A Page From the Hoover Playbook

I recently posted commentary on the obstructionist tactics currently being utilized by the Congressional GOP to delay and disrupt efforts to pass a comprehensive stimulus package. Not being content with the financial shambles in which they and the Chimperator have left the country, the GOP leadership in Congress seems to be trying to push the nation towards another Great Depression. As is now the norm for the GOP, extreme reactionary ideology is again trumping the best interests of the country and everyday Americans. Harold Meyerson has a new column in the Washington Post that looks at this phenomenon further and which underscores why knowing real history - as opposed to some Christianist rewrite - is absolutely important. Here are some highlights:

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As the nation navigates through the most perilous straits it has seen since the 1930s, policymakers are looking back to the '30s to see which of the paths that Depression-era America embarked upon actually led toward recovery. Well, some of our policymakers. Others, it seems, have seized upon the very policies that deepened the Depression and are repackaging them as solutions for our time.

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In Monday's meeting between President-elect Barack Obama and congressional leaders, Senate Republican leader Mitch McConnell suggested that instead of providing aid to the states to help them meet their Medicaid and education obligations, the federal government offer them loans. The idea is ridiculous on its face: With revenue drying up, states are already slashing services and reducing their workforces, which only deepens the downturn. The last thing they'd be inclined to do would be to take on more debt at the very moment they're struggling to balance their budgets.

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But back to my original point: This idea was tried once before, in the depths of the Depression. In 1932, Congress appropriated $300 million to the Reconstruction Finance Corporation to send to the states for unemployment relief. . . . Unfortunately, Herbert Hoover's RFC didn't offer the funds to the states as grants but as loans. Already all-but-insolvent, many states didn't take the offer. And the economy continued its plunge into the abyss. This is Mitch McConnell's idea of a policy worth reviving.

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Such historical illiteracy can result not only in cures that kill the patient but is also a cause of our current crisis. . . . Wall Street [and the GOP] should have hired a handful of hists (my version of Wall Streetese for economic historians). Those hists might have insisted that the risk models include data from the late 1920s, the last time that America's financial institutions were as highly leveraged and as lightly regulated as they were last year. . . . Unfortunately for us all, it's on the question of how to restore broadly based prosperity that the historical illiteracy of the American elite is at its most acute.

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The business lobby is throwing big money into ads opposing the Employee Free Choice Act (EFCA), which would make it easier for workers to join unions, but one concern it has neglected to address is how the United States can again become a land of broad-based affluence with private-sector unionization at its current 7 percent level. There is no historic precedent for mass prosperity absent mass collective bargaining. The model cannot be constructed.

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Happily, Barack Obama seems to have learned the right lessons from America's economic history. He knows that the stimulus package needs to be big enough to compensate for the collapse of bank lending. He knows that unemployment insurance and food stamps cannot be allowed to run out. He supports the EFCA as a way to boost Americans' incomes.

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The problem is that a number of powerful members of Congress aren't much more historically literate than McConnell. Some Republicans advocate time-honored business tax breaks that have never done anything to jump-start the economy.

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Now is a time when innovative thinking is needed. Sadly, the Christianist controlled GOP is incapable of innovative thinking and will not consider supporting any policies that run counter to the anti-union and anti-progressive mindset of the party's Kool-Aid drinking base.