The Weiner Component Vol.2 #6 – The Federal Reserve: Part 1

English: Monthly changes in the currency compo...

English: Monthly changes in the currency component of the U.S. money supply as reported by the Federal Reserve at the St. Louis Fed’s F.R.E.D. website at: http://research.stlouisfed.org/fred2/data/CURRNS.txt The data was copy/pasted into an OpenOffice.org Calc spreadsheet, the monthly changes were calculated using a simple formula, then this image was generated from that data. (Photo credit: Wikipedia)

Every industrial nation or group of countries like the Euro-pact, which uses a common currency, has a Central Bank that largely controls that controls its Monetary Policy, the flow of currency within its borders. In Europe it’s called the Central Bank and in the United States it is called the Federal Reserve System or the Fed.

 

Initially when the United States was founded under the Constitution in 1789 the Secretary of the Treasury, Alexander Hamilton, suggested that a Bank of the United States be established; and it was in 1791. The bank served as a repository for federal funds and as the government’s fiscal agent.

 

The bank was privately owned, as money for it was subscribed by private citizens, but its prime function was to serve the new government. It was granted a twenty year charter by Congress and had branches in eight cities. Consequently in addition to acting for the government the bank also conducted general commercial business. Although it was well managed and profitable critics charged that it was favoring the mercantile class over agrarian interests. This brought about its temporary termination after its charter expired in 1811. In 1816 the Bank of the United States was reestablished because the country had faced financial problems during the War of 1812 and it received a new twenty year charter.

 

The Second Bank of the United States would exist until and through most of the second term of Andrew Jackson’s presidency. It’s President, Nickolas Biddle, attempted to force Jackson to sign a Congressional bill chartering another twenty year extension to the bank. President Jackson reacted to this by moved all new government income to a group of western banks, that became known as his “pet” banks, and spent the funds already deposited in the Bank of the United States before withdrawing funds from his “pet” banks to pay for the needs of the Federal Government. The Second Bank of the United States got a state charter and would eventually go bankrupt. The western “pet” banks went on a lending spree which inflated the sale of western land by hundreds of percent, resulting in a depression, when the bubble burst, that affected the entire United States during the tenure of the next President, Martin Van Buren. In any event the nation no longer had a Central Bank.

 

In 1913, during the Presidency of Woodrow Wilson, a new Central Bank was set up by Congress. It was called the Federal Reserve and was supposed to regulate the flow of currency within the nation in order to avoid the large and regular economic dips of recession and depression.

 

Its initial mission was to control Monetary Policy, the flow of money through the entire economy. Gradually Congress extended it purpose by new legislation. These gradual extensions were a broadening of Monetary Policy.

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Keep in mind that at this point in the history of the United States money or currency was specie; that is, it was gold or silver in the form of coins. Paper money did exist but it was a promissory note that could be exchanged at any bank, theoretically at any time, for gold and silver coins. However if this was done on a massive scale there would be a run on the bank and it would run out of money and go bankrupt. In order for business to properly occur more bank notes were printed than there was gold available.

 

Basically these metals, gold and silver, were purchased by the National Government and then minted into different denominations. The coins denoted the weight of the metal. A one ounce gold coin was a $20 gold piece. A one ounce silver coin was a silver dollar. Money, then, was exchanging value for value. The basic value of the metals was agreed upon international; so money as gold or silver could be used anywhere in the world.

 

In 1929, for various reasons, the Great Depression occurred. Under a Republican administration, that of President Herbert Hoover, the country, and, for that matter, the world, went economically downhill for the next decade. Each industrial nation had to work out its own deliverance from the Great Depression.

 

In 1932, the Democrat, Franklin D. Roosevelt was elected President of the United States. He introduced the “New Deal.” His basic program was the three R’s: relief, recovery, and reform. He attempted to offer employment to many of the unemployed, an end to the reasons for the depression, and reform by legislation or otherwise so it could never happen again.

 

Roosevelt was the longest serving President in the history of the nation. He served for four terms, through the Great Depression and most of World War II, dying in office during his fourth term.

 

Sometime during his first administration he had a bill passed by Congress that changed the use of money, first in the United States and then it was copied throughout the rest of the world. The Federal Government collected all the gold coins, with the exception of a small number that could be kept as souvenirs, issued paper silver certificates for one and five dollar bills and Federal Reserve Notes for any amount above that. The gold coins were melted down into bars of gold and stored in underground depositories like Fort Knox, situated around the country, with gold certificates issued for the gold, which the government kept on deposit to verify the value of the Federal Reserve Notes.

 

In essence money being worth its weight in gold became a myth. The gold certificates were never on display or otherwise available. There was never any record kept of actual gold being added or subtracted from the gold supply in the depositories. Money became paper, a token of no real value; everything else was a fiction.

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Early on in World War II the countries that were to become allies of the United States shipped their gold supplies to the U.S. I don’t believe the gold was ever returned to those nations. They spent the gold on buying supplies with which to fight the war. After the gold was spent the United States used a system called “lend lease” to supply its allies with the necessary food and war materials. Those goods were never really paid for monetarily. But World War II ended the last hangovers of the Great Depression. The United States and later the rest of the world emerged in different levels of economic fitness in 1945. All actual money had become paper tokens that were used to exchange goods and services for goods and services. The basic world currency, upon which all the other national currencies were based, after the war was the American dollar. It is still that today.

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The Federal Reserve came into being because of the depression or panic of 1907 and other extreme downturns in the economy. Attempts had been made during the late 19th and early 20th Centuries, by the moneyed class, mainly bankers, to control the economy mainly for reasons of profit. These, in turn, particularly when they failed, had exacerbated economic shifts within the economy, usually in a downward direction.

 

The Panic of 1907 and 1908 was also known as the 1907 Bankers Panic or Knickerbocker Crisis. Its causes took place initially over a three week period when the New York Stock Exchange fell almost 50% from its peak the previous year. It lasted for slightly over a year.

 

Monetary panics occurred during this time of economic recession and there were numerous runs on banks and trust companies. It spread throughout the nation with many state and local banks and businesses going bankrupt. The primary cause of the run was a retraction of market liquidity by a number of New York City banks and a loss of confidence among depositors, exacerbated by unregulated side bets of bank funds by banking executives.

 

The panic was begun in 1907 by a failed attempt to corner the market on stock of the United Copper Company. When this failed, banks that had lent money to the cornering scheme suffered runs that later spread to affiliated banks and trusts, leading a week later to the downfall of the Knickerbocker Trust Company, New York City’s third largest trust. The collapse spread throughout the city trusts as regional banks withdrew reserves from New York City banks. Panic extended across the nation as vast numbers of people withdrew their deposits from regional banks.

 

To simply state what happened was that the object was for a group of investors to gain control of the stock shares of United Copper Company. The group concerned controlled numerous banks and trust companies. They believed that a large number of shares had been borrowed and sold short. (To sell short is to sell a stock at a higher price before one owns it, then when the price drops buy the stock at a lower price, and eventually pocket the profit.)

 

The group believed that a majority of the stock was held by the Heinze family and that a significant number had been borrowed and sold short on the belief that the price would drop considerably. Their aggressive purchasing would drive up the price of the stock. The short sellers would be forced to come to them in order to purchase stocks that they had already sold and they could charge whatever they wished.

 

United Copper rose in one day from $39 to $52 a share. It then went up to nearly $60 a share, but the short sellers were able to able to find United Copper from other sources. The group has misread the Market and the stock price began to collapse. It closed at $30 and then dropped to $10 a share. The manipulators and the banks they represented were ruined. As news of the collapse spread depositors rushed to pull their money out of these banks. The run on banks spread throughout the city. A week later many regional stock exchanges throughout the nation were closing or limiting trading.

 

The hero of the crisis was J.P. Morgan. He coordinated the heads of the banks and trust companies and was able to keep the total economy of the United States from collapsing. The Panic of 2007 was from May 2007 to June 2008, 13 months. While it started and was centered in New York City the entire nation was involved. There was bank panic, runs on banks and trusts with crowds of depositors withdrawing all their funds, and falling stock prices that resulted in massive economic disruption. Production fell 11% in the nation, imports went down by 26%, and unemployment rose to 8% from under 3% two years earlier. Even immigration dropped to 750,000. It had been 1.2 million two years earlier. J. P. Morgan lost about $21 million straightening the situation out.

 

The frequency of economic crises and the severity of the 1907 panic led to a national debate on reform of the system. In May 1908 Congress passed the Aldrich-Vreeland Act that established a National Monetary Commission to investigate the panic and propose legislation to regulate banking.

 

It was discovered that the major difference between European and American banking systems was the existence of a Central Bank which controlled Monetary Policy. They could easily move money to where it was needed. The European nations all had one, the United States did not. The European states were able to extend the supply of currency during periods of low cash reserves. The United States had a great problem doing this.

 

The final report of the National Monetary Commission was on January 11, 1911. For nearly two years Congress debated the proposal. On December 23, 1913 Congress passed the Federal Reserve Act. President Woodrow Wilson signed the bill immediately and the legislation was enacted on the same day, December 23, 1913, creating the Federal Reserve System as the Central Bank within the United States.

 

 

English: Flag of the United States Federal Res...

English: Flag of the United States Federal Reserve Bank (Photo credit: Wikipedia)

The Weiner Component Vol.2 #5 Part 2 – President Donald J. Trump

Imagine a 17 year old adolescent in an over-fed 70 year old body with all sorts of insecurities who thinks of himself as being king of the world, and is surrounded by “yes men,” and you have an image of Donald J. Trump.

 

President Donald J. Trump is a Dorf.  In certain areas he is very secretive, while in other areas he makes constant dramatic public announcements, always talking about his great achievements.  Thinking back over former President Barack Obama’s eight year tenure as Chief Executive one remembers a formal signing of the Affordable Health Care Bill during his second year in office.  Looking back after Donald Trump being in office for three weeks there have been innumerable signings of his many Executive Orders.  He seems to take the position of a 16th Century European monarch, continually giving orders to the country.  But we are in the 21st Century and many of his Executive orders end up being suggestions for Congress to pass bills, which they may or may not do.  Most of his Executive Orders do not initiate anything.  Others are like his tweets: single sentences that tend to be fairly to very general in the area in which he is dealing.  The results of these can be obscure as his language use may not be clear.  All of them are in a black folder ready to be put on a shelf in his library after he retires from office.

 

Among other things President Trump ordered the Environment Protection Agency (EPA) to not make any public reports about pollution or anything that would upset his plans to limit the industrial expansion by increasing pollution.  He also ordered other units of government to not release or publish any similar type of information.  In turn when the general public became aware and protested loudly Trump backed down.  One wonders how much repression he is going to attempt.

 

In addition all ads urging sign-ups for Affordable Health Care (Obamacare) were cancelled.  And this includes those that had been already paid for.  His actions in this area threaten to undermine the nation’s medical insurance market by continually changing the parameters under which these policies are written, causing the insurance companies to lose their predictability factors as to what to charge for their services.

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On Friday, January 24th, just four days after he had assumed the presidency, Donald Trump issued an Executive Order suspending the issuing of visas to Muslims for 90 days from seven specific countries: Iraq, Iran, Syria, Yemen, Libya, Sudan, and Somalia.  He did not bother with our close ally, Saudi Arabia from which Osama bin Laden, the organizer and head of al-Qaeda, came.

 

The Secretary for Homeland Security is in charge of this move that is protecting the United States from foreign terrorist’s entry into the country.  No refugee will be admitted into the country for the next 120 days.  No one will be allowed in from Syria at all.  Muslim students, who are in the process of going to a U.S university and have gone to visit their parents over the holidays, generally will not be allowed back into the country.  Non-Muslims (Christians) from these countries will be allowed into the U.S.  Trump has stated that this is not a Muslim ban.

 

The result of this has been mass confusion at the nation’s airports.  The immediate effect has been to cause immediate confusion since a number of people from these seven countries were already in airplanes flying to the U.S.  Also the Home Security Agents at the airports stopped all Muslims coming into the country even those who ordinarily live in the United States and are returning home to their families. 

 

The Executive Order was passed with no warning.  Military officers are contending that it will hurt their relations with members of these countries who are fighting ISIS.  In fact an Iraqi legislator wanted to bring up a bill that would exclude all Americans from that country.  Inside the State Department some officials are contending in a document that closing the nation’s doors to 200 million people in order to weed out a handful of would-be terrorists will not make the nation safer but might instead increase the threat of violence.  The State Department affirmed the existence of this internal memo on Monday, January 29th. 

 

Meanwhile it’s been madness at the airports across the nation with millions of Americans peacefully and loudly protesting Trump’s edict.  The ACLU has been present at all these airports ready to represent the incoming Muslims.  It should be noted that even some top Republicans criticized the directive. 

 

The White House defended the Executive Order rollout as a success.  On Friday it led to the detention of more than 100 people landing at airports across the nation with valid entry documents.  Well over 200 individuals with valid visas were denied permission to board flights to the United States.   

 

An emergency stay was issued by a Federal Judge in Brooklyn, New York on Saturday.  In other areas of the country four other Federal Judges issued temporary stays.  Trump tweeted about Senators John McCain and Lindsey Graham objections that despite a rigorous existing security process, arrivals until now have not been properly vetted. 

 

The interesting note or irony to all this is that under President Barack Obama vetting of immigrants could take up to two years.  But under President Trump it is currently limited to 120 days.  Apparently Trump has a need to direct everything as President.  It as though in his mind nothing happened before he entered his new office.  In any event he does have the ability to increase his negative image among the American people.  He is probably the only president in the history of the country who can continually increase his unpopularity level among the people of the country.  And this during his first week in office.

                         

During the first week of February a Seattle Judge issued a national temporary restraining order on the ban after Washington State and Minnesota sued.  The Justice Department appealed to the 9th Circuit Court.  They argued that the president has the Constitutional power to restrict entry into the United States and that the courts cannot second-guess his determination that such a step was needed to prevent terrorism.  The states argued that Trump’s ban harmed individuals, businesses, and universities.  They cited Trump’s campaign promise to stop Muslims from entering the U.S., stating that the ban unconstitutionally blocked entry to people based upon religion.  All three Judges on the Appeals Court sided with the states.  The cancelation of the ban was continued. 

 

Trump stated that he will appeal the case.  If the second appeal goes before the Supreme Court with four conservative Judges and four liberal Judges and the result is a tie then the 9th Court Appeal’s decision stands.  The probability, however, is that at least one or two of the conservative Judges will probably uphold the Appeals Court decision, then it will be 5 to 3 or 6 to 2 in favor of upholding the lower court’s verdict.  Trump has a problem with rejection.  What does he do then?

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During his first twenty days in office President Trump has gone from crisis to crisis.  In all probability each new crisis was supposed to wipe out all objections on the preceding one.  In all it’s been a strong emotional ride for the American public.

 

First came his non-resolution for his conflict of interest.  He refused to get rid of his business interests and set up a blind trust.  Instead he turned all his business interests over to his older sons.  Presumably he will have nothing to do with them while he is president.  But as President-Elect he charged a multi-thousand dollar entry fee to anyone who wanted to spend New Year’s Eve at his party with him in his Florida club.  He brought back the Keystone XL pipeline which Obama had canceled and in which he invested quite a bit of money.  He also took on Nordstrom because they dropped his daughter’s business.

 

On his first full day in office there was the Women’s Protest March throughout the major and many minor cities of the United States and throughout Europe.  This was a historical first in the United States. 

 

Meanwhile he disrupted relations with our neighbor Mexico by insisting that Mexico will pay for the 12,000 mile Wall he is going to build between the two nations.  The Mexican President cancelled a diplomatic visit with the “world’s greatest negotiator,” as Trump has defined himself.

 

He has insisted that Obamacare is a disaster and that it will be replaced by a better plan.  The Republican Congress has begun the process of defunding Affordable Health Care but there doesn’t seem to be any replacements.  In fact the only plan there is in existence now is a voucher system, which has been discussed but not acted upon.  This will cost the recipients more every year since the probability is that medical costs will rise but the costs paid out in vouchers will not go up.  The Republicans talk about making access to what will be Trumpcare available to all but not about helping fund it for those who cannot afford to buy it.

 

Trump generated the Muslim Travel Crisis to the U.S. without any warning to anyone.  In essence he has shut the nation’s door to most refugees.  Even though, at least, five Federal Judges have put temporary bans upon the order from Brooklyn to Los Angeles, Trump has declared his ban a success.  He has threatened to make it permanent.  An Appeals Court has found it unconstitutional.  To Trump the point that it not constitutional would seem to be beside the point.  He says that it is necessary to keep terrorism out of the country.

 

The former Acting Attorney General has refused to defend Trump’s Executive Order in Court.  His response has been to fire her.  An interesting note of interest here is the fact that when the Acting Attorney General, Sally Yates, was being questioned by the Senate, Senator Jefferson Beauregard Sessions, the current, as of a few days ago,  Attorney General asked her who was primary in her carrying out her function in the Department, the President or the rule of law?  Her answer was the rule of law.  Trump fired her for doing just that.  He placed another person in her position who would use the Department to support the President rather than the rule of law.  And now that Jeff Sessions is Attorney General where will he place the emphasis?

 

Trump has appointed a reactionary individual, Judge Neil M. Gorsuch, to replace the former conservative Justice, Antonin Scalia, who died about a year ago.  A large percentage of Democrats believe the Trump has stolen a Supreme Court seat that should have come under the jurisdiction of President Barack Obama since Scalia died about a year ago and Trump has been President for a little over three weeks.

 

We are also dealing with the question of lifting sanctions placed upon Russia after she invaded and seized sections of some of her neighboring countries.  And the issue of Sanctuary Cities where the local enforcement authorities cannot be used by the Federal Government to enforce Federal Immigration laws or edicts against Muslims.  The California Legislature is currently dealing with a bill to make the entire state a Sanctuary one.

 

The interesting note of irony here is that the Republican Party is the minority political party in the United States.  They have essentially gotten control of Congress by gerrymandering political districts and the presidency with a minority vote.  Can Trump and the Republicans continue to enforce their will upon the American People?  There is a midterm election in November of 2018 and a Presidential Election in 2020. 

The Weiner Component Vol. 2 #4: Part 1 – President Donald J. Trump

speaking at CPAC in Washington D.C. on Februar...

As of January 20, 2017 the United States had a new president and he certainly seemed different from any that had come before.  On his second day in office a good percentage of women in the county with the aid of some men held protest marches in all the major and a lot of minor cities, not only in the United States but also throughout the world.  Celebrities and female members of Congress came out with anti-Trump speeches.  One march was held within sight of the White House.   Instead of acknowledging this as a First Amendment right, Trump ignored the happening.  On a much smaller scale this has been repeated within the United States every day since, throughout Trump’s first two weeks in office.

 

At the Women’s Marches the women judged Trump, who had previously, over most of his life, judged them on a 1 to 10 scale according to his sexual preference, and found him as president on a scale of 1 to 10 rating below zero.

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Now that Trump has been elected President of the United States he is a very nervous head of state.  He can’t seem to get it out of his head that Hillary Clinton received 2.8 million more popular votes than he did.  With absolutely no evidence but a hurt ego, he has stated that he believes that all those extra votes that Clinton got were cast by non-citizens, people registered in more than one state, or by people voting in the name of dead individuals.  He also stated that many people who are registered in two or more states, vote in each. 

 

His daughter, Tiffany is registered in two states.  So is one of his advisors, Steve Bannon. And so is one of his son-in-laws who he is now using as one of his advisors.   People reregister when they move out of a state or to different residences within a state.  There is no mechanism to unregister.  Apparently, one’s name is removed from the voting rolls if an individual does not vote for a number of years.  Somehow Steve Bannon recently got his name removed from a Florida registration.

 

But Trump seems to feel that all this is a plot that kept him from getting both the electoral vote and the popular vote.  He cannot believe that a large number of voters did not really purposely vote for him.  Instead they voted against Hillary Clinton.  The improper balance of votes and false or fake news brought about her defeat.  Trump just happened to benefit from these.  He is the least popular or most disliked candidate in the history of the United States to have run for president.

 

Now, as President, he has ordered an investigation of the voting practices in the last Presidential Election.  The results should be interesting.  All the current evidence implies that all the cheating on voting is a very small fraction of one percent, certainly not the almost three million votes that Trump did not get.  I suspect the public will never hear the results of this investigation if it is even carried out.

 

During the campaign one long-time reporter on the staff of the Wall Street Journal defined Trump as a perennial adolescent who never really grew up.  Apparently what he learned up to that time he still knows.  Anything that has happened to him since that time just reinforces what he already knows. 

 

For some unknown reason this reminded me that Trump, who has never been in the military, was sent by his parents to a Military High School for his education.  Why would New York City parents send their child to a military high school?  The answer would be to get rid of a child who was essentially out of control.  If he misbehaved there he would be sent to the guard house, something his parents could not necessarily do.  Trump is very proud of his high school years which, he believes, gave him a knowledge of the military, since he never served in the armed forces.

 

Most people if they find things in their lives that they don’t like try to change that aspect of their lives.  But Donald Trump does not do this.  Instead he lives in an alternate reality.  If he finds something he does not like he innately knows that it is wrong and takes action accordantly.  With a contractor he has hired for something he knows that he has paid him enough and stops paying him, usually on the last instalment.  With the popular presidential vote he knows that he really won it.  Therefore people must have cheated at the ballet box.  As President he can call forth the forces of the nation to discover his alternate truths.  As a result President Trump is unique and totally scary.  There is no telling what he might do with his alternate reality.

 

If we assume the Wall Street reporter’s analysis of Trump was correct then is the man today any different from the adolescent high school student?  He is thin skinned, generally verbally attacks anyone who criticizes him, ignores group protests protected by the first Amendment, and can be erratic with constantly changing decisions.  Like many adolescents he seems to be incapable of being briefed with by the Intelligence people or, for that matter, by anyone else.  His concentrative ability seems to be relatively short where he is not directly involved in what is going on.

 

Lynden B. Johnson, when he became President of the United States, after the assassination of John F. Kennedy, fulfilled what seemed to be his lifelong ambition.  He became the most powerful man on earth.  What he found was that even though he had the power he couldn’t use it.  He ended up losing the Viet Nam War even though he escalated that war.  Donald J. Trump may not be smart enough to realize that limitation.  And that is really scary as he will be President until 2020, unless he is impeached prior to that time.

              

One thing Donald Trump does do is to project some of his own negative aspects upon any opponent.  For example, during his campaign struggle with Hillary Clinton, Trump called her “Crooked Hillary.”  It seems that he and the Clintons both ran altruistic Foundations.  His was run according to his rules which in many cases legally had nothing to do with the way a Foundation is supposed to function.  Much of what he did with the funds that were contributed by others benefited him directly.  Since the Foundation the Clinton’s had was ten or more times larger than his they must have been at least ten times more dishonest than he was.

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Trump believes in secret prisons outside of the country and that, in interrogating prisoners, torture inevitably works in gaining information from them, as was done under the President George W. Bush’s administration.  Even though the majority of military, CIA and FBI interrogators are against the use of torturing prisoners and do not believe it is an effective way to get information out of enemy prisoners.  The use of this type of “enhanced interrogation,” to quote former Vice President Dick Cheney, is now illegal.  I suspect both Donald J. Trump and Dick Cheney know it works because they feel if they were tortured they would tell the person questioning them whatever they wanted to know.  He is, however, willing to not push this point since his Secretary of Defense does not believe in the use of torture or secret prisons.  But he knows, without any evidence or experience, that torture absolutely works.

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During most of his presidential campaign Donald Trump boasted that as President he would build a high wall between the United States and Mexico to keep thieves, rapists, and murderers from coming into this country from Mexico.  He also boasted that Mexico would pay for the wall.  The Mexican government stated that under no circumstances would Mexico pay for such an enterprise.

 

On Wednesday, January 25, 2017, five days after Trump officially became President of the United State, he signed an executive order beginning work on this enterprise.  The Mexican president then cancelled an official visit to the U.S. and blatantly stated that under no circumstances would Mexico pay for the wall. 

 

Trump stated that it would be complicated getting Mexico to pay for the wall.  On Thursday, January 26 he announced his plan.  There would be a 20% tax on all imports into the United States from Mexico.  Whether this is his opening position or final position is unknown at this time.  In either case it would cancel out the NAFTA agreement with Mexico and make the United States a non-dependable trading partner since it would thereafter have a reputation for changing international trade rules arbitrarily by ignoring its own Trading Treaties.

 

It should be noted that the two countries share a twelve hundred mile border and while some areas in connecting cities where the two country’s border touch, currently have fences; these may not come up to Trumps expectations.  Depending on the fence or wall that Trump wants to build the costs will be anywhere from 3 billion to 33 billion or somewhere above that.  Imagine how much it cost to build a fence around a home property.  There the fence or wall will be, at most, six feet high.  The wall Trump is talking about would be fifteen to twenty feet high and extend for 1,200 miles. 

 

As of Wednesday January 26th the United States would pay for the WALL but will eventually get its money back from a 20% tax on all goods coming into the country from Mexico.  That was the plan on Thursday morning but by Thursday late afternoon the plan had disappeared.  However on the next day, Friday, it was being touted again.  It disappeared again the day after.

 

This so-called wonderful plan of Trump’s will firmly place the cost of building the Wall on the backs of the American taxpayers by placing the payment of the wall firmly on Americans in the U.S.  It will also significantly reduce the purchasing of Mexican products in this country by raising the price of all goods imported from Mexico twenty percent.  Mexico will reciprocate by placing a similar tax upon American goods coming into Mexico.  The result will be a trade war that freezes out a large percentage of purchasers in both countries for people who can no longer afford the assorted items being shipped from one country to the other and both countries will be harshly effected since today both have major trade with the other . 

 

This will be particularly troublesome because Mexico currently is the second largest export market for the United States.  One of the many types of products that comes to the United States from Mexico are fresh fruits and vegetables, particularly during the winter season.  With a twenty percent increase in cost many people will no longer be able to afford these products.  This will take the U.S. back thirty or more years when people had fresh fruits and vegetables in season only, instead of all year.  Not only Mexican farmers and American consumers will be hurt but the entire pattern of trade will be hurt negatively affecting people in both countries.  It may also disrupt trade with many of our other trade partners and destroy the NAFTA agreement between the two counties which has been highly effective for both sides.

 

In addition, once the wall is completed it will have to be constantly monitored.  This will require a large number of crews monitoring it over all twelve hundred miles.  It will cost billions to build and additional billions to care for it.  Even if the United States could get it built at no cost it would still cost vast amounts to maintain it.

 

The entire plan is crazy.  The U.S. will be putting out multi billions of dollars, increasing the National Debt, which may or may not get all its investment back over an unknown number of years; meanwhile standards of living in both countries will drop with the rise in prices.  It is a sad use of resources while the U.S. has a fair sized homeless population of which just the city of Los Angeles, according to a recent count, had 47,000 homeless, many of whom will die of exposure during the winter season.  In addition there are far more things to be done in the U.S. particularly regarding its infrastructure that should take priority over a wall separating both nations.  

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Donald J. Trump has been very busy during his first week in office signing executive orders, each neatly placed in a black leather folder.  The problem here is that the majority of these single page documents are not executive orders, they are, if anything, requests to Congress to pass laws that will put these statements into practice.  Of the smaller percentage that are executive orders many contain contradictions that make carrying out the order impossible.  The problem here is that Trump and his staff need to learn what the parameters of executive orders are before he or they start writing them.

 

President Trump has retired or fired the entire upper echelon of the career diplomats at the State Department who have served under both Republican and Democratic presidents.  When the new Secretary of State takes command of that department he will be missing a whole layer of career executives who run the departments on a daily basis as well as many of the trained negotiators.  Of course Trump, who considers himself the world’s greatest negotiator, may appoint a whole new cadre of people to run it but they would not have any experience at doing so.  It would be like bringing back the 19th Century Spoils System into the 21st Century.  These positions are too important to give to loyal amateurs.

 

In addition a large percentage of the individuals who work for the State Department have signed letters of protest against one of Trump’s executive orders baring the entrance of Muslims from entry or reentry into the United States.  They have stated that this order will do more harm than good.  Trump’s press secretary has stated that they can either carry out the order or leave the Department of State.  With the career leadership already having been removed from the State Department and a mass quitting or firing among the rest of the personnel Trump could well begin his tenure with a Secretary of State and a non-functioning Department behind him.  In either case the moral at the Department has never before been as low as it currently is. 

 

So far, after about two weeks in office, Trump would seem to be his own worst enemy as far as running the United States.

The Weiner Component Vol.2 #3 – The Purpose of Government

English: Citizens registered as an Independent...

English: Citizens registered as an Independent, Democrat or Republican. Derived from :Image:Party affiliation USA.jpg. (Photo credit: Wikipedia)

If the question of what is the primary purpose of government in the 21st Century is raised then depending upon which major political party you adhere to you get different answers. 

 

Historically people have always been social animals, always functioning in groups with some form of social organization.  Traditionally governments have functioned to provide a framework in which people have lived.  They have provided rules or laws that have allowed them to live together, kept them safe within the society and from foreign invaders, provided the necessities for reasonable living conditions and protected their property.  These governments have provided a currency and regulated trade within and with other nations.  Other than that people have provided for their individual needs for themselves.  This, in essence, is the Republican concept of the function of government.

 

In 1929, through following these concepts and unlimited growth on the stock market, the United States economy crashed and billions of dollars were lost almost overnight in the 1929 Great Depression.  From 1929 through 1932 feeble attempts were made by the Republican dominated government to allow the Stock Market to adjust itself.  Instead it kept dropping lower.  This occurred from 1929 through 1932, when it and the rest of the economy reached its lowest level.  The Market Model was unable to adjust itself; it had been abused too much.

 

In 1933, the Democrat, Franklin D. Roosevelt became President, replacing the Republican, Herbert Hoover.  Roosevelt, in dealing with the massive unemployment problem, extended the purpose of the Federal Government, by having the Federal Government assume responsibility for those people who could no longer function successfully within the broken society.  He created mechanisms whereby these people could again function with a measure of success within the economy.  The Federal Government had now assumed responsibility for the people in the country who could no longer provide for themselves.  This now became the new additional function of the Central Government. 

 

While conditions improved considerably the Great Depression did not end until about 1940 with the outbreak of World War II when first European and Asian nations bought unlimited goods from America and at the end of 1941 when the Federal Government began unlimited spending in fighting the war. 

 

The government had dedicated itself to a new purpose which would continue on after the war had ended, more or less, depending upon which political party controlled the Central Government.  The Republicans tended to favor business and the wealthy, limiting social spending as much as possible, while the Democrats favored the middle and lower class extending this practice as much as they could.

 

Currently with the Republicans in control of Congress and the Presidency they are moving to get rid of Obamacare (Affordable Health Care).  They are presumably going to replace it with Trumpcare, whatever that is.  Probably it will be a voucher system that will be cheaper for the government to operate, but will gradually become more and more expensive for its recipients as medical costs increase but government vouchers do not.

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Two events occurred: one began in the 1970s, an increasing need for more money to be available in the National Cash Flow; and the other in the 1980s with the election of Ronald Reagan to the presidency.  In the earlier decade the major banking houses in the country began packaging mortgages in small fractions and selling them.  They did this gradually on a larger and larger scale.  The process took off in the 1980s with the Reagan White House.  This, in turn, increased the value of the homes.  In essence a percentage of the population began mortgaging and refinancing the ever increasing value of their houses over and over again.  At no time during the 30 years of this period was there any real inflation in the country.  For the first 10 years the country was in an inflationary cycle that began with the Viet Nam War.  This was ended at the beginning of the 1980s.

 

Reagan was the first of the really Conservative Presidents.  Forty-five years earlier he had majored in economics as an undergraduate in college.  Since that point in history economics had developed far from where it had been when Reagan was a college senior.  Much more about its functioning was understood in the 1980s.

 

Adam Smith began modern economics with the publication of his work,  “An Inquiry into the Wealth of Nations,” in 1776.  In this work, among other things, he developed the Market Model, which functioned through the use of the “invisible hand.”  The invisible hand is the profit motive.  Smith believed that the profit motive would best make all the Market decisions of what to produce and how to produce it. 

 

President Ronald Reagan and a good percentage of Republicans in Congress also believed this.  During his presidency hey did away with all bank regulatory laws that had been developed during the 1930s and beyond to avoid another Great Depression.

 

In the period before the 1929 Stock Market Crash many bank executives had taken depositors monies and invested them in stocks.  Shortly thereafter when the price went up they had sold the stocks and pocketed the profits.  People could also buy stocks on margin; all an investor needed was 10% of the value of the stock he/she bought, the banks would lend the remaining 90%.   The problem here was that many people were in love with the concept of the stocks, not with their true value, and they kept forcing up the value of all the stocks by continually buying and selling them.  This created a bubble that had to burst at some time.  When it did, from 1929 on, it not only bankrupted innumerable stockholders but also innumerable banks with unbelievable negative effects upon the overall economy.

 

The result of what Reagan considered reforms was that a multitude of banking organizations began an almost limitless level of refinancing homes, allowing people to take their ever increasing equity out of their properties to buy whatever, and countless billions of dollars were created in the National Cash Flow allowing almost endless spending.  All of this occurred until 2008 when the bubble burst.  Interestingly some of these companies insured the bank loans, charging generous premiums.  These companies and many banks faced immediate bankruptcy with the crash.

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In the year 2008 the Housing Bubble, that had been developing over the last forty years, burst, bringing about an almost instant and complete drop in home property values.  People’s home values virtually dropped overnight hundreds of thousands of dollars per single unit leaving a percentage of homeowners underwater, suddenly owing more on their home properties than they were worth.

 

This process had been slowly building since the 1970s, with it massively accelerating during the Reagan administration in the 1980s, when virtually all banking laws, many of which came into being during The Great Depression in the 1930s, were done away with and the country followed the administration’s mantra of letting the Free Market make all the economic decisions.  A good percentage of the population, with strong encouragement from the banks, had gone through a wild period of spending.

 

Specifically what happened was that the country did not have enough money in the National Cash Flow to meet its needs.  There was a shortage of money in the overall society.  The banks, among the many services they perform for the general society, also can increase or decrease the amount of cash available within their specific regions.  They do this through their lending or non-lending practices.  Most exchanges of cash at this time was through the transfer of funds by writing checks, bringing about an exchange of numbers in different columns of different bank ledgers.

 

People discovered the advantages of their equity in their home loans by taking out First, Second, and Third mortgages based upon their equity.  Over the forty year period as people borrowed upon their homes the value of their homes went up continually.  It seems the continual borrowing created a desire in people who rented living space to attempt to buy homes, forcing up the value of the homes even more for this forty year period.  Properties that were purchased for well under one hundred thousand dollars, because of the sudden great demand, were worth hundreds of thousands of dollars. 

 

For the forty year period, well into the year 2008 home values kept rising.  People refinanced their properties over and over again buying whatever they wanted.  The overall economy prospered.  People bought all the toys they ever wanted: boats, mobile homes for traveling, whatever.  There was no real inflation.

 

By the year 2007 the indications of a collapse were present for those in a position to understand what was going on.  But the bankers, who had taken home millions in compensation, were in total denial.  They were incapable of understanding that conditions could change.  To encourage further refinancing many banks raised the level of refinancing homes to 125% of the appraised value of the property.

 

Toward the end of the year 2008 the bubble burst or the crash came.  Many homeowners suddenly discovered that they were underwater, owing more on their home than they were then worth.  Some just walked away from their properties, leaving a deserted house behind them.  Others just stopped making payments they could no longer afford.  Unemployment rose significantly. 

 

Hedge Funds that had been developed from some of this mortgage paper were suddenly worthless.  Banks foreclosed upon properties that they both owned or had owned and sold to hedge funds.  The entire situation was a total mess.  Hedge funds were suddenly worthless, many banks were on the point of bankruptcy.  It looked like the entire economy was on the point of collapse.

 

At this point President George W. Bush and his Treasury Secretary, Hank Paulson, arranged for bank loans to keep many financial institutions from going bankrupt.  Then Bush was replaced by President Barack Obama who continued the bank loans and also bailed out the American auto industry which was also at the point of bankruptcy at that time.  With President Obama’s massive spending efforts what could have been a greater depression than the Great Depression of 1929 turned into what has been called the Great Recession, from which the country is still on its way out of.  By January of 2017 unemployment in the United States had dropped to 4.8%. 

 

The problem that existed here is that from the 1970s on more money was needed in the economy that should have been supplied by the Federal Reserve on a more gradual level.  A controlled increase of funds for the nation would have allowed for a slow healthy economic growth with no crash in 2008.  Allowing the banks to do this with just the profit motive led to unlimited and reckless greed as the major factor controlling the economy.

     

English: Franklin Delano Roosevelt and Herbert...

English: Franklin Delano Roosevelt and Herbert Hoover in convertible automobile on way to U.S. Capitol for Roosevelt’s inauguration, March 4, 1933 (Photo credit: Wikipedia)

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Th

e Great Depression was caused by the Republican’s legislating after World War I.  This was from the election of Warren Harding to the presidency through Herbert Hoover.  They created the necessary laws and general milieu that allowed it to come about.  The Housing Crash of 2008 was set forth by the policies of President Ronald Reagan.  He inspired and brought about the environment that allowed the financial institutions to go berserk through the unhampered use of the profit motive.  Now, with the election of Donald J. Trump to the presidency an equally horrible situation exists with the Republican legislature and Trump promising to do away with Affordable Health Care and the distinct possibility of taking medical care away from about 30 million citizens.

 

During his first year as President in 1993 William Jefferson Clinton, among other things, attempted to set up a system of Universal Health Care for all the people in the United States.  He placed his wife, Hillary, in charge of a task force that was supposed to develop a plan for this.  The Republicans were strongly against it.  They tried everything they could to kill this plan.  Finally they succeeded when they came up with a slogan: “There has to be a better way.”  The “better way” ended up being: No way.  With this mantra they successfully ended the plan for universal health care in 1993.

 

During President Barack Obama’s first two years in office he had a Democratic majority in Congress.  Together, they came up with a plan for the majority of people in the country to achieve health care.  The plan had been developed by a Republican think tank for Mitt Romney, when he was governor of Massachusetts.  I imagine that President Obama assumed that a Republican Plan would gain some Republican support in both Houses of Congress.  But by that time the Republican members of Congress had in a caucus and taken an oath to make Obama a one term President by not supporting anything he supported or for which he could take credit.  As a consequence they have vigorously opposed and continually denounced Obamacare (Affordable Health Care), which was in actuality their plan.  Affordable Health Care was passed in Congress strictly on a party basis, not one Republican Congressman voted for it.

 

In 2011 the Republicans gained a majority in the House of Representatives.  From then on the House passed bills to do away with Affordable Health Care; this was over fifty times.  While the Democrats controlled the Senate the bill was not even taken up there.  In 2014 the Republicans also gained the majority in the Senate.  In 2016 they gained Donald J. Trump as the new Republican President.  They are promising to replace Obamacare with a new and better policy.  But no specific plan seems to be on the horizon.  Meanwhile the first steps have been taken to begin the process dismantling Affordable Health Care.

 

Interestingly even the Republicans are now stating their sense of responsibility for the medical welfare of the general public.  But Affordable Health Care was their plan for universal health care.  It entails using private enterprise to bring universal medical care into existence. 

 

What is interesting or strange is that in 2012 when President Barack Obama ran for reelection, his Republican adversary, Mitt Romney and his fellow Republicans seem to have totally forgotten the Crash or Great Recession of 2008.  When elected they were going to do away with the laws passed in 2009 and 2010 to avoid that situation from occurring again.  And the same is true about the Presidential Election of 2016.  It would seem that the Republicans have some sort of collective amnesia about their own past.  The difference is that in 2016 the Republican candidate, Donald Trump and his fellow Republicans won the election, not only the presidency but also both Houses of Congress.  What will they do?  It seems that the Republicans themselves are not sure

The Weiner Component Vol, 2 – #2: Images of the 2016 Election

English: Painting, 1856, by Junius Brutus Stea...

English: Painting, 1856, by Junius Brutus Stearns, Washington at Constitutional Convention of 1787, signing of U.S. Constitution. (Photo credit: Wikipedia)

English: Seal of the President of the United S...

In every Democratic Country, with the exception of the United States, the winner of the Presidential or Prime Minister Election is the one who receives the most popular votes.  All the votes count equally; every citizen has one vote that counts the same as every other vote.  The exception to this is the U.S. where the winner is the one who receives the most Electoral Votes.  It takes 270 Electoral Votes to win the Election in the United States.  There are 538 Electoral Votes possible, 435 for the members of the House of Representatives, 100 for the Senators from the 50 states, and 3 for members of territories belonging to the U.S.

 

The system was designed in the late 18th Century when the Constitution came into existence.  It was the first Democratic instrument of modern government.  Its intent was to be Democratic without being overly Democratic.  According to the original document of government, the Constitution, the House of Representatives would be elected directly by the property owning male voters and represent them, two Senators would be elected by each of the State Legislatures and represent their interests.  The President or chief executive would be chosen by an Electoral College made up of the same number of both members of the House and Senate.  The voters would choose the smartest men in their Districts to pick out the best man in the country to be President.  Everyone understood that George Washington would be the first President.  There is no mention of political parties in the Constitution nor was there any thought of them at the time.

 

The first political party was organized by Alexander Hamilton, one of the Founding Fathers, while the Constitution was being voted into existence by nine of the twelve states.  Rhode Island refused to participate in this activity.  The first political party, the Federalists, represented the Urban Business Class. 

 

The second political party was organized by Thomas Jefferson for the 1800 Presidential Election in order for him to become President.  It was called the Republican Party.  The Federalists satirically christened it the Democratic-Republican Party and shortly thereafter it became the Democratic Party, a name it still bares today. 

 

Jefferson favored the Yeoman (small) farmer.  In fact his rationale for the Louisiana Purchase in 1803 was so that there would be land available for the small farmers for the next hundred years.

 

In essence the Democratic Party has always favored the ordinary citizen above the merchant or business class.  During the Great Depression of 1929 the Democratic Party took on a level of responsibility for him where he couldn’t provide for himself.  That is still the major maxim of the Democratic Party. 

 

The Republican Party which officially came into existence in the Election of 1860 over the issue of slavery and has always favored business and the wealthy class.  It is an interesting commentary on the current society that they elected a group who favors the business class over the ordinary individual citizens.  They were able to do this because the form of our government is archaic, allowing a minority of the population to elect the President and allowing the states to gerrymander or shape their Election Districts in such a way that they favor the Republican Party.

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The Constitution has been amended numerous times in the past, clarifying or changing aspects of its original intent.  In fact the first ten amendments, the Bill of Rights, was agreed upon even before the Constitution was ratified by the original nine states.  James Madison wrote twelve amendments, of which ten were approved by nine of the states, a 2/3 majority.  The rest of the amendments, currently making a total of 27, were added through 1992.  An equal rights amendment, making women equal legally with males was attempted but never passed by the 2/3s majority.

 

All citizens of the United States, both males and females since 1972, upon reaching the age of 18 now have the right to vote.  It took more than one Amendment to the Constitution to do that.  But the votes are not counted equally and innumerable instances of voter suppression during elections occur today in the United States.

 

By law a census of the population is taken every ten years and the fixed number of seats in the House of Representatives is reapportioned according to changes in the population.  There are 435 seats in the House of Representatives and they are reapportioned every decade.  The next census will occur in 2020. 

 

Regardless of its actual population every state must have at least one representative in the House of Representatives.  Seven states have that number beginning with Montana which has a population of 1,023,579, with the number decreasing to Wyoming which has 584,153 citizens.    Five states have two representatives, three states have three, six states have four representatives, three states have five, two states have six, three have seven representatives, and four have eight representatives.  Four states beginning with Tennessee, which has a population of 6,549,352 have nine representatives in the House of Representatives.  Then single states have ten, eleven, twelve, and thirteen representatives.  Two states have fourteen representatives. One state has sixteen.  Two states have 18 and two have 27.  Texas has 36 seats in the House of Representatives and California has 53 seats. 

 

Every state regardless of population has at least three representatives in Congress: one in the House of Representatives and two in the Senate, giving them at least 3 Electoral Votes.  California, according to the Census Bureau in July of 2014, had a population of 38,802,500 people and a total of 55 Votes in Congress: 53 in the House of Representatives and 2 in the Senate.  Wyoming, with a population of 584,153, had a total of 3 Congressional votes: one in the House of Representatives and two in the Senate. 

 

There are fifty states making up the bulk of the United States.  Population-wise it takes 29 of the lowest populated states to make up the approximate population of California.  Their populations go from about 5 ½ million down to a little above ½ million.  Yet each of these states have two Senators.  This throws their representation in Congress well out of kilter with the high population states like California, Texas, Florida, and New York.  Combined their representation in Congress is totally out of proportion to the high population states, making their votes count for far more than the other states.  It’s this type of balance that got Donald Trump elected to the presidency even though Hillary Clinton had almost three million more popular votes than he got in the 2016 Presidential Election.

        

In addition within all the states there is a gradual movement from the rural areas to the urban ones where more new jobs develop.  Farming, incidentally, has become and is more and more mechanized requiring less and less people.  This means that the votes in the rural districts tend to count for more than in the cities because their number is always decreasing.  Depending upon the accuracy of the census these numbers are adjusted every decade.  A new census will occur in 2020.

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Another factor that keeps the vote uneven is that in the United States there are 50 plus elections.  Each state conducts its own separate election under its own specific laws.  This can and does lead in interesting and unfair situations.  In Texas, for example, in order to vote an individual needs a special type of official identification.  These can be easily gotten in the cities.  But a percentage of the state live and work in rural areas.  In order for these people to get the ID they have to take a day off from work and go into a nearby city, pay a fee, and get the ID.  But the facilities that issue these IDs do not keep regular hours, nor are they open every day.  The days and hours they function are not advertised.  Texas is a right to work state which limits union operations there.  A goodly percentage of the people working in the rural area cannot afford to take a day off or are they necessarily allowed to do so.  Since these laws were passed, not many years ago, the voting by minorities has dropped several hundred thousand.  When this case was first appealed the Judge declared that this law was a modern version of the poll tax and declared it unconstitutional.  It was then appealed to the Fifth Circuit Court which was completely appointed by Republican presidents.  They upheld the law, declaring it Constitutional.  It can be appealed to the Supreme Court, but they now consist of four liberal and four conservative judges.  The probability is that they will not even take the case.

 

Before this law was passed Texas was becoming a purple state with a possibility of eventually becoming a blue or Democratic state.  By restricting minority voting in the state the Republican dominated legislature was able to turn it back into a red or Republican state.  This type of activity is going on throughout all the states where the Republicans dominate the legislature. There is a constant struggle between the Democrats and Republicans to expand and to restrict the vote.  Eventually the Democrats will win because the basic makeup or demographics of the U.S. population is changing.  The Caucasians or whites are no longer the majority of the population.  They are just one of the large minorities that exist in the country now.  And that number is gradually decreasing.

 

Another device for controlling elections in some of the larger states is by the use of gerrymandering.  Keep in mind that each state controls completely the elections held within its boundaries.  There is a fixed number of voting districts for the House of Representatives, 435.  Every ten years there is a census and the voting districts are reconstituted based upon population changes.  Consequently some states will gain seats in the House of Representatives while others will lose one of more seats.  In any case the state districts are redrawn after each census.  In Republican dominated states there is imaginative gerrymandering.

 

By going over the party registrations within the state each political party can determine which regions are strongly Democratic and which are mainly Republican.  By freely drawing the lines in an erratic fashion a district can be changed from being heavily for one or the other political party.  Both parties have done this.  But the Republicans have used this device far more than the Democrats.   

 

In fact since the 1965 Presidential Election when Barry Goldwater ran against Lyndon B. Johnson the extreme right section of the Republican Party has vigilantly worked to extend their influence on a state level.  By the Census of 2010 they were able to dominate the House of Representatives.  In 2012, even though one and a quarter million more Democrats voted for members of the House of Representatives the Republicans still had the majority of members there.  In terms of today’s House of Representatives Democratic voting blocs have been broken up by suddenly having their parts connected to three or four Republic areas with the Democrats becoming a minority in each of the new Republican dominated districts.

 

This gerrymandering has also carried over to the 2016 Presidential Election in medium sized states by establishing the Electoral Voting Districts which, in point of fact, are the same as the House of Representative Districts.  Donald J. Trump won the election even though Hillary Clinton had 2.8 million more popular votes. 

 

Trump had 306 Electoral Votes.  Several of his electors refused to vote for him.  Instead they cast their votes for other Republicans.  Clinton had 232 Electoral Votes.  The popular vote for Trump was 62,979,879 votes, 46.1% of the popular vote.  The popular vote for Clinton was 65,844,954 votes, 48.2%.  Clearly Hilary Clinton won the 2016 Presidential Election but Trump won the Electoral Vote.  Who should really be President of the United States?

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What is needed to fairly have rule by the majority are four Amendments to the Constitution, all dealing with one or another aspect of elections.

 

First: the Federal Government has to assume responsibility for the elections in all the states, having them all function with one similar set of rules from the census on.  The states with more than one Election District should be all divided geographically and not based upon the political registration of its inhabitants.  Thus gerrymandering will be permanently ended.

 

Second: we need some form of common registration in all the states and territories that will encourage the adult population to vote in all the elections.  Currently shortly after birth all babies born in the United States receive their Social Security number.  Upon reaching the age of 18 they could also receive their registration forms, pre-stamped, to be filled out and mailed back.

 

Third: the Electoral College has to be done away with.  Presidential Elections should be won by the number of votes cast.  One equal vote for every person voting, having them all count the same.  The winner being the individual getting the majority of votes.

 

Fourth: The 100 Senate seats to be divided up according to population.  Each of the 50 states to have one Senator.  The remaining 50 Senate seats to be divided up by state population.  While this would still give the smaller states an advantage it would half the advantage that currently exists.

 

This can be done as either a single Amendment with four sections or as four separate Amendments.  The probability is that the fourth section, dealing with the number of Senators per state, will not come about in the near future.  The two Senator per state concept is a sacred cow.

 

Whether the Amendment(s) will be passed sometime during the next decade or during the rest of this century is a moot question.  The current system is advantageous to the Republican Party and at this point they control 29 state governments.  It is dubious that these states would vote for one or more Amendments to the Constitution that could hurt their standing as a political party. 

 

However soon to be former President Barack Obama has called for and may lead a grass root rebellion starting with school boards and moving up to state governments in order to take back the Federal Government.  Donald Trump and the Republican dominated Congress may well cooperate with Barack Obama by the legislation they put forth and President Donald Trump signs. 

 

The next census is in 2020 that is two elections from now.  Trump and the Republicans may well discredit themselves with the American people by then.  The bleak seeming future could change fairly quickly, particularly with well over 20 million people losing their medical coverage.

Map of number of electoral votes by state afte...

Map of number of electoral votes by state after redistricting from the 2000 census. Modified by User:Theshibboleth for the font to be consistent with electoral maps. Edited with Inkscape. Reuploaded by User:King of Hearts to correct spelling (vs. Image:Electorial map.svg). (Photo credit: Wikipedia)

The Weiner Component Vol.2 #1 Part 3 Introduction

At some point during the 1980s, when I was a social science high school instructor, for the last two or three weeks of an eleventh grade United States history course I decided to teach a unit on the future.  We would examine the possibilities of how the Twenty-first Century might affect the lives of my students.  Virtually everyone in the class balked at this.  They absolutely refused to consider the changes that could occur and how these possible societal changes could affect their future lives as adults.  I had never faced this type of response before.  It was an interesting situation.  The future, even the immediate future was unknown.  The past was known and could in the minds of many also be idealized.  I did not attempt to teach this unit again.  From then on the course ended in the immediate present.

 

Is the general public that different from my students?  Do they idealize the “Happy Days” gone by and avoid thinking or dealing with the possible changes to come?  It would seem so.  Most people like dealing with what they know.  Unknowns to them are scary since these might easily change their living conditions for the worst.  (Unfortunately even so called knowns can bring about changes in the society.)

 

Most people (Family units) live economically on the edge; they are, more or less, living up to their financial limit and in many cases slightly or more beyond.  Any real change could throw them into financial disaster.  I would guess that a very large percentage of the population move forward with this concept, problem, or anxiety constantly before them.

 

Of course, change is constantly occurring: economically many low skilled and other occupations are diminishing, robotics are the new manufacturing tool, some new occupations are materializing.  The myth of a changeless safe society is just that, a myth.  But apparently the reality has nothing to do with the perceptions.

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We may ask:  What brings about societal change (both economic and political)?  Is anything ever fixed for a lengthy duration?  Is society dynamic, in an ever state of flux, constantly undergoing some form of evolution (growth, shrinkage) either positive or negative changes?

 

If change, gradual or otherwise, is a constant what then determines it?  Is it mainly political or economic?

   

In approximately 900 AD the Emperor Charlemagne set up what has come to be known as Feudalism in his massive domain which comprised most of what was to become Europe.  His lands were divided into fiefs (large estates or sections of land, some as large as modern states, each with its own population and largely self-sufficient).  These were ruled by individual nobles, who, in return for the fief owed their lord (Charlemagne) fidelity (allegiance and a given number of knights and other armed men when called upon by their lord, the king).   With the death of Charlemagne his empire was divided up among his three sons and the beginnings of modern Europe were formed. 

 

Wealth, at this time, was ownership and control of land.  The king divided his kingdom among a relatively small number of high nobles who owed him fidelity (men and arms in time of need).  These nobles divided their lands up into smaller estates to lesser nobles who owed them fidelity when called upon.  This process could continue into smaller and smaller estates numerous times, with each owing his lord fidelity/military support when called upon.  Each small estate also supported a number of knights.  Theoretically the king ordered the higher nobles to appear at a certain place at a certain time.  They, in turn, ordered their subordinate nobles to do the same and so on down the line, proceeding all way down to the knights and unarmored fighting men.  Thus the king was able to go into battle with an army.  After a few generations all sorts of complications would occur from this arrangement.

 

The use of money was not a factor.  Supposedly the circulation of specie had ceased by this period.  The use of fidelity replaced the need for money.  However according to quite a bit of historical research done from the middle of the 20th Century on the use of money, gold and silver coins, never quite disappeared.  Their use diminished considerably and at some point slowly began to increase, allowing gradually for the rise of cities and of the bourgeoisie or middle class throughout Europe.  For that matter the Italian City-States existed throughout the Middle Ages.

 

With the gradual rise of the bourgeoisie and the independent cities throughout Europe money was slowly returning to common use and commerce was also growing.  Wealth was slowly transitioning from land to gold.  And with this there was the slow rise of the modern nations and kings who could collect taxes and pay their armies.  They could also use their armies to break the power of the nobles in their countries.  This was exemplified by the French king Louis XIV who also became the model of an absolute monarch.  Modern nations were formed or defined under the kings. Within two reigns after Louis XIV the French Revolution came about and it would end in rule by the middle class.  The remnants of Feudalism and the nobility would persist, mostly on a name basis, until the end of World War I.

 

What brought about these changes?  How do we move from small, largely independent economic entities to rule by the bourgeoisie?  To answer this question we have to go to a force Karl Marx called “economic determinism;”   the economic system controls the political system.  During the Medieval Period the nobility controlling the land determined the development.  The society was not static but in a very slow state of flux.  With the change in the wealth base, land to gold, there was the rise of kings.  The wealth which enabled the kings to develop their nations and their absolutism was created by the bourgeoisie who eventually broke the power of the kings and set up middle class democracies.  The economic development of the different nations brought about the changes.  Those who controlled the wealth of the nation would eventually control the nation.

 

A relatively modern day example, on a smaller scale, would be racial integration in the United States during and after World War II.

During World War II the United States both had massive armies in the field and supplied them and their allies with the materials they needed to successfully pursue the war.  Prior to United States involvement in the hostilities that nation had been largely segregated, but with the war on there was a constant and endless need for war materials.  First the women were brought into the factories to work alongside the men, then the older high school students after their school day, and after that the orthopedically handicapped.  Finally Blacks, in 1943, were hired and because of the great need, were allowed to work alongside whites in the “battle for production.”

 

Economic necessity had brought about what was then considered a great change in the society.  Blacks not only worked in the factories; they also, as they moved north to get these jobs, ended up, in many cases, living among whites.

 

And irony of ironies, in the military, segregation continued to exist.  Black troops were commanded by white officers.  The exception being the Tuskegee pilots.  All pilots, in the U.S. Air force, were automatically given officer rank.  Blacks, who flew planes were consequently officers and had to be saluted by soldiers of lesser rank.

     Parenthetically this led to interesting situations.  In military bases, particularly in the Southern United States, white privates had to salute Black officers.  Here the rationalization became that they saluted the uniform, not the man.  Another situation occurred in the U.S. Navy, where no Black could become an officer.  A doctor volunteered to serve in the navy during World War II.  An investigation of his background revealed that he had a Black forbearer of which he was unaware.  The event of his volunteering was in the newspapers.  But the Navy could only accept him on the lowest core level.  Consequently he never served.

 

The U.S. Military sent a segregated, Jim Crow, army overseas to fight the Nazi/Axis menace and bring freedom to the world.  In the decade after World War II the military was integrated, one service at a time.  Despite some people’s contrary feelings there was no longer any practical reason to maintain segregation.  In 1954 the Supreme Court rendered its Brown vs. Topeka Board of Education Decision; and after another decade of resistance education in the U.S. became, more or less, integrated.  Defacto segregation in housing would very slowly break down but never really disappear.

 

The most effective weapon used by Blacks in most of the southern communities, besides marches and protests which made the nation aware of what was happening, was the economic boycott.  In 1955, in Montgomery, Alabama, Rosa Parks, a Black lady, refused to give up her seat on a bus to a white man.  She was taken off the bus and arrested.  For nearly a year afterwards the Blacks in that city refused to ride the busses and shop in many of the city stores. 

 

When all was said and done, principles of right and wrong were outweighed by the basic principles of economics.  In Montgomery, Alabama, an economic boycott desegregated the busses.  Other changes would come about brought by threatened or direct economic change: the “sit-ins,” desegregation of interstate busses, etc., etc., etc.  Perhaps the exception might be the Earl Warren Supreme Court decision in 1954 but, I suspect, the state of Blacks and what they were willing to tolerate at that time is what ended the Plessey vs. Ferguson Decision of the late 19th Century which made segregation legal in the South. 

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The Gross Domestic Product includes all the goods and services produced in the United States in one fiscal year, twelve months.  If we deduct from this the amounts needed for the development and replacement of outmoded and worn out machinery, all sorts of necessary research for the development of new products, and take the remainder and divide it by the number of people in the United States we have considerable individual incomes.  If the problem of a fair distribution could be solved no one in this country would be homeless, would go without proper medical treatment, or proper food levels of nourishment. 

 

We are currently tied to an archaic economic model which, among other things, is shrinking the middle class toward nonexistence.  We could, in the near future, conceivably end up a nation of upper and lower class, with a token middle class; and with more and more of the wealth going to the upper class and less and less to people able to purchase the goods and services provided.  It would be a situation similar to that of the late 19th and early 20th Centuries and could result in a depression far greater than that of 1929.

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If we go back to our earlier premise that in order for goods and services to be continually increasing then those goods and services must be continually consumed:

Production of Goods and Services = Consumption of Goods and   Services

The problem in insuring this positive circumstance is the proper distribution of the money needed.

 

How can this be done?  If we follow Adam Smith’s market-place model the distribution will actually decrease as control of wealth passes, more and more, to a small group leading eventually to a massive breakdown of the Business Cycle: recession and depression.  And this breakdown could be a meltdown on a world basis causing all sorts of disruptions both within and between nations.

 

How do we avoid this economic breakdown?  The simplest means would be through transfer payments.  The government taxes everyone on a graduated basis: the more one earns the greater the percentage of tax paid.  It then transfers or pays out to those earning below a certain economic level bringing these people up to a “so called” minimum standard of living.  Thus the government is ensuring a level of consumption which would guarantee continued production of goods and services.

 

Of course, transfer payments is an attempt, albeit a necessary one, to avoid economic disaster.  It continues an old economic system with yet another variation and allows the market model to continue to work.  What is really needed is a new economic model which would allow for an equitable and continual distribution of goods and services.  And that means a redefinition of the concept of work, with an extended system of remuneration, a fairer tax system, and a new understanding of the concept of money as a means of exchange rather than as a means of wealth.

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The basic societal economic decisions: What to produce?  How to produce it?  And for whom to produce it?  These are currently largely determined by the “market;” i.e., demand.  The entrepreneur determines there is a market for a particular product.  He/she then will produce it at the lowest possible cost; and then ship it to the various market(s) where it can be sold at the best possible price.  How would these decisions be made in a non-market economy?

 

Parenthetically, when these decisions were made in the mid-20th Century in the Soviet Union by central planners there was no real correlation between decision and actual needs; and often parts of the system broke down temporarily when vital parts like bolts or a specific type of screw had not been produced in enough volume to meet the needs and the manufacture of something like automobiles had to stop until the bolt or screw had been manufactured and shipped to the auto plant.

 

It would seem that these market decisions would still have to be largely made by some form of demand.  Of course the government would have to control the process since income was no longer a factor.  In fact, somehow, government would have to control the entire process.  But then again I suppose in this digital age with computers, we can be a lot more efficient than the Soviets.  But can computers determine demand?

 

The concept of ownership and wealth would also have to become different.  The idea of group responsibility, snergy, would have to change.  We would all have to become our brother’s/sister’s keepers; each becoming responsible for all others.

                          *     *     *     *     *     *     *

To create a new economic model we have to first redefine the concept of work.  In the early 1930s during the depth of the depression the Roosevelt Administration had a group of economists, in Washington, D.C., define the concept of work in order to be able to measure its growth or contraction.  They created, what they called the Gross National Product, which was supposed to measure the wealth produced in one fiscal year, as the form of measurement.  This is now the Gross Domestic Product (G.D.P.).

 

The question for them was: What to measure?  They decided to include all those aspects of effort that earned money.  They did not include such domestic efforts as homemaker or childcare since these were non- remunerative activities.  Interestingly, in some European countries, housewives and/or mothers are given two week vacations away from their families at government expense.   Even today different societies place different values on what constitutes work.

 

What, then, would constitute work?  Does it have to be something which is remunerative?   Can it be virtually any activity?  Does it have to produce something: material?   Ascetic?

     Suppose we define work as any effort to achieve something; then building something is work; thinking is work; writing or learning would also be work.  Virtually any activity which brings about any kind of change would be work.

                           *    *    *    *    *    *    *    *    *    *

Let’s start with one type of effort: education/learning.  Every society, no matter how primitive or advanced, has some form of teaching its youngsters to successfully function as adults.  Education, learning should not only be a form of work, it should be considered one of the primary forms of employment in any society for it readies the next generation to continue the progress of development of the society.  Gandhi, in the 20th Century, during his crusade to equalize society in India said, about the Untouchables that among them with proper learning could be another Einstein or Newton.  Can not the same thing be said about the poorer elements of the United States?

 

Do we search our young to find the truly brilliant individuals and then nurture them to their full development?  No, in the United States we provide, by law, primary and secondary education, albeit at different qualities depending on where the youngster lives and goes to school.  Then he/she may apply for some full or partial scholarship or pay tuition and go on to a Community College, University, or Graduate School.  The cost for this must be borne by the individual or his/her parents

 

Education is a right in this country to which every youngster is entitled through high school whether or not he/she or their family want it.  It is general and teaches a level of literacy which is supposed to allow the youngster to function later as an adult.  Would it not make more sense, as is done in many European nations, to actually prepare the child for a specific endeavor based upon his/her ability?  Education would still be a right but it would also be a privilege.  The youngster has to earn his/her advances and would consequently be trained to the fullest of his/her ability, from preschool through graduate school or anywhere in between.  Each individual would be trained to the fullest of their ability.  Late starters could be also worked into the system.  No one would be wasted; all the potential Einsteins, Newtons, Rembrandts would be found and allowed to develop.  This would indeed be a positive usage of the concept of work.

                   *     *     *     *     *     *     *     *

Despite Adam Smith’s concept of “hands off” by government in his market model, governments, particularly of industrial nations, have never totally kept hands off their economies.

 

The question that arises in the 21st Century is what is or what should be the role of government in dealing with the economy?  If we look at the United States Constitution it begins in the Preamble with the phrase “We the People. . . .”  The document had to be approved by a majority in nine of the twelve states participating.  (Rhode Island had refused to deal with any part of the process.)

 

If we then ask, after studying the Constitution, what is the major purpose and/or function of the government?  Is it to protect the property rights of the few or provide for the welfare and prosperity of the many?  Are we protecting property rights and allowing more and more people to live at substandard level of existence?

 

     A “nation so conceived and so dedicated,” to paraphrase Abraham Lincoln, is or should be “of, by, and for the people.”  If we accept Lincoln’s premise then the government has a responsibility which is to serve all of its people; and that means to provide for them economically when they cannot or are not allowed to provide for themselves.

The Weiner Component Vol 2 #1 Part 2 The Introduction

Deviations from the long term growth trend US ...

Deviations from the long term growth trend US 1954–2005 (Photo credit: Wikipedia)

Business Cycle

Business Cycle (Photo credit: Wikipedia)

To avoid the vicissitudes of the business cycle and the inequality of the distribution of the National Income, the Gross Domestic Product, we need a new economic model or we have to make intensive changes in our present system.  If we stay essentially with our present model then the government has through a tax and redistribution system to balance incomes. A realistic minimum standard of living has to be set.  Those earning more than this level will have to be taxed on a realistic graduated level.  Those earning less would receive transfer payments from the government to bring their standard of living up to the minimum level which has to allow for a decent standard of living.  With this system, which more or less exists today in many European nations, we can keep the profit system and have all its so-called advantages.  But would this end the vicissitudes of the Business Cycle?

 

The amount of productivity today per working unit/person is constantly increasing.  One individual working continually provides for more and more people.  In order to keep constantly producing goods and services this productivity must be continually used up so more is always needed.  Consumption now becomes as important as production if the economy is to continually grow.  Therefore the consumer whether or not he/she is employed is needed as much as the producer.  This system can only flourish through government taxes and a redistribution of the National Income.  The producers can earn assorted amounts of surplus income which they can spend, save or invest while the unemployed or underemployed population can receive government transfer payments which will allow them to properly consume the necessary goods and services to both keep production going and have a decent standard of living.

 

Of course if we can create a new economic model which would allow for a fair distribution of goods and services without using the profit system then we would be far better off.  But this would probably require a complete change in our overall thinking and value systems.  We would also have to deal with the issues of what to produce and how to produce it without the motivating force of the profit system. 

   

Is it possible?  We would have to separate production of goods and services from money and find another reason to labor other than individual profit.

 

There is a disparity between the use of money as income, a means of exchange, and storage for labor and profits.  The distribution and expenditure of money determines where we are on the Business Cycle.  This, in turn, can throw the economy into recession or depression and cause a breakdown in the production of goods and services and partial or massive unemployment.  The extent of the distribution of money can cause a partial or full cessation in the distribution of goods and services.  They are two separate entities that are tied together in an unwholesome relationship.  If they were separated the economy would be far better off.  The problem, of course, is how to separate them.

 

Generally speaking, the overall public reaction to all of this is to return to the thinking of the late Nineteenth Century: the “safety” of the profit system. This, I believe, President Donald J. Trump will attempt to do; and this, seems to be today, the basic Republican value for economic growth.

 

     MONEY: ITS HISTORY AND USE:  The two entities which keep any economy functioning are self-interest and money.  Self-interest would affect every working individual from owner, entrepreneur, to physical laborer who wants the greatest return he/she can get from their endeavors.  Money is the grease that operates the economy: it is wages, salaries, profits, rents, interest, and dividends.  The spending of money determines demand, production, and also the phases of the Business Cycle.

 

The entrepreneur, factory or store owner will charge the greatest amount they can legitimately and pay his employees the least amount they can get away with.  Thus prices will be as high as possible while money paid to worker will be as low as it can be.  The producer will maximize production to increase profits; the workers will not be able to purchase all the goods and services produced because of low wages and over-production will eventually result.  This will lead to recession, unemployment, business failures, and depression.  Self-interest, which is the major motivating force of the economy, also tends to eventually cause the economy to malfunction into depression.

 

What is the problem?  It is the process of the distribution of money throughout the economy.  Whenever the distribution breaks down the economy goes into recession and depression.  It ceases to operate for the benefit of its members.

 

The use and distribution of money becomes the problem.  What then is money?

 

To understand what it is and its use(s) we need to have knowledge of how money was used both historically and at present.  Presumably, at first, man begins with barter: goods and services were directly exchanged for goods and services.  At some later point in time these were exchanged for their exact value, generally, in precious metals.  Rather than continue using scales to weigh the metal one group of traders, probably the Phoenicians, began stamping the weight on the metal piece.  This became the initial use of money.  The idea was then picked up by other groups or nations and coins came into being: an exact weight of a precious metal with the country or ruler or some symbol stamped on the metal to guarantee its value.  What happens here is that a good is exchanged for its exact value in the metal: equal value for equal value.  This allowed for free trade throughout the Mediterranean several thousand years ago.

 

Money, as it existed at this time, was labor or a good whose value was exchanged for its equivalent in gold, silver, or cooper coins.  Similar worth was exchanged for similar worth.

 

As time proceeded the coins became more ornate.  Rulers images were stamped on the coins, various designs were used.  Different denominations appeared, allowing coins to be minted in different sizes and weights; and also in different metals.  And thus was value exchanged for value, money for goods and services.

 

Of course, into this economic system occasionally various enterprising individuals and/or governments began a process of “watering” some of the coins minted; that is, mixing base metal with the gold or silver, thereby hoping to get more goods and services for less gold or silver.  This process would be done on a large scale by such individuals as the Roman Emperor, Nero; who tended to need more money than he could collect in taxes.  The result was to cheapen the value of the specie bringing about inflation which also resulted in a lowering of overall wages and other disruptive problems to the economy.

 

However, this economic system worked and continued to work successfully as long as conditions in the society(ies) were stable; that is, there is no rapid infusion of massive amounts of gold or if large amounts of money don’t have to be transferred over distant areas.

 

The discovery of the New World by Christopher Columbus brought into Europe, in the Sixteenth Century, massive amounts of gold over a fairly short period of time.  The Americas were systematically looted.  The gold passing through Spain and went on to the Netherlands, which was ruled by the same person as Spain, and then into rapid circulation throughout Europe.  This caused, what has been referred to as, “The Gold Revolution” which decreased significantly and continually the value of gold in its relationship to goods and services, and brought about unbelievable economic hardships to the wage earning working classes of Europe.  Wages remained essentially fixed while the value of the money dropped continually in a never ending cycle of inflation; thus bringing about a tremendous drop in standards of living.  It took about a century for a new reasonable balance between the value of gold in relation to the cost of goods and services to come about.   

 

Another problem which could upset the economies was large scale trade over great distances and/or between different nations. There was great danger from bands of thieves on land or pirates when shipping gold over bodies of water.  A safe way had to be found to ship gold. 

 

During the late Middle Ages different cities, city-states, provinces, and countries became known for producing certain products.  These were desired throughout Europe.  Also some of the Italian city-states, after gaining control of the Mediterranean Sea, gained a monopoly of trade with the East for spices and other products.  (It was the search for a new route to the East that brought about Columbus’ expedition.)  This and other factors brought about a need for the safe transfer of specie over long distances.  In addition the breakdown of Feudalism and the rise of Kings brought about a necessity for the availability of large amounts of money for the payment of armies and other large scale projects.

 

To offset these economic needs there arose in various cities: first in the Germanies and then in the Italian city-states merchant families who eventually traded in money as a commodity.  These became the merchant bankers of the Hanseatic League and the Italian city-states.  They set up branches of their banks in different countries which allowed for immediate transfers of gold; and they became in many cases the new nobility: the merchant princes.  Of the Medici family of Italy two of the women became queens in France and one of the Medici became a pope.  Cosimo, the founder of the family had been a money lender whose symbol of trade was three brass balls.

 

From the Italian Renaissance on (Fourteenth Century) banking was fully developed with the banking families, in many instances, ruling the Italian city-states.  The goods of the East came to Europe by way of the eastern Mediterranean, through the Italian city-states, and on to the general population of the continent.  The fleets of ships plying that sea were controlled by the merchants of the city-states; who also controlled banking and, among other enterprises, made high interest loans to the emerging kings.

 

It was the potential profits from the trade that caused the new nations like Spain, Portugal, England, and France to explore, searching for a new route to the East.  This was the justification for sailing west to get to Asia and thus discovering the Americas.  Prince Henry of Portugal began sending expeditions south, exploring Africa trying to find a river crossing Africa west to east.  Eventually one of the expeditions rounded that continent and was able to bring back to Europe a cargo of spices worth many times the value of the ship and cost of the expedition.  Portugal controlled that trade for about fifty years. 

 

With the new routes and the emergence of pirates in the eastern Mediterranean, Italy lost control of that body of water and the trade and profits moved to the new emerging nations.  Incidentally the Renaissance now became the Northern Renaissance and banking and trade moved to these countries.

 

Money, during this period, remained as it had always been: equal in value to the goods and services for which it was exchanged.  Spain’s looting of the gold from the New World and having it pass directly into the European economy brought about a 90 year period of inflation in the Sixteenth Century but did not change the concept of value for value.  Actually by making gold more plentiful and less expensive it allowed for a more rapid economic growth.

 

With the coming of the wonders of the Industrial Revolution (the development of machines going from wood to metal, transportation: put a steam engine on wheels and you have a train, advances in medicine: ever increasing abilities to fight the assorted diseases, phenomenal population growth, advances in metallurgy, gas and electric engines, etc., etc.) the nations of the planet underwent massive changes: national populations went from the low millions to the high millions approaching and exceeding in one or two cases a billion people.

 

As we moved into the Twentieth Century (in addition to the major wars which wiped out millions) with the tremendous growth of business, of  the needs for ever increasing goods and services there were not enough precious metals to allow for an exchange of goods and services based upon value for value.  For this and other reasons in 1929 we have the Great Depression.

 

Paper money when it was first used consisted of silver and gold certificates which supposedly could be exchanged for actual specie at any time at one’s bank.  (However, if everyone were to do it at the same time there would be a run on the banks and they might well become bankrupt because there was never enough metal to satisfy everyone’s needs.)  In point of fact the Industrial nations eventually got off the direct gold standard by collecting and storing the gold bullion and printing paper money supposedly based upon the value of this stored bullion.  Silver coins would maintain a certain amount of precious metal for a while.  Later in the Twentieth Century virtually all nations will go off the gold standard basing the value of the money on the prestige of the particular country. The remaining silver coins became copper sandwiches.  By the beginning of the Twenty-first Century money is, in all cases, devoid of any precious metal or anything else of real value except the credit of the nation issuing it.

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Since 2008, when the United States went through what is generally called today The Great Recession the country has been recovering from what could have easily been The Greatest Depression in its history.  This economic condition had been building rapidly since the presidency of Ronald Reagan in the 1980s, when all government restrictions on trade, many of which were developed by the Roosevelt administration during the Great Depression, had been done away with by the Reagan administration.  The banking industry in the country had a free hand to do whatever they wanted.  And what they wanted was to increase their profits astronomically.

 

The banking industry convinced a large percentage of homeowners to turn their homes into bank accounts by a process of continually taking equity funds out of their homes.  They did this by constantly refinancing their properties.  In the process of doing this the paper value of the homes continually increased.  Presumably people were spending what they believed was their never ending increases.

 

This became rampart from the Reagan administration on.  By 2007 the oncoming crash was apparent but the banking industry was in denial.  At that point mortgage refinancing was raised to 125% of the appraised value of the home.  In 2008 the crash came and the Housing Industry collapsed.  Many of the banking houses were overextended and also at the point of collapse or bankruptcy. 

 

Since the basic financial structure of the entire economy or nation is based upon the banking structure and their functioning the Bush administration in 2008 lent large amounts to the banks.  This, however, was not enough money and the incoming Obama administration had to make more massive loans to the banking houses in order to save them.  The Obama administration also set conditions about massive remunerations to executives which the Bush people had not done.

All of this was in 2008 and 2009.  The trillions of dollars the Federal Government spent at this time saved the country from going into a more massive depression than that of 1929.  In fact we would still be coming out of it if the government had not jumped in. 

 

What emerged instead has been called The Great Recession.  In 2009 the unemployment rate had risen to 7.6%.  By 2010 it had reached 9.8%.  Thereafter it began to fall, reaching 4.6% by November of 2016.

 

In this process millions of people were underwater in their homes, suddenly owing more on the house than it was worth.  The banks, with aid from the government, largely recovered, with some being taken over by other banking houses.  Even with virtually no regulation some of the banking actions were illegal.  No one went to jail.  Instead the banks paid fines, which taken together were in the billions of dollars. The banks eventually repaid their government loans and executive pay rose to new heights.

 

We are still in a recession, with unemployment at the tail end of December 2016 at 4.5%.  For recovery, on the business model to occur, the range of people not working would have to reach 2.5%.  Is that a future possibility with President Donald Trump?  Probably not.  Since the Republican image of creating jobs has nothing to do with current levels of economic understanding.  They believe that jobs are created by doing away with government regulation.  It would seem that by their way of thinking as pollution increases and so do jobs.

Donald Trump enters the Oscar De LA Renta Fash...

The Weiner Component, Volume 2 – Economics in the 21st Century: #1: Change & the 21st Century: Part I Introduction

 

Prenote: I find myself getting bored with Donald J. Trump and his machinations.  He, as President-Elect is setting up a government which seems that it will wipe out any progress made in the 20th Century on.  Will it?  We’ll have to wait and see. 

Meanwhile the stock market is rising to new heights.  Is that because of President-Elect Donald J. Trump or in spite of him?  Again we’ll have to wait and see.  Basically the issue with Trump is that we, the public, will have to wait and see what he does after January 20, 2017, when he becomes President of the United States.

Meanwhile I will begin a new version of my book, “Economics in the 21st Century.

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Volume 2 #1 – The Purpose of Government in the 21st Century:                                                            Introduction: Part 1

 

The past is always safe, particularly if it is mostly imagined.  It is a known when balanced against the future which is always unknown and therefore unsafe.  In the presidential election of 2016, Donald J. Trump was elected by a minority of voters who were fearful of the changes that were occurring in society.  Trump promised to bring back the past.  He would bring back the values and conditions that supposedly were while Clinton would continue forward to a changing society.

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 With the election of Donald J. Trump, as President of the United States by a majority of people from the smaller states the country choose the candidate that got the minority of popular votes but the majority of electoral votes.  Hillary Clinton actually won the election with nearly three million more votes than Trump received.  The voters who choose Trump actually choose to stay with what they believed would be a return of the past, to the supposed happy days when there were jobs for all the low skilled workers.  Trump would, he said, “stay the course” and continue the process of lowering taxes.  He would continue the war effort in the Middle East and the War against Terror.  He would bring back all the jobs that had moved overseas and take the country back to its happy days, whenever they were.  He would reform our society, making it as it had been in the past.

 

Of course “reform” historically was a euphuism for change or raising taxes among the ordinary citizens of the country.  Trump has promised to lower taxes for the wealthy.  Ordinary people would object to a tax raise but how can they be unhappy about reform, semantical games.  The problem is that the government is spending billions of dollars daily above what it collects in taxes pushing the National Debt (which President Clinton had begun to reduce) to new astronomical levels.  Trump will lower taxes for the wealthy and the corporations.  He will have to make up the difference somehow.

 

There is currently one vacancy on the Supreme Court and one Justice in her eighties.  From what I understand Trump should be able during his tenure as President to probably make two appointments to the Court.  This should make the Court 6 to 3 in favor of the conservatives.  The significance of a solid conservative balance on the Supreme Court is that it might, among other things like individual rights, finish striking down Roe vs. Wade; and thus take away the right of choice from slightly over fifty percent of the population.  The majority of women, according to the surveys taken, are overwhelmingly in favor of choice.  It would be a decision imposed by a minority upon the majority.

 

 This seems to be Trump’s version of the “good old days.”

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But despite what is currently happening with Donald J. Trump as the new President-Elect no one really knows what he will do as President.  Still the Twenty-first Century holds the promise of all sorts of social and economic changes for the people of the United States, the other Industrial Nations, and even for the emerging non-industrial countries of this world.  The question, of course, is whether these changes will be positive or will they be otherwise.  Our traditional economic model will no longer function (if it ever did properly beyond the theoretical stage).  Technological change, particularly that of the Computer Revolution is moving forward at a rapid pace.  The changes are speeding up. 

 

     With these changes the concept of employment (What is work?) is/will also undergo evolution.  Low skilled jobs are and have been disappearing in the United States; some highly technological occupations are and have been coming into being.  A large number of factory and many white collar jobs are moving overseas where they can be performed at a much lower cost.  The economy today is a world-wide one with the individual nations still being essentially nationalistic.

                         *     *     *     *     *     *     *     *

     For the last three to four thousand years the concept of work has been fairly constant.  It has essentially been effort related to survival: production of food, shelter, clothing, and gradually entities needed for recreation.  Up until the Industrial Revolution it took ten or more people working full time (sunrise to sunset) to provide the fundamentals needed for one individual to have the leisure time to be a priest, government official, artist, or someone not having to work for survival.  With the change over from a hand-craft society to a machine- operated one the ratio has changed and continues to decrease.  From ten to one we gradually went to one person supplying everything for one hundred people.  With the coming and continuance of the Computer Revolution the ratio has gone from one supplying everything for one hundred people to one supplying what’s needed for a thousand individuals, with the possibilities of eventually going well beyond that number.

 

     What then happens to both the concept of work and the need to work when all the rudiments can easily and almost effortlessly be supplied?  Traditionally man (and woman) have earned their bread like Adam (after being expelled from the Garden of Eden) by the sweat of his (her) brow.  Now, ironically, we have returned to garden conditions.  Can we handle them?

 

     Today, at the Second decade of the Twenty-first Century, we seem to be well into the Computer Revolution; but, I suspect, we are only seeing its initial stage. 

 

The government constantly monitors and publishes the unemployment percentage of the working population.  They are thrilled when it decreases by one or several tenths of a percent.  Politicians like Donald Trump, are constantly promising to decrease unemployment.  The President will proudly proclaim and take credit for any tenth of a percent decrease.  The goal, as far as the government and public are concerned, seems to be a healthy economy with full employment in an era when computers are rapidly increasing the rates of productivity and many corporations are downsizing while increasing their output.  We seem to be squarely and hopefully looking historically backward.

                               *     *     *     *     *     *     *     *

Many thousands of years ago a man-like creature first picked up a rock or piece of wood and used it as a tool or weapon for the first time.  From that time on the concept was passed to others and they did the same, eventually discovering that they could chip the rock into a specific shape and sharpness and sharpen the wood, fire-hardening a point.  Over the multitude of years types of tools were developed.  Mankind developed more and better means of increasing his productivity, of making life easier for himself.  In fact his conscious or unconscious goal during all the years of his existence has been to produce more with less effort.

 

During the 19th Century the emerging handicraft society began to change in England and then Europe and the United States with the gradual development of machines; this became known as the Industrial Revolution, when manufacturing changed from hand-production to machine production.

 

The early machines were mostly made of wood and were operated by water-power, and shortly thereafter by steam power.  With the invention of the electric motor and development in metallurgy the machines became metal and also more highly efficient, multitudinously increasing their productive capacities.  Where in the Eighteenth Century it took ten people to produce enough to free one from labor, now gradually one person could produce enough to supply ten individuals with all their basic needs.  Life and the concept of work changed.  A percentage of the handicraft people were displaced becoming superfluous; these were the luggites.  Machines did their work a hundred times faster than they could by hand.  The level of productivity brought about by the Industrial Society achieved by the middle of the Twentieth Century a level of supply of goods and services in the Industrial Nations that had been inconceivable earlier.  It also brought about the Business Cycle — prosperity, recession, depression, and recovery — in a never ending pattern erratically coming about in shorter or longer periods of time.

 

Recession and depression, presumably caused by overproduction, brought about a situation in which there was fair to large scale unemployment, reduced consumption of goods and services in an economy where the overall workforce strongly desired to work and consume but could not.  The economy had broken down, ceased to smoothly function.  The willingness to work was there but the economy could not utilize it.  For one reason or another the basic rudiments that caused the economy to smoothly flow no longer worked. 

 

The question here is why?  There is a ready and willing workforce anxious to labor and consume the goods and services produced but there is no work for them and very little for them and their families to consume.  WHY?

 

The grease that allows the economy to function is money.  The distribution of that entity throughout an economy, the amounts that each family unit earns or has determines who will get how much of the goods and services produced.

 

How then is money distributed within a society?  The different occupations receive different levels of remuneration.  Unskilled labor, which is mostly grunt type work requiring generally brute strength only would be the lowest paid earnings.  In many cases, not enough is earned to provide for the basic needs of an individual or family.  Skilled labor, on the other hand, can go from a fair standard of living to a level where the amount of money earned cannot possibly be spent because of its vastness in the millions.

 

Money can also be stored, not used for consumption, but put into banks or other financial institutions where it earns interest.  In addition it can be used as a commodity where it can earn profit.  Used this way it tends to increase the productive capacity of a nation; but this has nothing to do with the distribution of goods and services.

 

Money, in the form of profit (Adam Smith’s “invisible hand”) becomes the motivating force behind production of both goods and services.  Profit, from the sale of goods or the charge for services and the accumulation of money is the motivation for production.  This accumulation allows a small percentage of the population to amass large amounts but again, has nothing to do with a reasonable distribution of the specie.

 

It can be argued that Adam Smith’s “invisible hand” works on every level of the economy.  Given a choice the laborer, white collar worker, executive, entrepreneur will take that position which pays the greatest amount or has the best advantages.  Therefore each entity within the society is functioning where he/she can in their own interest; doing the best for themselves and their family unit.  But, again, what has this to do with a fair distribution of the National Income?

 

Several interesting questions arise here: Is money really related to the production of goods and services?  And if it is not then in what way would distribution be accomplished?  Since volume of production is tied directly to volume of consumption how, if we are to avoid upturns and downturns (constant recovery and recession), can we maintain a steady course of production and distribution of goods and services? 

 

The economic model (capitalism) was stated in 1776 by Adam Smith in his book “An Inquiry into the Wealth of Nations,” which was published that year.  Smith designed his model for a pre-industrial nation, for a time when production could not meet the overall needs of everybody in the society.  We are now almost into a postindustrial society moving rapidly through and into the computer Revolution.  We are still prone to the vicissitudes of the Business Cycle.  Can we afford this kind of continual economic up and down turn?

                   *********************************

The Twenty-first Century promises to be a time of intense change.  If we continue to adhere to what we have now then the economic upheavals can be catastrophic.  The Great Depression of 1929 could be mild compared to what we may face. In 2008 we faced such a situation.  It was avoided by massive spending by Presidents Bush and Obama.  

 

Donald Trump seems to be pointing toward the pre-2008 period.  He could, during his four year presidency, bring us back to an economic situation as bad as or far worse than the potential 2008 Depression. 

 

To avoid the possibility of negative economic change within our economy the country needs a new economic model or it has to make massive changes within our present system.

 

 

The Weiner Component #175 – Part 2: Notes on Donald Trump

Currently there is little going on between the Trump Group

US Intelligence Community Seal

US Intelligence Community Seal (Photo credit: Wikipedia)

and the CIA and other intelligence services.  For one thing Trump is refusing to attend daily Intelligence Briefings more than once a week.  He claims he is smart enough to know what is going on in the world and that the meetings are redundant.  He is having his Vice-President, Mike Pence, attend daily. 

 

On the other hand there is heavy dissent over the issue of Russia having influenced or tried to influence the Presidential Election by hacking and releasing through WiliLeaks thousands of Clinton and others Democratic emails.  There is even a possibility of Russia having hacked into actual voting in the rural areas of the smaller states.  These assertions have come from both Democrats and Republicans, marking the first time he had been officially called out by his own party.  In fact Senator John McCain, the chair of the Armed Services Committee called for an investigation of Russian interference in the election.

 

The Trump people are mockingly pointing out that the CIA supported the concept of weapons of mass destruction during the first Bush Jr. administration, which incidentally they did not do.  They were surprised by this Bush assertion and stated then that it wasn’t true, there were no weapons of mass destruction in Iraq.  Bush and Cheney had found a pseudo expert who propounded this theory.  Bush Jr. wanted the invasion because the ruler of Iraq had attempted to assassinate his “Daddy.”

 

Currently leaders in Congress are attempting to form a bipartisan group to investigate this situation.  Trump is insisting that this finding by the Intelligence Community is nonsense for two reasons: (1) He didn’t need any help in winning the election, and (2) He has specific plans for dealing with Putin and Russia under his administration and the move by Congress could force him to alter them.

 

Trump’s rationale seems to be that the Intelligence Community has “no idea if it’s Russia or China or somebody else.  He called their report “Ridiculous.”  Of course he knows this without looking at the CIA’s evidence.  Remember, he does not attend Intelligence Briefings.

 

In the first postelection pushback that Trump has encountered from the Republican Party that belatedly and reluctantly embraced the unconventional candidate whose views often clash with traditional GOP ideology, the majority and minority heads of the Senate Armed Services Committee, Republican Senator John McCain and Democratic Senator Chuck Schumer stated: “Democrats and Republicans must work together and across the jurisdictional lines of the Congress, to examine these recent incidents thoroughly and devise comprehensive solutions to defer and defend against further cyberattacks.”

 

During the final weeks of the campaign thousands of emails, many stolen from the Clinton campaign were released to WiliLeaks on an almost daily basis.  On Friday December 9th President Barack Obama ordered the CIA and other intelligence agencies to conduct a full review of foreign based digital attacks aimed at influencing the election. 

 

On Friday December 16th in his final Press Conference President Obama stated that he had seen the evidence that the hacking had been done by Russia in order to influence the American election in favor of Trump.   He also stated that this would never have happened unless Vladimir Putin was directly involved in the action.  President Obama further stated that the United States would take action, some visible and some publically invisible against Russia.

 

President Obama has a fraction over one month to take action or actions against Russia.  On January 20, 2017, Donald Trump becomes the 45th President of the United States for the next four years and he has a positive view of Vladimir Putin. 

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Trump was elected by numerous individuals, many of whom probably voted for the first time because of Trump’s promises.  In fact choosing him as the Republican candidate was a populist revolt over Congress’ inaction over the last six years.  The group or groups in the individual states that caused him to win the election were both high school graduates and non-graduates who couldn’t stand the Democratic Party but had gotten nothing from the Republican Party in return for their votes in the past.  Trump, the so-called billionaire, became the representative of this group throughout the United States.  At the Republican Convention he promised to be their voice, to represent them and to bring back the past.  That is, to bring back the jobs which have gone overseas or had technologically disappeared during the last forty or fifty years, which their group supposedly had in those earlier decades when life was simpler and, presumably, these people prospered or at least were able to earn a decent living.

                       ****************************

Trump made all sorts of promises during the campaign.  Now we begin to see, in a vague manner, where Trump is going politically by his Cabinet choices.  He seems to favor generals, billionaires, and Wall Street.  This is a strange group to satisfy the needs of the “forgotten man” or woman.  He has chosen one of the most consistently conservative policy teams in the total history of the nation.  In fact, most of these people chosen seem to hold opposite views in terms of the offices to which they are being appointed.

 

Trump vigorously campaigned against Wall Street and big banks, then chose a former Goldman Sacks partner who is a billionaire, Steven Mnuchin, to run the Treasury Department.  Mnuchin is the co-chief executive of the hedge fund Dune Capital Management.  He has served as chairman of the One West Bank after he led a group to purchase it.  The bank has been criticized for a large number of foreclosures and for discrimination against minorities.  It has also financed several high-profile films.  Prior to that Mnuchin spent 17 years at Goldman Sacks.  According to the Progressive Orange Campaign Committee Mnuchin made a fortune foreclosing on working family homes.  This is the man Trump has chosen to oversee the financial structure of the United States.

 

A former lobbyist for the Koch brothers, who led a group that argued that solar energy would dramatically raise the cost of electricity is Trump choice to take over the Energy Department.  Thomas Pyle is the man.  For years Pyle has led a national assault on renewable power.  Pyle has tweeted that he expects the new administration would go beyond a mere rollback of President Obama’s climate change actions.  This is the man that Trump would have run the Energy Department.

 

In Health and Human Services, Social Security and Medicare, which Trump promised to save he has chosen Representative Tom Price, who has advocated major revisions in both, to run those services.  Price is a six term Georgia Congressman who has led the charge to privatize Medicare.  Trump did not mention Price’s plans for major changes to Medicare and Medicaid.  Price wants to privatize Medicare and give participants in the program medical vouchers.  He wants to save the government money by actually gradually making the beneficiary more and more responsible for paying for his own medical care.  In terms of Medicaid give grants of money to the states.  In this fashion the Federal Government can gradually decrease what it pays for these social programs.  These programs mostly serve poor Americans.  These changes would slowly decrease their benefits.  He probably would also privatize Social Security. 

  

 His choice for Labor Secretary is Andrew Puzder, the CEO of CKE that owns Hardees and Carl Jr., who will control the working people and has spoken of the advantages of using automation instead of people at Carl Jr.  He named Oklahoma Attorney General Scott Pruitt, a man that has repeatedly expressed skepticism about the scientific consensus on climate change to lead the Environmental Protection Agency.

 

Presumably his choice for Secretary of State is Rex Tillerson, the CEO of the Exxon Mobile Corporation.  Tillerson has had dealings with Vladimir Putin and Russia.  In fact in 2013 Putin gave him the highest civilian medal that could be awarded to an individual, the Russian Order of Friendship.  It has also recently been released that Tillerson is a Director for a Russian-American oil company based in the Bahamas.

 

For Attorney General Donald Trump has chosen Senator Jeff Sessions of Alabama, a true Southerner with strong Southern values who claims he is not a racist.  Republican Representative Mick Mulvancy, a Tea Party deficit hawk is Trump’s choice as his budget director.  He is cofounder of the hard right House Freedom Caucus and has a reputation for pushing deep spending cuts in order to balance the budget.

 

For Transportation Secretary, Trump choose Elaine Chao.  She served eight years as George W. Bush’s Labor Secretary and is married to Mitch McConnell, the majority leader in the Senate.  Retired Lt. General Michael Flynn was named as National Security Adviser.  Flynn was fired by the Obama administration for erratic behavior and has used anti-Muslim language that even the most strident Republicans have avoided.  He has used the words “radical Islamic terrorism in a way that blurs the lines between a war on terrorism and a war on Islam.  Nikki Haley, the governor of South Carolina, was chosen to become Ambassador to the United Nations.

 

Trump is still looking for people to appoint to other departments and there are others he has already appointed.  The point has been made that most of Trump’s appointments are people who are opposed to the departments they are heading.  Their function, apparently, will be to do a hatchet job on their departments, destroying any progress that has been made toward a cleaner, nonpolluting environment.  The country has chosen a rather depressing four years.

           *********************************

In order to save jobs in Indiana Trump got the air conditioning company, Carrier Corporation to not move 2,000 jobs to Mexico.  Instead for a state tax rebate of seven million dollars voted by a committee headed by Governor Mike Pence of Indiana, Carrier, the highly financially successful company, is only moving twelve hundred jobs to Mexico.  Trump saved eight hundred jobs.  It only cost Indiana seven million dollars in lost taxes. 

 

What emerges here is essentially a negative pattern in which President Donald Trump by placing people who basic philosophy is counter to the departments in government to which they are appointed can in a relatively short time wipe out the achievements of their departments and bring the country back to where it was prior to 2008 when the Housing Debacle occurred.  They can relatively quickly get rid of all or most government restrictions on industrial and banking development.  Many Republicans, particularly the Tea Party group, applaud these choices by Trump.  A small percentage of the Republicans do not appreciate them. 

 

There are currently 52 Republican Senators and 48 Democratic ones in the Senate.  Most of Trump’s appointments require “advice and consent” by the Senate.  I can think of no way in which all the Republican Senators will give Trump a blanket vote.  Trump may find it impossible to get many of his choices for Cabinet department heads through.  The Democrats will give negative blanket votes against almost all of them.  It will only take 3 Republican votes to get a person rejected.  The hearings should be interesting and dramatic.

                       *********************************

What we see here seems to be a pattern of what the two major political parties stand for and where they currently are in terms of historical time. 

 

The Republicans seem to be in the late 18th Century, when this country was started, and in the 19th Century when life and work was simpler.  Their basic premise seems to be that the function of government is to take care of wars and provide a safe environment where business can take place.  The people of the nation are responsible for themselves.  This type of government did function during the early period of our history, when men could pack up their families and go west.

 

The Democratic Party, which was begun by Thomas Jefferson, initially was the party of the yeoman farmer, it served the little man as he and his family made their way through life.  This changed in the 20th Century when life became mostly urban and monopoly arrived, virtually totally exploiting the common man.  A young lawyer, Louis Brandeis, introduced sociological evidence, the living conditions of workers, in his trials for the first time and essentially changed the concept of what was considered evidence.  For this he was rewarded or punished by being placed upon the Supreme Court.

 

Brandeis was followed by the Great Depression of 1929 and Franklin D. Roosevelt who redefined the functions of the Democratic Party as the Party of the common man.  Its functions, in addition to the normal ones of a National Government, became those of assuming responsibility for the functions of society that individuals could not handle for themselves, making the nation safe and positively functional for everyone.

 

With the election of Trump we seem to be at the beginning of a return to the past.  Of course, with doing away with Affordable Health Care (Obamacare), which the Republicans have tried to do multiple times under President Obama and claimed should be done, we could, at some point in 2017, see well over 20 million people lose their medical coverage.  In addition the entire medical insurance industry could be totally disrupted as the insurance companies base their premium rates upon their knowledge of their clientele.  A disruption of this sort could cost the Republicans both Houses of Congress in 2018.  And it’s interesting to note that toward the end of 2016, after Trump became President-Elect, there has been a massive surge of sign-ups for Obamacare.  It is in the millions.

          **********************************

Donald Trump has promised, among other things, not to change Obamacare other than to make it better.  The Republicans in Congress have promised to do away with it for the last six years.  Over 20 million people who had no medical insurance prior to Obamacare are now insured.  The Republicans have promised to replace it with something better but in six years they have come up with nothing better.  What are they going to do?  Twenty million or more people suddenly losing their health insurance will, no doubt, make their feeling known in the next Congressional Election in 2018.

 

Paul Ryan, the Republican Speaker of the House of Representatives, recently was questioned by the press about Obamacare.  He equivocated, saying that nothing has been decided yet.  The Republicans have controlled both Houses of Congress for nearly two years and nothing has been decided.  Apparently the Republicans do a good job of objecting but a lousy job of legislating.  It would seem that the different shades of conservatism are incapable of coming to agreement on most things among themselves or, to put it more simply, compromising even among themselves.

                  

In terms of Trump and the majority of Congress, both claim to be Republican, but do they really agree on all or even most traditional conservative policies?  Keep in mind that the conservatives in Congress have problems functioning as a single unit, then add the President-Elect, who has his own version of conservatism and would come to different conclusions on many issues, and try to visualize what will probably happen.

 

The issue is Russian interference in the 2016 Presidential Election.  There are also innumerable other issues.  One gets the feeling that the Speaker of the House of Representatives, Paul Ryan, doesn’t quite trust Donald Trump.  The two smile a lot together but don’t really trust one another.

 

First: Ryan was the only Republican in the House of Representatives that all the Republicans in the House could accept as their conditional leader after John Boehner was forced to resign as Speaker.  Second: Ryan is using the same techniques against Trump that he used against President Obama.  The Finance Bill, which funds the Federal Government, traditionally was passed for the entire fiscal year.  Ryan changed that.  It is now passed on a four month basis.

 

According to the Constitution all money bills have to originate in the House.  The Bill then goes to the Senate.  They can pass it exactly as it is or they can change it.  If they change it the Bill then goes to a Conference Committee, made up of Representatives from both Houses of Congress.  Both Houses vote on the new Bill; and when passed, it goes to the President for his signature.

 

Paul Ryan changed that pattern.  The House would pass the money Bill just before the House adjourned for some sort of break.  The Bill sent to the Senate had to be passed just as it was.  There was no time for the Conference Committee to meet.  Attached to the money Bill were riders the President would not ordinarily approve.  The choice was to pass the Bill or allow the government to run out of money.

 

The last money Bill that Congress passed was in the middle of December of 2016.  The next money Bill will have to be passed in the middle of April of 2017.  Ryan has left himself with leverage that can be used against President Trump if it is necessary.

       **************************************

Trump’s Presidency should be loud and vociferous.  Trump will be highly frustrated every time he doesn’t get his way.  The frustration will begin with many of the appointments he has made.  Only a percentage of his appointments will be approved.  He should be denouncing congressmen loudly, accusing them of all sorts of things.  In addition he will want to perform assorted actions that Congress does not approve of and he will be reacting to that.  At some point the House may even vote a Bill of Impeachment against him for conflicts of interest or for some other reason.  The next four years will be colorful and probably, at times, very emotional.

 

The Weiner Component #174 – The 2016 Election

 

Hillary Clinton won the popular vote in the 2016 Presidential Election by at least 2.8 million votes.  She actually won the election but lost the Electoral College Vote: Clinton had 232 Electoral votes to Trump’s 306. On the basis of a true Democratic Vote, rule by the will of the majority of people in the country, Hillary Clinton actually got the majority of votes.  She should have won the election.

 

Donald Trump won the actual election because of a system inaugurated by the Founding Fathers in the late 18th Century that allowed the election to be skewered toward the much less populated states.  The initial issue in the late seventeen hundreds was representation for all thirteen states regardless of population. 

 

Each state regardless of size got two senators while the number of representatives in the House of Representatives was determined by the population of each state.  The smaller states didn’t want to be totally overshadowed then by the larger states.  The 2016 Presidential Election is the fourth time in the history of the nation that the election has gone to the person with the lesser amount of the public votes.

 

It has happened twice in the 19th Century and, so far, twice in the 21st Century.  As a rule the Republicans tend to do better in midterm election than in Presidential elections.  This is mainly because a lot of voters don’t vote then.  In addition to this Republicans use what methods they can to suppress the minority vote.  Texas has been quite successful with voter suppression.

 

The majority political party in the United States is the Democratic Party, then comes the Republicans, then the Independents, down the line there are the Libertarians, and finally the Green Party.  There are other groups but they tend to be regional.  Occasionally there will be Third Party candidates.

 

During a Presidential Election only two of the fifty states, Nebraska and Maine, do not follow the winner take all principle.  In the remaining forty-eight states whoever wins the majority of votes gets all the electoral votes for that state. 

 

There are 435 elected members in the House of Representatives that represent the 50 states.  There are three more that represent territories held by the United States.  Not all territories are represented.  The 435 seats is a fixed number.  Every ten years a census is taken and the seats are redistributed based upon population changes.  Regardless of population every state will have at least one member in the House.  In the Senate every state is represented by two Senators regardless of population. 

 

Every four years a Presidential Election is held.  The voters, within the country, do not vote directly for the president.  Instead they elect an invisible elector who will vote for the person they choose.  There are 538 people who are chosen as electors, three or more from every state representing the members of Congress and three representing the U.S. territories.  It takes 270 electoral votes to become President.

 

One of the problems with this system is that the Electoral Districts are the same as the House of Representative Districts.  Both political parties, but the Republicans particularly, have gerrymandered their Districts within their states to give them the most advantage when it comes to elections.  They have drawn the districts to break up Democratic blocks of voters and whenever possible give Republicans the advantage.  This same advantage exists in the Electoral Districts of many states, since both are the same. 

 

This advantage has allowed the Republicans to hold a majority in the House of Representatives since 2011 even though in 2012 over one and a quarter million more Democrats voted for members of the House.  That same advantage existed for Donald J. Trump even though Hillary Clinton has received well over two million more votes from the general population than Donald Trump has gotten.

 

Two of the Texas electors have announced that they cannot in good conscious vote for Trump.  One has stated that he will resign and the other will vote for another Republican.  This, of course, will not change anything.

                    *************************************

Since the overall population of the United States increases and continually relocates a National census is taken every ten years to determine the number of House of Representative Districts in the nation.  The number is fixed at 435.  The Congressional Election Districts are rearranged every ten years.  Also within the cities of each state there is a continual movement from the rural areas to the urban cemters where most job opportunities occur, so that the population will dynamically change within the ten year period.  Consequently the cities continue to grow making for totally unequal numbers in many of the Congressional Districts.  Within most states the urban votes count for less each year against the rural districts, which tend to lose people continually.

 

What is true for the individual states is also true for the United States, except that here it works on a larger scale.  The number of people voting in the larger states, which have many more and much larger urban areas, have their individual votes count for a lot less than those residing in the smaller states, particularly in the rural sections of the smaller states.

 

All fifty states are shown on MSNBC, CNN, or Fox News as either red or blue states: red is Republican and blue is Democratic.  There are also purple states, which are the swing states that can go either way.  Most of the campaigning during Presidential Elections is done in the purple or swing states.

 

These battleground states carry disproportionate influence in Presidential Elections.  In 2016 most of the campaigning was done in just twelve states.

                         **********************************

According to the U.S. Census Bureau there is a net population gain of one person every 13 seconds.  This means that the United States gains 110.77 people every day or 40,431 every single year.

 

The following population statistics are taken from the Census Bureau’s July 2014 estimate.  If anything they tend to be conservative.

 

The statistics here used were done by the Census Bureau in July of 2014.  According to the official 2010 population count officially done by the Census Bureau the population of the United States was 308,745,538 and was estimated to be 318,857,056 in July of 2014.  The 2016 Vote was taken from the results of the Presidential Election.

 

                                                               House     Elect.      Pop. Per   |2016

Rank|     State           | Population|  Seats|   Votes   |House Seat| V0te

    1  |  California      | 38,802.500|    53    |     55       |      717,763|  D

    2  |   Texas            | 26,956,958|    36    |     38       |      734,867|  R

    3  |   Florida         |  19,893,297|    27    |      29       |      715,465| R

    4  |  New York     |  19,746,227|    27    |      29       |      724,824| D

    5  |  Illinois           |  12,880,580|   18     |      20       |     715.292 | D

    6  |Pennsylvania |  12,787,209|   18     |      20       |     709,085 | R

    7  |     Ohio           |   11,594163|   16     |      18       |     721,514 | R

    8  |    Georgia      |   10,097,343|   14    |       16      |      708,568 | R

    9  | N. Carolina   |      9,943,964|   13    |       15      |      750,159| R

  10  |  Michigan     |      9,909,877|   14    |       16      |      705,954| D

  11  | New Jersey  |      8,938,175|   12    |       14      |      738,716| D

  12  | Virginia         |      8,326,289|   11    |      13       |      744,170| D

  13  |Washington  |      7,061,530|   10    |      12       |      689,701| D

  14  |Massachusetts|   6,745,408|     9    |       11      |      738,460| D

  15  |   Arizona       |      6,731,484|     9    |       11      |      728,139| R

  16  |   Indiana       |      6,596,855|     9    |       11      |      726,370| R

  17  |  Tennessee  |      6,549,352|     9    |       11      |      717,360| R

  18  |   Missouri     |      6,063,589  |     8   |       10      |      752,749| R

  19  |  Maryland    |      5,976,407  |     8   |       10      |      735,570| D

  20  |  Wisconsin   |      5,757,564  |     8   |       10      |      715,800| R

  21  |  Minnesota  |      5,457,173  |     8   |       10      |      672,392| D

  22  |  Colorado     |      5,355,856  |     7   |         9      |      741,083| D

  23  |  Alabama     |       4,849,377  |     7   |        9      |       688,860| R

  24  | S. Carolina   |       4,832,482  |     7   |        9      |      674,818 | R

  25  | Louisiana     |       4,649.676  |    6    |        8      |      766,982 | R

  26  | Kentucky     |       4,413,457  |    6    |        8      |      730,069 | R

  27  |  Oregon       |       3,970,239  |    5    |        7      |      779,871 | D

  28  |Oklahoma    |        3,878,051 |    5    |        7      |      762,964 | R

  29  |Connecticut |        3,596,677 |    5    |        7      |      718,059 | D

  30  |     Iowa         |        3,107,126 |    4    |        6      |      758,547 | R

  31  |  Arkansas     |        2,994,079 |    4    |        6      |      737,283 | R

  32  |Mississippi    |        2,984,926 |    4    |        6      |     746,232  | R

  33  |      Utah         |        2,942902  |    4    |        6      |     713,822  | R

  34  |   Kansas        |        2,904,021 |     4    |        6      |     721,476  | R

  35  |   Nevada       |        2,839,099 |     4    |        6      |     689,733  | D

  36  |New Mexico |        2,085,572 |     3    |        5      |     695,179  | D

  37  |  Nebraska     |       1,881,503  |     3    |        5     |      618,508 | R

  38  | W. Virginia   |        1,850,326 |     3    |        5     |      618,471 | R

  39  |    Idaho         |         1,634,464|      2    |       4     |      797,864 | R

  40  |   Hawaii        |         1,419,561|      2    |       4     |      696,157 | D

  41  |   Maine       |    1,330,089   |         2    |       4     |      664,596 | D

  42  | N. Hampshire| 1,326,813  |         2    |        4     |      660,350| D

  43  |Rhode Island|   1,055,173  |         2     |        4     |      525,146| D

  44  |   Montana   |    1,023,579  |         1     |        3      |  1,005,141| R

  45  |   Delaware  |        935,614  |         1     |        3      |      917,029| D

  46  | S. Dakota    |        853,175  |         1     |        3      |      833,354| R

  47  | N. Dakota   |        739,482  |         1     |        3      |      699,628| R

  48  |   Alaska       |        737,732  |         1     |        3      |      736,732| R

  49  |   Vermont   |       626,011   |         1     |       3       |     626,562 | D

  50  |   Wyoming  |      584,153    |         1    |        3       |     576,412 | R

 

Depending upon population every state has at least three people in Congress, two in the Senate and at least one in the House of Representatives.  Wyoming, population-wise has the smallest population, a little over ½ million, while California has the largest population, almost 40 million.  California has 53 house members and two Senators.  The other states generally come between these two. 

 

Altogether there are seven states that have only one representative in the House and two in the Senate.  Of these two voted Democratic and five voted Republican.  Only thirteen states have ten or more electoral votes.  All the others go from one to nine.

 

If we take the bottom 29 states and count their total population then we have approximately the same population as California.  They have 55 House Districts and 42 Senators.  This gives them 97 electoral votes against California’s 55 electoral votes.  There seems to be something wrong with this math. 

 

If it’s argued that some of the bottom 21 states voted for the Democratic candidate, Hillary Clinton, then if we skip those states and count just Republican states the number diminishes a little but the same problem exists.  The number of House votes will increase and there is still a large number of Senate votes.  No matter how this is added up it is totally unfair.  The smaller states each have two Senators and the number adds substantially to the number of electors representing them while the much larger states only have two senators.  

 

The reason for the Electoral College may have made sense in the late 17 hundreds but it makes no sense today.  A fair election in a Democracy is an election where all the people are equally represented.  This does not exist with the Electoral College.  It is past time for a change. 

 

Even Donald Trump has called the system unreasonable.  With a fairer system Trump said he would have done most of his campaigning in the bigger states.  He believes he still would have won.

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In addition, under the current system, there are actually 50 plus elections going on with no carry-over from one to the other.  Forty-eight of the states are winner take all states.  This means that every vote for the losing candidate is lost.  In a truly democratic election there would still be one winner, but every single vote would matter until the winner was chosen.  That doesn’t happen here.  Hillary Clinton had well over two million more votes in the 2016 Election than Donald Trump.

 

In addition states like California send millions of tax dollars to the Federal Government.  The smaller states are generally the recipients of much of this money since many of them receive much of this tax money in aid. 

 

Trump ran up large margins in small cities and rural areas turning out white, working class workers in states like Michigan, Wisconsin, Pennsylvania, and Ohio.  He also did extremely well in rural areas of battleground states like Florida and North Carolina, which he won.

 

It is certainly time to modernize our election system.  All votes should be counted equally.  The Founding Fathers did not visualize or necessarily approve of political parties.  They developed a system that they believed would allow the President to be chosen by the best educated people living in the country.  They never even had a glimmer of a country such as exists today. 

 

Political Parties came into existence almost immediately after the Constitution was ratified.  Alexander Hamilton organized the first political party, the Federalist Party.  Shortly thereafter Thomas Jefferson organized the Democratic-Republican Party.  Both men served under President George Washington. 

 

We are now in the 21st Century.  It is time to modernize the Constitution.  Hillary Clinton should have won the 2016 Presidential Election.  Hopefully Trump will not take us back to the 1920s and the disaster that followed in 1929.

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Hillary Clinton had 2.8 million more votes than Donald Trump.  She had approximately the same number as Barack Obama had in 2012.  She won big in the larger states like California and New York, beating Trump by almost 2 for 1 in California.  Trump, where he won, won by small margins.  In the smaller states he won by slight margins; and mostly by votes in the underrepresented rural areas of the smaller states.  It was an election where the smaller states, those that generally get economic help from the Federal Government, made Trump the winner.  The 2016 Presidential Election was a prime example of rule by the minority.