Your Presidential Choice: Two Names for More of the Same

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On Tuesday,
November 4, 2008, voters across the United States will take to the
polls in hopes of determining their political and economic futures.
Fat chance. The two major party candidates are so close in terms
of policy positions that only a two-party system could produce two
“opposition” candidates so nearly identical to one another. Both
Republican John McCain and Democrat Barack Obama advocate managed,
rather than free, international trade, although each candidate’s
rhetoric is expertly designed to appeal to his respective political
base. Both candidates voted to again canonize Big Brother government
by reauthorizing the USA PATRIOT Act in 2006. Both accept as a given
the productivity-discouraging fractional slavery of the federal
income tax. As best-selling author and historian Tom Woods snidely
remarked in a speech
on September 5
,

On
taxes, the Democrat favors a top income tax rate of 39.5 per cent
and the Republican favors a top rate of 35 per cent. Well ain’t
democracy grand? We get to debate a whole four and a half percentage
points. We’d better spread this system around the world!

And indeed,
both
candidates
seem poised to continue spreading away, with each
man supporting the expansion of the United States’ global hegemony,
already enforced by the troops manning the more than 800
U.S. military installations
in 140+ countries around the world.
The differences between Obama and McCain on foreign policy are nuanced
and unsatisfying, especially to the radical anti-war activists that
have worked for many long years to bring American service members
home to their families and productive domestic lives. Both candidates
advocate increasing troop deployments, although Obama’s military
adventurist aspirations would in part serve to satisfy the pop-interventionists
who have been lusting for American involvement in Sudan and would
in part show that Obama is a tough guy who can really get the arch-terrorists
along the Afghanistan-Pakistan border. McCain’s hawkishness, on
the other hand, alternates between chest-pounding and talk of saving
face by “winning,” as measured by some undefined standard that,
in its vagueness, may as well be synonymous with “make war for as
long as possible wherever possible.”

Of
course, “as long as possible” just may be growing shorter, since
the Federal Reserve’s enaction of Ben Bernanke’s brand of Friedmanite
monetarism — mistakenly labeled “free market” — is likely to prolong
the current recession by both preventing the full correction needed
to adjust for the misallocations of the boom period and by compounding
these misjudgments by luring entrepreneurs and consumers alike into
even further debt. The plutocrats like United States Treasury Secretary
Henry Paulson and his former financial market colleagues, along
with activist central bankers, led by Chicago School true-believer
Fed Chairman Ben Bernanke, are now in a position to really distort
markets, thanks to the extensive new powers granted by the pork-induced
congressional “bailout,” a clear capitulation to the executive branch’s
whims.

With the current
hyper-interventionist Bush regime often being incorrectly described
as laissez-faire, one cannot help but be reminded of the popular
but incorrect account of the Great Depression and the Hoover-Roosevelt
regime change. The story goes that speculators ran amuck in a too-free
market under a free-wheeling do-nothing Herbert Hoover. Then along
came Franklin Delano Roosevelt, armed with his New Deal, to rescue
the battered proletariat from the merciless jaws of its capitalist
abusers. Of course, this account is incorrect. During the 1932 campaign,
FDR actually criticized
the incumbent Hoover for excessive government spending. Hoover said
the following
about his own policies:
We
might have done nothing. That would have been utter ruin. Instead
we met the situation with proposals to private business and to Congress
of the most gigantic program of economic defense and counterattack
ever evolved in the history of the Republic. We put it into action.
No government in Washington has hitherto considered that it held
so broad a responsibility for leadership in such times. Some of
the reactionary economists urged that we should allow the liquidation
to take its course until we had found bottom. We determined that
we would not follow the advice of the bitter-end liquidationists
and see the whole body of debtors of the United States brought to
bankruptcy and the savings of our people brought to destruction.

Rather than
being a do-nothing president, Hoover was indeed an economic interventionist
of the first order
. Historian Joseph Stromberg argues
that FDR only extended and formalized the corporatist policies of
Hoover.
Herbert
Hoover was a major architect of peacetime corporatism. As Commerce
Secretary he encouraged the cartelistic integration of trade associations
with labor unions. As President, he pioneered most of the New Deal
measures, which had the unexpected effect of prolonging a depression
itself caused by governmental monetary policy. In the election of
1932, important business liberals shifted their support to FDR when
Hoover refused to go over to a fully fascist form of corporatism.
By contrast, the Roosevelt Administration pushed through the National
Recovery Act, which openly sanctioned the cartelizing activities
of trade associations, and the Agricultural Adjustment Act, cartelizing
the farm sector. The Wagner Act of 1935 integrated labor into the
nascent system.

Under
the Hoover administration, the American people saw increased inheritance
taxes, sales taxes, income taxes, public works spending, extensive
stock market regulation, systematic immigration and labor restrictions
and regulations, and unsound monetary policy. That last was made
possible by the creation of the Federal Reserve in 1913. FDR’s own
interventions certainly extended beyond those of his predecessor,
but it should be noted that on March 9, 1933, only five days after
assuming office, one of FDR’s first acts was to push through a sweeping
“Emergency Banking Relief Act” that was largely drafted by the supposedly
do-nothing Hoover administration. Austrian School economists such
as Murray Rothbard have shown that the actions taken by both Hoover
and Roosevelt actually deepened and extended the depression.

In keeping
with the tradition of inaccurate portrayals demonstrated by the
Hoover-FDR example, George W. Bush, who has presided over one of
the largest, most interventionist governments in human history,
is largely portrayed by both parties and by uninformed commentators
as a champion of free markets. The present crisis is being blamed
— mistakenly — on “market failure,” when nothing could be further
from the truth. The current financial crisis is only the natural
result of the meddlesome policies of the federal government, combined
with the incentivized responses of market actors responding to manipulations
of money and credit. One wonders if those objecting to the operation
of economic law would be equally vehement in denouncing physics
for interrupting one’s upward travel by operation of that pesky
law of gravity.

With
“freedom” like what we’ve seen over the past eight years, it is
no wonder that many people are seeking an alternative. Unfortunately,
the American people are faced with the disconcerting certainty that
the next president will preside over an America that is less free,
less prosperous, and more inhibited by government intervention in
the marketplace than any time since the New Deal. It isn’t clear
that democratic action can or will prevent the desperate actions
of lawmakers who are willing to break any oath in order to appear
busy in the face of a looming catastrophe, and who are even more
desperate to protect the position and influence of the plutocrats
who in many cases played a major role in getting them elected. When
it passed the Emergency Banking Relief Act of 1933 and the $850
billion Emergency Economic Stabilization Act of 2008, the Congress
leapt before it looked. Both acts were passed by a congressional
body before it could fully read and understand what it was approving.
Both
major party 2008 presidential contenders voted in favor of the latter
legislation. Regardless of which candidate succeeds George W. Bush,
Americans face the very real threat of the next top executive wielding
even broader emergency powers than Lincoln, Wilson, and FDR did.

October
20, 2008

Dick Clark
[send him mail],
a native Southerner, currently lives in exile in Boston, MA. He
is a 2L at Suffolk University Law School.

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