We are as a society and as a planet at a crossroads of sorts. A crossroads fraught with peril if we take the wrong path as can be evidenced by historical precedent.
Here is a brief history of what can happen when we have financial instability of the greater portion of the population:
The Panic of 1837
Unfortunately no practical measures were at first instituted to relieve the distresses of the working classes, and advantage was taken of the opportunity by politicians and demagogues to inflame the passions of the ignorant and the vicious.
The economic harvest of the Jackson years is the Panic of 1837, with an ensuing depression. During these years cotton production increased in the South, agriculture expanded in the West, cities grew, manufacturing replaced trade as the economic base in the North. These phenomena were accompanied by a rise in the sales of land, and also in the price paid for land. There was a need for internal improvements, roads, canals, etc. and these had to be financed by states and private companies. Inevitably, speculation and inflation accompanied such activities, and President Jackson hoped to curb the unhealthy aspects of a growing economy by extirpating the central bank, which he considered the root of the evil.
But with Federal funds distributed widely in "pet banks" and surplus revenues distributed among the states, the control exercised by the Bank of the United States is replaced by financial anarchy: the number of banks and the number of bank notes increase. In response to the President's Specie Circular issued in 1836, the local banks are faced with a critical situation, and call in their loans. (At the same time, a depression in Great Britain results in withdrawals of British investments and a decline in the demand for cotton.) First the New York City Banks suspend specie payment; then others follow suit. Lacking sufficient hard money, banks fail, enterprises go bankrupt, unemployment spreads. As the depression deepens, President Van Buren continues to follow Jackson's policy, with the ill-advised codicil of a plan to fragment the single treasury into a system of "sub-treasuries."
Which resulted in the
Flour Riots flour went from $5.62 a barrel to $12 a barrel: Hunger is the worst enemy of social cohesion.
The end result of privation is always, always, always violence. No amount of cable television and pharmaceutical medications will change that.
Picture the outrage that people experience every time the price of a barrel of gas goes up, then throw in extreme poverty and unemployment – up to a third of the working population was jobless. That’s basically what happened in 1837 when the cost of flour went up from $5.62 a barrel to a whopping $12 a barrel. The price of everything was skyrocketing and it was sending people to the poorhouse. People organized and decided to meet at City Hall to rally against people who were price-gouging – everyone, they said, from landlords to flour merchants. Then someone started naming names – Eli Hart was allegedly hoarding flour, and the crowd was in the mood to do something about it. Hundreds of people stormed down Broadway to Washington Street and forced their way into the building. Attempts to control the mob were completely useless and the mayor ended up fleeing while the crowd tossed barrels of flour out of the windows so people could scoop it up in boxes and pails. The flour, it is said, was nearly a foot deep in the street. The riot only died out when backup police and militia arrived. By this time, Hart’s flour had been cleaned out and the crowd had started to loot other flour dealers.
This depression lasted until 1843.
The panic of 1857 where the jobless massed in Central Park and demanded jobs. Giving them work suppressed the riots that would have resulted:
...giving them work in Central Park, recently purchased and then in course of development. The charitable societies and people of the city established soup kitchens for the needy and starving thousands, so that danger of an uprising was averted. This brief panic is notable for the role that telecommunications plays. When a branch of the Ohio Life Insurance and Trust Company fails, news that would formerly have taken weeks to criss cross the nation, its impact diminishing with time is known within hours, thanks to the telegraph. The news induces one of the first waves of panic selling in the stock market. The underlying cause of the recession is a downturn in agricultural exports brought on by the end of the Crimean War in Europe, as well as over-speculation in railroads and real estate.
The situation is familiar to us all by now. We know how this works; Boom, bust, unrest.
James Buchanan while in office as President March 4,1857 to March 4, 1861.
Washington, December 8, 1857.
Volume: V Page: 436 (extract) "We have possessed all the elements of material wealth in rich abundance, and yet, notwithstanding all these advantages, our country in its monetary interests is at the present moment in a deplorable condition. In the midst of unsurpassed plenty in all the productions of agriculture and in all the elements of national wealth, we find our manufactures suspended, our public works retarded, our private enterprises of different kinds abandoned, and thousands of useful laborers thrown out of employment and reduced to want..
Saner heads prevailed and the issues of the masses were addressed. Not on the grand scale that is needed today but enough to keep the population and the Nation from dissolving.
But again unregulated speculation rears it's ugly head.
Panic and Depression 1869-1871
The Gold Exchange was established in 1864 on the corner of Broad Street and Exchange Place. The dramatic incident of this period was the gold panic on Black Friday in September, 1869, when a combination of several unscrupulous speculators, among them James Fisk, Jr., and Jay Gould, attempted to corner and put to extravagant figures the gold supply of the market. Operations on the Stock Exchange proper at that time were largely made up of the personal struggles of rival capitalists, notably in connection with the Erie and New York Central railroads.
BLACK FRIDAY: The term is often used to designate a dark financial day. September 24, 1869, is sometimes referred to as Black Friday in the United States. On this day a syndicate of New York bankers advanced the price of gold to 162 1/2, causing a panic. It sold at 143 1/8 the previous evening. The Grant Administration dumped $4,000,000 in gold on the market, the price falls in fifteen minutes from 162 to 133, and many investors were ruined. Fortunes were lost. Wall Street brokerage houses failed. Railway stocks shrank. The nation's business was paralyzed. Another such day was Friday, Sept. 19, 1873, when Jay Cooke & Co., leading American bankers, failed. A great crash ensued in Wall Street, the center of financial operations in America, and the historic panic of 1873 began. Credit generally was impaired and many financial institutions were forced into bankruptcy.
Ten days before Grover Cleveland was inaugurated one of the many rail roads which were heavily reliant on stocks for financing filed for bankruptcy. In short order industrial commodities stock prices nose dived...
Panic of 1893
Prices of grain, cotton, steel, and timber fall steadily, while the stock market fluctuates wildly. Many financiers, including August Belmont, J.P. Morgan and Henry Villard, warn Cleveland that a panic is nearing, and add their pressure to get a repeal of the Sherman Silver Purchase Act of 1890, which they blame for the crisis.
The chief fear among Eastern financiers and businessmen is that in a panic the United States could easily be forced off the gold standard. Early in May the panic begins. More railroads go broke; many of the great financial trusts begin to collapse; European banks begin selling their American stocks and bonds, and a huge run on banks ensues, until more than 500 Banks have failed. A vigorous battle begins, with the goal of repealing the Sherman Act. Forces for and against repeal are lined up geographically: the West and South favor retention of the act, and the East favors immediate repeal. Despite the repeal of the act in October, the deepening depression is becoming worldwide, and is wiping out prosperity in all sections of the economy.
Due to the severity of this latest panic of unregulated capitalism the
Pullman Strike was initiated because, just as today, the errors of the wealthy means the workers must suffer the burden. In this case pay an benefits were cut 25% but the costs of employment remained the same including in the mandatory company housing. After forming a committee and asking that the rents be reduced. They were refused and three of the committee were fired. The largest strike heretofore in American history was started then. No trains West of the Mississippi were allowed to operate.
The governor of Illinois was John P. Altgeld. He did not want to request troops because he believed that workers should have the same rights as their bosses. These ideas made the General Managers Association uneasy. The railroad managers started flooding the newspapers with stories that made Debs's American Railroad Union seem like a violent and lawless gang and portrayed Eugene Debs as a radical. They claimed that unrest had always ended in violence and threatened that this strike would be the same. The railroads began sending people to work on railroads as strike breakers or scabs.
Attorney General Richard Olney supported the General Managers Association because he believed that the railroads had the right to do things their way, and if the workers disagreed with the treatment they were receiving, they could quit. On June 29, 1894, Debs went to Blue Island and asked the railroad workers there if they would support the strike. The railroad workers there felt they were being discriminated against. Angry railroad workers in Blue Island began destroying the yards and burning anything that was flammable. Attorney General Olney requested President Cleveland to send federal troops into Chicago to break the strike.
On July 2, 1894, Olney obtained an injunction from a federal court saying that the strike was illegal. When the strikers did not return to work the next day, President Cleveland sent federal troops into Chicago. This enraged strikers, and rioters began stopping trains, smashing switches, and, again, setting fire to anything that would burn. On July 7, another mob stopped soldiers escorting a train through the downtown Chicago area. Many people were killed or wounded from bullets.
We have a pattern here. People get greedy and run up the price of stocks in a vain attempt at a power grab and then the market crashes leaving a few already wealthy investors better off while the rest are financially ruined. Who could have guessed?
The Panic of 1901
--In your own country, hundreds of thousands of newly rich investors have just been wiped out in what history books will remember as the panic of 1901. The panic is triggered by a brutal financial knife-fight for control of nation’s railroads between soon-to-be-legendary-capitalists E.H. Harriman, J.B. Schiff, and J.P. Morgan.
--The fight for Northern Pacific railroad sends the stock soaring…and then crashing…and leaves investors gutted and the capitalists firmly in control of what looks like the most economically important asset the nation has.
Then we had the Great Depression. An episode that again was preventable and resulted in hunger, homelessness, and bloodshed. But we had had enough, and we created stock regulations and while we were at it made the financial sector of banks separate from the everyday transactions banks engaged in. But then we ended up with some Neo-Cons that thought it would be a grand idea to unleash the power of greed again on the hapless population of the world so their cronies could make a profit. So those regulations that protected our society for 50 years were soon gone.
Can you guess what happened next?
The anomaly to this boom, bust, riot cycle is the Occupy Movement.
We for once have enough of our population educated enough to understand what will happen if our society does not begin to heal itself. And with the Do-Nothing Congress we have now healing is impossible. So peaceful non-violent protest methods are being taught to those most likely to be engaged in the civil unrest. Unrest driven by the uncertainty and hunger we are hurtling towards on rails greased by Tea Baggers. Make no mistake, we are in an economic condition worse than the Great Depression. A Depression that was prolonged until nearly the mid point of World War II.
How did we get out of that Depression you ask?
Government spending on a scale never imagined then or now.
We can continue to spend the amount it would cost to repress the inevitable costing lives and most likely eventually infrastructure damage. Or we could spend far far less and deal with the issues being protested.
We need to insist that peaceful protesters are given their voice. How can our politicians say we are being heard if we can not even voice our concerns in a free manner? We have ample historical precedence of what results from such treatment of the people of any society.
I'm looking at the upcoming summer. We will have continued foreclosures, anemic job growth, and more people going hungry and homeless. We will have the precedent set of police violently repressing protesters in many cities. That police violence will not keep desperate people off the streets at all. Quite the opposite, all it will do is give license to those that are intent on destruction to begin with. A situation Occupy works tirelessly to avoid through education and social repudiation of those engaging in behavior that does not embrace non-violence.
There are many ways we can bring the nation and the world back from the brink.
We need sustainable energy. That means jobs in a range of fields for every education and skill level. Instead we get watered down crumbs that still leave us vulnerable to manipulation of petroleum prices. If not worse. Technology that destroys water supplies as it squeezes the remaining available petroleum products out of the ground. If the Twentieth Century was the Oil Century I guarantee the Twenty-First will be the Water Century as water becomes the commodity of choice for those that wish to grasp power.
We need projects for transportation for a society after oil. That means a return to local rail projects as well to the actual development of high speed rail. We need to retrofit the highway system for strategic purposes so that too will need to be funded.
Also we need to create again family farms. In small pockets we still have such an enterprise but for the most part factory farms are the order of the day. Factory farms are not a sustainable model. Or do we need to have an epidemic of antibiotic resistant bacteria to get the point. Oh wait, we already have that problem.
Again we need our Do-Nothing Congress to actually look for the interests of the people that voted them in. Instead they look to who will give them the best "retirement package" after they are voted out of office. We have to pass campaign finance reform. That will do more for the people of the world then any other action we could insist on.
To quote Robert Frost we are upon a trail in the woods:
I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
I vote for the road less traveled.