Obama is Determined to Re-Create FDR's Mistake

The likelihood of a repeat of the 1937 recession within a depression grows day by day. Obama, like FDR, is convinced that balancing the budget is a sure cure for what ails the economy. But history shows that was a mistake. FDR didn't have the benefit if history, but Obama does. Sadly, Obama is willfully ignoring the lessons of history.

Here are some bits from an excellent post by Brad DeLong on Obama's fixation with the deficit and debt:

Barack Obama:

Transcripts: There are a lot of folks out there who are still struggling with the effects of the recession. Many people are still looking for work or looking for a job that pays more. Families are wondering how they deal with a broken refrigerator or a busted transmission or how they're going to finance their kids' college education, and they're also worrying about the possibility of layoffs. The struggles of middle-class families were a big problem before the recession hit in 2007. They weren't created overnight, and the truth is our economic challenges are not going to be solved overnight.

But there are more steps that we can take right now that would help businesses create jobs here in America. Today, our administration is trying to take those steps....

[T]here are also a number of steps that Congress could be taking right now on items that historically have had bipartisan support, and that would help put more Americans back to work. Many of these ideas have been tied up in Congress for some time. But, as I said, all of them enjoy bipartisan support, and all of them could help grow the economy. So I urge Congress to act on these ideas now.

Of course, one of the most important and urgent things we can do for the economy is something that both parties are working on right now, and that's reducing our nation's deficit...

No. No. No. No. No. No. NO. NO!!!!!!!!!

Absolutely the last thing, the last thing, the country needs is to cut federal spending or raise taxes in fiscal 2011, 2012, and it is now looking like fiscal 2013 as well.

Absolutely the last thing the country needs.

I always thought that smart people surrounded themselves with experts with a diverse range of perspectives so that they can weigh the alternatives and pick the best option. But Obama is deaf to Keynesian economics, the only economics that historically has been shown to get you out of a depression. It is becoming more and more clear that Obama will recapitulate every mistake of the Hoover/FDR administrations before he decides to address the real issue: the dearth of private spending caused by people being savaged by the Main Street effects of the Wall Street crash, the consequent widespread unemployment, and the loss of wealth by the house price collapse that makes them feel vulnerable.