It's Just History Repeating. . .

History loves irony, and right now the Democrats are giving it off in spades. They are repeating obvious mistakes that millions of others before them have made. Yet, like so many Wiley E. Coyotes, they’re shocked that things aren’t turning out the way they expected. In fact, they spent the weekend whining about the unfairness of it all.

Consider the following four issues: the stimulus, the TARP, Obama’s dictator-appeasement plan, and Obama’s mortgage rescue plan. Each is blowing up in their faces like an ACME explosive.


• DeStimulus: The Democrats spent the weekend freaking out both on and off the record that despite all the money they poured into the stimulus, unemployment remains higher than it was before the stimulus began. What’s worse, they think they are now being unfairly blamed by ungrateful taxpayers for running the deficit/debt to dangerously high levels.

But of course, they aren’t the first to do this. Indeed, consider the case of FDR’s Treasury Secretary Henry Morgenthau. Here is what Morgenthau wrote in his diary about their efforts to combat the Bush. . . er, Hoover Recession:

“We have tried spending money. We are spending more than we have ever spent before and it does not work. . . [A]fter eight years of this administration we have just as much unemployment as when we started. . . and an enormous debt to boot!”

Sound familiar? Despite FDR’s mega-stimulus, unemployment fluctuated between 14% and 20% during his first eight years, with the 20% coming later, not earlier. You would think somebody (**cough cough** Obama **cough cough**) might have considered this before they acted, but maybe that’s too much to ask.

Interestingly, FDR raised the top income tax rate so he could keep spending, causing unemployment to spike. The top rate went from 24% under Hoover to 63% to 79% to 90%. In 1941, FDR even proposed raising it to 99.5% on all income above $100,000 -- probably would have worked better if he’d said $250,000. All this did was bring unemployment to an all time high and stretch out the Great Depression an extra 15 years. FYI, Obama wants to raise the top income tax rate so that he can keep spending. Obama’s rates are not as bad, he’s aiming for something in the 50% rate, but the effect will be the same. Geithner’s diaries should make for fun reading someday.


• TARP Monster: Do you remember how the TARP was supposed to save the banking system from the folly of the banks who were too big to fail? Well, it turns out the TARP put the banking system at the mercy of those very banks. Indeed, a recent report from the government’s own TARP watchdog reports that the TARP has hurt smaller banks, who are having trouble repaying the money, and they are now vulnerable to being taken over by the very same too-big-to-fail banks that caused the crisis. Soon, those too-big-to-fail banks will be too-bigger-to-fail.

By the way, the historical parallels to this are legion. For example, every time socialism has been put in place to help the common man or a dying industry, it ended up making living conditions worse, and it ended up wiping out small firms in favor of the large firms that caused the competitiveness problem in the first place. Similarly, for you history buffs, the US government’s attempts to fix (read: “bailout”) abusive and negligent railroads which were putting the whole economy at risk resulted in those same railroads consuming vast numbers of other industries who found themselves at the railroads’ mercy.


• Appeasement: You would think by now that people would understand that you can’t negotiate with dictators from a position of weakness. But the cornerstone of Obama’s foreign policy has been appeasement. He begged forgiveness of Muslims and got only contempt. He surrendered our friends in Eastern Europe to the Russians to get help with Iran. . . the same Russians who will start fueling Iranian reactors this week. And he begged the Chinese to go along with the harshiest, most-non-cuddly sanctions yet on Iran, only to have them flip him the bird and announce last week that they would start buying Iranian oil. His bended-knee effort to get the Iranians to behave appears to have made war inevitable. His kowtowing to North Korea has brought us closer to war with them than we’ve been at any point since the 1950s. And don’t get me started on Cuba, Venezuela, Brazil, Sudan, etc. The fact that begging for respect has never worked, never once crossed Team Obama’s minds.


• Mortgage Failure Program: Finally, do you remember Obama’s mortgage rescue plan, which was supposed to help homeowners by stopping the flood of foreclosures and thereby stabilizing the housing market? It’s not working. According to a special inspector general for the bailout programs, the mortgage plan has not “put an appreciable dent in foreclosure filings” and foreclosures have hit an all time high. In other words, it turns out that giving second chances to irresponsible people does not suddenly make them responsible. And this is forcing down home prices, further hurting the housing industry, and delaying the resolution of millions of inevitable foreclosures, all of which puts more homeowners at risk.


One definition of insanity involves trying the same things over and over but expecting different results. Interestingly, if you add in a little self-pity to that definition, then it seems you’ve defined the Democratic Party.