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aceventura3 · 02-05-2010, 08:29 AM

Obama has been in office over a year and from my point of view the economy is worse now than it was a year ago and now I fear it is going to get progressively worse. It is about a year ago that I first pointed out my difficulties as a small business owner, in the credit market. Credit was frozen, new credit was unavailable, interest rates and fees were significantly increased in some cases more than doubled, that condition still exists today. The costs to do business, including employing people or hiring new people, are high with the risks of those costs going higher - nothing has been done. If action in these two had areas occurred, I think the economy would be better today than it is.

Now we have heard talk for the past few weeks about small business tax breaks for new hires. So guess what, no one is hiring now because they need to know what the plans are. The President and Congress need to stop talking and act.

Capital gains taxes are going up, taxes on people who can invest in growth are going up, taxes on banks are going up, regulations on making money are going to increase, the national debt continues to rise, the value of the dollar declines, we have no energy plan, no health care plan, no social security fix, and we are still in two wars. Is Obama, the next Herbert Hoover?

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However, more recent historical analysis has demonstrated that President Hoover adopted pro-labor policies after the 1929 stock market crash that "accounted for close to two-thirds of the drop in the nation's gross domestic product over the two years that followed, causing what might otherwise have been a bad recession to slip into the Great Depression."[39] Hoover, in fact, took an active role in trying to protect the economy through wage controls and job sharing. Hoover generally shared the economic theory that the stock market crash was a consequence of inequality of wealth and income. In November 1929, he met with industrialists and union leaders and negotiated a deal whereby industry agreed not to reduce wages and labor unions agreed not to strike. This later led to Hoover signing into law the Davis-Bacon Act, which required local governments to pay union wages on public works projects and the Norris-LaGuardia Act, which prevented courts from issuing injunctions against union strikes. Keeping wages artificially high limited employment opportunities such that by the end of 1931, the unemployment rate was 16% and growing.[40]

In 1929, Hoover authorized the Mexican Repatriation program. To combat rampant unemployment, the burden on municipal aid services, and remove people seen as usurpers of American jobs, the program was largely a forced migration of approximately 500,000 Mexicans and Mexican Americans to Mexico. The program continued through 1937.

Congress approved the Smoot-Hawley Tariff Act in 1930. The legislation, which raised tariffs on thousands of imported items, was signed into law by Hoover in June 1930. The intent of the Act was to encourage the purchase of American-made products by increasing the cost of imported goods, while raising revenue for the federal government and protecting farmers. However, economic depression now spread through much of the world, and other nations increased tariffs on American-made goods in retaliation, reducing international trade, and worsening the Depression.[41]

In 1931, Hoover issued the Hoover Moratorium, calling for a one-year halt in reparation payments by Germany to France and in the payment of Allied war debts to the United States. The plan was met with much opposition, especially from France, who saw significant losses to Germany during World War I. The Moratorium did little to ease economic declines. As the moratorium neared its expiration the following year, an attempt to find a permanent solution was made at the Lausanne Conference of 1932. A working compromise was never established, and by the start of World War II, reparations payments had stopped completely.[42][43]

Hoover in 1931 urged the major banks in the country to form a consortium known as the National Credit Corporation (NCC).[44] The NCC was an example of Hoover's belief in volunteerism as a mechanism in aiding the economy. Hoover encouraged NCC member banks to provide loans to smaller banks to prevent them from collapsing. The banks within the NCC were often reluctant to provide loans, usually requiring banks to provide their largest assets as collateral. It quickly became apparent that the NCC would be incapable of fixing the problems it was designed to solve, and it was replaced by the Reconstruction Finance Corporation.

By 1932, the Great Depression had spread across the globe. In the U.S., unemployment had reached 24.9%,[45] a drought persisted in the agricultural heartland, businesses and families defaulted on record numbers of loans, and more than 5,000 banks had failed.[46] Tens-of-thousands of Americans who found themselves homeless and began congregating in the numerous Hoovervilles (also known as shanty towns or tent cities) that had begun to appear across the country. The name 'Hooverville' was coined by their residents as a sign of their disappointment and frustration with the perceived lack of assistance from the federal government. In response, Hoover and the Congress approved the Federal Home Loan Bank Act, to spur new home construction, and reduce foreclosures. The plan seemed to work, as foreclosures dropped, but it was seen as too little, too late.

Prior to the start of the Great Depression, Hoover's first Treasury Secretary, Andrew Mellon, proposed and saw enacted, numerous tax cuts, which cut the top income tax rate from 73% to 24%. When combined with the sharp decline in incomes during the early depression, the result was a serious deficit in the federal budget. Congress, desperate to increase federal revenue, enacted the Revenue Act of 1932. The Act increased taxes across the board, so that top earners were taxed at 63% on their net income. The 1932 Act also increased the tax on the net income of corporations from 12% to 13.75%.

The final attempt of the Hoover Administration to rescue the economy occurred in 1932 with the passage of the Emergency Relief and Construction Act which authorized funds for public works programs and the creation of the Reconstruction Finance Corporation (RFC). The RFC's initial goal was to provide government-secured loans to financial institutions, railroads and farmers. The RFC had minimal impact at the time, but was adopted by President Franklin D. Roosevelt and greatly expanded as part of his New Deal.

Herbert Hoover - Wikipedia, the free encyclopedia