Stock futures plunged even further following my last post, highlighting the magnitude of the challenge Pres. Obama faces. He will have to hit the ground running tomorrow. Today was the worst inauguration day performance since the Dow came into being in 1896. Confidence in the U.S. banking sector is collapsing fast, as today's prices for major banking stocks indicated. It is now estimated that rescue of Bank of America, the bank that just four months ago was considered solvent, may require $80 billion or more. Citigroup is now considered to be beyond rescue and the market appeared to indicate that its nationalization will be necessary. JP Morgan and Wells Fargo stock prices are also plunging. Many banks stocks fell by 25% today alone! This seems to get worse by the day...
Could Pres. Obama's Policies Usher In/Prolong A Depression, as It Did With His Hero?
Let's hope that President Obama doesn't make the same mistakes that Herbert Hoover and Franklin Delano Roosevelt, both fellow "progressives", made during the Depression. (Hoover was, for a time, a literal member of the Progressive Party, but FDR implemented more forcefully the policies of progressives.) While the Depression in Western Europe lasted only a few years, it lasted nearly more 12 years after FDR took office. In Europe, it was just the "Depression". In the United States, FDR's policies made it the Great Depression, thanks largely to FDR's policies of progressivism. He played god with the U.S. economy, throwing the kitchen sink at it. He taxed small businesses into non-existence, leaving millions more Americans unemployed. His policies were the biggest reason the Depression lasted nearly 12 additional years instead of just a few short painful ones, as it did in Europe. Ironically, Pres. Obama has indicated that FDR is one of his heroes! If this recession lasts as long as the "Great" Depression did, we won't see a recovery until 2021! Ugh!
