[Reprint from 7/2/08. It is freshly relevant, given this week's developments. You will recognize the old "game plan" in Main Causes of the Great Depression. And here is a very entertaining piece by Edward Griffin on the Federal Reserve System. It is important to understand how that "scam" works, and who runs it.]
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I would like to share a few disturbing items I've run across, and pose a question.
First:
Shades of Great Depression on Wall Street
2008/07/01
WHEN Wall Street slumped on Thursday, in response to the oil price surging above 140 a barrel and renewed fears about the banking system, the alarm bells rang more loudly than usual.
Barring a miraculous recovery, the Dow Jones industrial average is heading for its worst June since 1930, when it plunged by almost 18 percent. ...
After the crash of October 1929...America entered a depression and the stock market went into a deep freeze that lasted a quarter of a century, taking until 1954 to get back to its pre-crash high. Are there any parallels with today? [...]
Second:
GM's Stock Falls to Lowest Level Since 1956
Associated Press - updated 6:54 p.m. ET, Wed., July. 2, 2008
DETROIT - Shares of General Motors Corp. plunged Wednesday to close below $10 for the first time in more than half a century, on worries about the company’s cash needs and speculation about a possible bankruptcy protection filing down the road. [...]
1954 again? Ironically, "the pre-crash high" year, but bad by today's standards. Weird coincidence, anyway. Third:
Depression, Not Recession, Looming in America
Published Thursday, March 6, 2008
... A real similarity between our current moment and the Great Depression is the massive growth in income disparity that has emerged as the dominant feature of the economic and social landscape. In March 2007, two leading economists reported that the top 1 percent of Americans, whose incomes exceed $350,000, received the largest share of the national income since 1928, the eve of the Depression. The income of the top 300,000 Americans nearly matched that of the bottom 150 million combined. Furthermore, the size of this gap has doubled since the 1980s. [...]
And finally:
Main Causes of the Great Depression
by Paul Alexander Gusmorino III May 13, 1996
... Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade...
The "roaring twenties" was an era when our country prospered tremendously. ... The maldistribution of income between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income.
A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period. ... As production costs fell quickly, wages rose slowly, and prices remained constant, the bulk benefit of the increased productivity went into corporate profits. In fact, from 1923-1929 corporate profits rose 62% and dividends rose 65%.
Does this sound familiar to anyone? He continues:
The federal government also contributed to the growing gap between the rich and middle-class. Calvin Coolidge's administration (and the conservative-controlled government) favored business, and as a result the wealthy who invested in these businesses. An example of legislation to this purpose is the Revenue Act of 1926, signed by President Coolidge on February 26, 1926, which reduced federal income and inheritance taxes dramatically.
Does THIS sound familiar? He continues:
Andrew Mellon, Coolidge's Secretary of the Treasury, was the main force behind these and other tax cuts throughout the 1920's. In effect, he was able to lower federal taxes such that a man with a million-dollar annual income had his federal taxes reduced from $600,000 to $200,000.
Yes, tax cuts for the wealthy, and for big corporations. Very familiar...
And how they got ignorant poor and middle-class people to support their fight against the "estate tax" was obscene. "Today, the estates of only 1 out of every 200 people who die owe any estate tax whatsoever, because the first $2.0 million of the value of any estate ($4.0 million for a couple) is totally exempt from the tax. Further, the exemption level is scheduled to rise to $3.5 million ($7 million for a couple) in 2009..." http://www.cbpp.org/...
But Rush Limbaugh and his ilk had all the knuckle-draggers HOWLING against the "death tax", as though it actually affected THEM. What some lying, manipulative assholes Republicans are (and what some dupes are citizens, to believe them).
Continuing:
The rich stopped spending on luxury items, and slowed investments. The middle-class and poor stopped buying things with installment credit for fear of losing their jobs, and not being able to pay the interest. As a result industrial production fell by more than 9% between the market crashes in October and December 1929. As a result jobs were lost, and soon people starting defaulting on their interest payment. Radios and cars bought with installment credit had to be returned.
Hmm. We've got HOMES being returned everywhere, now. Yes, these parallels are disturbing. He concludes:
All of the sudden warehouses were piling up with inventory. ... Foreigners stopped buying American products. More jobs were lost, more stores were closed, more banks went under, and more factories closed. Unemployment grew... The country spiraled quickly into catastrophe. The Great Depression had begun.
But THEY had foreigners BUYING American products, factories running, and jobs to BEGIN with. We DON'T, to any great extent; OUR jobs and factories have already been going overseas for several years!
My conclusion, after seeing the "Writing on the Wall" [original diary title]:
Eight years of Bush oil barons and wealthy multinational corporate interests have put us in an alarming state which greatly parallels the state immediately preceededing the Great Depression.
"Barring a miraculous recovery", as the first article put it, we may soon find ourselves in a hell of unprecedented proportions, given our current demographics and culture. (The first time around, many lived on farms, and could grow a turnip, raise a cow, or shoot some game, in order not to starve.)
Now, the question: The same wealthy interests who convinced people that George Bush and Dick Cheney would be good for the country, and for our pocketbooks, are now trying to do the same for John McCain. Do you think they should be trusted any further, or do you think we need to CHANGE this damnable course they've put us on?