Historical Inauguration Speeches

C-Span has a You Tube channel focused on historical inauguration speeches. It includes footage of FDR's 1933 speech which contains his "the only thing we have to fears is ...." line - one of the more famous in history.

Here's a link to that speech:

There's a debate going on now about the importance of a good inauguration speech. Obama didn't get good marks for his first one - we'll find out tomorrow if he does better this time, and if that even matters.

FDR's speech is noteworthy for his explicit request that he be granted additonal executive powers to handle the Great Depression. We will cover this when we discuss the expansion of executive power that happened durign hiw presidency.

The Washington Post has an interactive site with info on all past addresses.

Keynes vs. Hayek

Click here for a review in Reason Magazine of a recent book detailing the conflict between John Maynard Keynes and Frederick Hayek over what, if any, measures should have been made by government to intervene in the Great Depression. The reviewer argues that the book falls short of outlining the dispute adequately, but fill in the gaps for us.

Federalism and Financial Services

I stumbled across the following article from the Heritage Foundation a moment ago:

Federalism and Financial Services

It's worth a quick read because it analyses how the Constitutional framework impacts the regulation of the financial services industry. It provides terrific background, but it's an ironic read since it argues in favor of repealing the Glass-Steagall Act, the depression era bill which separated the banking, securities and insurance businesses.

The act was indeed repealed, but that has been argued by many to have led to the careless financial moves that led to the current economic collapse. It's a bit like watching a train before the wreck.

Are the Culture Wars Over?

Frank Rich thinks so. The economy may have something to do with it. People stopped worrying about prohibition when the Great Depression started. There were more important things to worry about. Same thing today.

Are we in a Depression?

How would we know?

What is Stimulus For? Why Should Government Get Involved in the Market Place?

Someone, thankfully, in one of my classes fessed up to not knowing what the stimulus bill was about and how government could stimulate the economy. I'm sure he or she was not the only one unsure about this (this is why we tell you that there are no dumb questions, we need to know the level of knowledge you have in order to effectively communicate ideas to you).

With that in mind here is a brief overview of what the issue is about. Bear in mind that I am not an economist, but even economists disagree about all of this.

During the Great Depression, policymakers struggled with what to do. How does a government get itself out of a depression? Should the economy be left alone -- to the peril of the general population -- or should it intervene, and if so how?

Prior to the Great Depression laissez-faire ruled. Little if anything, was done to address a slumping economy, but with the 1932 election -- which followed the onset of the depression -- ideas (particularly those developed by John Maynard Keynes) emerged that held that a focus on stimulating demand would help the economy rebound. This meant government spending more than it took in, but focusing spending projects that would put money in people's pockets. Generally these are public works projects, but they could be all sorts of things. This was, in a sense, what the New Deal was all about.

The idea was that when government funds a project -- no matter how trivial -- the people involved in that project would not only earn money, but would spend that money in the local economy. Government may pay me to dig a ditch, and I use that money to pay my mortgage, buy groceries and clothes, and maybe see a movie. So the money I earned helps out the bank, the grocer, the shop I bought my clothes and the owner of the movie theater. They can then stay in business -- spend their money as they choose -- and continue to hire or retain workers who can then spend their money in the local economy.

So when government spends money to stimulate the economy, it intends to inject money in the economy that will circulate in the community. The theory is that this stimulus will help the economy, and the general population, survive until the economic system picks itself up and can begin to create its own jobs.

There are arguments against this theory, and nuances that are worth further discussion, including suggestions that these policies create more problems than they solve and that other governmental activities are more effective in helping the economy, but I'll hold them off to another day. Again this is a very simple explanation of what a stimulus package is supposed to do. Corrections and comments are welcomed of course.

Here are further links which should be helpful:

- Encyclopedia of Economics: Keynesian Economics.
- Wikipedia: Keynesian Economics.

Another Depression?

Andrew Leonard argues that we are closer to a depression, as opposed to a mere recession, than we might like to think. Factors at play in the late 1920s are underway today:

Want to see "The Great Depression: The Sequel"? Here's a handy three-step do-it-yourself action plan.

1. Continue to ignore growing income inequality and govern the United States for the benefit of the rich at the expense of the many.
2. Continue to whittle away at the safety nets that exist to cushion Americans from economic ill winds.
3. Continue to weaken government oversight of Wall Street.

Each is underway he tells us. A theme in his article is that factors related to each are now at levels equal to those surrounding the Great Depression era. We can no longer say "not since the Great Depression," but "as bad as the Great Depression."

He reminds us that current Fed chairman Ben Bernanke was a student of the Great Depression and he is using what he leaned--essentially that existing financial institutions must not be allowed to fail or else they will begin a domino effect where one could fail after another leading to a system wide collapse.

Wish him luck.