How to be a Great American President

I have worked out the formula for creating lasting legacy, and an image of true greatness. Someone told me a while back that the American people remember FDR fondly because he carried them through the Great Depression—even if he did make it longer with his bad policies, he was there for the people, and suffered with them (even if he skimmed the cream off the top*).

So, here is the formula:

1. Run for president right after a stock market crash, preferably with a bank correction, and preferably one that the current president is fudging up.
2. Enter office and immediately pass a bunch of laws that will slow the correction and lengthen the recession, and bash business a lot, and take them to court; ideally turn the recession into a depression.
3. Once the recession has set in, begin to transfer powers previously held by other branches to the executive. Don’t forget to reach for the gold, you’ll never get it if you don’t try.
4. Use these new powers to create a bunch of new wings of government directly controlled by you, and use them to transfer money from one group in society to another—preferably, take from the whole people and give to small groups that will reward you with lots of good publicity and votes.
5. Most important: make soothing, well-written speeches. Lots of them.

If done right, all the powers over the economy will be nicely controlled from Washington. As written up at the Franklin D. Roosevelt American Heritage Center:

Under the New Deal, the federal government greatly extended its power over the economy. By the end of the Roosevelt years, few questioned the right of the government to pay the farmer millions in subsidies not to grow crops, to enter plants to conduct union elections, to regulate business enterprises from utility companies to airlines, or even to compete directly with business by generating and distributing hydroelectric power. All of these powers had been ratified by the Supreme Court, which had even held that a man growing grain solely for his own use was affecting interstate commerce and hence subject to federal penalties.

Of course, there are other things that you can do to be remembered well, including fighting a long war. But I think those 5 can already bring about a legacy. If we do not learn, history truly does have a way of repeating itself—in this case, likely because someone did learn from history, and wanted to be the next Great American President. Let's not let him.

* John Flynn recalls the scandals that occurred and were well documented by newspapers at the time, of the Roosevelts’ abuses of their position. For example, Elliot Roosevelt had his father convince the A & P Tea Company to loan Elliot $200,000, backed by shares in a Texas radio station. The company went along in order to avoid the New Deal inquiries that Roosevelt could enflame. In 1942, the President gave $4,000 to A & P and demanded the “worthless” stock back. It was worth $1 million, but A & P gave it back to the New Deal architect, and deducted the $196,000 loss off their tax returns.

The Tea Party Protests

I am getting a little annoyed that some people have argued that the Tea Party protests were somehow a corporate funded "astroturf" effort, coordinated by the Republican Party, and that policy wonks rebuttal of that perception is defensive and proves them right. Yes, Republicans and old partisan-oriented groups have jumped on board, but they could not do it without genuine outrage, which is evident in the polls, and they did not organize the 750 protests across the country on tax day.

The people have a message: 84% of Americans are against the current government expansion in the longer term. 44% of Americans are against it even in the short term. The protests were coordinated by different groups in each city--some by Ron Paul groups, some by young conservatives, some by coalitions of different groups. This is no different than the anti-war protests by hodgepodge groups, including partisan ones like Move On, and radical ones, and apolitical ones.

Now, here is a round up of great, and disparate, highlights from the protests.

In NY:

“I think Newt Gingrich is – I think he’s a slime ball,” said Roy Delduco, a self-described Constitutionalist with tattoos up his arm and a shaved head. “I don’t like Republicans. I don’t like liberals either. I don’t like the whole bipartisan system. I think it’s part of the problem.”

Delduco said he wants the Federal Reserve disbanded, the IRS “put in jail” and his taxes lowered. He complained about government spending under both Presidents Obama and Bush.

“We’ve basically bankrupted the dollar, and I’m scared,” he said.

...One young man handed out feathers in homage to the Boston Tea Party; another offered stickers in support of John Galt, the hero of Ayn Rand’s “Atlas Shrugged.”

...Raymond Kwai stood alone in the crowd, holding up a sign that said, in all capital letters, “IF I WANTED TO BE A COMMIE, I’D STAY IN CHINA.”

In San Francisco:

"The government is growing too big," Bernstein said in an interview with CBS News after her speech. "And I grew up in socialism and I've seen it. And this is reminding me more and more of what Poland used to be. I was fortunate to see the transfer from socialism to a free market economy in Poland and i'm very sad to see that the opposite is happening here."

...The San Francisco rally was non-partisan: it attracted Democrats, Republicans, Libertarians, Greens, and independents, many of whom appeared to be supporters of Texas Rep. Ron Paul's 2008 presidential bid

Overall favorite quote: "You can't put lipstick on socialism."

Here is a roundup. Also, check out the coverage by Pajamas Media.

For Keynesians, Too Much Is Never Enough

The New York Times has an article on the “stimulus attempt” in Japan in the 1990s. The article describes two points of view: American economists who think that it partly worked, but did not go far enough, and everyone in Japan, who thinks it was a colossal waste, which they will have to repay for decades, and a waste which turned their economy into one large public works project.

The article also provides some insight into how large a stimulus these American economists think is necessary to get the economy moving. A little bit of math shows that their target size would be even more massive than anything we’re currently debating, and would cripple the economy, not stimulate it.

The article explains:

After years of heavy spending in the first half of the 1990s, economists say, Japan’s leaders grew concerned about growing budget deficits and cut back too soon, snuffing out the recovery in its infancy, much as Roosevelt did to the American economy in 1936. Growth that, by 1996, had reached 3 percent was suffocated by premature spending cuts and tax increases, they say. While spending remained high in the late 1990s, Japan never gave the economy another full-fledged push, these economists say.

They also say that the size of Japan’s apparently successful stimulus in the early 1990s suggests that the United States will need to spend far more than the current $820 billion to get results. Between 1991 and 1995, Japan spent some $2.1 trillion on public works, in an economy roughly half as large as that of the United States, according to the Cabinet Office. “Stimulus worked in Japan when it was tried,” said David Weinstein, a professor of Japanese economics at Columbia University. “Japan’s lesson is that, if anything, the current U.S. stimulus will not be enough.”

If Japan’s economy is half the size of the American economy, then these economists would suggest that we spend at least $4.2 trillion over four years, or more than $1 trillion per year. To not “cripple the stimulus in its infancy,” we’d have to sustain this for significantly longer than just four years. Deficit financed public works costing more than $1 trillion per year, over, let’s say, eight or ten years – this is supposed to stimulate the economy? This would obviously cripple the economy! When spelled out like this, it is hard to imagine any economist seriously suggesting that America should, or could, borrow that kind of money and create that kind of long-term public sector employment.

Instead, it seems that Keynesian economists are simply running out of excuses as to why previous experiments in spending “stimulus” plans have failed to produce good results.

Learning and Bureaucracy

The market is an evolutionary process, in which selection forces actors to learn, and price conveys the information necessary for that learning. The pressure on the individual to innovate (or face losses) is not a pressure applied strictly to firm owners and managers- it is also applied to workers and job-seekers.

The Iraqi band Acrassicauda recently acquired refugee status and settled into a nice New Jersey metal band lifestyle. One of them explained their prior training and conditioning:

“We’re good at process,” said Mr. Riyadh, 24, who has previously used the name Marwan Hussain. “Going to the U.N.H.C.R.,” he said, referring to the United Nations High Commissioner for Refugees, “standing in a queue for three or four hours. We’re good at that. But musically, we need to practice.”

This reminded me of what Irina Pantaeva said of her training in Soviet Russia:

Neither of us knew how the fashion business worked in the West. That models carry thick books full of glossy pictures, and that they made appointments and worked with agents. We knew only what we had learned in Russia: if you want something, go to where it is and be prepared to wait.

In a bureaucratic country or system, there is no pressure applied that can force the individual to work, learn, innovate, or generally train themselves. Instead, they learn to wait on lines, fill out paperwork, and ask others for handouts. Expect a lot more of this kind of learning as government continues to rapidly grow, and a lot less innovation and new technology.