by Len Hart, The Existentialist CowboyUS Taxpayers have underwritten and/or are committed to a transfer of some 8.6 trillion dollars to Wall Street [see:
8.6 Trillion was a Drop in the Bucket]. As no 'bailout' has yet done anything but enrich Wall Street 'robber barons' who have invested their windfalls offshore, I propose that Wall Street get no more bailout monies whatsoever. I propose that the government divide up that 8.6 trillion up among all the citizens of the United States. Your share is over twenty-eight thousand dollars. I will take my share now, thank you! Gold --not Monopoly money, please! If this kind of bailout were put into the hands of the folk who really drive the economy with their purchases of homes, cars, meals and clothing, the economy would literally turn around overnight.
During the Great Depression, John Maynard Keynes proposed that the government would do much, much worse than simply putting 'pound notes' in Mason jars, burying them in a landfill and letting people dig them up. Keynes was not kidding. Clearly, his proposals would have worked while every cockamamie GOP plan since Ronald Reagan's depression of some two years following his tax cut of 1982 has failed.
Instead of cutting taxes for Wall Street traders and speculators, taxes should be raised, in fact, taxes should be raised for every member of the elite of just one percent of the population. This elite owns more than about 90 percent of the rest of us combined. Ending their free ride would go a long way toward mending this broken economy.
Wall Street has not appreciated nor done any good with monies it has already received. In fact, the crooks on Wall Street have complained loudly and arrogantly about the monies they've gotten already. Fine! You don't like it? Then give it back to folk who might use it to save their homes!
The axis of China and Wal-Mart puts Americans out of work and sells them cheap shit that is overpriced at any price and more so when wages and jobs are declining because of the bargain.
Not only have the bailouts failed to effect the economy, the huge brokerage firms, banking houses, and insiders are complaining that they haven't gotten enough money. My position is that they should never have gotten the money in the first place. The result has been that the US is mired, perhaps bankrupted, ever deeper in a pit, an economic black hole from which there may be no escape. At least, not soon!
The bailouts failed because the wrong people got the money. What is called the 'real' economy never got a bailout. It was the 'phony economy' that got YOUR money.
While Wall Street demands more of your money, I demand to know how much of that 8.6 trillion dollars has wound up in hidden accounts in the Caymen Islands.
Tent cities are associated with the Great Depression and many have forgotten that there were tent cities in boomtown Houston, TX. The cause was Ronald Reagan's depression of at least two years following his ruinous tax cut of 1982. Convenient amnesia and denial is found throughout the GOP whenever the facts about Reagan come up. Republicans are not merely wrong, they are nuts! Clue: Obama had no more to do with this crash than FDR with Hoover's crash of 1929.
Depressions are not the result of a 'business cycle'; they are the result of a 'capitalist cycle' or, better, a 'Wall Street cycle'. The cycle is one of 'buying' and then 'selling' and it is a characteristic of the 'phony economy' --not the real one. Declines in the 'phony economy' occur whenever there are more sellers than buyers. Prices rise whenever the opposite is true. Buy and sell, boom and bust. By contrast, 'real' economies in which 'just folk' buy real products of utilitarian value from manufacturers and service vendors who deal in real products might be unaffected but for their reliance upon investment capital.
I define 'capitalists' as those peripheral 'investors' in more complicated economies characterized by a division of labor. There is evidence that the 'division of labor' is ancient but it may be anyone's guess when someone got the bright idea of offering up a piece of papyrus, parchment or paper as representing a 'share' of his enterprise. Whoever that was, he/she was the world's first capitalist.
Economists like to talk about the 'business cycle' as if it were holy script! I don't believe that 'business cycles' are necessary. It's just a term that economists have chosen to use to describe an observed phenomenon but that does not mean that there is anything 'necessary' about them that competent policy could not or would not address and cure. 'Capitalists' would --of course --prefer that you continue to use the term and believe in them. It's not science; it's religion. The term 'business cycle' is, rather, the convenient cover while 'insiders' take their profits. It is what St. Thomas More during the reign of Henry VIII described as a 'conspiracy of rich men'.
This distinction between real business --often called 'main street' --as opposed to Wall Street capitalism is blurred because there exists a symbiotic relationship between them. Mass consumption represented 'mass need' to be met with 'mass production'. Obviously, a burgeoning Ford Motors would require 'capital' in order to meet the 'demand' for cars nationwide.
The key is demand. A small enterprise might meet a local demand without any help from Wall Street. The small enterprise might finance expansion out of profits or with a loan from the local 'building an loan'. Unless the small enterprise requires enormous sums in order to meet regional or national markets, it may never require the kinds of cash that are available only in the nation's financial centers, primarily Wall Street.
With the exception of bad weather and bad crops, local economies might very well have been immune to the so-called 'business cycles' that define Wall Street. Had not global firms --financed by money changers on Wall Street and other financial centers like London or Hong Kong --insinuated themselves like Kudzu in the smaller communities of America, the effects of a 'recession' might have been confined to the money-changers who cause them. Simply, recessions/depressions occurred when stocks plunge; stocks plunge when traders --leeches who have never produced a thing in their lives --compete with one another to take their profits --Thomas More's 'conspiracy of rich men'. Last man out loses. Wall Street is a game of economic 'chicken'.
If the consequences could be confined to those who cause the problems, I might say: to hell with it! But like China who must bail out America or be sucked into the black hole itself, the government is compelled to 'bail out' the crooks and liars who caused it all. In literature that is called a Faustian bargain. Everyone, it seems, will, at some point in time, sell his soul to Wall Street.
Given the crooked nature of this scheme, it seems redundant to point out Wall Street's obvious hypocrisy, that of 'blaming' government for its excesses, blaming Democratic regimes for daring to criticize the Wall Street robber barons who caused it all. These folk are divided into two groups 1) the crooked, and 2) the stupid! Being a Wall Street trader, broker or insider is not indicative of intelligence. A truly intelligent person will have figured out a way to be independent of Wall Street. Someone once said that the best revenge is living well. Wall Street, by contrast, will ALWAYS collapse periodically and just as predictably will seek a bailout as it blames the government for its failure. Many so-called 'conservatives' denounce what they call 'government interference' in the 'free market' but that is true ONLY when they are not seeking a handout or a bailout.
To be sure, the economic contraction is causing pain just about everywhere. In October, less than a month after the financial markets began to melt down, Moody’s Economy.com* published an assessment of recent economic activity within 381 U.S. metropolitan areas. Three hundred and two were already in deep recession, and 64 more were at risk. Only 15 areas were still expanding. Notable among them were the oil- and natural-resource-rich regions of Texas and Oklahoma, buoyed by energy prices that have since fallen; and the Greater Washington, D.C., region, where government bailouts, the nationalization of financial companies, and fiscal expansion are creating work for lawyers, lobbyists, political scientists, and government contractors.--The Atlantic, How the Crash Will Reshape America
The US economy has entered into a contraction not seen since 1929. Private and public payrolls combined have shrunk for 14 straight months. Some 650,000 jobs have been lost each month for the last four months.
That's like losing a city the size of Austin, TX every month.
Some people have given up finding work. The Labor Department’s alternative unemployment rate measure is designed to measure this effect. This figure is at its highest since 1994. In February that figure was 14.8 percent, up 6.1 percentage points since the recession began. Over 23 percent of an estimated 12.5 million unemployed may have simply given up finding a job.
US may have fallen off the cliff already, and, like Wiley Coyote, is now just hanging on to a branch. Why haven't the bailouts worked? As was the case with Reagan's 'voodoo economics', the wrong people got the money. Did Reagan's tax cuts bring about more growth than would have normally occurred? Of course not! The opposite occurred. The record shows that the growth rate was 3% between 1979 and 1989 --the same as the growth rate between 1973 and 1979! There was, then,
no improvement with "voodoo economics" than without it.
There was no "Reagan recovery"!Punch out the next gopper who tries to tell you that there was. There was no Reagan recovery. Wealth did not trickle down! Rather, wealth has continued to be transferred upward to about one percent of the total population. I am inclined to believe that this transfer was deliberate, planned and executed. It abated only briefly in Clinton's second term. That is but one reason Clinton is officially and systematically demonized and reviled. I have my own problems with Clinton, that is, he did not go far enough. But everything said about Clinton by Republicans are lies! Likewise, I have problems with Obama --but everything said about him by Republicans can be dismissed summarily.
There are many parallels with the American economy of the 1920s. The economy was booming but by 1927 the nation had overproduced goods for which there was no market. Overproduction led to a slowdown in both manufacturing and agriculture. This is evidence --if not proof --that 'trickle down/supply side' economics is a right wing fraud. Transferring monies to manufacturers that are over-produced is economic disaster. Wealth does not 'trickle down', rather, it is transferred to tax heavens offshore. Clearly --a bailout for big banks is a mistake that will continue to have the effect of reducing the supply of money in circulation --a 'contraction'. The so-called 'Great Depression' was, in fact, a
great contraction in which those who would have spent monies were deprived of it.
During the Great Depression and, later, Ronald Reagan's depression of about two years, millions lost their jobs. In 1929, bankers and financers continued to speculate on stocks, borrowing the money and buying stocks 'on margin'. More recently, 'short sellers' have made fortunes that you can rest assured have already been transferred into offshore tax havens.
By late October, 1929 investors competed not to buy but to sell. Obviously -prices crashed in what was accurately called a 'panic'. On October 29, 1929 some 16 million shares were dumped. Wall Street had officially collapsed
People lost jobs and fortunes. Companies failed. Millions were thrown out of work and, eventually, gave up looking. Banks failed as people withdrew savings. Other banks had squandered depositors monies in the failing stock market. People lost homes and farms because the couldn't pay their mortgages. Shantytowns sprang up all over America.
There are yet other clues to what Americans who survive this GOP debacle may expect in the future.
It is possible that the United States will enter a period of accelerating relative decline in the coming years, though that’s hardly a foregone conclusion—a subject I’ll return to later. What’s more certain is that the recession, particularly if it turns out to be as long and deep as many now fear, will accelerate the rise and fall of specific places within the U.S.—and reverse the fortunes of other cities and regions.By what they destroy, what they leave standing, what responses they catalyze, and what space they clear for new growth, most big economic shocks ultimately leave the economic landscape transformed. Some of these transformations occur faster and more violently than others. The period after the Great Depression saw the slow but inexorable rise of the suburbs. The economic malaise of the 1970s, on the other hand, found its embodiment in the vertiginous fall of older industrial cities of the Rust Belt, followed by an explosion of growth in the Sun Belt.The historian Scott Reynolds Nelson has noted that in some respects, today’s crisis most closely resembles the “Long Depression,” which stretched, by one definition, from 1873 to 1896. It began as a banking crisis brought on by insolvent mortgages and complex financial instruments, and quickly spread to the real economy, leading to mass unemployment that reached 25 percent in New York.During that crisis, rising industries like railroads, petroleum, and steel were consolidated, old ones failed, and the way was paved for a period of remarkable innovation and industrial growth. In 1870, New England mill towns like Lowell, Lawrence, Manchester, and Springfield were among the country’s most productive industrial cities, and America’s population overwhelmingly lived in the countryside. By 1900, the economic geography had been transformed from a patchwork of farm plots and small mercantile towns to a landscape increasingly dominated by giant factory cities like Chicago, Cleveland, Pittsburgh, Detroit, and Buffalo.--The Atlantic, How the Crash Will Reshape America
by Len Hart, The Existentialist Cowboy
