By: Mary Mostert, Analyst, Banner of Liberty (www.bannerofliberty.com)
September 10, 2001
The lead article in every paper and on every TV network this morning seems to be all about a Bush "Recession." "Fear of Recession Ignites Discussion of More Tax Cuts" says the New York Times. CNN talks about our "downtrodden economy." "Wall Street Grows Depressed" the Washington Post warns. "Global Gloom Grows" CBS tells us.
Is it really all that bad? And, if it is, how come we didn't notice it during the Clinton Administration, say back in 1996 when unemployment was 7,235,000, or 5.4% of the workforce compared to End of August 2001 figures when unemployment of 6,957,000, or 4.9% of the workforce?
The Stock Market closed in August 1996 at 5616.20 and it closed in August 2001 at 9949.75, which is 177% of August 1996.
Unemployment for both men and women ages 25-54, the main family creating years stands at 3.9% today. In 1996, at the beginning of September, the unemployment for both men and women ages 25-54 was 4.2%.
The wonderful state of the economy was why America re-elected Bill Clinton in 1996, or so we were told. Twice in his 1997 inaugural address Clinton mentioned America had the "world´s most productive economy." Today the economy is still the "world's most productive economy." We even have the second largest surplus in history, after a 1.2 trillion dollar tax cut.
Yet, all the news is doom and gloom. Are all those millions of employed Americans going to suddenly stop buying things because of the dire reports in the media about how bad the economy is supposed to be?
Maybe it's my age, having grown up during the depression years when most of the work force was composed of men and up to 23.7% of them were out of work, which meant there was no money to buy ANYTHING for millions of Americans. The rest of the workforce was scared to death during the 1932 election when the Democrats used the worldwide economic downturn to advance their view of who should control the nation's productive forces.
In Hoover's first inaugural address he outlined the key debate of that era - i.e. capitalism versus socialism when he said: "The election has again confirmed the determination of the American people that regulation of private enterprise and not Government ownership or operation is the course rightly to be pursued in our relation to business."
The socialists were in ascendancy all over the world at that point. Government ownership and control of the means of production was the issue. And, by 1932, largely BECAUSE governments all over the world were taking control of the means of production, there was a worldwide depression. In the 1932 election, the Democrats used fear to convince the American people that the sky really was falling, inasmuch as the stock market, which dropped sharply in 1929 from a speculation driven high of 380.3 at the end of August 1929 to 239 at the end of November 1929.
Then the market began to go back up under Herbert Hoover. It reached 286.10 by March 30, 1930. However, as Franklin Delano Roosevelt and the Democrats in the Congressional Election year of 1930 began their coordinated campaign to blame the Republicans for the depression, the stock market again began to fall. By election day, 1930, it was a 183.40. The Democrats, finding that fear worked in the 1930 election, used it with greater force in the 1932 presidential election. By Election Day in November 1932 the Stock Market had dropped to 56.40 and that generation of American were so scared that those who are still alive are STILL scared of the stock market.
At the end of February 1933 the stock market hit a low of 51.40. Franklin Delano Roosevelt, in his inaugural address March 20, 1933, reversed tactics immediately and assured the frightened public that "we have nothing to fear but fear itself" now that he, not Hoover, was in the White House. There was an immediate jump in the stock market. It rose from 51.40 at the end of February to 107.2 at the end of January 1934. This was during the period of time when Roosevelt literally was running a one-man government, creating one socialist "solution" after another. When the Supreme Court ruled his schemes unconstitutional, he announced his decision to increase the number of judges so he could appoint ones that agreed with him.
That effort failed, quite possibly because the stock market after four years of Roosevelt was still less than half what it had been under Hoover and the number of true believers in Congress had dwindled. As the nation went into the 1936 election the markets had risen to 177.4 and the public was totally convinced that Roosevelt had saved them from utter destruction. Even though the stock market dropped throughout Roosevelt's second term to 131 by election Day November 1940, he was re-elected to an unprecedented third term. In 1944, no one had any interest in the stock market, which was still at a weak 146.5, since the public's entire energies were concentrated on the Second World War, and Roosevelt was re-elected to a fourth term.
After the war, the stock market went up as the war industries re-tooled to make refrigerators and passenger cars again but was still only 269.20 on election day November 1952 when Republican Dwight D. Eisenhower was elected, along with a Republican House and Senate. It was the first time the Republicans had controlled the White House and both houses of Congress since the Congressional Elections of 1930 - 22 years.
Two years later, in time for the Congressional elections of November 1954, and twenty-five years after the stock market peak of 380.3 at the end of August 1929, during the Eisenhower Administration the stock market finally pulled out of the depression of the 1930s and 1940s.
Yet, to this day, most Americans believe that Roosevelt saved them from the depression. Hopefully today's younger generation will not fall for the same kind of fear propaganda that worked so well for the Democrats in 1932 and which Bill Clinton brushed off and reused in the 1990s. I think sometimes the only hope for America lies in the fact that most of the younger generation won't read the newspapers and doesn't believe what they hear on radio and TV.
To comment: mmostert@bannerofliberty.com