempt to stabilize prices. In the antipodes, Giblin was studying the effects of a labor multiplier as wheat prices crashed, a major export of Australia.

        This whole time period was a bunch of economic experiments. Crop subsidies unintentionally liquidated the sharecropper and tenant farmer. The subsidy was supposed to “trickle down”, instead they were kick off the land.

  6. Lucky the sagacious marmot

    All these extreme measures to deal with the debt ceiling… Am I the only one who wonders why they don’t simply abolish the ceiling? It’s only been around since WW1 or so, it can done away with. No, I don’t mean it’s a solution to the feigned ‘arch rivalry’ of spending approaches, nor a solution to the amusing ‘fiscal unsustainability’ the President likes to quip. I’m just saying, let them all continue to sit there at the Partisan Poker Table Of Banality and continue with their silliness, but just pull the countdown clock off the wall. As MMTers might say, if a sovereign denominated debt in a fiat it emits at will into existence–and thus conceptually need never be bankrupt–then what is a “debt ceiling” limit but an arbitrary limitation? >> If I conjure my own Lucky dollars with a marmot logo, and I denominate my debt in Luckies, and my Luckies rule the wasteland, why on earth would I tolerate a debt ceiling on myself? …And excuse me, but wouldn’t abolishing a ceiling and letting them continue to annoy us be a much easier solution than risking a constitutional crisis or the hilarity of a coin seignorage or risking a default-by-clock-tick?

    1. curlydan

      That’s easy. We can’t eliminate the debt ceiling because we live in a sound bite culture. The first person/party who utters that thought will get ripped in 2012 because there will be a commercial that says in a deep, intoning voice: “And in 2011, in the midst of the greatest debt crisis this country has ever seen, Mr. [X] said ‘Eliminate the debt ceiling’. Mr. [X] wants big government, big taxes, and out of control spending. Is this the future you want for your children and grandchildren? Vote for Mr. [Y]. He wants smaller government, lower taxes, and a strong America.”

      1. Lucky the sagacious marmot

        Well put. It’s also interesting to me that even among the commentators, there is a notable lack of discussion for this simple option–even here. It’s as though people prefer the spectacle, the hand-wringing over extreme options, and the apocalyptic hyperbole.

    2. nonclassical

      ..everyone knows I’m sure, but the “debt ceiling” was raised
      5 times under Bushit..

  7. Cedric Regula

    Well, maybe I’m just not a fan of MMT think. But as far as needing treasuries for our savings, our biggest savers are now the Federal Reserve, then China, then Japan. So I don’t see why we (meaning US citizen-wannabe savers) should play up this insight to Obama, because his economic advisors will just tell him we are all nuts and he doesn’t need to listen to us.

    1. Bill C.

      Isn’t it some kind of uber Economics irony, that the very entity that once floated (unsuccessfully it seems) the idea balloon of the global economics crisis being due the China’s (and other Asian nations’) “savings glut”, has hugely expanded its own balance sheet with the “savings” of toxic assets.

      Truly, WGACA (what goes around…..)

  8. KFritz

    It’s a tragedy that a man who waged one of, if not the most tactically and strategically brilliant presidential campaign(s) ever, turns out to be almost totally unsuited the office he pursued.

    I’d like to find out Noam Chomsky’s take on the tragedy, or resurrect Marshall McLuhan to hear his analysis.

    1. Valissa

      Obama as not the one running his election campaign. That was Axelrod and his other propaganda experts… all mostly paid for by the banksters bankrolling him.

      1. KFritz

        One of the characteristics of a good leader is the knack of discovering and empowering capable subordinates.

        1. Valissa

          That’s one way to look at it… but I see Obama as a tool and a subordinate himself. He’s not a leader, IMO. He’s a charismatic front man.

          1. Ransome

            It is never one person, it is a team decision. You must go with the team, otherwise, why have them.

  9. Rex

    “Well, maybe I’m just not a fan of MMT think.” — Well, that’s a huge f***ing revelation. Thanks for clarifying that for us.

    As for the rest of your post, I can’t figure out if there is any meaning there or not. But, I’m getting used to that.

  10. ambrit

    Just a thought. Would it be fair to say that Obamas career shows evidence of a core Stockholm Syndrome? By emphasizing ‘conciliation’ and ‘compromise’ doesn’t he show the self destructive tendencies of a classic outsider personality? His upbringing alone suggests several posible motivations which would drive an intense ‘other oriented’ social strategy.
    Some here have suggested that the present political system is a somewhat disguised ‘one party state.’ All well and good, as far as the ‘large picture goes. I would suggest however, that this formula shows the working of a long accepted social contract. Ie., as long as the present system fulfills the basic needs of the people, the people will tolerate a high degre of ‘conformism’ in the public weal. Now that the old social contract is being attacked, from whence will its’ replacement come? Therin lies the real problem. Modern semi democratic government was a response and replacement of the earlier outright feudalism. People living back then clearly saw democracy, in whatever form it emerged, as a superior political system. The present Conservative movement thus is plainly Reactionary. To that extent, Obamas appeasment policies towards the ‘Old Guard Intellectual Clique,’ (dare I say Neo Feudalist Social Movement,) fits him squarely within the Revanchist camp. He best embodys T.S.Eliots’ “The Hollow Men.” Or better yet, Ezra Pound, in his Italian career. I suspect quite a good movie could be made about this “Presidents Analyst.” Unfortunately, the price of admission is going to be very, very steep.

    1. steelhead23

      Dear God man, are you a professor? Seriously, that is a ton of metaphor and allusion in one paragraph. Erudite writings like yours are a tad tough for me to digest, although I aspire to “get it.” From a more technocratic perspective, I tend to see Obama as a consummate politician – able to inspire – but sadly lacking in intellectual curiosity and overflowing with ego, thus unable to quench his ignorance. This leaves him extremely susceptible to “experts” whom he parrots with enthusiasm. It was experts who helped him pick his advisers and now his expert advisers are misleading him and making him complicit in this quest toward neo-feudalism.

      1. ambrit

        Good Sir;
        Point well taken, a little less fulsomeness and turgidity coming up. Really though, your point about how he operates is right on the mark. Lots of the commentators and bloggers on this very site complained loud and long about just that point too. As to my style, sorry about that, I’m just a construction worker who reads too much. See you at the barricades!

  11. ballyfager

    “Not everything he did worked”. Understatement of the day.

    Hoover was bright, Roosevelt was not.

    I don’t know who is the worst president we ever had but Roosevelt is certainly the most overrated.

    He was really just a patrician Bill Clinton.

    1. Chester Genghis

      Hoover and Clinton were/are probably both brighter than Roosevelt. Does that make them better presidents? I think not.

    2. lambert strether

      As the saying goes, FDR had “a second-class intellect but a first-class temperament.” Plenty of the elite are wicked smart — not stupid in the eternal “stupid and/or evil” question. The best and the brightest have a really bad record making the country better off. See the last forty years….

  12. Robert Asher

    Hoover had the RFC forced on him by more liberal elements in the Republican Party of 1930-32. They were internationalists who had been active in the Democratic Party-created WWI finance agencies. As you all know, back then there actually were some liberal Republicans. Or at least non-right wing people who understood that an economic crisis was the equivalent of war. Hoover vetoed a true relief bill in 1932–passed by Democrats in Congress with the aid of some Republican votes. He administered the RFC with one goal in mind: rewarding the businesses of Republican Party loyalists with loans, not helping the business that needed the most credit. So please do not get too carried away with the comparison. Just look at our current failed President. A soulless monster who does not even know that he is a disaster. We should yearn for Jimmy Carter, not Hoover. Heck, I would even settle for Walter Mondale, who had some courage, arguing for a tax increase against the advice of all his friends.

    1. Alex

      Hoover was a very smart guy who wasn’t up to being president. He was an able bureaucrat who did a lot to help US logistics during and after World War I, including the food-aid sent to Germany after the war. Unlike Obama, Hoover was a decent human being, but he and his administration weren’t up to coping with the Great Depression.

      Obama, on the other hand, isn’t even trying.

  13. yetagain

    Hoover’s “reputation” is the direct result if the propaganda machine of the Demcrat Party, and the “direct political action” fronts of the New Dealer and crypto-communists inside and outside the Democrat Party of the say.

    Hoover’s “fate” had little to do with some “failure to recognize” the “failure of capitalism”, and of course, the Great Depression was not a failure of capitalism but a failure of Socialism. (And it is just bizarre at this late date that you folks hold onto this bit of Democrat propaganda.)

    This is just complete hogwash:

    Hoover’s tragedy lay in the fact that whilst he recognized the deficiencies of the prevailing neo-classical laissez-faire nostrums of his day, he could not ultimately break with them and accept that the economic tenets which he had grown up with were deficient in terms of dealing with the huge unemployment challenges posed by the Great Depression.

    His “tragedy” was that the was not Democrat supporting Socialist/Marxist take over.

    Yet there is more wrong with this: !) America was not strictly a “laissez-faire” economy back then (and you notion of “laissez-faire nostrums”, whatever that means, is as vague and woolly-head as to be intentionally evasive rather than informative. A Straw man

    2) It was not Hoover’s “mental limitation” that kept hm from being a full blown Marxist, it was what was left of his morality and common sense. A wholly unfounded, self serving assumption here.

    3) The “polices” that he foreshadowed, to be fully implemented by FDR did not work They in fact created the Great Depression. Had Hoover followed the example of Coolidge, the Great Depression would not have happened.
    But this is a real howler: “Roosevelt was himself instinctively a fiscal conservative throughout much of the early stages of his political career (and campaigned as a gold standard man during the election of 1932)”

    FDR was a Socialist demgogue, a political opportunist and, above all, a lair.

    This “experimenting” of his what the project form the beginning and it has been a disaster for prosperity, morality and liberty in this Nation ever since.

    FDR and the New Dealer looted this nation for the sake of their own power, wealth, vanity and nihilism. The Democrats under Obama are doing the same thing today. This time the target s the middle class as there is n one left to loot. It s all they can do for they are incapable of productive wealth creation themselves.

    So of these vipers are literally the descendants of those crooks and commies that pilfered this country during the s called Great Depression.

    Yet again, we see that this site is incapable of delivering little more than the usual Marxist cant and revisionist claptrap,

    1. Yves Smith Post author

      You obviously learned your history at the knees of Fox News. Funny you use the word “hogwash” since you are the one dispensing it. The tell is the use of the word Marxist when FDRs policies were backed by a block of major corporations (the multinationals of its day, for instance). See Tom Ferguson’s book Golden Rule for details, he has the archival work to support it.

      And Eisenhower refused to dismantle the New Deal despite the pressure of conservatives, ditto Nixon. So they didn’t agree with your reading either. So are they Marxists too?

      The rest of the world is considerably to the left of the US (save maybe plutocratic Russia). I’d take the morality of their societies any day over ours.

      1. JasonRines

        I agree with Yet Again’s historic analysis, with the exception of slamming your service Yves for publishing multiple viewpoints. I want all the viewpoints.

        It seems any narrative of leaders that supported bankers then and now was enorsed and supported by media. Any opposed have become demonized. I believe that is part of the point Yet Again was trying to make.

      2. Chester Genghis

        The Marxist label is also ironic, as FDR arguably saved the country from Marxism.

        From today’s vantage point, it is easy to forget the extent to which the Great Depression was seen as evidence of the failure of Capitalism. Remember before the forced collectivisation, the purges, the arms race, and ultimate stagnation, the Marxist/Socialist ideal held great promise (as an alternative form of government) for many here and in Europe.

        FDR saved Capitalist Democracy by showing it could be responsive to social/economic crisis in a way it hadn’t before.

        Can we do the same now? (Results so far are not encouraging.)

          1. Cedric Regula

            Yeah. At least in the old days one robber baron could wipe out another robber baron.

            Today they are all insured against failure.

        1. KnotRP

          This second Great Depression will also be seen as a failure of capitalism, though what we have been doing doesn’t resemble capitalism at all.

        2. JasonRines

          Good addition Chester. I thought our time period was a bit unique. It isn’t. I view FDR as a Centrist that reached a form of compromise with the bankers. This time may be different maybe not, time will tell.

          I was reading papers from the 1930’s. Both Communism and Fascism were considered as potential evolved forms of government. Socialism for the rich or poor seems cyclical with bankers, corporations and politicians profiting off the imbalances.

          I believe the best our era could do is extend the life of a Republic through structural improvements using more Open Space type system. Modern communications now holds a mirror in front of us all. Damn are we mostly Adonis but a bit Medusa! Either way, slowing sociopaths from rising to power is worthy of consideration.

    2. citalopram

      This is so wacky and flawed I don’t know where to begin. This kind of nuttiness is what you’d hear come out of the mouth of Glenn Beck, and I’ll be sparing my eyes from any future readings.

      I certainly hope you’re not here to propagandize and instead learn.

  14. Jim Haygood

    John Lienhard on Herbert Hoover’s translation of Agricola’s classic work, De Re Metallica:

    Lou and Herbert Hoover undertook the job together. They worked every spare hour on it from 1907 until 1912, and what they produced was no mere translation. I have a copy here. It’s 670 pages long. A great deal of it is introductory material, footnotes, and appendices. By themselves, these annotations make up the first comprehensive history of mining that’d ever been written.

    Agricola had had to invent most of his Latin technical terms, and all the previous German translators had butchered them. Now, with extraordinary care, the Hoovers — using Herbert’s knowledge of mining — figured out Agricola’s intent. They made a whole separate study of Latin and medieval units of measure. Herbert even did laboratory experiments to check Agricola’s statements. Together, the Hoovers take us on a guided tour through the complete mining literature before Agricola and much of what followed. These two amateur historians established the entire provenance of the field of mining engineering with brilliant scholarly work.

    And it’s lovely to look at. Its 289 fine woodcuts not only tell us just what mining was like and how it was done; they also present a microcosm of early 16th-century life. The Hoovers’ work stands today as the classic in the history of mining.

    By contrast, the narcissist Boomer lawyer Obama has written a couple of books too — about himself and his oh-so-special family. Look for them to be listed on Amazon at a token $0.01 after this moral zero returns to well-deserved obscurity.

    1. Paul Tioxon

      It must be nice to be so rich, that you have a bottomless reserve of time and carefree financial status that allows you to be a patrician scholar historian. What is unfortunate, is that pseudo-intellectual scribe work is allowable preparation for becoming the Commander in Chief of the nation. Maybe being a charter member of the rare book translation club of the month passes for a life time award achievement, but you just betray your self centered world and all of its meaningless concerns that will pass into the too much info category of useless and pointless knowledge. Maybe you should start a ComicCon pop event for your like minded Latin Translation-O-Rama afficiandos. Rare cigars and single malt liquors can be imbibed as well.

      1. KFritz

        (This is fr/ memory)Hoover was one of the most accomplished and successful mining engineers of his day. He was a ruthless negotiator and a (metaphorical)slavedriver of him employees. But when his partners in an Australian venture absconded w/ money, he assumed all risk and cleaned up the mess w/ his own effort and money. A combination of nobility and ruthlessness.

        This is not in any way an endorsement of Mr. Hafgood’s spin on Obama. But Hoover was an extremely high achiever from humble background, and a more useful person than Obama.

  15. Bruce Krasting

    Poor Obama, everyone hates him these days. Auerback does.

    As of today the “plan” is to spend $22 trillion over the next decade on Social Security and Medicare. about 45% (10T) is borrowed money.

    That is not a plan. That is a train wreck. It is certain that we can’t do this. If we try, the Great Depression of this millennium will be assured.

    For those liberals who are disappointed with Obamaa I would ask, “What is your plan?” If the liberal plan is, “Hands off SS and Medicare” then there is little hope.

    The lines have already crossed on these programs. If liberals ignore these realities they do it at great risk to their “base”. It is the people who are most dependent on these programs who will be the biggest losers.

    Fix it, or die.

    1. Dave of Maryland

      There is a story going round that Boehner’s problem is that he can’t deliver his own party, split as the Republicans are. Meanwhile traditional Democrats are apoplectic. No one wants Obama’s debt ceiling program, though the reasons vary.

      Which is to say, Obama no longer has any support at all in Congress. No one wants the man, no one wants his ideas, no one wants his policies. Certainly the country doesn’t.

      Since no one wants to call the debt ceiling’s bluff, since we’re all wedded to finding some solution to it, the Grand Compromise would be to speedily impeach & remove the Obama (the Obstructionist President) & then cut a deal with President Biden. Who actually has some prior experience working with Congress.

      There’s a solution for you.

    2. curlydan

      Well, as Alan Grayson pointed out a couple years ago, dying is the conservatives health care plan for America. “Part one, don’t get sick. Part two, if you do get sick… Part three, die quickly.” Isn’t that what Ryan proposed?

      An increase in the payroll tax upper limit fixes Social Security. Nobody dies unnaturaly.

      Medicare/Medicaid is in big trouble, but the liberal-in-chief wasted 1.5 years passing the conservative-in-chief-in-waiting’s health care plan that does nothing to stop out of control medical costs. “Fixing” Medicare involves killing old people. Fixing the health care system only involves killing EPS driven health insurance companies.

      1. JasonRines

        Lack of competition kills. Since we’re discussing the parallels with the 1930’s, consider this quote it answers a lot I think: “Competition is a sin; therefore you must destroy it.” – John Rockefeller

      2. KnotRP

        Well, at least the all important foreign wars program is not at risk….good to know we have our priorities intact.

    3. citalopram

      How to fix it?

      Increase taxes on the rich including making them pay into social security and a higher capital gains rate. Capital gains is not work and thus should be taxed higher than useful labor.

      Ditto for inheritance taxes; if you didn’t work for it you have no right to inherit it.

      Enact a small transaction tax on all trades generated by Wall St.

      End both wars and cut the offense budget. Start making things in this country again.

      Enact a jobs program here at home to put people back to work — WPA II.

      I don’t agree with “taxing corporations” because that just gets passed on to us.

      Nationalize the Fed and pay zero interest on any money created.

    4. Jim Baird

      On the contrary, it is certain that we can. A sovereign currency issuer has no financial limits on it’s ability to spend, and has no need to “borrow” in it’s own currency – in fact such “borrowing” as does go on is merely a reserve drain to allow for non-zero interest rates.

      As long as there are enough physical resources to go around, there can be no problem with paying for them.

  16. Norman

    O.K. now folks, I take it that each & everyone who has commented here, will now do their collective damnedest best to make sure the general population is made aware of this flim flam man, if we are to survive the destruction on the horizon if he gets his way. Assuming we all survive the onslaught before the Phoenix rises, it really is a shame to have to go through those extremes. He may be the 1st, probably will be the last. Ego sure has a way of destroying.

  17. Mike Murphy

    Obama the gardener, or Obama the eleven-dimensional chess whiz? Alas, I fear, the gardener. He likes to watch.

  18. drfrank

    Let’s stay with the focus on Obama’s core belief that the level of government debt is too high when all the future commitments are considered. It represents a layman’s view that there ought to be some relationship between income and debt service, even or perhaps especially when it comes to government debt. A problem with the MMT approach is that when governments don’t adhere to some idea of responsibility in the use of credit, nobody else does either, since there is no limit to what government will bail out. Obama’s notion that everyone should share the pain of bringing some kind of order to the long term US debt picture is awful in its disproportionate delivery of pain to the already hurting. This is the point of departure from the Democratic legacy. The Republicans don’t want to help the unfortunate, never have, never will. Given the high level of government debt, there is a vaild concern about the impact of higher interest rates. A weak, and weakening, economy does keep rates low. A grand bargain on reduced spending and higher taxation might help keep rates low for a long time. As for unemployment, the sad truth may be that there is nothing that can be done about it until wage rates fall to the point where it makes sense to repatriate manufacturing to the US. I’d like to know what kind of jobs Marshall thinks stimulus can create give the non-manufacturing nature of the US economy. Thanks.

  19. Rex

    I’m as progressive as they come and donated heavily
    to B.O. Sorely disappointed and in agreement with
    pretty much everything stated here.

    However, while Social Security for Americans who have worked and paid into the system over forty quarters should not be cut,there is one aspect of it that should be cut, gutted and done away with: Supplemental Security
    payments for “refugees”.

    San Francisco is a great example. Thousands of old Chinese men, Filipino Women, Soviet Jews,
    Somalian children and Nicaraguan couples have managed to
    get on the SSI gravy train as well as receive food
    stamps, housing assistance and other perks while we
    Americans whose grandparents, parents and ourselves have paid and paid and paid into the fund are asked to

    These people are entitled to these benefits paid for
    by us the minute they step off the plane. Let private charities and their own national special interest
    groups fund their presence here if it is so valuable.

    1. FR

      I see the same thing happening in the Detroit area emergency room that I work in, with Chaldeans (Iraqi Christians) and Soviet Jews comprising the largest number of freeloaders. The practice even extends to the elderly relatives of well paid specialists from countries like India and Pakistan, whose mid to high 6 figure incomes would be more than sufficient to support their parents without public assistance.
      It’s frustrating and painful seeing the growing number of 18 to 65 year old people (whose families have contributed to Social Security and Medicare since their inceptions) trying to get by on $15/hr jobs that provide no health insurance while someone whose been in the country for 15 minutes avails themselves of government benefits.

      1. Foppe

        The reason why healthcare’s become unaffordable is not because immigrants entered the US, but because gold-plating hospitals, pharmaceuticals, medical device manufacturers and insurers are driving up healthcare costs like mad, because they wish to extract as much wealth as possible in exchange for their services. So rather than directing your ire towards those “undeserving immigrants”, direct your ire towards them, and the politicians who enable them.

        1. FR

          I understand why health care is increasingly unaffordable, which includes the reasons you mention as well as provider salaries that are considerably higher than those enjoyed by our peers in other developed countries. It’s why I belong to an organization that advocates for single-payer.
          I also understand the role the United States has played in making living conditions intolerable in many of the countries whose immigrants we receive. I don’t have a problem with providing public benefits to legal immigrants, but only after we’ve amended our system to provide those same benefits to all American citizens. It’s not a question of who is or isn’t “undeserving”, but who is more or less deserving to a finite pool of resources. To me, it’s my neighbor’s brother who lost his auto plant job and whose ancestor fought in the Civil War instead of a non-citizen from Russia or Iraq.

          1. Foppe

            But you and your neighbor will lose your jobs irrespective of whether those asylum seekers are there too or not, if they feel like it. Get it through your head: None of you matters to them. Don’t waste your time or breath talking about immigrants when the your problems are being caused by plutocrats.

          2. FR

            I understand the plutocracy this country has become. I understand changing it is going to be a long, hard process that I may not live to see.
            I also know that when I go to work tomorrow, I’ll be treating more than a few patients without jobs or health insurance and trying to survive with a disappearing safety net, patients who were born in this country and whose parents and grandparents were born and worked in this country while dutifully paying into Medicare and Social Security. I know that many of those patients will have forgone medical care they couldn’t afford until their problem became serious enough they had to visit the ER. One of my worst days at work was the day I had to tell a woman who had lost her job and health insurance that she had cancer, and watching her cry not because of her diagnosis but because she didn’t know how she’d afford the treatment.
            I also know that tomorrow someone will immigrate to this country and immediately get benefits that aren’t available to many of my patients. Explain to me how it’s fair that American citizens go without those benefits while someone whose feet haven’t touched our soil yet receive them- why is it xenophobic to think that those people who will get here next week or next month or next year should go to the back of the line instead of the front?

          3. Foppe

            Explain to me why you should worry more about the fact that maybe a few thousand of these immigrants do get this access to healthcare when millions of ‘real’ Americans are being denied the right? Even if that little bit of help (which is a drop in the bucket at the national level) had gone to nationals, the system would still have to be called broken. Not having single payer alone costs you $350 Billion per year. To quote Matt Taibbi’s “Sick and Wrong“:

            In the real world, nothing except a single-payer system makes any sense. There are currently more than 1,300 private insurers in this country, forcing doctors to fill out different forms and follow different reimbursement procedures for each and every one. This drowns medical facilities in idiotic paperwork and jacks up prices: Nearly a third of all health care costs in America are associated with wasteful administration. Fully $350 billion a year could be saved on paperwork alone if the U.S. went to a single-payer system — more than enough to pay for the whole goddamned thing, if anyone had the balls to stand up and say so.

            Everyone knows this, including the president. Last spring, when he met with Rep. Lynn Woolsey, the co-chair of the Congressional Progressive Caucus, Obama openly said so. “He said if he were starting from scratch, he would have a single-payer system,” says Woolsey. “But he thought it wasn’t possible, because it would disrupt the health care industry.”

            Huh? This isn’t a small point: The president and the Democrats decided not to press for the only plan that makes sense for everyone, in order to preserve an industry that is not only cruel and stupid and dysfunctional, but through its rank inefficiency has necessitated the very reforms now being debated. Even though the Democrats enjoy a political monopoly and could have started from a very strong bargaining position, they chose instead to concede at least half the battle before it even began.

          4. FR

            Your copy and pasting abilities are certainly impressive, but Taibbi doesn’t write anything I haven’t been aware of for a long time. As I wrote, I belong to a group advocating single payer and have lectured my peers on the subject.
            I think it’s clear my differentiation is between citizens and non-citizens, a distinction most countries in the world make when it comes to providing welfare benefits. I think I’ve also made it clear I support the broadest possible social safety net, particularly for American citizens who yes, I think are more deserving by virtue of their citizenship.
            As to why I should worry, maybe it’s because it’s an issue that’s in my face daily, working as I do in an ER (which are collectively becoming the frontline of the healthcare crisis in this country). If you’re writing under the delusion that the issue of non-citizen immigrants collecting healthcare (as well as other welfare) benefits extends to just a few thousands, you’re mistaken and not really qualified to comment on the subject. It’s a condition of my work every day on the job, and every day I’m stricken by the inherent unfairness that people who have ‘played by the rules’ for many years (and many generations) are shut out while people who’ve done nothing more than purchase a plane ticket to the US collect benefits that do in fact cost billions of dollars and contribute to the phony deficit debate.

  20. ep3

    Obama has always been about doing “big things” as he says. This creates two opportunities. First, he wants to go in history as the president who fixed health care, paid down the debt, got bin laden, etc etc etc. Instead of being known only as “the first black president”. This feeds into this fantasy he has that makes him think that doing things like reforming SS will make the market gods build a shrine to him and raise his name on high. Which, sure, rich ppl will gladly praise him for dismantling SS, but us poor ppl will be mad. He wants his face on the side of Mt. Rushmore.
    Second, he’s trying to do things that put in place assured sources of funding for the democrat party from big shot campaign donors. Remember the post the other day that says Speaker of the house has to raise $25 million for the party just to keep the job? Nobody knows that maybe the president has to raise $500 million to keep his job. But also, he thinks that if he makes some back door deal with big pharma to pass health care and he assures them no public option, that they won’t donate so heavily to republicans to spite democrats. And that philosophy goes for all sectors.
    Did we see him get mad about the gulf oil spill? UH no.
    So, in summary. It’s all about his glory and money.

  21. Stratos

    We as Americans need to stop moaning, groining and psychoanalyzing Obama and start planning our response to the depredations of this administration.

    That planning needs to factor in the automatic use of violence, spying and propaganda that the plutocrats will bring to bear when the American people finally reach their breaking point.

    Tactics that worked in the 1960’s, like marches, rallies and sit-ins are of limited use. More effective are boycotts, divestments and the creation of alternatives to the current plutocratic structure.

    The question to ponder is: should the rich live tax free?

    1. Rex

      How about rephrasing that?

      “No representation without taxation”

      Those who pay no or miniscule taxes relative to their income be they real human citizens or corporate creations
      should be stripped of their vote, legal standing in
      court and rights under the Uniform Commercial Code.
      Poor Americans of course should be exempt from this.

  22. Christopher Harlos

    Perhaps Obama is the greatest radical nihilist in U.S. history, intent on destroying the system, but offering no vision of a successor system. Obamaism: Let the cards fall where they may, but the American Project (with its proud legacies of genocide, slavery, apartheid, militarism, and economic imperialism) is finished. Talk about a soul on ice, that dude is colder than death.

    1. JasonRines

      “The bankers own the place” – Dick Durbin
      Obama is a puppet. I agree on the nihlism and no plan b of revenue creation. For you see, bankers make loans. They do not run fiscal policy. Their is a marginal utility value in the economy with loans. So now that debt saturation has occurred Congress is supposed to be making fiscal policy. But they have:

      A) Forgotten how after 40 years of monetary only type policy
      B) Been bought off by lobbyist not to and continue catering to bankers

      The previous commentator disucssed plans to deal with oppression. Sure, worth discussing but more important is methods of teaching self-sustainability as the supply chains are going to get disrupted.

  23. steelhead23

    Comparisons of Mr. Obama to the likes of Mssrs. Hoover and FDR are strained. A far better comparison might be made with one Neville Chamberlain who was so aghast at the prospect of war that he gave away that which was not his to give, in a vain attempt to appease an appetite the knew no limits. Capitalism unleashed is not dissimilar to megalomania unleashed. Obama is the great appeaser.

    1. KnotRP


      Obama’s “Hostage” comment demonstrated it, in fact…..made me stop what I was doing, stare at the screen, and say “holy shit” aloud….

      1. Jim Baird

        My favorite was his remark that the Repubs better not try to “call his bluff”. I don’t know if he ever played poker, but announcing that you’re bluffing not the reccomended strategy…

  24. Foppe

    Might I suggest that everyone just starts referring to both parties as “The party of Wall Street”? Don’t bother mentioning party affiliations; people can look those up if they want to, but doing so might save us the need to constantly bicker over the contribution to the current situation made by the D/Rs.

    Note that I first encountered this term watching an interview/lecture with David Harvey

    1. curlydan

      or if there is a distinction to be made, we could call one the Explicit Party of Wall St and the other the Implicit Party of Wall St

  25. Extreme Predjudice

    You guy’s just complain. But none of you come up with any solutions for Obama.

    1. Yves Smith Post author

      We don’t live in a parliamentary democracy, or did you miss that somehow?

  26. Hugh

    “Someone please explain this basic economic tenet to the President”

    While I would agree with Auerback that Obama is worse than Hoover, the problem is not just Obama. The problem is with Democratic and Republican officeholders generally. The problem is kleptocracy. The point is not to fix or repair. The point is to loot. Trillions for banksters, the cost of those trillions to us. Tax cuts to them, benefit cuts to us. “Get out of jail” cards for them, Dickensian justice for us. And on it goes. It is not just one area, economics, but the imperial wars and the surveillance state. It is not just Obama but the elites in general.

    1. KnotRP

      A political system designed to divide up the cargo will
      not know what to do when the cargo stops arriving,
      except maybe repave airstrips and put out more tropical
      flame lamps to light the way at night.

      We don’t have problem solvers.
      We have dependents, in Washington D.C., and we can’t afford to keep them in the lifestyle to which they’ve become accustomed, while simultaneously dropping our own living standard.

  27. Buzz Meeks

    I always look forward to someone defending Hoobert Heever. Besides the knee jerk anti-New Deal rebop, try to remember Hoover as Commerce Secretary maneuvered radio censorship, eliminating dissenting free speech from the air into the big radio networks (licensed at a fraction of their worth). He also effectively killed off TR’s Square Deal and trust busting work.

    Obammy is just a Wall St. pimp who does not deserve a comparison to anyone.

  28. Bc

    If I were a frustrated MMT guy I would point out that countries that left the gold standard early recovered sooner than those who delayed escaping the Great Depression. Try saying this over and over until you get some traction as an empirical argument instead of beating the MMT accounting identity to death. Might work.

  29. Noogan

    “Not everything FDR did worked, but his lack of rigid ideology and his bold spirit of economic experimentation ultimately did much to reduce the scourge of unemployment, even though such policies brought him into significant conflict with the economic royalists of his day.”

    FDR reduced unemployment? Well….maybe in 1941. But we were struggling along bouncing the bottom until the war created real employment. Just sayin.

    The place in hell we find ourselves today is attributable to so many people over the course of so many decades; it’s not Obama’s responsibility alone. But we are where we are; and Obama wanted to be POTUS. Who knows why, but personally, I suspect it’s just the narcissist in him that compelled him; he certainly didn’t have a love of policy, just of power. So, it’s possible that we are now seeing through the charade of Obama to his inner psychological self–and it’s really ALL ABOUT THE POWER for him, not some contrived, machiavellian plot as Auerback fantasizes.

    Yeah, I think that’s pretty much it. Obama loves power; everything he does is geared toward gaining it and maintaining it. That is all. Carry on.

  30. TC

    “So spending will be further cut, debt deflation dynamics will intensify, sales will go down more, more jobs will be lost, and tax revenues will collapse even further. Which will set the whole process off again: more spending is cut, sales go down more, more jobs are lost, and tax revenues fall more, etc. etc. etc. until no one is left working. All are radically underestimating the speed and extent of the subsequent damage.”


    “Someone please explain this basic economic tenet to the President…”

    Who could advise Hitler when he was launching Germany off the deep end? That’s what we’re dealing with here. A loon.

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