You’ve heard it said that Mitt Romney has great business experience and that is just what we need in a president. Perhaps Obama’s zero business experience is the catalyst for that thinking. You may think it yourself, may have even said it yourself. So let’s look at the presidents with not just some or a little business experience, but at those with quite a lot of it.
Truman owned a haberdashery with a partner for a time, until they went broke. That bit of business experience was the sum of it and in itself didn’t make him a good or even better president, but how he handled the failure of that business did reveal the character of the man. Except for the mortgage held by the Continental Nation Bank, he personally repaid all of the creditors out of later earnings which had nothing to do with the business. He could have declared bankruptcy, but he didn’t consider it to be honorable. The creditors had loaned their money and sold him inventory on credit in reliance on his word that he would pay them back. He wasn’t going to let them down. Truman was a good president but that was due to his core principles as a man, not because of his business experience.
Abraham Lincoln clerked in a general store for a while. It was in that endeavor that he walked 10 miles in the snow to return ten cents to a woman he had mistakenly overcharged. He was also a good railsplitter. He won arm wrestling contests with bigger and seemingly stronger men in the railsplitting line of work. Lincoln’s business experience, such as it was, showed him to be a man of honor and principle. But again, it was his core principles and personal moral code that made him a great president.
In fact, while there may have been several presidents with some, usually very little, business experience, there have been only three presidents with extensive business experience and which they and their supporters hailed as their main qualification to be president. So we should look at those three and ask what sort of presidents they were.
The three were: Jimmie Carter, Herbert Hoover and Warren G. Harding. None of them were presidents of any acclaim, except Harding, and his main claim to greatness is that when the Panic of 1921 set in he was too drunk and too busy with his mistress to get involved in trying to end it. As a result of him staying the course (with his mistress and his bottle) the Panic of 1921 soon found its own cure, and the Roaring Twenties began. So while Harding did well on that score, that was about the only good thing he did and that was by default. As for Jimmie Carter and Herbert Hoover, both were unmitigated disasters.
Obama, with no business experience whatsoever, is also a disaster. The lesson seems to be that unlike knowledge, a little business experience is good but a lot doesn’t correlate much at all with competence in the White House. Those who tout Romney’s business experience to mean he’ll be a great president need to think that through a little.
The New Deal Was A Failure — Hoover and FDR Prolonged the Great Depression With Their Big Government Policies — Obama is Doing The Same Thing Now
I’ve said something here many times that I think readers have found surprising because it is probably the opposite of what they learned in school, heard from their parents when they were children, and read and heard in the media all their lives. The conventional wisdom is that FDR saved America from the Great Depression. You may have been incredulous when you read in previous posts that I believe FDR, with help from his predecessor Herbert Hoover, was actually the cause of the Great Depression.
The 1929 stock market crash did not cause the Great Depression, rather Herbert Hoover plunged the country into a recession by increasing government spending unreasonably, raising taxes, signing the Smoot-Hawley tariff, and imposing burdensome regulations through the Reconstruction Finance Corporation, giving $2 Billion (real money in 1932) in aid to state and local governments and made loans to banks, railroads, mortgage associations and other businesses, much like Obama did in 2009 with the $780 Billion “Stimulus” bill.
But Hoover’s missteps would have only resulted in a prolonged recession were it not for FDR and the New Deal. FDR’s New Deal doubled down on Hoover’s mistakes and turned the recession into the Great Depression. It is a long standing myth that World War II ended the Great Depression, or at least a very misleading analysis of history. World War IL stopped the New Deal and that is what ended the Depression.
After World War Ii the politicians and bureaucrats feared that the country would revert to Depression and they crafted a second New Deal to prevent that, or so they thought. But political grid lock prevented the second New Deal from being implemented, and voila, the economy quickly recovered and the post-war economic boom ensued.
This video tells that story in an easy of follow format:
Further reading: The Forgotten Man by Amity Shlaes; Depression, War and Cold War by Robert Higgs; New Deal or Raw Deal by Burton Folsom; FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression by Jim Powell
Authors who have written articles and columns on the Great Depression and its causes: Thomas Sowell, Walter E. Williams, Jeff Jacoby.
One of Mitt Romney’s top economic advisors is Greg Mankiw, Harvard professor of economics. Mankiw is a much esteemed and accomplished New Keynesian Economist. The new kind of Keynesianism is probably better than the old kind which thinks government spending is the answer to everything whether it be sluggish growth or unemployment or deflation. That’s not enough to make New Keynesianism much better than plain old Keynesianism because this new brand still blames every malady in the economy to “imperfect competition” and “market failure.” It still offers that same old tired prescription for “stimulating” the economy with government spending. The suggestion that economic messes might be a creation of government failure that is over-intrusive into the private sector is not of any concern, or at least not enough concern, to the New Keynesians.
This is the sort of economic advice that led Mitt Romney to make the mistake of Romneycare in Massachusetts and why he cannot be trusted, should he become president, to do anything about the terrible consequences that Obamacare will inflict on the American economy, not to mention that it will destroy the quality and availability of health care.
Following the advice of the New Keynesians Romney will resort to fiscal policy and monetary policy in an attempt to fix every perceivable economic problem, the very same tools that were deployed by previous presidents and that have brought and are bringing the American economy to its knees. Romney never learned anything from Warren G. Harding and Calvin Coolidge, who took a brilliant and successful approach to the Panic of 1921 (“Panics” are now called recessions). Their strategy was both smart and simple: they did nothing. It worked. The economy picked up within about 18 months and remained good throughout the roaring twenties, until government under Herbert Hoover over-reacted to Black Friday in 1929 and started deploying fiscal policy of raising taxes, increased government spending and enacting the Smoot-Hawley tariff, and monetary policy in the form of tightening the money supply. After 1932 FDR piled on with the New Deal, and America got a full blown depression out of all that government intervention.
No politician these days wants to sit back, do nothing, and let a free-market economy show off its own self-correcting mechanisms and get the country back on its feet. How do you take credit for doing nothing, even when doing nothing is the absolutely best thing you can do?
Too bad that is the conventional wisdom because Sir John Cowperthwaite, governor of Hong Kong in the 1960’s, perfected the art of resistance to pressure from Keynesians old or new to “do something” at every hint of economic decline. Sir John’s steadfastness in doing nothing was the wisdom that built Hong Kong’s properity. Cowperthwaite did not refer to his economic philosophy as “doing nothing,” however. To the contrary, he made an important distinction between doing nothing and what he called “positive nonintervention.” He said that while doing nothing is easy, positive nonintervention is constant hard labor — to resist the temptation to “do something” under pressure by unrelenting critics convinced they know how to spend public money better than the public does, and preferably without the public’s permission.
Today those unrelenting critics are called New Keynesians, and they hold the key to understanding Mitt Romney’s economic philosophy. A philosophy that will spell disaster for a Romney presidency, and for the country.
Keynesianism will always be popular with politicians because, unlike Hayekian economic philosophy, it gives cover to politicians for spending more and more of the people’s money in ways that will benefit them and their cronies. So when the whole idea of Keynesianism began to be understood as a massive failure, it was time to shine up a completely new and improved brand in order to keep the carnival of deception going. Romney fell for it. I hope the American people don’t.
See Update 9/14 below.
The Atlantic is not a conservative magazine, in fact I think it’s leaned left in recent times. It’s senior editor Megan McCardle is certainly no conservative, in fact she’s pretty clearly an Obama supporter, at least a hopeful one. So her comments on Obama’s speech last Thursday are striking:
I was tenatively in favor of the jobs plan that Obama proposed last week. But that’s before I realized that he has no intention of trying to get it passed.
Ms. McCardle details evidence that the specific proposals Obama has said will pay for his jobs bill will in fact kill jobs. Thus, he knows the House Republicans will not go along with it because it would be political suicide for them.
I didn’t need all the research Ms. McCardle cites to know what Obama’s game was last Thursday night. It should have been obvious to everyone that the Obama speech last Thursday had nothing to do with jobs for us and everything to do with his own job and whether it will be a job saved or another job lost in the 2012 election. Obama knows he’s in trouble in 2012. He knows that even the One Billion Dollars in campaign war-chest money he will raise may not be enough to get him to 50.1%. He needs a narrative to get himself off the hook for the economic trouble he has created for the country. This latest “jobs” plan is meant to give him the “do-nothing Congress” political argument that got Harry S Truman re-elected in 1948. Obama wants to be able to say in 2012 that the economy would have improved “if only those obstructionist Republicans had passed my Jobs Bill!”
So he gives them a plate of dog poop, calls it ice cream, and whines when they turn their noses up.
It won’t work. Obama is not Harry S Truman, and 2012 will be nothing like 1948.
Truman had been greatly vilified in 1948. I was only 4 years old, but I can remember my grandfather ranting about Truman. I didn’t know who Truman was, but I knew he was somebody my grandfather didn’t like. He could have lived next door for all I knew; the rant was intense enough to make an impression on a four-year old. This Truman guy, whoever he was, my grandfather had no use for him. Of course, now I know my grandfather was wrong. But I digress.
Obama’s plan won’t work because Harry S Truman was a master of the “whistle stop campaign” and the economy was good in 1948. Obama is too narcissistic and arrogant to make the retail connection with people Harry S Truman could do easily. Truman genuinely loved and respected the people of this country. Obama hates most of us and we know it. Moreover, the American economy will still be in the tank in 2012. No president can overcome a high unemployment rate and a sick economy. That’s the main measure of their popularity. Obama is hazardous material at this point, and will be toxic in another 12 months of the mess he has created.
Ms. McCardle has more to say:
I really wish that Obama hadn’t wasted my Thursday evening, and that of 31 million other Americans, listening to a jobs plan that was only designed to produce one job–a second term for Barack Obama. I mean, I don’t blame him, exactly. But I get a little pang when I realize that I could just as well have spent that time bleaching the grout in the master bath.
Megan McCardle, you are a senior editor of The Atlantic magazine founded as The Atlantic Monthly in 1867 by Harriet Beecher Stowe, Ralph Waldo Emerson, Henry Wadsworth Longfellow, Oliver Wendell Holmes, Jr., John Greenleaf Whittier and James Russell Lowell. Your magazine’s pages have reported American cultural, literary, political and intellectual thought for 144 years. I was a happy subscriber for about 25 of those years, until you went so far left I could no longer understand or appreciate what you have to offer. You are yourself an astute political observer. Surely, you could not possibly have thought that watching Obama’s speech last Thursday evening was going to be anything other than a waste of time. You had to know it was going to be just what it was: pure political theater, nothing more.
I guess I understand your problem. Like Obama, you are still stuck in the “aggregate demand” Keynesian twilight zone.
Obama will no doubt be giving jobs speech #942 soon, so maybe you can get that grout in the master bath cleaned.
UPDATE: Ms. McCardle has another submission today on The Atlantic site, Why Obama Was Never Going To Be The Next FDR. There is so much I could say about her current writing if time would permit but it won’t. I can distill its major theme this way: Obama’s policies won’t help the economy, that much is admitted and I certainly agree. I don’t agree that Obama actually wants to improve the economy, but that’s another subject. Ms. McCardle and her muse for today, Ezra Klein, apparently believe that nobody, absolutely nobody, knows what to do. Obama is just unfortunate in having his presidency coincide with such a rotten economy. He has no magic tricks he can perform, and neither does anyone else.
It’s true that Obama can’t come up with a plan to improve the economy because he doesn’t know what that would be. But others do and it’s fairly simple. Since it involves government getting out of the way of the people and allowing their animal spirits to go to work, Democrats have no interest. It isn’t that they don’t know what should be done, it’s that what must be done is something they will never agree to do — get out of the way.
All this brings to mind a Robert Heinlein quote I’ve posted a couple of times before, but it never gets old:
Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”
— Lazarus Long in Time Enough For Love (1973), by Robert Heinlein.