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Posted by on Oct 15, 2008 in Economy, Politics | 11 comments

Great Depression 2.0, Meet New Deal 2.0

The reason that John McCain and the rest of the GOP is failing this year is not because of media bias, or dirty tricks by the Obama campaign, but because conservatives have run out of ideas. McCain has never been an idea person, hoping that people would elect him on his august resume.

But you can only go without new ideas for so long, which is why the GOP is getting its head handed to them come November.

But I tend to think this is a Republican loss and not a Democratic win, meaning just because the GOP isn’t doing so well, that doesn’t mean that Democrats have new ideas ala Bill Clinton in 1992.

The Democrats have pretty much abandoned the “New Democrat” strategy, which placed a more centrist face on the party. It was that willingness to co-opt conservative ideas that gave Clinton two terms in the White House. But the base thought such moves were nothing more then “Republican-lite” and have worked to cast the Democrats in a more traditional liberal mold. Because of that, and because of the utter failure of the GOP under George W. Bush, we have a Democratic Party running on policies that are 70 years old.

Politico is reporting that Democratic lawmaker see a need to bring back some of the programs that had their start in the Great Depression. Call it New Deal: The Next Generation.

With visions of a massive liberal majority in the next Congress and the power to remake economic policy for the next generation, Democrats are dusting off their New Deal history books and openly discussing the idea of re-engineering Depression-era agencies for the 21st century.

Several lawmakers want to bring back the Home Ownership Loan Corp., and others have discussed resurrecting the defunct Reconstruction Finance Corp., a federal program that made direct loans to businesses. Others see a lame-duck stimulus bill less as a short-term cash infusion for the economy and more as a long-term, government-driven jobs creator — a kind of modern Works Progress Administration that invests in infrastructure, bridges and roads.

The recent mess on Wall Street has led some to think that desperate times call for desperate measures and so we get this supposed New Deal sequel.

I think it can be wise to look at what worked in the past, and since the New Deal has been such an important part of history for the Dems, that makes sense. But it seems like they are trying to recreate some golden past instead of trying to work for the future. My personal feelings on government intervention aside, maybe some New Deal-style programs would make sense, but the fact is, we don’t have the economy we had in 1933. Also, it’s still murky as to whether or not a depression is an outcome. A lot of experts think we are headed more towards 70s-style recession than 30s-style depression. So, if that’s what we are headed for, does it make sense to have such a big response?

I’m not saying the government should have no role. In such a crisis as this, government needs to have a role to keep us from entering a 21-century depression. But I wonder if this dream to establish a Second New Deal is overkill. The Dems need to come up with ideas that fit the current times.

The GOP have no ideas and that’s bad. But having the Dems dust off old ideas isn’t any better and voters can only take that tack for so long.