Shortly before his death, the late Hunter Thompson wrote that '....the American nation is in the worst condition I can remember in my lifetime'. He said that our prospects for the future were even worse. Indeed, we are poised on the brink of a financial collapse that may yet make the crash of '29 and the subsequent Great Depression look like a walks in the park.
The difference is that in 1929, the US still had industries and small farmers many of whom survived the depression very well. As youngster, I recall talking to some of these people and listening in awe. Some of them actually lived off the land like pioneers. For some, 'polk salad' was a staple. Others lived off ' 'Possum'. Still others waged war on the 'game warden' who might have prevented their living off the land. A great Uncle wrapped up a 'Game Warden' in a cow hide, hoisted him over a high limb in the Texas 'Big Thicket'. He left him there --swinging in the high branches. They were inventive, resourceful and ruthlessly determined to survive. The 'man' would not deprive them of a right to survive.
Thompson wrote that he was 'surprised and embarrassed to be a part of the first American generation to leave the country in far worse shape than it was when we first came into it. As I have written on this blog, the US has exported its industries, primarily to China. We have Nixon and the Bushes to thank for that.
Even before the US entry into WWII, Adolph Hitler and his 'inner circle' often ridiculed American automobiles and highways --or lack thereof. Germany had the autobahn. Albert Speer, in his "Inside the Third Reich" recalled an auto 'trip' he took with Hitler. They were overtaken that evening by someone in an American made auto. The Nazis would not be outdone. As I recall, Hitler, himself, was behind the wheel in a Mercedes. In a burst of testesterone, Herr Hitler put his 'pedal to metal', overtook the American car and left it 'in the dust'. Speer recalls that they all had a good laugh. At our expense.
It could be argued that the way in which Thompson wrote a lot of his work is attributed to the New Journalism movement during the 1960's, led mainly by Tom Wolfe. New journalism aimed to revolutionize and break all the rules of traditional journalism, including features like writing as if you are inside the head of a character or documenting everyday events and details. Thompson has adopted many of the features that are deemed to be part of this movement, but he has made a positive contribution and a significant impact on it by taking these features to a new level and putting his own spin on them. Thus publicizing an original branch to this wave of new styles, although what he writes about is largely non-fiction he relies on satirical devices to drive his point's home.As Thompson pointed out:
--Hunter S. Thompson's World of Fear and Loathing
Our highway system is crumbling, our police are crooked, our children are poor, our vaunted Social Security, once the envy of the world, has been looted and neglected and destroyed by the same gang of ignorant greed-crazed bastards who brought us Vietnam...Hitler and Goring must be laughing in their graves. The American GOP has achieved in the US almost everything Hitler might have dreamed about except the extermination of Jews, Gypsies other 'untermenschen'. The GOP with key and strategic Democratic sellouts here and there betrayed the people and subverted the Constitution
Thompson called 'disastrous' US defeats all over the world. The 'Gonzo' also predicted that the 'stock market' would never come back.
There were other 'harbingers', prophets warning of impending disasters. In his 'Confessions of an Economic Hit Man' of 2004, John Perkins gave us an insider's account the 'neo-colonist' exploitation of the Third World by what Perkins called a cabal of corporations, banks, and the US government.
It was done against the backdrop of 'economic hitmen' laughing it up, toasting the greatest transfer of wealth from the bottom up that the world had ever seen. As a counter-point, Naomi Klein’s Shock Doctrine seemed to be working according to plan.
Naomi Klein: Shock Doctrine
The book and film argue that free market policies of Milton Friedman and the Chicago School of Economics rose to prominence in Chile under Pinochet, Russia under Yeltsin and in the US under George Bush. The Katrina disaster is the most recent example. The 'privatization of Iraq's economy' under the Coalition Provisional Authority was not popular and was not Democratic. The citizens of Iraq were, in fact, in a state of shock. The US even boasted of its campaign of 'Shock and Awe'. As I have written myself --short a revolution, we are fucked!
Two big factors have already made the US a THIRD WORLD nation
Nearly three decades that Reaganomics has been allowed to survive, if not thrive, have been enough to allow the trickle-down theory to come to fruition. Unfortunately, it is debt -- and not wealth --that has been trickling [down].Reagan's economic target was to drown government in a cocktail of lowered government spending, deregulation and reduced tax rates. However, in order to shrink government to bathtub size, the role of private business had to expand to fill basic needs, which was totally fine with Republicans.
But another consequence of Reaganomics, one that doesn't jive so much with traditional Republican values, is the reduction of states' powers. Local governments are beginning to see the real meaning of trickle-down economics: dwindling federal funds make it harder for states and cities to meet annual budget requirements. While the U.S. government can live on credit, many local budgets are required by law to be balanced. So the largest tax cuts to date were bound to trickle down to local governing structures, and now many governors and mayors are responding in an uncharacteristically Reaganistic fashion.
Take Obama's home territory, for example. Chicago, under the firm grip of Democratic Mayor Richard M. Daley, is deeply committed to privatization. Not because it's a popular idea, mind you, but because the city is desperate for funds.
Still, they don't call it the Chicago school of economics for nothing.
The US simply cannot continue to survive as a nation, let alone a world power. And for all of this we owe the GOP for having been its architect and the Democratic party for having caved on crucial issues.
Supply-side economics is not a 'hands off' policy at all. It is, in fact, an active, deliberate distribution of wealth upward to an increasingly tiny elite. It is pseudo-economics touted to justify big tax breaks for the upper ten percent of the nation's income recipients and wealth-holders. Reagan's own budget director, David Stockman, called 'supply-side economics', a trojan horse advocated by what he called a 'noisy faction of Republicans'.
If the US should slide off into another great depression, it will be because consumers of all classes and primarily the middle and lower classes do not have money to spend. Another great depression will result for two basic reasons:
- the investor classes have exported their tax cut windfalls offshore causing net declines --not increases --in jobs;
- The productive (working) class is taxed disproportionately, effectively robbing them of their purchasing power which alone drives the economy.
As class warfare propaganda, this myth is matched only by 'supply side (trickle down) economics. Indeed, many believe that the crash of Black Tuesday, October 29, 1929 is one and the same with the Great Depression. In fact, there were many causes for the Great Depression which was, in fact, the contraction of the money supply among those who were most likely to spend it.
Nevertheless, the crash is significant. Stockholders lost more than $40 billion dollars within two months of the crash. The market had regained some of its losses by the end of 1930 --not enough to prevent the nation from entering the Great Depression.
More significant, is the fact that millions lost their 'savings'. People save in order to spend. It is spending that might have kept a viable economy afloat. In the 1930s, over 9,000 banks failed at a time when bank deposits were uninsured. Surviving banks stopped making new loans, reducing total amount of money in circulation. That's called a 'contraction'; the other word for 'contraction' is 'depression' as in 'Great Depression'. The same thing happened recently, when those favored by Reaganesque 'tax cuts' exported their monies to offshore tax havens. Another 'contraction' occurred! It is often called Reagan's recession. Others, recalling that it was the deepest, longest 'contraction' since Hoover's 'Great Depression' of the 30s will call it what it was in fact! Depression!
As a result of the '29 crash, fears, and bad news, millions of all classes just stopped buying, leading to sharp reductions in production and jobs. As unemployment increased, people fell behind in their installment payments; homes and items were repossessed. Inventories increased, sat idle, and could not be sold. Meanwhile, the unemployment rate rose above 25%.
American Economic Policy with Europe
As businesses failed, it was hoped that the Hawley-Smoot Tariff of 1930 would protect American companies. The act charged a high tax for imports causing a reduction in US-foreign trade.
While not a direct cause of the Great Depression, the drought that occurred in the Mississippi Valley in 1930 was of such proportions that many could not pay their taxes or other debts. They were forced to sell their farms for no profit to themselves.
This was the topic of John Steinbeck's The Grapes of Wrath. GOP policies are clearly responsible for the income and wealth disparities that are at the root of every GOP recession/depression since 1900. Ronald Reagan's GOP tax cut of 1982 is the easiest target. Several points should be made about this improvident move. One --if 'tax cuts', the GOP panacea for every evil, were in any way effective against depression, then why did a depression of two years follow the Reagan tax cut?
Instead of making peace with the GOP, the Democrats should have waged JIHAD! By bending over and taking it, by capitulating to the robber barons, the US has been sold down the river.
It's all over folks. This US may not come back in our lifetimes.