Huey Long and Barack Obama Big, Smart, Successful Politics.
At his assassination in 1935, Senator Huey Long of Louisiana was easily the most entertaining and media savvy politician in America as well as a man on the rise to the presidency. Franklin Roosevelt feared him as a rival. The Senate despised and envied him as a colleague. The state of Louisiana and a deal of the Democratic South admired and endorsed him and his spontaneous policies. And the radio audience could not turn away from his wild, lucid voice. Seventy-five years ago right now, February 1934, Huey Long proposed on air his brightest and most potent idea, the "Share Our Wealth Society," a utopian club that was immediately as popular to the nation as it was threatening the the Washington leadership. Huey Long always boasted that he could "out promise" FDR. With "Share Our Wealth," Huey Long overwhelmed FDR's struggling New Deal and dazzled the political class. Huey Long aimed to use the cult that sprang up around the society, five million or more members by 1936, to launch his own presidential bid in 1940. Huey Long's sudden death ended the boom but not the notions. What is most entertaining today is to read over the "Share Our Wealth" promises and consider how closely they resemble the Obama administration's to-do list. Huey-Long-following is smart politics. Why? It works.
Share Our Wealth 1934/2009.
1. 1934: No person allowed a net worth more than $5 million. Annual taxes would be used to enforce this mandate on all persons with a net worth over $1 million. 2009: What is the difference between this and the House bill that confiscates the earnings of all persons at private companies that are judged to have received government bail-out cash? Jim Taranto in OpinionJournal.com writes that the 90% levy by the House on AIG and other bonus villains will actually translate, after state and city taxes in, for example, New York, into a 102% tax. Jim McTague of Barron's asks the question, when is what Congress calls a tax -- not a tax? A few voices are now suggesting that the AIG bill is unconstitutional. Meanwhile, the pursuit of the AIG bonuses is excellent politics: New York AG Andrew Cuomo announced late Monday 23 that 15 of the top 20 bonus villains at AIG will return their swag. The other five will provide Mr. Cuomo another week's news in his careful and skillful journey toward the governor's chair at Albany and the president's chair at Washington. Huey Long is a guide for all who read closely.
2. 1934: Every family is guaranteed a fixed annual income. Yearly income of any family is to be capped at 100 to 300 times the average family income. 2009: The Obama administration proposes new and as yet undefined taxes on any family or small business exceeding $250,000 in annual income. This is the first step in the Obama plan to pay for the other Obama plans. This is in addition to the AIG-inspired anti-bonus bill against those who work at firms that take bail-out money. (Trusted correspondent writes me that the Obama administration's ambition to cut the taxes of 95% of the people means that many (who dod not pay federal or state taxes, just sales taxes) will be getting what they never put in, in other words, direct federal subsidies. Is this not Huey Long's genius? Every man a king, and here's a check for your vote, sire.)
3. 1934: An old-age pension for those over 60. 2009: FDR's social security program was the crowning success of the New Deal, in part because it was a political answer to Huey Long's Share Our Wealth. Today, Social Security is broke in n number years (depending upon the spin), and the fuse is lit for a panic. The Obama administration proposes stepping toward federal takeover of healthcare as an answer in part to Social Security's doom.
4. 1934: The federal government will buy up and store excess farm production. 2009: The federal government pays farmers not to produce; however the Obama administration proposes to pay certain so-called wealthy farmers less, as part of the capping of incomes proposals.
5. 1934: Veterans are paid what they are owed. 2009: Veterans may be required to share their healthcare costs with the government, however this general policy seems untouched and consistent with Huey Long -- certainly much different from what FDR mandated in cuts in his first months in office.
6. 1934: Education and training for all children to be "equal in opportunity" for all schools through professional schools. 2009: The Obama administration is aggressive on education, with emphasis on empowering the teachers and their unions.
7. 1934: Federal revenue to be raised for all programs from the fortunes of the wealthy. 2009: The wealthy are, according to the Obama administration, to be obliged to pay their fair share. Details to come; details to be adjusted. The Obama administration's definition of "wealthy" is not yet clarified.
The Bear Market Bear Relief Rally.
Tim Geithner's presentation this morning, however tardy and incomplete, was greeted by a vigorous rally on Wall Street, especially in the ruined financial group. Any good day is a good day for Tim Geithner, President Obama and Ben Bernanke. Calculated Risk provides the steady hand here on what to make of a rally in a bear market of famous dimensions so far (see below). The best way to read this is that we are now rallied back to the bottom of the sell-offs in the 1973-1974 OPEC crisis and in the 2000-2001 technology crash. We must retest the lows of early March 2009. If the March lows hold, then there are several years ahead (a decade?) to rebuild the confidence in the markets. The challenge now and going forward is that the average investor no longer believes in the market. The volume is not robust. Selling any stock or fund or asset will remain the best investment idea for many quarters. In the best of all worlds, we can retest and hold the lows in October 2009, and then try for a rally again in 2010. What will darken this prospect? The ghost of the "Share Our Wealth" in 2009. Caveat: My reading of the life and times of Huey Long is that the man was gifted, inspired, ruthless, strategic and lucky. But for fate, Huey Long may very well have been elected the president of the United States in 1940. He would have assumed office in January 1941, in time to face off with the Devils, and to transform history into "Share Our Wealth." The Obama administration is well-informed to pursue Huey Long's policies and promises and to stay with the pursuit no matter the noise of the opposition. If not, don't look back, because Andrew Cuomo will be gaining on you.
from Calculated Risk:
TCA says:Today, 4:07:47 PM EDT
Amazing day on light volume.
Yep, volume was HALF what it was on Friday's big down day. This
What worries me is why the market has basically ignored the 90% tax bill. Or, Barney Frank's comments that limits on executive compensation may soon apply to all publicly traded companies, not just TARP recipients.
It could be either really good news (markets figure the 90% thing is just sabre-rattling and nothing to worry about) or really bad news (markets figure class warfare and punitive tax increases on the wealthy are here to stay, and are just shrugging their shoulders and making the best of it.)
from Calculated Risk comments:
Here are the bear market rallies that occurred during the Great Depression. We are likely to see 3 or more before it's over.
November 1929 - April 1930: +48%
June 1930 - September 1930: +12%
December 1930 - February 1931: +21%
May 1931 - June 1931: +27%
October 1932 - November 1931: +35%
July 1932 - September 1932: +72%
http://socialize.morningstar.com/NewSocialize/forums/p/228893/2591709.aspx
Here in India, with an appropriate socialist streak, ordinary commerce is almost entirely need-based. People go to the shops only if they should actually need something. As such, Indian shops tend to give the appearance of being rather disorganized with stuff all over the place. More often than not, a shop will have no parking facilities; neither will there be sidewalks suitable for what we in the West would call ‘window shopping’. Merchants don’t try to entice you into buying something you may never have thought of getting by displaying it prominently or even attractively. In fact, with all space so severely limited as it is in much of Asia, the customer must generally ask for what he wants. Someone at the shop will then be sent to prospect for it. He or she will be sure to first wipe off the dust before handing it over to the cashier for packaging.
This is, of course, quite different from the West where shopping is indulgence-based. It is common for people to view shopping as a social outing. Often, people will venture out to malls simply for something to do, having virtually no idea what, if anything, to buy. It is only after having arrived - where a variety of attractively lit stores will beckon customers with seductive displays - that they will allow themselves to be tempted to spend their money.
Such desultory behavior may be regarded as the height of obscenity by some. With so many deprived and starving people all around the world, they would argue, such frivolous self-indulgence is an insult to common decency. They may have a point. I recently heard of one of India’s super-rich buying a Rolls-Royce which he would park just across from a slum (next to which his business was located). I personally would regard this as a somewhat vulgar display of a serious psychological condition on his part. On the other hand, I cannot in good conscience fault the people who have built their livelihood on the production of a car that is truly exquisite; one, that may even be considered as an example of high contemporary art.
About the ROLLS- who drives one into a slum, parks it, and trusts that it won't be stolen, stripped, or vandalized?
No one in America!!!