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Yesterday an attorney from Canada petitioned the Canadian government to deny entrance into Canada to former President George W. Bush. Seems that there is a Canadian law that prohibits entrance anyone who has been suspected of war crimes, especially torture. Allow entrance of deny it, either decision could cause international ripples.

Some pundits in the US are pushing President Obama about investigating and prosecuting possible war crimes of the Bush administration. Some talk show programs have already judged Bush and Cheney of war crimes.

I understand that action on the war crimes subject could affect President Obama’s “unity” and “go forward” themes. So, I have a suggestion: appoint a veteran that is also a republican to lead any such investigation. Maybe a retired general officer with a positive reputation. Possibly a republican member of Congress who has spoken out against torture. If not a person in congress, then perhaps a conservative republican prosecutor known for integrity.

I believe that an investigation is inevitable. Why not get to it quickly to protect America’s image?

The political arguments fly back and forth concerning how to pull out of our economic mess. Some suggest we learn from FDR and how he led the US out of the great depression. Others insist that it was not FDR’s “New Deal” that lifted us from depression, but World War II. Who is right?The best measure of our economy is the gross domestic product (GDP), which measures our national income and output. Another measure is the percent unemployment, which was not considered vital before the depression and so until 1930 was estimated rather than measured. Let us look at the GDP and unemployment data for the years in question. The data is in the table at the bottom of the page.Historical data (arrayed in the table below) indicates that the effects of stock market crash of 1929 were gradually felt by most people. The depression took time and the recovery was slow.As I view the data, it seems clear that FDR’s new deal was leading the US out of the depression. The GDP in 1929 was 103.6 billion dollars. The GDP hit a bottom of 56.4 billion in 1933, but rose to 101.4 billion dollars by 1940. The trend of the GDP is clearly positive before our involvement in WWII. By 1937, well before the war, GDP had increased 61% from its low point, and, of course, by 1940 the GDP had regained most of the loss.

Unemployment, not clearly measured before the depression, was estimated at 3.5 percent in 1929, it was 8.9 percent in 1930 and struck a low point of 24.9 percent in 1933. By 1941, before the war, it had improved to 9.9 percent. The trend of unemployment shows that it had returned to 1930 levels before the war began for the US on December 7, 1941.

Some people note that, before we entered the war, our industry produced the supplies necessary for Britain and the Soviet Union to fight the war. That observation is true, but irrelevant. Technically the war started for Europe in 1939 when Germany invaded Poland. The Lend Lease program that US industry used to manufacture and supply equipment to Europe did not begin until March 1941, so it could not account for the 1940 and early 1941 GDP.

Those who reject FDR’ efforts miss that the US had 17.86 million of our citizens who served in the military during the war. At the end of 1945, 14.32 million were still in uniform. Most service members were released by June 1947, more than 9 million new workers. If our economy was still not recovered, why didn’t unemployment skyrocket after the war? Unemployment in 1946 and 1947 was 3.9 percent, in 1949 5.9 percent, and was mostly in the 5 percent range during the years of the 1950s.

Yes, the GI bill helped our economy after the war by financing higher education and housing for our veterans. Yes, the Marshall Plan, which essentially rebuilt war damaged European countries, stimulated our economy to 300 billion in the 1950s. And yes, the Eisenhower administration sponsored the building of interstate highways which also assisted the economy. But all of those were government sponsored and funded programs, just like the “new deal.”

So, I think the information is clear that the great depression was over for the United States before WWII. If this is true, why don’t we learn from FDR and get ourselves out of this mess?

YEAR GDP* UNEMP*

1929     103.6      3.5

1930      91.2      8.9

1931       76.5    15.9

1932      58.7      23.6

1933      56.4      24.9

1934      66.0      21.7

1935      73.3      20.1

1936      83.8      17.0

1937      91.9      14.3

1938      86.1      19.0

1939      92.2      17.2

1940      101.4      14.6

1941      126.7      9.9

1942      161.9      4.7

*GDP = Gross Domestic Product in Billions

*UNEMP = Unemployment as Percent of Workforce

** US Department of Commerce and US Bureau of Labor Statistics data

Robert Samuelson, in a recent Newsweek article, complains that Obama’s “stimulus” is “stunted”. He makes several points: according to the Congressional Budget Office (CBO) much of the spending will not come until 2010 or later; again, according to CBO, for some projects, like the electronic health records, the progress will be slow, hence of very little help as stimulus; third, it is too little help for state governments, according to Center on Budget and Business Priorities (CBBP); and finally, he says that the bill Obama signed was very political. My first problem are his sources. The CBO is an analyst group who take numbers and make estimates. The are neither prominent economists nor political experts. They make estimates based upon assumptions, and they assume that the proposed actions will take a long time. Their assumption is unwarranted. CBBP is no different, they are analysts, not project experts, and their judgments are based upon the information provided them, and that information does not come from the project’s planners.

Let us take the electronic health records plan. It will take as long as Obama’s people decide it will take. There is a current program already working extremely well in the Veterans Administration. The VA system has computerized health records, inventory, and instant connection to orders for medical tests and prescriptions. After a brief review by computer experts, the entire country could have electronic health records in less that a year. All we must do is copy what works.

Samuelson has sufficient training to realize that the key element in any economic stimulus is confidence. Credit is not flowing well enough because wealthy investors are afraid of losing more money. When they are confident they are willing to take risks on loans. Samuelson, despite any “good intentions” is, of course, helping to undermine any confidence that could be gained from Obama’s effort.

 

 

Yuval Levin, In a recent Newsweek article, suggested that partisanship is necessary for our democracy to work. He claimed that opposing parties must hammer out their differences in open debate. Sounds good, but he used those observations to legitimatize the current discord in congress. So, I think his comments are misdirected.

What about the current discord in congress? Is it due to honest philosophical differences, or petty partisanship? I suggest that neither of those are in play. The clash in congress is far more due to the influence of “special interest” lobbies.

How could anyone bright enough to be in congress attempt to preach to the American people that the way to create jobs is through tax cuts? That may indeed be true in a robust economy, but we are currently experiencing a serious recession. Companies are shedding workers in order to survive. Some companies are not surviving. Taxes are currently not the problem. We need a method that will convince those with lots of money to lend that money to small businesses. We must persuade lenders to provide loans to people that wish to purchase homes and automobiles. The inventory in both sectors of our economy is very large. Without credit being available, why would anyone build a house or car? Also, if we cut the taxes of those who already have lots of money, what is their incentive to open credit to others? We must remember that, since they also lost money, how do we give them the confidence to lend to others? With the current low interest rate, isn’t it logical that they will safeguard their funds just like they did in the recent TARP and like their fathers did during the beginning of the great depression?

What I have a tough time understanding is why those who are lobbying members of congress are against fixing our economy. In whose interest is it to have unemployment keep rising? Who would wish our economy to fail? The only people I can see wishing to hurt our economy are our enemies, and I hope that are not that well connected.