Can Taiwan survive a depression?

Belatedly, President Ma Ying-jeou is coming out on the frontline — he promised to stay behind the front where his premier, Liu Chao-shiuan, is in charge — calling the shots to get Taiwan's Democratic Progressive Party-messed economic house in order. He ordered, in rapid fire, a tax cut, the issuance of consumers' vouchers, creation of at least 500,000 new jobs, the opening of all three direct links between Taiwan and China, massive public works construction and a series of cuts in Central Bank basic rates to stimulate the economy. Bailouts to ailing industries, such as automobile and DRAM (dynamic random access memory), are in the card. He still wants to keep his campaign promise of an annual economic growth of six percent for eight years. To put it simply, he is trying to act like President Franklin D. Roosevelt in his Hundred Days and shortly thereafter.

But Ma sounds more like Herbert Hoover. Right after the 1929 Wall Street crash, President Hoover became the exorciser with public statements such as “Any lack of confidence — in the basic strength of business — is foolish,” “business and industry have turned the corner” and “we have now passed the worst.” When the wheat prices dropped to a record low in 1930, he had Secretary of Labor James J. Davis drop this gem: “Courage and resources are already swinging us back on the road to recovery, and we are fortunate in having a president who sets a shining example of that courage and initiative.”

Actually, much more than talk was needed to swell the shrunken gourd and plump the shriveled shell. President Hoover did his best according to his lights, and he had a warm heart which responded to the suffering. But he was restrained from taking any bold imaginative steps by his wrong estimation of the situation. He meant very well, labored hard to find solutions and sought advice, but nothing seemed to work because being the prisoner of fixed ideas, and surrounded by like-minded men, he could not try anything new or bold. The Great Depression reached its nadir in 1932-33.

Unemployment hit 25 percent. Breadlines were in cities across the country. Although alleviated by the bold expedients of President Roosevelt's New Deal, it did not really end until 1939-40 when the United States began to re-arm in anticipation of its participation in the Second World War.

Roosevelt succeeded in saving twentieth century American capitalism by purging it of gross abuses and forcing an accommodation to the large public interest, because he reasserted the presidential leadership which had been forfeited by his three predecessors and promoted the growth of federal power which had halted since the First World War.

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