Democrats & the Economy: History Lesson #3

Jimmy Carter: Author of Stagflation

Jimmy Carter: Author of Stagflation

The 1970s were dark years in many ways, and one cannot blame all the economic woes on one individual. OPEC kept increasing oil prices, which was a major headache for everyone. Yet presidential leadership can make a difference. That leadership was not forthcoming, however. At the beginning of the decade, we had Watergate and the Nixon resignation, followed by Ford, who failed to inspire. Both were Republicans; the economy was not strong.

When Jimmy Carter took office in 1977, it was hard to believe things could get worse–but they did. The Carter presidency gave rise to a new term: stagflation. What did it mean? Depressed productivity occurring simultaneously with high inflation. Unemployment rose to 9%, inflation topped out at over 13%, and buying a home became foolhardy. Who would want to pay double-digit interest rates? Carter tried “voluntary” wage and price controls. To save energy, he encouraged people to turn their thermostats down in the winter to 65 degrees. That’s an energy plan?

While the decade’s problems cannot be laid solely at Carter’s feet, he obviously didn’t have any idea of what to do to solve them. When Reagan took office in 1981, he inherited this terrible economy. The media loved to call it “Reaganomics.” But Reagan’s first budget and the tax cuts he initiated didn’t even start to go into effect until October 1981. What the country was experiencing was not Reagan’s fault. By the end of 1982, things were picking up, and by the time the next election came in 1984, the economy was in a constant pattern of growth. Reagan noted that after a while, the media stopped referring to the economic situation as Reaganomics–they didn’t want to give him any credit for the turnaround.

Reagan: Presidential Leadership on the Economy

Reagan: Presidential Leadership on the Economy

Genuine Presidential leadership on the economy is a rare commodity. None of the Democratic presidents I have highlighted thus far really understood how an economy works. Their basic solution for growth was government spending, which is actually a big part of the problem.

Democrats & the Economy: History Lesson #2

LBJ: The Great Society?

LBJ: The Great Society?

FDR changed the way Americans thought about the role of government by using government as the supplier of needs in a time of crisis. Lyndon Johnson, in the 1960s, took that concept a step further; one might refer to his “Great Society” program as the New Deal on steroids.

The philosophy of the Great Society was a shift from helping in a time of need to helping all the time. Whereas the New Deal was conceived as a temporary measure that would get us back where we needed to be economically, the Great Society, at least as it played out in reality, started with the assumption that a system of permanent transfers of income was necessary to achieve “fairness.” The government now became responsible on a permanent basis for everyone’s well-being.

Perhaps the greatest shift in thinking was the idea that poverty was a part of the economic system known as the free market. People were not poor as a result of their own bad decisions or bad character, but simply because the system was against them. They were not to blame; the system was.

Consequently, the government’s role was to make up for the inequities in the system. To help the “disadvantaged” (who were in that state primarily because of discrimination), LBJ, like his mentor FDR, initiated another round of government agencies and set a course for government involvement in the economy and in people’s lives that has been almost impossible to reverse.

It didn’t take long, once these new programs were enacted, to build into them automatic increases in funding every year. The result: deficit spending that has spiraled up ever since. LBJ’s “War on Poverty” was supposed to eradicate all poverty in America. As many have said, it’s time to run up the white flag of surrender in this war. How many more trillions of dollars do we have to spend before we come to the realization that the poor will always be with us. Now who said that, I wonder?

The Great Society led us into the 1970s, where we witnessed the worst economy we have experienced since the Great Depression.

The excellent British historian Paul Johnson, surveying American history in the 1960s and 1970s, declared this to be the time when America attempted suicide. I believe it is only by the grace of God that the attempt failed.

Trust the Democrats in a bad economic time? Why?

Lesson #3 tomorrow.

Democrats & the Economy: History Lesson #1

FDR: Architect of the New Deal

In the midst of the current economic jitters, I have heard more than one commentator assert that when economic times are rough, voters tend to gravitate toward the Democrats.

Why on earth would that be?

I want to provide a little history lesson on how Democrats have handled the economy over the past 70-plus years. Let’s start with Franklin D. Roosevelt.

The Great Depression hit America in 1929. Voters turned out the Republicans and looked to FDR to reverse the economic downturn. He initiated his program, which was called “The New Deal.” He became the most activist president in history up to that point, and more legislation passed Congress in a short period of time than ever before. A slew of new agencies (dubbed “Alphabet Agencies”) erupted on the national scene, all created for one ostensible purpose: bring the country out of the Great Depression.

Eight years later, no visible improvement had occurred. In fact, in 1937, when things had started to rise slightly, we suffered another recession in the middle of the Depression. I think most honest historians today have to admit that FDR’s New Deal was actually more of a stimulus for extending the depression than solving it. What got us out of it? Only all the production that was needed for WWII.

Now, people who lived through the 1930s “feel” like FDR brought us out of the Depression. He was a good communicator (his Fireside Chats on the radio) and all the activity made everyone feel like the government was busily reversing the bad situation. But, in fact, it was doing nothing of the kind.

Feelings can lead us astray. I submit that if the commentators are correct, feelings once again are poised to undermine genuine recovery.

Lesson #2 coming up soon.

The Market and Personal Responsibility

The big news last week, of course, was the near-collapse of the market, fueled by the bailout of major firms by the federal government. Leading the way were Fannie Mae and Freddie Mac, the quasi-private, quasi-government lending institutions. Now the taxpayers have the burden of guaranteeing an additional $700 billion.

Why did this happen? I’m not going to go into all the economics of it, but at the base of the problem is a spiritual issue. It has to do with personal responsibility. First, individuals were irresponsible when they sought loans for homes they could not really afford. Then, the companies were irresponsible for giving them those loans.

Further irresponsibility came from Congress, which did nothing to warn against the oncoming crisis; in fact, under Democratic leadership, the Congress refused to deal with the issue at all, primarily because of the cozy relationship between members of Congress and the leaders of the industry who were giving them money.

How many news reports pointed out that the men running Fannie Mae and Freddie Mac were staunch Democrats? I didn’t see any, did you? Instead, we are given sermonettes on the “failure” of the free-market system. That system can fail, yes–but only when character fails.

It all comes back to understanding that we are accountable for our actions, and that arrogance, greed, and selfishness (the lenders and Congress) combined with foolishness and selfishness (the buyers) has led to this debacle.

Loss of Biblical principles affects us all.

Celebrate the Constitution

This past week marked the 221st anniversary of the writing of the Constitution.

From May to September 1787, delegates from all states except Rhode Island labored over the intricacies of what makes government work. They did this in a room with the windows closed even on the hottest days to ensure that their deliberations did not leak to the public. They took a vow of silence, so to speak, in order that they might be able to discuss freely without fear of recriminations from the media of their day.

James Madison, who is often called the Father of the Constitution, took notes on what everyone said all those months. He would write in shorthand during the meetings, then turn his notes into a full account in the evenings. His transcription of the convention’s debates were finally published after the deaths of all the persons who were involved.

Some people today would probably decry this type of secrecy, but it was a wise move. The delegates were uninhibited in their discussions and were able to reach consensus on the form of government without the distracting swirl of constant criticism. Although the debates in the convention were secret, the ratification of the document was not. State conventions debated freely the contents of the proposed Constitution; the final vote in each state was the result of a frank, open discussion of the document’s merits.

The form of government set up at that convention has been the envy of many in the world. It has been copied by some, but not always with good results. The key to its workability always rests on the character of the people of a nation. Supposedly, a woman came up to Benjamin Franklin at the conclusion of the convention and inquired, “Mr. Franklin, what have you given us?” His response? “A republic, madam, if you can keep it.”

That statement is just as true today.

Principle: God the Creator

Continuing with a review of Biblical principles, I want to focus now on the truth that God is the creator of all things. If God “is,” then it is not a great logical leap to conclude that He also “does.” We don’t really grasp the concept of how astonishingly creative He is. All that we see around us began with an image in His own mind. He then transformed that image into something tangible. The universe sprang from His creativity; all the features of this earth are the result of His desire to create; the material and animal creations manifest His imagination.

Then came man. This was a unique part of His creation. Man is separated from all other created things by one key ingredient. Within man was planted the image of God. Nothing else in creation has this gift. God reasons; man can reason. God displays emotions; man possesses identical emotions. God chooses; man has a will. God knows the difference between right and wrong; man is endowed with a conscience. God is a spirit who is from everlasting to everlasting. Although man has a starting point, he also is more than a physical being; he has a spirit, and he will live forever as well. The only difference is that there are two eternal locations for that spirit, and only one is in the presence of his Creator.

Perhaps Michaelangelo expressed it best in his painting of the Sistine Chapel.

How are we handling this most wonderful creation of God? Do we reason as God reasons? Feel what He feels? Choose as He would choose? Is our conscience informed by His truth or have we instead seared our conscience to avoid the truth? This is not a game; it determines where our spirit will spend eternity.

And do we attempt to influence our culture by speaking clearly regarding this truth? Or do we hide the truth in order to be accepted by the culture? The future of the nation depends on the answer to that question.

A Truly Christian Discussion

I had a great experience last evening. As part of Constitution and Citizenship Day at Southeastern University, I moderated a panel discussion on politics. First, I presented, without comment, planks from both the Democratic and Republican platforms on such issues as: national defense and terrorism; government reform; energy policy; education; environmentalism; abortion; and marriage, among others.

After I finished, I turned the program over to a panel of four Southeastern faculty members, who made comments on items in the platforms, sharing their Christian concerns in the process. When they completed their remarks, it was time for the audience (which numbered approximately one hundred) to ask questions of the panel.

Why do I call this a great experience? Because two goals were achieved. The first was to better inform potential voters as to the issues at hand and where the respective parties stood on them. The second was to demonstrate that Christians, even when they may disagree with one another on certain aspects of public policy, can conduct themselves in a manner that does credit to the One they serve. The presence of God permeated the room; we were all challenged to make sure that our Christian faith has priority over our political views, and that our political views should be informed by our Christian faith.

Moreover, if we can carry ourselves in the love of God, the world will notice how different we are. Jesus said,

I pray also for those who will believe in Me through their message, that all of them may be one. Father, just as You are in Me and I am in You. May they also be in us so that the world may believe that You sent Me. . . . May they be brought to complete unity to let the world know that You sent Me. (John 17:20-21,23)

It’s nice to experience that unity once in a while. It should be a more common occurrence.