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Thursday, January 7, 2010

Neo Revisionist History

By far the most maddening refrain from the Right wing these days is the one condemning President Obama for spending too much tax payer money. I have to ask the question: "Is that the tax payer money being used to bail out the financial system which collapsed 7 years and 10 months into Bush's presidency?" Sometimes I feel like I live in Alice's Wonderland with Rush Limbaugh as the Queen screaming about Obama spending too much, despite the fact the spending is directed toward cleaning up the mess left by his Republican predecessor whom Limbaugh (and the Right) championed.

At this point there should be little debate about the wisdom of spending our way out of this current depression. Ben Bernanke, a Republican and the chairman of the Federal Reserve appointed first by President Bush agrees the only way to get out of the current financial crisis is to inject taxpayer money into the economy. In fact Bernanke believes there should be a second stimulus. Bernanke was the architect of the initial bail out of the banks to include the controversial purchase of Merrill-Lynch by Bank of America. Alan Greenspan, former Federal Reserve Chairman appointed by Ronald Reagan and also a Republican agrees in his naturally obtuse way, that it is acceptable for the US Government to provide capital in an economic crisis. However, he feels the financial system should be fixed first. Prominent economist on the left side of the economic academic elite promote Government intervention with tax payer money as well: Paul Krugman a former Professor of economics at Princeton and recipient of the Nobel Prize in economics has advocated in his New York Times columns not only for Government intervention but a much larger infusion of cash then the current stimulus contains; Laurence Summers, an economist and former President of Harvard University echoes the need for Government intervention and currently serves as an advisor to the President.

What gives then? If both sides of the economic political spectrum are in agreement why are the populist fires being stoked to such great effect against the bail out and the stimulus plan? A big part of the answer of course lies in simple partisan politics. Limbaugh and Co. want the Democrats to look bad no matter what. The problem is that this propaganda is being regurgitated by common people on the street and there is nothing explaining the very compelling opposite side of the coin. It may be time for non-partisan office holders like Bernanke to explain why the Federal Reserve and other agencies have taken the measures they have, if for no other reason then to enlighten the public.

Bernanke is an interesting person to have on the world stage right now. As a Princeton Professor one of his areas of expertise was the Great Depression. He has commented publicly on his efforts to avoid the mistakes made by the Government back in 1929. Specifically, those mistakes include the failure of the Government to get involved in keeping the banking system from collapsing which led to 25% unemployment and 25 years before stock prices reached their pre-crash levels. This sort of historical information might be useful to the American public right now. It is unclear why the Obama Administration, the Fed and other agencies have not been more effective in getting the word out. This is not a matter of partisan politics but a part of the duty of the Government to keep the people informed of the reason it is taking a certain course of action. Such explanations have been lacking or so quiet as to be lost in the storm of baseless criticism against the bail-out and the stimulus.

Here is a late Fall 2009 video from REAL TIME with Bill Maher interviewing Paul Krugman, among others.

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