The Weiner Component V.2 #38 – Money & the Presidents: Part 4

English: Official photograph portrait of forme...

English: Official photograph portrait of former U.S. President George W. Bush. Português: Foto oficial de George W. Bush, presidente dos Estados Unidos da América. (Photo credit: Wikipedia)

U.S. President George W. Bush and Afghan Presi...

U.S. President George W. Bush and Afghan President Hamid Karzai appear together Wednesday, March 1, 2006, at a joint news conference at the Presidential Palace in Kabul, Afganistan. (Photo credit: Wikipedia)

Clinton raised taxes for the very wealthy and lowered them for everyone else.  There was prosperity with deficit reduction for his last three years in office.  George W. Bush lowered taxes for the rich and gave everyone else a token discount on their income taxes.  He also got the U.S. involved in two wars, one of which was unnecessary and the National Debt zoomed to the point of almost doubling.  Over his eight years in office the National Debt went from 5 trillion 792 billion dollars to 11 trillion 898 billion dollars.

 

In November of 2,000 George W. Bush won the Presidential Election in an extremely controversial election.  His Democratic opponent, Al Gore, had a greater popular vote.  And in Florida they used a punch out ballot in the election.  The problem here was that the punch outs required an additional effort to be totally detached from the ballot.  Numerous ballots contained partially punched out votes.  These were not immediately counted and later had to be considered one by one.  The Chief Justice of the Supreme Court, William Rehnquist, made a negative point over counting individual ballots and the practice was discontinued, giving the presidential victory to George W. Bush.  It was victory by default!

 

From January 20,Th when he assumed office, until the early afternoon of September 1, 2001 nothing much happened in the country.  On the morning of that day President George W. Bush was reading to a Primary school class from one of their textbooks when news arrived of what had happened at the New York City World Trade Center.

 

Four large passenger American airplanes, after takeoff from Eastern airports, had been hijacked by groups of Al-Qaeda terrorists.  Two had crashed into each of the two main towers of the 110 story World Trade Center, destroying the towers.  One plane had crashed in the countryside on its way to Washington, D.C. and the fourth plane had crashed into the Pentagon, destroying a section of it.  2,996 people had been killed and over 6,000 people were injured.  There was over 10 billion dollars in property damage.

 

The leader and founder of Al-Qaeda, Osama bin Laden, had set up the terrorist mission.  He would be killed several years later by navy seals working under the orders of then President Barack Obama.

 

President Bush’s reaction was to declare War on Terrorism and go after Al-Qaeda and the Taliban, which was then housed in and which also controlled the government of Afghanistan.  The United States, initially supported by Canada and the United Kingdom, and later by a coalition of over 40 countries, all belonging to the United Nations, would attack Afghanistan, the home country of Al-Qaeda and the Taliban.  Their object was to deny the terrorists a safe haven in Afghanistan by removing it from their control.

 

On October 7, 2001, President Bush launched Operation “Enduring Freedom” with Great Britain.  They were later joined by the Afghanistan Northern Alliance which had been fighting the Taliban in a Civil War since 1996.  In December 2001 the United Nations Security Council established the International Security Assistance Force.  NATO became involved in August 2003.  The U.S. provided the commanding general.  This force included troops from 43 nations.

 

Osama bin Laden and his forces had been driven out of the country but the Civil War continues today, over 16 years after.  The Afghanistan government, democratically set up by the U.S. and U.N., has never been able to control the country.  This has been done by the United States and its United Nations allies.

 

In May 2012, NATO leaders ordered an exit strategy.  In 2014 the U.S. announced its major military operations were over and that it would leave a residual force in the country.  In 2014 the British handed over their bases to the Afghan government and on December 2014 NATO formally ended military operations.  In September of 2017 the Trump Administration deployed an additional 3,000 troops to Afghanistan bringing the U.S. presence there up to 14,000 soldiers.  There doesn’t seem to be any end in sight.

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

Early in the Afghan War President Bush, his Vice President, Dick Chaney, and his Secretary of Defense, Donald Rumsfeld, met in Texas to discuss with the Commanding General Tommy Franks “Desert Storm II,” the invasion of Iraq which Bush considered part of the “axis of evil.”  Presumably, under Saddam Hussein, Iraq contained “weapons of mass destruction” and was a threat to the United States.

 

Iraq, at that time was allowing U.N. experts to examine their military facilities searching for illegal weapons.  The United Nation inspectors complained that Bush’s invasion cut their investigation short.  In fact the CIA had mixed feelings about Iraq having these weapons.  They mostly felt that there were “no weapons of mass destruction.”  It turned out they were right.

 

Why did Bush and his coterie insist upon invading Iraq?  There was no evidence that they had in any way participated in the destruction of the Twin Towers.  Bush was creating another war that was not really necessary.  Two reasons emerge here.  One was that they believed they could remake Iraq into a small version of the United States.  All they had to do was get rid of its dictator, Saddam Hussein.  Then they could hold a Democratic Election and the new Iraq would live happily ever after.  They did not understand anything about the Middle East.  They were either totally naïve or completely ignorant.

 

The other reason was the fact that Saddam Hussein had attempted to have George W. Bush’s father, former President George H.W. Bush assassinated and the son wanted to punish him.  It could have been a combination of the two reasons.  They saw it as a win, win situation.  In any event the cost of this decision was over 3,000 American soldier’s lives and about ½ million Iraqi lives.  In addition it destabilized the Middle East and forced us to continue to keep troops in Iraq as the government there was never able to maintain control of the country.

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

During Bush’s last year in office, 2008, the Real Estate Bubble, which the banks had been creating since the 1980s, burst.  People had been encouraged to use their homes as bank accounts.  They could always refinance their home whose value kept increasing  largely because of the continual refinancing.  In essence the banks had gradually created money in the trillions of dollars throughout the country by continually refinancing homes at ever increasing value.  By 2007 the problem became obvious but the majority of bankers were in denial.  In fact some of them began refinancing homes at 125 percent of their appraised value.  The entire system collapsed in 2008, Bush’s last year in office.  Many homeowners suddenly owed more on their houses than they were worth.  Bush and his Secretary of the Treasury bailed out the banks with multi-million dollar loans.  This was the state of the union that George W. Bush handed over to his Democratic successor, Barack H. Obama.

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

In essence George W. Bush, who had initially won the Presidential Election over a quirk, the Florida punch ballots, had brought about an unnecessary war, in all probability, to punish a dictator for attempting to have his father killed.  In this process innumerable people, both American soldiers and Iraqis had lost their lives.  The financial cost of this action would double the National Debt and put an unnecessary financial burden thereafter upon the United States.

 

He would also pass on to his successor a country on the verge of a depression great than that of 1929.

The Weiner Component V.2 #30 – Trump & Afghanistan

On Monday, August 21, 2017, President Donald J. Trump gave a foreign policy speech dealing with Afghanistan.  It stated that there would be a continuation of our troops being there and that at some near point in the future more troops would be added to our presence.  The Afghanistan War, if it is a war in the strict sense of the term, is to date the longest war or military action in which the United States has ever been involved, it has now lasted 16 years.  Of course one could argue that we are still at war with North Korea since we have had troops stationed at their border since 1953 when a truce was declared.

 

The issue with Afghanistan is rather complex.  President Trump edited out a lot of information in his presentation.  It will be useful to consider some of these facts.

 

Shortly after the terrorist assault and destruction upon the Twin Towers in New York City on 9/11/01 the U.S. military attacked Afghanistan which was then ruled by the Taliban.  The terrorist raid upon America was organized from there.  While that war was going on the U.S. also attacked Iraq, a country which presumably had weapons of mass destruction.  To President Bush, his Vice President, Dick Cheney, and his Defense Secretary, Donald Rumsfeld, this was an ideal opportunity to remake both of these nations into copies of the United States.

 

Unfortunately by the American leaders there was no understanding of either of these countries or of their cultures or people.  Iraq was then ruled by Saddam Hussein, a dictator.  The country was quickly militarily taken over and a new government was established by the U.S.  One of the major problems of the new Iraqi government was that it functioned by favoritism, nepotism, and corruption.  For another thing the new government instead of treating all its citizens equally favored the Shiites over the Sunnis, one major religious sect over the other.

 

These forces that existed in both the military and the government put people in positions of authority regardless of their capabilities.  In the army it chose its officers in this fashion, meaning the military corps were essentially led by incompetents.  Given a combat situation they would probably be the first to run, leading to mass desertions during battles, particularly against determined fighters.

 

The Iraqi example of corruption that stands out was a large building put up by an Iraqi contractor and paid for by the U.S. government on the edge of the desert.  The building, when finished cost millions of dollars and was never used.  It’s probably become part of the desert today.  It seems that the builder, in order to increase his profits, minimized the amount of concrete mixed with the sand to such an extent that when water hit a part of the building it dissolved the concrete.  And it does at intervals rain there.  It was never safe to enter the structure because any part could dissolve at any time.  The probability was that the builder pocketed his profits without any complaints.  This is one blaring example, there are countless others.

 

In battle, when the Iraqi military faced determined fighters like ISIS, they would throw down their weapons and flee the scene.  The Iraqi President demanded that if the Americans stayed in Iraq they came under the legal jurisdiction of the Iraqi civilian legal system.  The American army has its own code of military laws which would try American soldiers for infractions of the laws.  They would not put their men under Iraqi jurisdiction.  Consequently, as the Iraqis wished, the United States began removing its army from Iraq.

 

Essentially the same thing happened in Afghanistan.  Under President Barack Obama the troops were being removed from that country.  Both Iraq and Afghanistan had been able to order the U.S. around but their governments were not strong enough to hold their territories against the Taliban, ISIS, and Al-Qaida.  This has necessitated the return of American troops and the continued war in these countries.

 

Presumably today, there have been improvements.  The American troops serve as advisers.  President Trump, in Afghanistan, wants them to kill members of the terrorist groups, that is, to go back to a combat mission and win the war.

 

Is it really a war?  Or are we holding these territories for governments that are not really capable of controlling their own land?  If this is true then we are stuck in Iraq and Afghanistan for the duration, however long that may be.

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

Trump’s new strategy for war in Afghanistan is very similar to Obama’s old strategy.  A large number, possibly 4,000 or more American soldiers will be added at some point in the near future bringing our military forces there to just over twelve thousand men.  The U.S. will, according to President Trump, presumably quickly kill the enemy and win the war.     The actual probability is that the enemy will then fade away, essentially leave the country during the American buildup and then return when the U.S. removes most of the troops.  They’ve done this before.

 

What will it take to change this pattern?  And is it possible?  Can the Afghanistan’s stand up to their radical forces?  This was President Obama’s plan.  If we again take up the war and fight it will we be actually doing Afghanistan a favor or encouraging their traditional position?

 

In point of fact, is it really a war that is being fought in Afghanistan or are we just maintaining the status quo?  Will these countries ever be strong enough to maintain their own security?  That’s an interesting question.  Can it be answered at present?

Secretary of Defense Donald Rumsfeld shares a ...

The Weiner Component V.2 #29 – The Pattern of United States History & the Evolving Purpose of Government: Part 2

Unemployment rate in the US 1910–1960, with th...

Unemployment rate in the US 1910–1960, with the years of the Great Depression (1929–1939) highlighted. (Photo credit: Wikipedia)

Herbert Hoover was elected President of the United States in 1928.  He

Franklin Delano Roosevelt, 1933. Lietuvių: Fra...

Franklin Delano Roosevelt, 1933. Lietuvių: Franklinas Delanas Ruzveltas (Photo credit: Wikipedia)

was the third Republican elected to the presidency since the end of World War I, taking office in March 4, 1929.  The Great Depression began on September 4, 1929, with a fall in stock prices.  The stock market crashed on October 29, 1929, Black Tuesday.  It would continue to drop thereafter, losing billions of dollars in value.

English: Real National Product in the Great De...

English: Real National Product in the Great Depression (Photo credit: Wikipedia)

 

Hoover was President about seven months before the crash came.  He spent the next three and some years contending unsuccessfully with the Great Depression and waiting for the Stock Market to reverse itself into positive territory.  It never did.

 

From October 29th on the Great Depression became a world phenomenon.   It had devastating effects.  Personal incomes, tax revenues, profits and prices dropped.  International trade plunged more than 50%.  Countries had set up tariff barriers against all other nations.

 

Both poor and rich suffered.  Personal income tax revenues, profits and prices fell.  Unemployment in the United States dropped to 25%.  It was higher in some other countries, reaching 33%.  Farming areas suffered as crop-prices fell 60%.  All this began eight months after Hoover became President of the United States and continued to get worse during his presidency.

 

Once the Depression hit, Hoover, as President attempted to combat the economic decline with large scale government public work projects such as the Hoover Dam.  He urged industry to keep wages high.  Reluctantly he approved the Smoot-Hawley Tariff of 1930 which set up international trade barriers.  Because he believed in a balanced budget as government income from taxes fell, he raised the rate.   The economy kept falling and unemployment gradually rose to 25%.

 

What had happened was that the economy fell like a bolder off the roof of a high building.  On the one hand President Hoover tried to continually add money to the economy but on the other hand he massively decreased the amount of money available to the public by continually trying to balance the National budget.  The basic problem was that no one really understood what was happening.  By continually decreasing the money available Hoover exacerbated the depths of the depression.  In 2008, when a similar situation occurred the President increased government spending by trillions of dollars and did not raise taxes.  What should have been a greater depression than that of 1929 became instead a Great Recession from which the country recovered in a few years.  Economic downturns are generally understood today; their causes and effects weren’t in 1929.

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

The Great Depression of 1929 was mainly caused by the unregulated banks.  They allowed stock to be purchased with a margin of 10 percent of the actual cost of the stock, the bank funding the remaining 90 percent with interest.  This allowed innumerable people to invest in the Stock Market.  The banks held the stock.  If its cost went down the so-called owner had to quickly come up with the difference raising the bank’s holding to 90 percent or they would sell the stock.  This was buying on margin.

 

The system created high false values on the stocks, producing a bubble which would at some point collapse.  Stocks that never paid a dividend were selling for ever rising costs.  Sooner or later a crash had to come.

 

When the Crash came on October 29, 1929, Black Tuesday, the majority of stocks dropped quickly far lower than 10 percent in one day and continued dropping on succeeding days.  A large number of stockholders were suddenly bankrupt and a lot of banks went out of business.

 

Overnight the amount of money in circulation decreased by a massive percentage and the country was in a deeper depression than it had ever been in before.  This was the Great Depression that would last until shortly after the outbreak of World War II.  What pulled the United States and other countries out of the Great Depression was the unlimited war spending.

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

On March 4, 1933 Franklin Delano Roosevelt took office as the first elected Democratic President since the end of World War I.  In the preceding campaign he had promised the country a “New Deal.”  It was a term that came from poker; the player gave up his five cards and received five new ones with which to play.  It was to the American people a promise of a complete change.  What the change would be, no one knew at the time.  I suspect that included the President; but he would experiment and find a way through the economic crisis.

 

The New Deal consisted of what Roosevelt called the 3Rs: Relief, Recovery, and Reform.  Relief was to create jobs for the unemployed, Recovery was to bring the economy back to a state of health, and Reform was to pass laws that regulated the banks and other enterprises that brought about the Great Depression.  It was felt that the overall economy had to be changed so that this condition could never happen again.

 

Initially Roosevelt closed all the banks and quickly began a process of auditing them.  He began his fireside chats over the new invention, radio, stating in one of his early talks that “We have nothing to fear but fear itself.”  He talked the nation through its fears.  During the first hundred days Congress passed bills that were largely blank, just having a title.  They were filled in by what was needed as they went into operation.

 

Roosevelt doubled the money supply by collecting all the gold coins, with the exception of a few held back as souvenirs.  People objected to having to turn in their gold coins for paper money.  The Federal Government sued them and won every case.  The gold was melted down and made into blocks which were then put into depositories like Fort Knox.  Gold paper certificates were then issued and kept by the Federal Reserve that denoted the amount of gold that was stored.

 

Ones and five dollar bills were silver certificates.  Ten dollar bills and up were gold certificates, actually Federal Reserve Notes.  Once this was completed the government had doubled its money supply.  Actually once this was done the country was off the gold standard.  It solved one major problem.  There had never been enough gold available to meet the monetary needs of the economy.  From this point on we were off the gold standard.  The theoretical fact that we, as a nation, were on one was a fiction.  Paper money could not be exchanged for gold.

 

What emerged as the New Deal developed was a series of Federal programs, public work projects, financial reforms and regulations enacted by the Roosevelt administration in response to the Great Depression.  These programs included support to the farmers, the unemployed, youth and the elderly.  It also included bank reform and changes to the monetary system.  They included both laws passed by Congress, and Presidential executive orders.  These programs focused on Relief, Recovery, and Reform.

 

In essence what Roosevelt did was to change the focus of the Federal Government.  From this point on it assumed responsibility for the welfare of its population.  It didn’t matter up until 2017 which political party was in control the new focus was kept up and added to by both political parties.  The Federal Government’s responsibility was to the people of the nation, to their welfare.  With the election of Donald J. Trump on January 20th on the government seemed to be attempting to move back in time to before 1929.  To date it hasn’t succeeded.

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

Harry S. Truman, who became President with the death of Roosevelt, and then won the next election for the Presidency introduced the “Fair Deal.”  It was a liberal extension of the New Deal.  Unfortunately, during his early presidency both houses of Congress were controlled by the Republicans.  What was achieved were those aspects of which the Republicans approved.

 

The Fair Deal included federal aid to education, a large tax cut for low income earners, abolition of the poll tax, an anti-lynching law, a farm aid program, increased public housing, an immigration bill, new TVA style public works projects, a new Department of Welfare, an increase in the minimum wage from 40 cents to 75 cents an hour, national health insurance, expanded Social Security coverage, and a $4 billion tax increase to reduce the national debt and pay for these programs.

 

A very small number of these items were passed by the Republican Congress.  In 1949 to 1950 there was a Democratic Congress and some more of these items were passed.

 

President Lyndon B. Johnson got a number of these reforms passed in his Great Society plan.  Medicare came into existence for senior citizens, with former President Harry S Truman getting the first card issued with the number 1.  Medicaid for the poor who could not afford proper medical care.  A number of civil rights and voter laws were passed desegregating the Southern States.  Johnson declared “War on poverty,” but was hampered in his domestic program by the Viet Nam War.  George W. Bush, the Republican President, added a 400 million dollar prescription drug bill to Medicare.

 

Finally under President Barack Obama in the early 21st Century Affordable Health Care came into existence.  Currently under President Donald J. Trump the country seems to be attempting to move backwards to a time before the New Deal.

++++++++++++++++++++++++++++++++++++++

To sum up: President Herbert Hoover spent millions on public works trying to help the nation quickly work itself through the Great Depression.  He didn’t want the government to directly give charity because that would destroy individual initiative.  President Franklin D. Roosevelt spent billions.  He doubled the money supply.  His policy was Relief, Recovery, and Reform: the three R’s.  There was some of each but the Great Depression did not completely end until the 1940s with World War II where spending was endless.  In 2008 the Real Estate Bubble, brought about by the banks over a 28 year period, burst and the value of the dollar dropped to about ten cents.  President George W. Bush initially bailed out the banks and then Barack Obama became President in 2009.  The country faced a potential for a depression far worse than the Great Depression.  President Obama spent trillions and the country faced a Great Recession which mainly ended a few years later.  We had learned how to limit depressions.

The Weiner Component V.2 #29 – The Pattern of United States History & the Evolving Purpose of Government: Part 2

 

Herbert Hoover was elected President of the United States in 1928.  He was the third Republican elected to the presidency since the end of World War I, taking office in March 4, 1929.  The Great Depression began on September 4, 1929, with a fall in stock prices.  The stock market crashed on October 29, 1929, Black Tuesday.  It would continue to drop thereafter, losing billions of dollars in value.

 

Hoover was President about seven months before the crash came.  He spent the next three and some years contending unsuccessfully with the Great Depression and waiting for the Stock Market to reverse itself into positive territory.  It never did.

 

From October 29th on the Great Depression became a world phenomenon.   It had devastating effects.  Personal incomes, tax revenues, profits and prices dropped.  International trade plunged more than 50%.  Countries had set up tariff barriers against all other nations.

 

Both poor and rich suffered.  Personal income tax revenues, profits and prices fell.  Unemployment in the United States dropped to 25%.  It was higher in some other countries, reaching 33%.  Farming areas suffered as crop-prices fell 60%.  All this began eight months after Hoover became President of the United States and continued to get worse during his presidency.

 

Once the Depression hit, Hoover, as President attempted to combat the economic decline with large scale government public work projects such as the Hoover Dam.  He urged industry to keep wages high.  Reluctantly he approved the Smoot-Hawley Tariff of 1930 which set up international trade barriers.  Because he believed in a balanced budget as government income from taxes fell, he raised the rate.   The economy kept falling and unemployment gradually rose to 25%.

 

What had happened was that the economy fell like a bolder off the roof of a high building.  On the one hand President Hoover tried to continually add money to the economy but on the other hand he massively decreased the amount of money available to the public by continually trying to balance the National budget.  The basic problem was that no one really understood what was happening.  By continually decreasing the money available Hoover exacerbated the depths of the depression.  In 2008, when a similar situation occurred the President increased government spending by trillions of dollars and did not raise taxes.  What should have been a greater depression than that of 1929 became instead a Great Recession from which the country recovered in a few years.  Economic downturns are generally understood today; their causes and effects weren’t in 1929.

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

The Great Depression of 1929 was mainly caused by the unregulated banks.  They allowed stock to be purchased with a margin of 10 percent of the actual cost of the stock, the bank funding the remaining 90 percent with interest.  This allowed innumerable people to invest in the Stock Market.  The banks held the stock.  If its cost went down the so-called owner had to quickly come up with the difference raising the bank’s holding to 90 percent or they would sell the stock.  This was buying on margin.

 

The system created high false values on the stocks, producing a bubble which would at some point collapse.  Stocks that never paid a dividend were selling for ever rising costs.  Sooner or later a crash had to come.

 

When the Crash came on October 29, 1929, Black Tuesday, the majority of stocks dropped quickly far lower than 10 percent in one day and continued dropping on succeeding days.  A large number of stockholders were suddenly bankrupt and a lot of banks went out of business.

 

Overnight the amount of money in circulation decreased by a massive percentage and the country was in a deeper depression than it had ever been in before.  This was the Great Depression that would last until shortly after the outbreak of World War II.  What pulled the United States and other countries out of the Great Depression was the unlimited war spending.

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

On March 4, 1933 Franklin Delano Roosevelt took office as the first elected Democratic President since the end of World War I.  In the preceding campaign he had promised the country a “New Deal.”  It was a term that came from poker; the player gave up his five cards and received five new ones with which to play.  It was to the American people a promise of a complete change.  What the change would be, no one knew at the time.  I suspect that included the President; but he would experiment and find a way through the economic crisis.

 

The New Deal consisted of what Roosevelt called the 3Rs: Relief, Recovery, and Reform.  Relief was to create jobs for the unemployed, Recovery was to bring the economy back to a state of health, and Reform was to pass laws that regulated the banks and other enterprises that brought about the Great Depression.  It was felt that the overall economy had to be changed so that this condition could never happen again.

 

Initially Roosevelt closed all the banks and quickly began a process of auditing them.  He began his fireside chats over the new invention, radio, stating in one of his early talks that “We have nothing to fear but fear itself.”  He talked the nation through its fears.  During the first hundred days Congress passed bills that were largely blank, just having a title.  They were filled in by what was needed as they went into operation.

 

Roosevelt doubled the money supply by collecting all the gold coins, with the exception of a few held back as souvenirs.  People objected to having to turn in their gold coins for paper money.  The Federal Government sued them and won every case.  The gold was melted down and made into blocks which were then put into depositories like Fort Knox.  Gold paper certificates were then issued and kept by the Federal Reserve that denoted the amount of gold that was stored.

 

Ones and five dollar bills were silver certificates.  Ten dollar bills and up were gold certificates, actually Federal Reserve Notes.  Once this was completed the government had doubled its money supply.  Actually once this was done the country was off the gold standard.  It solved one major problem.  There had never been enough gold available to meet the monetary needs of the economy.  From this point on we were off the gold standard.  The theoretical fact that we, as a nation, were on one was a fiction.  Paper money could not be exchanged for gold.

 

What emerged as the New Deal developed was a series of Federal programs, public work projects, financial reforms and regulations enacted by the Roosevelt administration in response to the Great Depression.  These programs included support to the farmers, the unemployed, youth and the elderly.  It also included bank reform and changes to the monetary system.  They included both laws passed by Congress, and Presidential executive orders.  These programs focused on Relief, Recovery, and Reform.

 

In essence what Roosevelt did was to change the focus of the Federal Government.  From this point on it assumed responsibility for the welfare of its population.  It didn’t matter up until 2017 which political party was in control the new focus was kept up and added to by both political parties.  The Federal Government’s responsibility was to the people of the nation, to their welfare.  With the election of Donald J. Trump on January 20th on the government seemed to be attempting to move back in time to before 1929.  To date it hasn’t succeeded.

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

Harry S. Truman, who became President with the death of Roosevelt, and then won the next election for the Presidency introduced the “Fair Deal.”  It was a liberal extension of the New Deal.  Unfortunately, during his early presidency both houses of Congress were controlled by the Republicans.  What was achieved were those aspects of which the Republicans approved.

 

The Fair Deal included federal aid to education, a large tax cut for low income earners, abolition of the poll tax, an anti-lynching law, a farm aid program, increased public housing, an immigration bill, new TVA style public works projects, a new Department of Welfare, an increase in the minimum wage from 40 cents to 75 cents an hour, national health insurance, expanded Social Security coverage, and a $4 billion tax increase to reduce the national debt and pay for these programs.

 

A very small number of these items were passed by the Republican Congress.  In 1949 to 1950 there was a Democratic Congress and some more of these items were passed.

 

President Lyndon B. Johnson got a number of these reforms passed in his Great Society plan.  Medicare came into existence for senior citizens, with former President Harry S Truman getting the first card issued with the number 1.  Medicaid for the poor who could not afford proper medical care.  A number of civil rights and voter laws were passed desegregating the Southern States.  Johnson declared “War on poverty,” but was hampered in his domestic program by the Viet Nam War.  George W. Bush, the Republican President, added a 400 million dollar prescription drug bill to Medicare.

 

Finally under President Barack Obama in the early 21st Century Affordable Health Care came into existence.  Currently under President Donald J. Trump the country seems to be attempting to move backwards to a time before the New Deal.

++++++++++++++++++++++++++++++++++++++

To sum up: President Herbert Hoover spent millions on public works trying to help the nation quickly work itself through the Great Depression.  He didn’t want the government to directly give charity because that would destroy individual initiative.  President Franklin D. Roosevelt spent billions.  He doubled the money supply.  His policy was Relief, Recovery, and Reform: the three R’s.  There was some of each but the Great Depression did not completely end until the 1940s with World War II where spending was endless.  In 2008 the Real Estate Bubble, brought about by the banks over a 28 year period, burst and the value of the dollar dropped to about ten cents.  President George W. Bush initially bailed out the banks and then Barack Obama became President in 2009.  The country faced a potential for a depression far worse than the Great Depression.  President Obama spent trillions and the country faced a Great Recession which mainly ended a few years later.  We had learned how to limit depressions.

The Weiner Component Vol.2 #17 Republicans & Affordable Health Care

Official photographic portrait of US President...

English: Nations with Universal health care sy...

English: Nations with Universal health care systems. Nations with some type of universal health care system. Nations attempting to obtain universal health care. Health care coverage provided by the United States war funding. Nations with no universal health care. (Photo credit: Wikipedia)

The existence of Universal Health Care exists in most of the industrial nations as a right for every citizen.   In the United States this concept came into being in 2010, the second year of the Obama administration.  Traditionally, in the U.S. up until that time health care was provided by many employers or it was for people who could afford to pay the required premiums.  The idea of Universal Health Care as a right of all citizens began in the United States in 1945 with President Harry S Truman.  It remained an idea because no legislation was passed by Congress.  Under President Lyndon B. Johnson in 1965 Medicare was passed for senior citizens and the disabled.  Former President Harry S Truman received the first card, numbered 1.

 

For younger people, those under 65 years of age, medical coverage had to be purchased.  Millions didn’t have any coverage.  Either their jobs didn’t provide it or they couldn’t afford the required premiums.  In medical emergencies these people had to go to E.R. in hospitals or attempt to ignore their illness.  The hospitals had to provide services even if they could not collect fees for them.

 

It should be noted that even with Medicare medical services are not completely paid for.  Even today many seniors have limited financial resources.  They may have to choose between medicine, food, and/or rent.  Medications also tend to be very expensive.

 

President Bill Clinton had a committee headed by his wife, Hillary, attempt to develop a Universal Health Care Bill during his presidency.  It was finally totally defeated with the slogan, “There has to be a better way.”  The “better way” was no Health Care Bill.  The concept was defeated during his first four years in office.

 

Under President George W. Bush a prescription payment was added to Medicare.  This did not do away with payments for medication but it reduced them considerably with the Federal Government picking up the balance.

 

It should be noted that one of the main groups of contributors to Congressional Elections, particularly Republican elections, is the pharmaceutical industry.  In turn Congress has protected their rights to charge outlandish prices for medications.  Most medications produced by these companies cost far less outside the boundaries of the U.S.  Ironically it is the taxpayers who now pick up most of the cost for medication so that politicians can more easily get contributions.

 

During the second year of the Obama administration, 2010, with the Democrats having control of both houses of Congress, the Affordable Health Care Bill was passed.  As a put-down the Republicans dubbed the bill Obamacare.  President Obama stated that he liked the title and it has been largely called that since.

 

Ironically, in order to make the bill palatable to the Republicans the Democrats built Affordable Health Care from a Republican plan, utilizing private enterprise, the insurance companies, to build a universal health plan.  Obamacare was modeled after a plan that had been developed and used by the state of Massachusetts under the Republican governor, Mitt Romney.

 

Not one Republican voted for Affordable Health Care.  They had all in caucus agreed to not support anything President Obama favored.  They were determined to make him a one term President.  The Bill was passed by the Democratic majority in both Houses of Congress.  Not one Republican voted for the Bill in either House of Congress.  In fact from 2011 on, when the Republicans achieved a majority in the House of Representatives, they voted over sixty times over the next six years to repeal the Bill.  Up until 2014 the Democrats had a majority in the Senate.  In 2015 the Senate barely achieved a Republican majority.  At that time President Obama vetoed the anti-Obamacare Bill.

 

With the election of the Republican Donald J. Trump as President of the United States and with Republican majorities in both Houses of Congress their goal seemed within reach.  But poles ascertained that repeal of that Bill had only 17% approval among the general public.  The majority of Americans want to keep it in existence.  Affordable Health Care had become even more popular than it had been during the time when Barack Obama had been President of the United States. The number of people signing up for it in 2017 increased considerably.

 

Suddenly the Congressional Republicans had a tiger by the tail.  When the Republican legislators went home on their numerous breaks to their districts they faced unhappy constituents who were vociferous in their protest against doing away with Obamacare.  This was particularly true when the Non Partisan Congressional Office that reported upon this bill stated that 14 million people would lose their health insurance coverage if the initial Republican “repeal and replace” health bill became law.

 

After failing to get their “repeal and replace” bill through the House of Representatives the Republicans members were careful to take their two week Easter break.  When they returned there was presumably a new “repeal and replace” bill which was rushed through the House and passed before it had been evaluated by the Non Partisan Budget Office that vets all bills as to their effects.  Since the bill would be massive in size the probability was that most of the Republicans who voted for it had not read it.

 

The new bill is called The American Health Care Act.  From what I understand it makes Health Insurance available to everyone if they can afford the premiums.  Whereas Affordable Health Care attempted to make Health Insurance a right for every citizen the American Health Care Act makes it a privilege for those who can afford it.  The Federal Government will give each state a fixed amount of money which the states can use in helping their citizens pay healthcare premiums.

 

The overall amount which the Federal Government will save is estimated to be around eight billion dollars.  This will allow the Congress to pass what it calls, tax reform.  Congress and President Donald Trump intend to reduce income taxes for the upper 1% and for corporations around eight billion dollars.  The principle here strikes me as reverse Robin Hood, that is, take from the poor and give to the rich.  If this goes through Donald Trump will reduce his taxes considerably.

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Fortunately the House of Representatives passing a bill is just that, passing a bill.  The bill then goes to the Senate and the Senate has to pass the bill.  First the bill actually goes to a Senatorial Committee where hearings on it will be held and it will be marked-up, changed or rewritten into a Senate version.  A number of Republican Senators have already stated that they have their own ideas about a Senate version of a Health Care Bill.

 

Once the Senate Committee has come out with their version of the bill it then goes to the full Senate where Senators can still amend the bill before voting upon it.  After amendments are added, and each one must be voted upon separately, the bill is again voted upon by the full Senate.  At best it will have three more Republican votes than Democratic votes.  The count in the Senate is now 52 Republicans to 46 Democrats and 2 Independents who caucus and vote with the Democrats.

 

It is very possible that the Republicans will not be able to get a majority vote and the bill will die in the Senate.  But even if it passes it will be different from the House bill.  Consequently the two bills will go to a Conference Committee made up of members of both Houses of Congress.  They, in turn, will have to come up with a Compromise Bill that is acceptable to both Houses of Congress.  If that were to occur then the new Compromise Bill would have to go to both Houses and be voted upon and passed in both Houses without any changes or it would have to go back to a new Conference Committee.

 

The chances of much of this happening is very small.  The probability is that the bill will not even reach the Conference Committee.  And even if it does it could easily die there.

 

What this bill will achieve is to upset the 14 million people who would lose their current medical coverage if the bill were to pass.  There is a Midterm Election coming up on the first Tuesday in November of 2018.  I am sure the Democrats in each District and State will be happy to remind their constituents of how their Republican representatives voted in 2017 on health care.  It would probably also be worth notifying them that the Republicans refused to raise the minimum wage above $7.25 an hour.  The probability is that the Senate will once again gain a Democratic majority and the House of Representatives could also achieve one.

 

President Donald Trump will likely be tweeting half the night if one or both Houses of Congress had a Democratic majority.  He has essentially been able to get nothing done with Republican majorities in both Houses of Congress.  He will probably get less than nothing done with one or both Houses of Congress in Democratic hands.

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As a point of interest, Paul Ryan, the Speaker of the House of Representatives, who is or was a follower of Ann Rand, at least until he found out she was an atheist, is largely responsible for the original new health bill and after the Easter Congressional break for the so-called new version of that bill that the House of Representatives passed.  He says that it is “a bogus attack from the left” to claim that the health care bill was rushed.  I suppose the “left” is the Democratic Party, as the bill was passed strictly along party lines.  No Democrat voted for it.

 

Ryan did not wait for the Non Partisan Congressional Office to study and give the over-all effects of the bill.  Rushing the bill through the House meant, not giving the constituents a chance to complain.

 

It is also interesting to note that Ann Rand basic philosophy, which she applied to her novels dealt with the Hegelian method, thesis vs. antithesis which she turned into individuals acting against each other in her two major novels: The Fountainhead and Atlas Shrugged.  Her form, in both novels dealt with the super individual functioning or struggling against the uncaring group.  In essence it would be the super human vs. the uncaring masses.  I suppose to Ryan it means him against the masses.

 

This philosophy was developed in the late 19th and first half of the 20th Century.  Its prime example would be Germany’s concept of the Master Race.  I would guess that the current Speaker of the House of Representatives mentally includes himself among that group.  This is the man that pushed through the current House Health Bill which will, if passed, take medical insurance away from 14 million people and also increase the wealth of the well to do by decreasing their taxes.

The Weiner Component Vol.2 #8 – Part 5: Alan Greenspan & the Federal Reserve

Former Chairman of the Federal Reserve Alan Gr...

Former Chairman of the Federal Reserve Alan Greenspan, receiving a Presidential Medal of Freedom in 2005 (Photo credit: Wikipedia)

In 1935, Cret designed the Seal of the Board o...

In 1935, Cret designed the Seal of the Board of Governors of the Federal Reserve System. (Photo credit: Wikipedia)

On August 11, 1987, Alan Greenspan became the Chairman of the Federal Reserve. He was appointed by President Ronald Reagan and served until January 31, 2006, when he retired from that office. There was a rumor that he had lobbied for the position.

 

After four years in office he was reappointed by President George H. W. Bush who later claimed he lost his reelection bid because of Greenspan’s Monetary Policy. Bill Clinton also reappointed him and so did George W. Bush.

 

Greenspan was a Republican conservative with a classical education in economics, who got his P.H.D. from N.Y.U. He supported privatizing Social Security and tax cuts which, according to the Democrats, would increase the deficit. In fact it has been suggested that the easy money policies of the Fed during Greenspan’s tenure there was a leading cause of the subprime mortgage crisis that occurred in 2008, after he left the Federal Reserve as Chairman.

 

Alan Greenspan was nominated by President Reagan on June 2, 1987 and was confirmed by the Senate on August 11 of that year. To Congress he quickly assumed the role of a seer, generally when he was questioned by Republican members of either House of Congress, they spoke to him with a large degree of reverence, as though his answers to their questions were the absolute ones. He was considered the maestro of economics; his words being gems of economic wisdom. This occurred throughout his entire term as Chairman of the Federal Reserve.

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The issue that Greenspan did not deal with, which, in fact, he stated that the Fed could not control or even really deal with was the amount of money in the National Cash Flow. His successor, Ben Bernanke did not have this problem and he both increased the amount available for over a two year period and solved an economic quagmire that the banks had created in 2008 following Greenspan’s easy money policy.

 

According to the late economist Paul Samuelson the process of splitting mortgages began during the late 1970s. For innumerable reasons banks had traditionally allowed people to take out second mortgages on their homes charging them slightly more in interest than they were paying on their first mortgage. Occasionally the banks would sell these mortgages to individuals in order to get their money back for a more profitable use. In the late 1970s many banks broke these mortgages up into large pieces in order to sell them and sold each one to a multitude of Hedge Funds who then used them as securities.

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In 1981 Ronald Reagan became President of the United States. He and his aids believed in a totally free Market where all economic decisions were made by the Market. The basis by which the Market operated was the profit motive. It had been explained by Adam Smith in his preindustrial revolution book that he published in 1776. The Reagan Administration did away with virtually all government regulation that controlled the form and actions of the banks, giving them a complete free hand in dealing with the public; but they kept the FDIC in which the Federal Government insured all bank deposits up to ½ million dollars.

 

Regulations limiting the form and actions of banks were brought in during and after the Great Depression. Among other things many bankers had abused their positions and used depositor’s money to make individual profits for their executives. When the stock market crashed in 1929 so did numerous banks and multitudes of depositors lost their savings. The Roosevelt Administration from 1933 on brought about legislation to stop this from occurring again. Apparently the Reagan Administration in 1981 on believed this was no longer a problem.

 

During the Reagan Administration the major banking houses in the United States like J. P. Morgan-Chase, Bank of America, Wells Fargo, and others decided to break up the mortgages into fractional shares, split the shares among Hedge Funds, and sell shares in the Hedge Funds. This included both first and second mortgages.

 

This was a good bet since people valued their homes. What happened was that the banks encouraged people to use the equity in their houses as bank accounts, mortgaging and remortgaging their homes. With the constant action, following the economic laws of supply and demand, the value of properties continued to rise like hot air balloons. The value of the homes kept growing, allowing people to take more and more money out of their homes to buy anything they desired. By this action the banks created trillions of dollars of new money and presumably everyone prospered.

 

On the one hand Greenspan stated he could not control the amount of money in circulation but on the other hand the Fed’s low interest rates encouraged this behavior. What the banks did was to issue and reissue mortgages which they, in turn, split into hundreds of pieces, placing them into different Hedge Funds from which these funds paid the banks endless service charges. The banks then used the money for new mortgages but serviced the accounts, charging fees for each action.

 

In essence the banks lent the initial funds, sold the mortgages to innumerable Hedge Funds, got their initial investment back, and lent it out again, endlessly repeating the process and endlessly charging innumerable fees for the continuing processing. Many banks also owned many of the Hedge Funds.

 

The bank and everyone in the bank involved in this process did well financially. As home prices rose the homeowners kept getting their equity back and could afford to remortgage their homes. It seemed like an endless Christmas!

 

Ordinarily every change in any property has to be registered in the city or county where it occurs. This is a fairly slow system. The banks were able to set up their own record keeping agency that they could use quickly. The problem here was that there was endless amounts of information. This system made innumerable errors in their bookkeeping. In 2008, when the system crashed, the records were worthless. There was no reliable information on all the transactions.

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By 2007 it was fairly obvious that the system was tottering and could fail. For the last quarter of a century this had been going on. It spanned the entire career of most bankers. They were in a state of denial that the housing bubble could burst. Some banks offered loans of 125 percent of the appraised value of homes.

 

The Housing Bubble burst late in 2008 while George W. Bush was still President of the United States. Suddenly many banks were on the verge of bankruptcy. President Bush and his Secretary of the Treasury lent some of the banks enough money to keep them solvent.

 

The new Chairman of the Federal Reserve, Ben Bernanke, authorized a loan to AIG, the leading insurance company in the United States. It seems they felt left out of all the money making and wanted their share. They insured a number of loans for high premiums. Their actuaries underestimated the risk involved. When the collapse came they didn’t have the funds to pay off the claims and without additional funds would have gone under costing a large percentage of the American public both the premiums they had paid and the protection these premiums bought.

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It is important to note that the flow of money in the United States and the rest of the industrial world, whether credit or cash, is through the banking system. If the major banks were to go under the flow of currency would be a dribble. In addition every bank account is insured up to ½ million dollars by the Federal Government.  The banks paying a small premium to the Federal Deposit Insurance Corporation (FDIC). If the banks go bankrupt the Government is still liable for those monies.

 

In addition AIG (American International Group) is the major insurance company in the nation, insuring, among many other things, millions of insurance policies throughout the nation. If it were to go under billions in premiums paid for years by countless Americans would suddenly be lost. It would be a major negative catastrophe in the country. AIG was literally too big to fail.

 

The failure of both the banks and the insurance company could easily bring down the economy of the United States. These concerns are necessary for the United States to function. They are not only too big to fail but also too important, in relation to the country.

 

This is the position in which President George W. Bush and Chairman Ben Bernanke found themselves in toward the end of 2008. And this is the position that Barack H. Obama inherited when he became President of the United States on January 20, 2009.

 

As Chairman of the Federal Reserve Alan Greenspan had supported an easy money policy. He retired shortly before the results of this policy exploded. Did he foresee the occurrence?   Was he responsible for it?

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From the 1980s on the American economy needed a greater Cash Flow. There literally wasn’t enough money available throughout the economy. Historically the Federal Reserve had never directly supplied money to the overall country. In fact up until 1933 all monies were comprised of gold and silver. All gold mines in the United States were required to sell all the gold they mined to the Federal Government for $16 an ounce. It was then minted into gold coins. Paper money could be issued: ones and five dollar bills were silver certificates and technically could be exchanged for silver coins at any time. Tens, twenties, fifties, and hundred dollar bills, and higher denominations could be exchanged for gold coins. From 1933 on gold disappeared and from ten dollar bills up money became Federal Reserve Notes. Later the five would also become a Federal Reserve Note. Thereafter the gold was stored in depositories and presumably stood behind the dollar.

 

In 1933 Roosevelt raised the value of money by law from $16 an ounce for gold to $32 an ounce. By doing this he doubled the available money in the United States and easily paid for the New Deal.

 

Consequently from that time on gold being behind the dollar was a fiction. Theoretically any Federal Reserve Chairman and his Board thereafter could have added money to easily to the National Cash Flow. But none did. During World War II the Federal Government spent a lot more than it took in in taxes. But it never just added money to the economy. In fact it used various devices such as War Bonds to attempt to limit the amount of money people could spend.

 

From what he has said and written Alan Greenspan did not believe that the government could just add money to the economy. That power was reserved to banks who could do so through their lending policies. Greenspan tended to understand economics as it was and had been. He ran the Federal Reserve on that basis. He lacked the imagination to do things any other way.

 

Possibly he suspected a crash in 2008 and so he retired before it came. Possibly he did not and felt he had been in that office long enough. Only he can answer that question.

The Weiner Component Vol.2 #7 – Part 4 – The Fed & the Inflationary Spiral

English: Former President Jimmy Carter and his...

English: Former President Jimmy Carter and his wife Rosalynn, wave from the top of the aircraft steps as they depart Andrews Air Force Base at the conclusion of President Ronald Reagan’s inauguration ceremony. (Photo credit: Wikipedia)

English: President Ronald Reagan, the 40th pre...

English: President Ronald Reagan, the 40th president of the United States of America, delivers his inaugural address from the specially built platform in front of the Capitol during Inauguration Day ceremony. (Photo credit: Wikipedia)

The Chairperson of the Federal Reserve heads this bank. Currently Janet Yellen is the chairwoman. She has held this position since 2014 when she was appointed by President Barack Obama. Prior to that Ben Bernanke was chairman from 2006 to 2014. He was appointed by George W. Bush and completed his term under President Obama. Alan Greenspan was the prior Chairman. His term was the second longest in the history of the Federal Reserve going from 1987 to 2006, 19 years. He was preceded by Paul Volcker, who served from August 1979 to August 1987. He was appointed by President Jimmy Carter and left toward the end of the Reagan administration. Paul Volcker served as Chairman for two terms, from August 6, 1979 to August 11, 1987.

 

These are the most recent people to serve as chairpersons on the Federal Reserve. If we go back to the Presidency of John Fitzgerald Kennedy, January 20, 1961 to November 22, 1963, the Fed Chairman was William M. Martin who had been appointed by Harry S Truman and served from April 2, 1951 to February 1, 1970.

 

The problem, when Kennedy became President, was that the country was in a recession cycle. By using fiscal policy President Kennedy was able to turn that economic phase into a recovery phase of the business cycle. At this time unemployment was slowly increasing and consumption was slowly decreasing. The economy needed an impetus. What the President proposed and Congress passed was a tax decrease. The result was that people had more money which they spent and the amount of Federal taxes collected actually increased. This move fairly quickly took the nation from recession to recovery.

 

Since that time, over fifty years ago, almost every Republican President has tried to follow that fiscal policy. In no case has it worked as announced. Instead from the time of President Ronald Reagan on it has allowed the National Debt to mushroom into the trillions of dollars. And during the last year of President George W. Bush’s presidency this tax reduction process led to the bursting of the Housing Bubble or the Great Recession in 2008. In the process of avoiding a Second Great Depression President Barack Obama was forced into excessive spending. It was the President and the Fed Chairman, Ben Bernanke, who enabled the country to squeak through the 2008 and 2009 Housing Crash or bubble bursting.

 

Currently President Donald J. Trump is proposing a massive tax cut for business and the wealthy. It has been suggested that this could bankrupt the U.S. Government. Whether his decrease in taxes and proposed increase in spending for the military comes about, if it does, then to what extent it will do so is still up for debate. Trump and some members of his Cabinet are claiming they can significantly lower taxes and increase production without adding to the National Debt. It should be an interesting experiment.

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President Lyndon B. Johnson, who had been President Kennedy’s Vice-President and succeeded him at his death in 1963, when he was reelected to office in 1965 massively accelerated the war in Viet Nam. He would have America, the strongest nation in existence, force North Viet Nam to accede to the wishes of the United States. And, at the same time, he would not lower the standard of living of any American. The country could both afford to fight a major war and care for its population as though it were still at peace; we would have both guns and butter. His only requirement was a small addition by everyone to their income taxes. This led to the beginnings of an inflationary spiral that would reach fifteen percent by the end of the 1970s. The inflation spiral would be broken by the Fed by taking drastic action in the very early 1980s.

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Paul Volcker was appointed was appointed Federal Reserve Chairman on August 6, 1979 by President Jimmy Carter. He began a process to end the inflationary spiral by making the borrowing of money so expensive that it would cause the percent of interest to rise to where it would cost too much to borrow. This, in turn, would cause the price of interest to drop toward zero.

 

If the inflation rate rises too high, like to 12 or 15 percent or more the way to reduce it is by raising the prime rate, the interest level the Fed charges banks, to a very high level. This forces the banks to raise their interest level to 20 percent or more. Money becomes too expensive to borrow.

 

Unfortunately many businesses have dormant periods during the year when they have to borrow money in order to meet their expenses. If the interest rate on loans is too high they cannot afford to borrow any money and consequently they go bankrupt. This causes an almost instant recession, with massive layoffs throughout the country. But it will end an inflationary spiral.

 

Early in this process President Jimmy Carter received innumerable complains from people around the country about what was happening to them and their businesses. He asked Volcker to back off and Volcker did so. The high inflation continued throughout President Carter’s term in office.

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Paul Volcker served two four year terms as Chairman of the Fed. He retired from that position on August 11, 1987, when Ronald Reagan was President of the United States. Reagan succeeded Carter in 1981 and remained in office for two terms, until 1988. He allowed Volcker to break the back of the inflationary spiral.

 

Under Reagan the monetary policies of the Federal Reserve Board led by Volcker were credited with curbing the rate of inflation and the expectations that inflation would continue. The United States rate of inflation peaked at 14.8 in March of 1980 and fell below 3 percent by 1989. The Fed Board raised the federal funds rate that had averaged 11.2 percent in 1979, to a peak of 20 percent in June of 1981. The prime rate also rose to 21.5 percent in 1981. All of this lead to the 1980-1982 recession, in which the unemployment rate rose to over 10 percent.

 

All of this elicited strong political attacks and wide spread protests. There were high interest rates on construction, farming, and the industrial sectors. U.S. Monetary Policy eased in 1982, leading to a resumption of economic growth.

 

Perhaps the most unfortunate part of this necessary readjustment of the economic base of the United States was the fact that President Ronald Reagan made a presentation on television one weekend in 1981 in which he held up the business section of the Sunday Times and stated that there were twenty full pages of job offers in the Times. If a person lost their job then they should go to where there was jobs available. President Reagan did nothing else. He could or should have set up some federal agency that could offer reliable job information. But he did not do so.

 

What followed was that sections of cities became deserted as people filled their cars with their belongings and followed rumors going from place to place looking for work. Mostly there were no jobs. Temporary agencies did a land-office business that year. I remember reading about an instance where a man with a wife and small child, having stopped for a red light, opened the passenger door, and pushed his wife and child out of the vehicle. When the light changed he drove on.

 

Cars moved from city to city that year, following rumors. While there had been some homeless before 1981 they became very visible from that year on; there were so many of them. The problem is still with us.

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What followed from 1981 on was the Fed’s tight money and the expansive fiscal program of the Reagan Administration: large tax cuts, and a major increase in military spending. While the middle class got some tax relief the tax cuts were essentially for the upper echelon of society who had their taxes reduced substantially. While the inflation rate stayed low, which it still is today, President Reagan’s spending produced large Federal budget deficits.

 

This combination of growing deficits and other economic imbalances led to the growing Federal debt and a substantial rise in Federal costs. Under Reagan’s spending the debt would reach over one trillion dollars for the first time.

 

Presumably Paul Volcker was fired or replaced in August 1987 after serving two four year terms in office because the Reagan Administration didn’t believe he was an adequate deregulator. Volcker was replaced on August 11, 1987, by Alan Greenspan.

The Weiner Component Vol.2 #6 – Part 3: The Purpose of the Federal Reserve

The title page to Keynes' General Theory.

Unemployment rate in the US 1910–1960, with th...

Unemployment rate in the US 1910–1960, with the years of the Great Depression (1929–1939) highlighted. (Photo credit: Wikipedia)

The Federal Reserve was established on December 23, 1913. Its major mission was to avoid panics or major recessions in the future. It would at that time do this by being able to move money quickly anywhere throughout the National Economy. In essence since the nation functioned through its banking system the new Fed would protect its financial institutions from runs or panics where the depositors could all withdraw their funds, generally following a rumor that the bank was on the edge of failing.

 

In addition the United States economy had/has systematically gone through regular business cycles of recession, slump or depression, recovery, and boom. Invariably each of these stages of the economy leads to the next stage. During a boom period overproduction is invariably reached, workers are laid off, there is less income available, which accelerates the recession. This, in turn leads to a trough or low economic point which can be a depression with high unemployment. Eventually there is a shortage of goods and the amount of money being spent in the National Cash Flow increases; people are hired; there is more and more money available and recovery begins, continuing until a peak or production boom is reached again. The duration of the cycles can and do vary, going from less than a year to over ten years as the Great Depression did from 1929 to 1940. It was ended by World War II. These depressions can be regional or they can cover the entire nation, if not the world, as it did in 1929. They generally last between the two periods given above.

 

In simple terms this is the economic pattern of every industrial nation. Does it have to continue? That’s an interesting question. The probability is that it can be controlled by the Central Government’s actions.

 

In 1929 the science of economics was generally not understood well enough to determine exactly or why the depression was happening. In 2008 when the country had what is now called the Great Recession, enough was understood to avoid a greater depression than that of 1929. This depression was avoided by actions of the Federal Government.

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Even today economists disagree as to what caused the Great Depression and how it should have been dealt with. There are numerous theories. Probably The Keynesian theory is the most accepted. Keynesian economics deal with the various theories about how in the short run, mainly during recessions, economic output is strongly influence by aggregate demand or total spending. Aggregate demand does not necessarily equal the productive capacity of the economy. Instead it is influenced by a host of factors that can behave erratically, affecting production, employment, and inflation.

 

Keynes theories were first presented during the Great Depression in his 1936 book, The General Theory of Employment, Interest, and Money. Keynes’ approach contrasted with classical economics. Keynesian economists believe that the private sector’s decisions sometimes lead to inefficient economic outcomes which require active policy responses by the public sector (government). It is a combination of the two that stabilize output with the government exercising control over the private sector. Monetary policy actions are needed at times by the Central Bank and fiscal policy actions (Government spending.) in order to stabilize output over the business cycle. Consequently Keynesian economics requires a mixed economy, predominantly private sector with a strong role for government interventions during recessions and depressions.

 

Traditional or classical economics as developed by Adam Smith in his 1776 book, An Enquiry Into The Wealth of Nations, set the Market making all the societal decisions. The motivating force, according to Smith was the “invisible hand,” the profit system. Adam Smith was responding to an economic system called mercantilism, where gold was considered the basic wealth of the nation and the economic decisions were being made by the kings of the various countries.

 

John Maynard Keynes during the world economic disaster called the Great Depression was questioning the validity of this system, saying what was needed to solve this problem was a combination of private enterprise balanced by state control of the marketplace. To him unfettered classical economics had brought about the Great Depression.

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The actual causes of the 1929 Great Depression have been extensively discussed by economists and remains a matter of intense debate. In fact they are part of the larger debate about economic causes. The economic events that took place at that time have been studied thoroughly: a deflation in assets and commodity prices, dramatic drops in demand and credit, disruption of trade, widespread unemployment, over 13 million by 1932 the lowest point of the economic decline, and hectic poverty.

 

There is no consensus as to overall causes other than it started with the initial stock market crash that began on Black Tuesday, October 29, 1929 when panic selling of securities led to a continued dropping of value of the securities until the end of 1932 when it reached its lowest point. The Crash triggered the depression which had reached a high level of deteriorating economic conditions such as rising unemployment, over production, a totally unequal distribution of incomes, under consumption, and extremely high debt.

 

Both the stock market and the economy would slowly improve after 1933 with the new President, Franklin D. Roosevelt. It would rise to new heights after 1939 with the outbreak of World War II in Europe. The stock market and the economy would rise to new heights with a massive infusion of money for goods and services within the United States. War will have brought about its end within the U.S. It is interesting to note that it was the money spent during the war, first by European and Asian nations, then after December 7, 1941 also by the United States that specifically ended the Great Depression.

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Once the Great Depression had started there were massive mistakes made by the Federal Reserve. The Fed actually caused a shrinkage of the money supply and greatly exacerbated the economic situation. Deflation caused people and businesses to owe ever increasing amounts upon money they borrowed actually shrinking the money supply in the U.S. by about 1/3.

 

With the election of Franklin D. Roosevelt to the presidency in 1932 a form of Keynesian economics became the policy of the President from 1933 on when he assumed power. Roosevelt’s policy was the “3 R’s: Relief, Recovery and Reform.” This comprised Roosevelt’s “New Deal;” his attack upon the Great Depression, which essentially lasted from 1933 to about 1938. The Federal Government put itself in a position to help turn the country around. It brought about great improvement but not a complete end to the Great Depression.

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Toward the end of 2007 in the last year of the George W. Bush’s Presidency what is generally called the Great Recession began. The Housing Market in the United States collapsed. A great many people had been using their home as bank or checking accounts generally from the 1980s on, constantly refinancing their home and taking their equity out as property values continually increased. People bought the toys they always wanted: new cars, fancy trucks, boats, expensive vacations; just about anything they felt was desirable.

 

This had been going on for about thirty years, the entire career of many people in banking had taken place during this period. Housing loans or second mortgages were divided into miniscule fractions, put into a multitude of different Hedge Funds and sold to the general public as safe interest paying loans. The process brought the value of the home loans up millions, if not billions of dollars. The banks were earning large amounts in fees as the demand for loans actually forced up the value of the homes. By 2007 the end had been reached, property values had been raised beyond the point of sanity. The bankers were in denial that conditions could possibly change. Some banks were lending out 125% of the appraised value of the properties, working on the premise the housing values would rise endlessly.

 

The economic collapse began during the second week of March, 2008. It tended to be worldwide. In the United States, on Tuesday, with the encouragement of the President, George W. Bush and the Secretary of the Treasury, Hank Paulson, the Chairman of the Federal Reserve, Ben Bernanke injected $236 billion dollars into the American banking system. Citigroup, the world’s largest bank spent one billion dollars bailing out six of its hedge funds. Lehman Brothers, America’s fourth largest bank went under. AIG, the world’s largest insurance company, had moved into the business of insuring leveraged debt right at the time when the financial system was at the point of collapse. When the Housing Bubble burst Ben Bernanke, as chairman of the Fed, announced an $85 billion loan for them. Hank Paulson, the Secretary of the Treasury proposed buying up hundreds of billions of dollars’ worth of toxic assets.

 

With the accession of Barack Obama on January 20, 2009 as President of the United States that country and the rest of the Industrial Nations continued to hover on the point of economic collapse. This would have occurred if the governments had not interceded with masses of cash. They prevented, using taxpayer money, a depression that would have made the Great Depression of 1929 look like a weekend holiday. It would have been the total collapse of the banking systems which, in essence, run the economies of all those nations.

 

(Interestingly Donald Trump’s administration wants to do away with all the regulation in the U.S. which came about to avoid a repeat of this situation. Memories are short!)

 

President Barack Obama continued the bailout, saving the banks from their own stupidities, and he added the American automobile industry which was also on the point of total collapse. The governments of the various countries spent a lot of money saving their economies and returning the world to economic sanity.

 

Recently President Donald Trump commented in one of his speeches that President Barack Obama increased the National Debt more than any other prior President. He did so cleaning up the financial messes that they had helped to create.

 

We have passed beyond Keynesian economics to the point where the Free Market is today a farce. The governments of the United States and of the other industrial nations have assumed responsibility for the welfare of both the rich and the poor within their societies. How long will it take for the populations to understand this?

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

In the United States and in most industrial nation there are groups that want to return to the good old days. Whatever they were. Everything is changing. The 21st Century will be completely different from the 20th Century.

 

It should also be noted that it was the Federal Reserve, under Chairman Ben Bernanke, who used creative Monetary Policy in a period of a little over 24 months, with strong encouragement from President Obama, to buy up the toxic mortgage pieces throughout the United States at the rate of 45 billion dollars’ worth a month and also he added another 40 billion dollars a month directly to the National Cash Flow.

 

The Republican dominated House of Representatives from 2011 on did nothing to help the situation. They should have applied Fiscal Policy, creating jobs by spending money on infrastructure modernization. Instead they tended to cut government spending and worsen the Great Recession. Mitch McConnell, the Republican majority leader in the Senate, announced that they would make Obama a one term president by not cooperating with him on anything. To them no price was too high in order to make Obama a one term president. Somehow the needs of the American people were lost.

 

It was the Federal Reserve and the President who saved the country from falling into the worst depression in its history. The Republicans, once they got control of the House of Representatives, refused to pass anything that would make President Obama look good. This was true even if it had a negative effect on the country and hurt the majority of its citizens. President Obama offered a Bill that would engender spending on our decaying infrastructure. It did not even come up for discussion in the House of Representatives.

The Weiner Component #169 – Part 3: The Modern Presidents & the Congress

English: Presidents Gerald Ford, Richard Nixon...

The first of the potentially extreme Conservative Candidates to run for the Presidency was Barry Goldwater.  He ran and was massively defeated in 1964 by Lyndon B. Johnson.  He received 22% of the vote, Johnson got well over 70%.  The extreme Conservatives (reactionaries) were not able to successfully mass their forces and win an election until 1980 with Ronald Reagan.  Both Eisenhower and Nixon tended to be more moderate Republicans.

 

Ronald Wilson Reagan was born on February 6, 1911 and died on June 5, 2004.  He served as President of the United States from January 20, 1981 to January 20, 1989.  This made him seventy years old when he first assumed the presidency and seventy-eight when he retired from that position, after serving two terms.  Up until that point he was the oldest President of the United States.

 

For his first four year term the Senate had a Republican majority and the House of Representatives had more Democrats than Republicans, meaning that the Speaker of the House was a Democrat.  This continued through the first two years of his second term.  During his last two years in office both Houses of Congress had a Democratic majority. 

 

In order to get legislation he wanted Reagan had to be able to compromise with the Democrats; “Take half a loaf.”  Occasionally he would go off on a tantrum and state that unless such-and-such a bill was passed he would not sign any other bills; but mostly he was able to compromise with Democrats.  Once in a while he would get his way.

 

Reagan has been called the Teflon President.  He came across as a nice guy with good intensions, being both an excellent speaker and a likeable person.  His years in the movies from the late 1930s on and the fact that he always played one of the good guys seemed to carry over. 

 

In 1964 Reagan gave a paid speech for Barry Goldwater called: “A Time for Choosing,” that threw him into politics.  He was elected the conservative Governor of California from 1967 through 1975.  Later he unsuccessfully entered the race as a potential Republican Presidential candidate in 1968 and 1976.  He lost both times and was not chosen as the Republican candidate.  In 1980 he did become the Republican choice and won against the incumbent, Jimmy Carter.

 

As the new president in 1981, Reagan instituted new and sweeping changes.  He espoused supply side economic policies which was described as “Reagonomics.”  This advocated tax reduction for the well-to-do, presumably in order to bring about rapid economic growth.  The argument being that if the rich had more surplus income they would then invest that money into new economic growth.  This new money would then trickle down to the ordinary citizens who would hold these new jobs and the government would then collect more taxes by reducing taxes.

 

There was only one problem with this system: it didn’t work.  Reagan himself had been one of the rich individuals benefiting from the new law.  His money had never been invested in new growth and this was true for the entire group that received this benefit; they tended to invest their surplus funds into old investments like the stock market.

 

He also advocated economic deregulation which brought about an increase in pollution and, in addition, he advocated a decrease in government spending; that would be entitlement programs to help the poor since he massively increased military expenditures.

 

Reagan felt that during administrations like that of Jimmy Carter the Soviets had militarily gotten ahead of the U.S. in military preparedness.  He firmly believed that America had to catch up and get ahead of Russia in its military ability.  Consequently we had to seriously upgrade our armaments.  The program was called “Star Wars.”   Apparently Reagan liked movies; some of the weapons he envisioned came out of films; they didn’t exist in real life.  He felt they could be developed as needed.

 

Reagan’s military concepts weren’t true; we were far ahead of the Soviet Union.  The U.S. National Debt went up for the first time to well over a trillion dollars during his watch.  In a sense it was a brilliant strategic move because if we upgraded, even though it was partly on a comic book level, the military was going to utilize weapons that didn’t exist but were going to be created as needed.  Following this happening the Soviet Union to just maintain it world position also had to upgrade its military. 

 

Every country, every economy is limited to the amount of productivity that its citizenry is capable of producing.  It may be a gigantic amount, almost beyond concept, but it is still a finite amount.  Consequently choices have to be made as to what it will produce.  The Soviet Union by trying to keep up with the United States militarily massively deprived its people of what they needed in order to successfully survive and the result was that the Communist State fell economically apart and Russia ceased being a communist dictatorship. 

 

Communism, where it existed, now became a National Movement rather than an international one.  Each of the existing communistic states like China and Cuba now became mixes of socialism and capitalism.  Reagan can claim credit for this; but it was an accident based upon his fears rather than a strategic move.

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

Early in his first administration Reagan allowed Paul Volker, the Chairman of the Federal Reserve, to institute the Draconian measures needed to break the inflationary spiral that had been gradually generated from the time of the Vietnam War.  These measures caused a lot of unemployment and misery throughout the United States.  Interest rates had reached over 12 1/2 percent. To break the cycle of inflation Volker raised them far beyond that.

 

With massive unemployment occurring Reagan went on national television with a copy of the Sunday Employment Section of the New York Times and stated to the American public that he held twenty pages of employment ads.  If anyone had lost their job then they should go to where there was employment.  After the announcement he returned to the Oval Office and forgot about the problem. 

 

From that day on people in old jalopies left home with their families and followed rumors of where there was supposedly employment.  Most of the rumors for employment in other parts of the U.S. were just that, rumors.  By 1982 the FED would reduce interest rates; the GDP would rise to 3.4%; the inflationary spiral was broken but the homeless problem would persist to the present day.

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

In 1984 Reagan won a landslide victory for his second term.  His foreign policy was at times strange: He described the Soviet Union as the
Evil Empire.
  In late 1983 Reagan approved having the CIA mine Nicaragua’s main harbor.  This was the harbor of a Socialist country with whom we were at peace.  The object was to keep out civilian cargo vessels and cut off imported weapons, fuel, and other supplies.  The premise being that this would seriously hurt the Sandinista or socialist government of Daniel Ortega.  This, in turn would give a serious boost to the CIA backed rebels or “Freedom Fighters,” as Reagan called them and create and uprising.  The CIA used firecracker mines dropped by small speedboats.  They were noisy but did little damage.  This act created an international uproar which forced Congress to take action.

 

In 1986 the U.S. bombed Libya in retaliation for a 1986 Berlin discotheque terrorist bombing.  There were 40 reported Libyan casualties and one U.S. plane was shot down.  The dead included a baby girl.

 

Reagan illegally authorized the Iran-Contra Affair.  Toward the end of his second term Reagan requested that Congress authorize funds for his “Freedom Fighters” in Nicaragua.  The Democratic Congress would not authorize any money.  Reagan’s people, with his approval, began a secret operation by which arms would be illegally sold to Iran through other countries and the profit would be used for the Nicaraguan rebels.  The operation was right out of the movies, probably a James Bond movie, and the man coordinating everything was Colonel Oliver North, who probably saw himself as the super-patriot.  North avoided prison because he testified before Congress and all of his testimony was exempt from prosecution.

 

It was all totally illegal and Reagan could have been impeached and he and his staff prosecuted and sent to prison.  In his speech when he admitted it to the nation he couldn’t believe that he had acted illegally.  But since his term was almost over and as he had acted, it was believed, for the good of the United States nothing was done.

 

President Reagan initially transitioned the Cold War from détente to rollback by escalating an arms race with the USSR.  He engaged in talks with Mikhail Gorbachev that culminated in the INF Treaty which shrank both countries nuclear arsenals.   He challenged Gorbachev to tear down the Berlin wall.  This was done five months after he left office and on December 26, 1991, nearly three years after he left office, the Soviet Union collapsed.  It can be argued that President Ronald Reagan ended the Cold War.

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

Reagan was followed by his Vice President, George H.W. Bush as the 41st President of the United States from January 20, 1989 to January 20, 1993.  He served one four year term as President.  Both Houses of Congress were controlled by the Democratic Party, consequently there wasn’t much cooperation between them and the Republican President.

 

President George H. W. Bush had a lot of experience working in the government: he had been a member in the House of Representatives from 1967 to 1971, United States Ambassador to the United Nations from 1971 to 1973, Chair of the Republican National Committee from 1973 to 1974, Chief of the U.S. Liaison Office to the People’s Republic of China from 1974 to 1975, Director of Central Intelligence from 1965 to 1977, and 43d Vice-President of the United States from 1981 to 1989.

 

In domestic policy Bush wanted to lower the National Debt which had grown to well over a trillion dollars under President Reagan.  He felt that this should be done by lowering government spending.  Congress, on the other hand felt it should be done by raising taxes.  Mostly the Democratic Congress won out.  Bush had promised not to raise taxes when he ran for the presidency but he later signed a bill that raised them.  This lowered his popularity significantly among Republicans.

 

President George H.W. Bush spearheaded, along with Canadian Prime Minister Brian Mulroney, the negotiations of the North American Free Trade Agreement (NAFTA), which eliminated the majority of tariffs on products traded among the United States, Canada, and Mexico.  The treaty encourages trade among these countries.

 

In foreign policy the U.S. invaded Panama and placed the popular elected president in charge of the country.  He had won the election but the old government under Manuel Noriega had invalidated it and remained in power.  After an American soldier was killed the U.S. invaded and arrested Noriega.

 

In Iraq the situation was different.  President Bush sent a plenipotentiary or special unassigned diplomat to deal with Saddam Hussein the ruler of Iraq.  The diplomat was a woman, which in the eyes of an Arab ruler meant that the mission was unimportant and also her authority to commit the U.S. to anything was highly limited.  Apparently the two verbally spared for a while. 

 

What Saddam Hussein needed to know was what would the U.S. do if Iraq invaded oil-rich Kuwait?  It would seem that diplomatic meetings never deal directly with the question that needs to be answered.  Saddam Hussein assumed from the meeting that the U.S. would do nothing to stop the invasion. 

 

I suspect that George H.W. Bush assumed he was establishing the concept of equal rights for women.  With his experience he should have known better.  The result of the Kuwait invasion was the Gulf War, which Bush had the sense to end without unseating Hussein.  Saddam Hussein would later attempt to have Bush assassinated for betraying him.  George W. Bush, his son, would later get even with Hussein and turn the Middle East into a cage-less zoo, which it still is.

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

In 1992, Bush was succeeded in the presidency by Bill Clinton, a Democrat, who held that office for two terms, until January 20. 2001.  Previously Clinton had been Governor of Arkansas.

 

Bill Clinton presided over the longest period of peacetime economic expansion in American history.  During his first two years in office he had a Democratic majority in both Houses of Congress and he signed into law The North American Free Trade Agreement (NAFTA), which had been initiated by Republcan President George H.W. Bush.

 

From 1992 until early 1994 the Republicans were able to stop legislation from passing in the Senate by use of the filibuster.  Clinton’s Health Care proposal was never voted upon and other legislation was also stopped in this fashion.

 

In 1994 both Houses of Congress achieved a Republican majority.  Newt Gingrich became Speaker of the House and Strom Thurman Majority Leader in the Senate.  The Senate had 47 Democrats and 53 Republicans.  The House had 230 Republicans and 204 Democrats.

 

President Clinton was seen by the Speaker and other Republicans as the enemy.  The Republicans shut down the government twice: from November 14 – 19, 1995 and from December 16 – January 6, 1996, for a total of 28 days.

 

The Speaker of the House of Representatives, Newt Gingrich, would resign his speakership and also resign from the House over ethics violation charges.  The potential vote against him was overwhelming by both Republicans and Democrats.

 

The final attack against Clinton ended in Impeachment Charges by the House of Representatives.  An independent council, Ken Starr, was appointed to investigate Clinton’s involvement in an earlier land deal, called “Whitewater.”  Nothing negative or impeachable was found about Clinton’s involvement.  What was discovered was that he was having an illicit relationship with a White House intern.  When questioned by a Grand Jury he gave misleading information.

 

Presumably he lied to the Grand Jury.  The first article of impeachment was approved by a House vote of 228 to 206.  Five Republicans refused to vote for it and five Democrats supported the impeachment.  He was accused of lying to the Grand Jury about the nature of his relationship with the intern.  The second article of impeachment, obstruction of justice passed by a narrower margin: 221 to 212.

 

The trial was held in the Senate, which also had a Republican majority.  The question, of course, was: Are these “High Crimes and Misdemeanors”?  Bill Clinton was found, Not Guilty.

 

The irony attached to this was that Newt Gingrich had earlier resigned both his Speakership and position in the House of Representatives.  He had been replaced by the Louisiana Republican, Robert L. Livingston as the new Speaker.  Larry Flynt, the publisher of Hustler Magazine offered one million dollars for each unflattering sexual story about Republican members of Congress. 

 

Apparently one million dollars is serious money.  Livingston was a true family man.  He so believed in it that he had two families, one legal and one not so legal.  His second extra-legal wife gave Flynt her story and received the one million dollars.  Robert L. Livingston resigned both his Speakership and his position in the House.  Other Republicans in Congress got very nervous as Flynt’s offer still remained.

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

For his last two years in office Clinton had a budget surplus and reduced the National Debt.  He signed a welfare reform act and the State Children’s Health Insurance Program that provided health coverage for millions of children.  Clinton left office with the highest public approval rating of any U.S. President since World War II.

 

The man who replaced Bill Clinton as the 43d President of the United States was George W. Bush, the second man elected president who did not receive the majority popular vote by the American people.

 

George Walker Bush was elected president in 2001 after a close and controversial election.  Eight months into his presidency, on September 11, 2001, The Twin Towers in New York City were destroyed in two terrorist suicide attacks.  Bush launched the War on Terror, an international military campaign which included the war in Afghanistan (2001) and the War in Iraq (2003).

 

In addition he promoted policies on health care, education, and social security reform.  While going to war he signed into law broad tax cuts, the Patriot Act, the No Child Left Behind law, social security reform, the Partial Birth Abortion Act, and Medicare prescription drug coverage benefits for seniors.  During his presidency there were national debates on immigration, social security, electronic surveillance, and torture or enhanced interrogation. 

 

George W. Bush was reelected to office in 2004 in another close election.  During his second term he received criticism for his handling, from both sides of the aisle, of the Iraq War and the Katrina Hurricane. 

 

Presumably the preemptive Iraq War was launched because Iraq had weapons of mass destruction.  No “weapons of mass destruction” were ever found in Iraq.  In point of fact, Saddam Hussein, the ruler of Iraq, had tried to have George H.W. Bush, the president’s father assassinated over Iraq’s Gulf War.  Bush Jr’s attack on Iraq was a punishment for that. A rather expensive punishment!

 

In the case of Hurricane Katrina which devastated much of the Gulf Coast and put much of New Orleans underwater, the man who headed the Federal Emergency Management Agency (FEMA), Michael D. Brown, was a Federal appointment.  He had been rewarded for his participation in the presidential election with that job and was incapable of properly carrying it out.  Bush responded to mounting criticism by accepting full responsibility.  But that was beside the point.

 

In 2006 the Democratic Party regained control of both Houses of Congress.  In December 2007 the United States entered the worst economic downturn since World War II, the so-called Great Recession.  Its causes had been rapidly generated from the Reagan administration on.  The Bush administration obtained Congressional passage of numerous economic programs intended to preserve the country’s financial system.  In 2008 Bush initially bailed out the major banks who through their hunger for profits and the lack of regulation had brought the nation to the brink of financial collapse and themselves to the point of bankruptcy.

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

It was at this point that Barack Obama assumed the presidency with the nation facing a disaster far greater than the 1929 Great Depression.  President Obama had been elected on a platform of “Time for a Change.”  Instead he had to make a potentially Great Depression into a Great Recession and allow the country to recover from the state of disaster that the Republicans had created, of which American was in the midst.

 

In his first two years in office he signed the American Recovery and investment Act of 2009 and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.  He also signed the Affordable Care Act (Obamacare) and the Dodd Frank Wall Street Reform and Consumer Protection Act.  In foreign policy he ended U.S. involvement in the Iraq War and increased troop levels in Afghanistan. In January of 2011 President Obama ordered the military operation that resulted in the death of Osama bin Laden 

 

Up until 2010 the Democrats had control of both Houses of Congress.  In that year the Republicans gained control of the House of Representatives.  The Democratic Party lost 63 seats in that House of Congress, giving the Republicans 243 representatives to 193 for the Democrats.  The Republicans had earlier in caucus taken an oath to make Obama a one term president by impeding everything he wanted to do.  For the first two years of his presidency they would delay and make extensive use of the filibuster in the Senate.  After they achieved their majority they would oppose everything he had or would try to do in the House of Representatives.

 

From 2011 on the House of Representatives has not only hampered Presidential actions but have also forced through laws by attaching amendments to necessary legislation that have actually worsened economic conditions brought about by the Great Recession or Housing Debacle of 2008.  They did this by, among other things, increasing unemployment.  Through the Federal Reserve’s use of creative Monetary Policy the President and the Chairman of that organization have brought about a good percentage of recovery.  Had they had Congress’ full cooperation, fiscal policy could have been applied and recovery would have been completely achieved.  Instead the country is still at about 5% unemployment.

 

President Obama was reelected to a second term in 2012.  He has, unsuccessfully in terms of Congress, promoted policies related to gun control, particularly after the Sandy Hook Elementary School shooting, among other reforms.  On foreign policy troops were sent back into Iraq to help counter the effects of ISIS and the situation in Afghanistan continues.  In 2015 the Paris Agreement on climate change was signed by the United States and by 192 other countries.  The U.S. was part of a United Nations agreement with Iran not to develop an atomic bomb and relations with Cuba were normalized.  All this, despite the actions of Congress, have given President Obama a highly favorable rating among American presidents and the general public.

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

On November 8, Donald Trump was elected President of the United States beginning January 20. 2017.  While the Democratic candidate, Hillary Clinton had 395,595 more popular votes than Trump, 60,467,245 to 60,071,650.  Trump had 290 Electoral College votes to Clinton’s 232. 

 

Trump has largely but not completely acted presidential since the election.  He still tweeted stupidly about the spontaneous protests that have occurred across many cities in the United States against him.  He is thin-skinned and over reactive.  But this is not the real crux of his present problems.  On November 28 the first of his Trump University class action suits begins.  Even though it’s a civil suit if Trump loses and is found guilty of fraud, which he is accused of, he could conceivably be impeached.  The judge in the case, who Trump has accused of being prejudiced because of his Hispanic heritage, has recommended that Trump settle the case out of court.  But there are over 7,000 claimants who say they were cheated by Trump’s false claims about Trump University, some of whom paid as much as $35,000 for tuition.  Trump may not be able to afford the cost of settlement.  In addition there are two other class action suits coming up in addition to a $40 million suit from New York State for fraud.  The current case was filed in 2010.  Trump could be impeached during his first year in office for what he did before being elected president.  It should be interesting, if not colorful.

 

 

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

 

The Weiner Component #168 – As You Sow, So Shall You Reap: The Recent History of the Republican Party

With the Friday, October 7th release of the lewd and sexual harassing conversation, that Trump did in 2005 on a bus into an open microphone to Billy Bush, one of the hosts of the TV show “Access America,” while on the way to do another show, being made public, many of the Republican leaders, in and out of Congress, are calling upon Trump to drop out of the 2016 Presidential race as the Republican candidate.  When he refused, saying that the conversation was only “locker room talk,” many Republicans, in and out of Congress, still want to drop the Party’s support for him, arguing that he’s already lost the election.  They want to concentrate all the Party’s resources and efforts on the Congressional and state elections.  Paul Ryan, while still endorsing Trump, has stated that he will no longer campaign with him and that Republicans should concentrate on Congressional and state election.

 

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

Paul Ryan and Mitch McConnell were in shock.  Ryan was booed on Saturday, October 8, for disinviting Trump from the Wisconsin Unity Rally.  But both Ryan, the Speaker of the House, and McConnell, the Majority Leader in the Senate, are equally guilty of creating the milieu within the United States that allowed Trump to become a presidential candidate.  Both are equally guilty of bringing about the gridlock in Congress that caused very little to be done there, in keeping the government barely functioning, and even shutting it down for a while.  Even now, with Republican majorities in both Houses of Congress, there is a short term funding bill for a small part of the next fiscal year’s budget.  This includes, after four months hassling, Zika funding.

 

Every effect has a cause; and the cause of Donald Trump being the Republican presidential candidate can easily be traced back to Republican inaction in passing the necessary laws needed to run this country.  Every Republican in Congress worked to make Barack Obama a one term President and then still refused to cooperate with him during his second term in office.  They are all equally responsible for Donald Trump being their presidential candidate today.  They, by their inactions, created the situation that exists today.  They are all the cause of their own present-day ever-growing discomfort, Donald Trump.

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

I suspect that by the end of his second term, President George W. Bush couldn’t even have won an election to become dogcatcher.  He has gotten absolutely no mention in the current election by Trump or other Republicans.  But he was the President of the United States who declared war on Iraq, supposedly because of their weapons of mass destruction, but actually to punish Saddam Hussein for attempting to have his “Daddy” assassinated.  He was the one who destabilized the Middle East and was the President responsible for much that was blamed on President Barack Obama.

 

George W. Bush has somehow gotten lost in history; but he was President of the United States only eight years ago; and much of what Donald Trump has blamed on President Obama was not only initiated by Bush but also carried out by him.  It was Bush who set up the U.S. exit from Iraq which President Obama then carried out.  And it was then the Iraqi and Afghanistan new governments that wanted the U.S. to withdraw.  Neither government was able to run their own state against the Taliban, the forces of the Middle East that opposed them.

 

And the U.S. National Debt was mostly created by Republican Presidents, starting with Ronald Reagan with his “Star Wars” operation which brought the Debt up to over one trillion dollars, to President George H.W. Bush who sent an army to remove the Iraqi military from Kuwait.  The war was known as Desert Storm and never would have been necessary if Bush had dealt properly with Saddam Hussein and not given him the impression that he could invade oil rich Kuwait.

 

The National Debt was actually decreased under President Bill Clinton.  But President George W. Bush initiated and fought two wars in the Middle East that, with slight interruptions, are still going on today. Through the efforts of these Republican Presidents the National Debt has soared from one trillion to over nineteen trillion dollars today.

 

The Great Recession of 2008 or to state it more clearly, the great bank caused housing bubble burst under President George W. Bush who initially bailed out the banks.  President Obama inherited it and in order to prevent it from becoming a greater depression than that of 1929 had to spend a lot of money.  He brought about a large degree of recovery in spite of the fact that a Republican led House of Representatives continually worked against it and his efforts to end it.  He also inherited two wars from George W. Bush. 

 

Donald Trump loudly and vociferously blames our NAFTA Agreement of 1993 on President Bill Clinton.  That agreement was initially negotiated by President George H.W. Bush in 1993.  Congress was unhappy with parts of it and these were renegotiated by President Bill Clinton and approved by both political parties in the Senate.  The initial international trade agreement was brought about by both a Republican and Democratic President.  Somehow Donald is either confused or he’s editing history to fit his pattern of what, he feels, the past should be.  Instead of calling President Obama a failed president he should call himself a failed candidate for the presidency.  This is especially true now that about a dozen or women have accused him of one or another form of sexual assault.

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

Barry Goldwater (R) ran against Lyndon B. Johnson in the 1964 Presidential Election.  He was the first ardent conservative to run for the presidency.  Goldwater, according to his autobiography, did not expect to win the election.  He achieved 22% of the popular vote.  That percentage marked the extreme conservatives in the American electorate at that time. 

 

Interestingly Hillary Rodham (Clinton), as a high school student worked as a volunteer on his campaign.  Her parents were conservative and she initially followed in their footsteps.

 

From that time on the extreme right of the Republican Party worked avidly to improve their status with the electorate in the United States.  The next president, four years later was the Republican, Richard Nixon.  He was not as conservative as many in the party were.  Nixon resigned half-way through his second term over the Watergate Scandal.  He left the day before the House of Representatives was going to vote for a Bill of Impeachment.  Gerald Ford (R), the Vice President Nixon had appointed, replaced Nixon after his initial Vice President, Spiro Agnew, resigned over a corruption scandal.

 

President Ford appointed Nelson Rockefeller as his Vice President.  Rockefeller represented what was then left or liberal end of the Republican Party; he was a moderate Republican.  The next President, the Democrat, Jimmy Carter, would be more conservative than Nelson Rockefeller.  This group of Republicans would be a dying breed. 

 

Ford was president for two years and then was replaced by the Democrat, Jimmy Carter, who would, four year later, be replaced by the Teflon conservative Republican President, Ronald Reagan.  With Reagan the ultra-conservatives felt that they had one of their own in office.  Reagan, however was capable of compromise.  The comment during his period as president was that he would take half-a-loaf, that is, compromise if he got some of what he wanted.

 

Reagan was followed by George H.W. Bush.  He had to contend with a Democratic Congress.  Then came William Jefferson Clinton for the next eight years.  Clinton spent most of his time contending with a Republican Congress.  He was frustrated over a number of laws he couldn’t get passed.  During his last year in office he actually reduced the deficit.

 

Clinton was followed by George W. Bush who was initially elected with less than the majority vote.  A foul-up on the ballots in Florida and the fact that his younger brother was the governor of that state and had inappropriately purged the voter lists got him elected.

 

Barack Obama was the first Black elected to the Presidency of the United States.  I suspect that that had something to do with the way he’s been treated by Congress.  All the Congressional Republicans at an early caucus meeting swore to make him a one term President.  They decided that they would support nothing that he tried to do.  

 

It was largely because of this overall inaction that the general public was alienated from Congress.  This brought about a condition in the country whereby the Blue-collar Republicans were looking for a hero to free them from the Washington Republicans.  That hero, to them, was Donald Trump.  It is amazing that the Republicans in Congress still do not understand what they have done.  And that is because they are still acting in that fashion with their short-term funding bill which they will revisit in December before the next Congress meets in January.

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

For most of his two terms in office President Obama bent backwards to accommodate the Republicans.  The Affordable Health Care Bill (Obamacare) was based upon a Republican plan developed by Citizen’s United, a far right think tank, for Mitt Romney when he was governor of Massachusetts.  It passed Congress on a partisan basis; in both Houses all Republicans voted against it and all Democrats voted for it.  From 2011 on the Republicans had a majority in the House of Representatives.  And outside of absolutely necessary bills nothing was passed.

 

A single bill can deal with an endless number of subjects and Paul Ryan came up with the idea of adding parts of their far right agenda to necessary bills that, for example, funded the United States.  That is why currently the bill to fund the U. S. for the next fiscal year was passed at the last minute and functions only until the middle of December 2016 when the Congress will meet again for a very short session presumably to fund the balance of the year.

 

The Republican dominated House of Representatives pattern is to pass their necessary bills at the last moment, shortly before they adjourn for some sort of extended break.  This means that the Senate gets very little time to consider the bill because they are also ready to leave for a period of time.  Consequently it’s pass the bill or let the nation suffer.

 

Ordinarily, every bill goes to a standing committee of members of that House where it is gone over, testimony on the bill can be taken and possibly the bill is modified, then it is sent to the specific house and can be debated before being voted upon. 

 

All money bills originate in the House of Representatives which directly represents the people, the Constitution gives them the “power of the purse.”  The Senate originally represented the states; they were elected by the legislative bodies in each state.  This was changed by the 13th Amendment to the Constitution in 1913 to where the people directly elected two Senators from each state.

 

After a bill is passed in one House it then goes to the other House and the same process is repeated.  Ordinarily there is some difference between the two bills and a Conference Committee, comprised of members of both Houses of Congress meet.  They work out a new version of the bill which then goes back to both House and is voted upon again.  If it passes in both Houses it is then sent to the President for his signature.  After he signs it the bill becomes law.  This process cannot be completed in two days.

 

The new process, presumably under Paul Ryan’s tutelage, was developed in the Republican dominated House after 2011 when the Republicans received a majority of members in the House of Representatives.  It was a means of forcing or blackmailing the Democratic dominated Senate and the President into accepting parts of the Republican agenda.  They either passed it quickly in the Senate and the President signed it or the country suffered.  An example of this was to take over four months to financially deal with the Zika epidemic and then to still not fully fund the bill to the amount requested by the President.

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Currently the Congress has the lowest approval rating in the history of its existence.  The Gallop Pole does a monthly survey which from 2011 to the present goes up and down continually from 9% to 20%.  A number of other polls average 13.8 % approval.  

 

Sooner or later there has to be a reaction to Congress’ high level of non-functionality.  That reaction in the 2016 Primaries was Donald Trump for those citizens who could not stand the Democratic agenda but were frustrated by that of the Republicans.  And Bernie Sanders was the candidate for those who were basically Democrats but were fed-up with Congressional gridlock.  Sanders has coalesced into the Clinton campaign and now supports her.

 

The Congressional Republicans created the field upon which Donald Trump, despite all the negative information that emerges about him, has flourished as the Republican Candidate.  They and they themselves by their strategies and actions have created him and now they refuse to take responsibility for what they have done.

 

Paul Ryan, who was totally disgusted by recent information that emerged about Trump, and cancelled his invitation to a rally with himself in Wisconsin, will no longer campaign with him.  He will concentrate upon Congressional elections only.  And it was Paul Ryan, as Speaker of the House of Representatives, who, at the last minute before adjourning the House, got the bill passed that temporarily funded the United States Budget through the middle of December so that the Republicans could once again make demands upon President Obama before he leaves office at the end of the year.

 

They are still playing the games that have lowered their approval rating with the American Public well under 20%.  Apparently winning political points is still far more important than carrying out their oaths to serve the American people.

 

The Republicans want political power and seemingly will do anything to achieve it.  And they will take no responsibility for the acts they perform.  It would be a nice irony for them if their actions caused them to lose control of both the House of Representatives and the Senate.  And, of course they would not understand how it came about.  Donald Trump, as a candidate, is their creation!

 

With the partial funding of the 2016 – 2017 budget the Federal Government may still face a major crisis.  If the House of Representatives attempts to force its agenda through at the last minute with the December Funding Bill then the last major act of President Obama may be to veto the Bill.  If this occurs then the current administration will end with a nonfunctioning government.  The new President will have to begin her administration by declaring a state of emergency until the government is legally funded in mid to late January of 2017 by the new Congress.  

 

Could this happen?  Very easily, if the Republican dominated House of Representatives attempts to force its will upon the country.  This would be shortly after the November 8th Election.  It would seem that a state of war exists between the Democratic President and the Republicans, and Donald J. Trump is just a byproduct of all this.

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“As you sow, so shall you reap.”  It shouldn’t take too much intelligence to understand this.

 

 

 

 

 

 

 

The Weiner Component #156 – Fear & the Economic Situation

Official photographic portrait of US President...

Official photographic portrait of US President Barack Obama (born 4 August 1961; assumed office 20 January 2009) (Photo credit: Wikipedia)

Starting slowly, probably around the 1970s, the process of splitting real estate loans into a few parts began, and then, with the election of Ronald Reagan as President of the United States in 1981, the concept took off on a refined bases, with each real estate mortgage being broken into innumerable parts and having each piece put into a different hedge fund and sold as a safe investment. It was considered safe because any single or few losses on any one of these hedge funds would be so small that it wouldn’t be noticeable and would not really affect the amount of the dividend.

 

Two things occurred from the 1980s on: one was the election of Ronald Reagan to the presidency of the United States and the imposition of a total Free Market Economy and the other was an incessant need in the general society for a much greater cash flow.  We were in a period where there was not enough money available to serve the overall needs of the population.  More cash was needed for the economy to function.

 

The agency of Federal Government that was supposed to be keeping track of this problem and monetarily serving the needs of the nation was the Federal Reserve.  It’s Chairman from 1987 to 2006, Alan Greenspan, like the President believed in a totally Free Market that would automatically adjust itself.  Consequently he and the FED did nothing to alleviate the problem. 

 

This in turn left the need prevalent and either purposefully or inadvertently it was picked up by the banks which were also deregulated by the Reagan administration.  They, at first, gradually and then, with ever increasing speed, using real estate as their base, picked up the speed of creating new value or money throughout the society.  This was to continue through late 2008 when the banks had far     exceeded the amount of money needed for the society to properly function and the Great Real Estate Crash occurred.

 

What happened was that the banks, by their lending policies from the 1980s until late 2008, over 28 years, created trillions of dollars of additional value based upon the public housing industry within the United States.  In addition deregulation also allowed them to freely invest their deposits into the agencies or funds that directly serviced this expansion.

 

By 2007 most bankers were aware that property values had far exceeded a sane level and that a crash was probable.  But by 2007 most of the bankers had been making high commissions on the property market for most, if not all, of their banking careers; they were in denial that conditions could ever change. 

 

The Real Estate Market crashed or the Real Estate Bubble burst in late 2008 under President George W. Bush.  Virtually overnight the economy of the United States went into an instant depression.  There was suddenly mass unemployment, many people owed more on their homes than they were then worth.  Some people just walked away from their homes, others stayed, the hedge funds, which many or the deregulated banks had also invested in, collapsed from non-payment on mortgages.  Bush and his Treasury Secretary bailed out some of the banks; then his term ended and Barack Obama became the next President of the United States.

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Barack Obama would spend his eight years in office dealing with this mess.  For his first two years he had a Democratic Congress and their full support.  From 2011 on the House of Representatives gained a Republican majority and thereafter passed no legislation that dealt with the economic emergency.  In fact they passed economizing laws that actually increased the disaster.  President Barack Obama and the Federal Reserve Chairman, Ben Bernanke, using Creative Monetary Policy were able to change the depression into a recession.  The country is still dealing with this problem that the House of Representatives refused to deal with.

 

Conditions have improved.  Unemployment is now at about 5%, a long way from the initial 12½%  The Republicans still have done nothing to improve conditions, instead they have actually worsened them.  They are a great political party for complaining and blaming.  But what they are blaming President Obama for, is mainly for what they, themselves, have not done, passing fiscal laws creating jobs and upgrading the infrastructure.

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In 2008, the year of the Real Estate Crash, the Gross Domestic Product   was at 800 trillion dollars.  In 2009 it dropped to 700 trillion dollars.  By 2010 it was slightly above where it had been the year before.  By 2015 it was in the area of 17.95 trillion dollars.

 

Keep in mind that the GDP refers to the market value of all goods and services produced within the country during the fiscal year.  Interestingly the United States is now ranking first in the world’s GDP level.  That makes it, even now with 5% unemployment, the world’s richest nation.

 

If, as we’ve seen in the GDP, the overall wealth within the United States was continually increasing by 2010 above the 2008 Real Estate Crash level then why was the U.S. up to 12 ½% unemployment?  The answer, of course, comes into the area of spending priorities mostly by the United States Government and the overall population.

 

Congress, from 2011 on, with a Republican majority in the House of Representatives, was on an economizing bilge. The country underwent and is continuing to undergo Sequestration, spending cuts across the board in virtually every area.  The President, on the other hand, particularly in 2009 and 2010 underwent expansive spending programs to avoid a depression greater than that of 1929.  Basically what started from 2011 on was a redistribution of income, with gradually more and more money going to the upper echelon of society and less and less being available for the middle and lower classes, these amounts increasing yearly.

 

In 2009 and 2010 the Obama Administration spent inordinate amounts of money extending unemployment benefits, saving the American banking and auto industries, among other things.  From 2011 on gradually most of these programs ended and government began a struggle between the House of Representatives and the President.  In 2013 we had both Sequestration and a shutdown of the Federal Government from October 1 through October 16, 2013, for 15 days.  The shutdown was over the issue of government funding for Planned Parenthood in the 2014 funding bill.  The Republican House of Representatives attempted to force its will upon the President and the Democratic led Senate.  The President and Democratic Senate would not cooperate with the Republican led House of Representatives.  In many cases Congress has refused, or through different Republican disagreements, has been unable to act.

 

The positive movement that had occurred in the economy, turning a potential Great Depression into a Great slow-moving Recession came about through Creative Monetary Policy, government spending policy, by the Federal Reserve with the compliance of the President.  In essence it’s been a battle between the President and the Republican House of Representatives, with the administration slowly winning since national unemployment is today in the area of 5%.

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The question that arises: if the GDP (Gross Domestic Product) today is greater than it was in the period prior to the 2008 Real Estate Crash then why is the middle class in the United States continually shrinking and why are more and more people continually having a harder and harder time economically surviving?  The answer to that questions is that the National Income is like a balloon filled with helium, slowly and continually rising and becoming part of the incomes of the top few percentile, the upper 5 or so percent of the population.

 

In essence the rich are getting richer and everyone else has less money.  It would seem that the society is geared so that the rich pay a lower percentage of their incomes in taxes than everyone else does.  For example: Donald J. Trump, who is running for the presidency in 2016 as the Republican candidate, has refused to show his tax returns for any prior year.  Trump claims to have over ten billion dollars.  The probability is that he is not showing his income taxes because he doesn’t pay any of these taxes.  Being in real estate he would have endless write-offs and building depreciations.

 

But it isn’t just people in real estate who have these tax advantages, it’s anyone who earns over $464,850.  The income tax system is graduated up to that point; that is the more one earns, the higher a percentage of his/her income he/she pays in taxes.  Anyone earning over $464,850 pays the same rate as those earning that amount.  A person earning a million dollars or 25 million a year pay the same percentage of the incomes as the person earning the above figure.

 

While the number of individuals is not large compared to the overall population of 350 million people, yet the taxation system is rigged in favor of the very rich.  The more they earn over $464,850 the smaller a percentage of their income do they pay in taxes.

 

This change or decrease in taxes was brought about during the last five years of the Obama administration.  The Republicans actually lowered taxes for the very rich.  The Democrats were forced to go along with this in order to pass other similar required legislation.

 

The Republican argument for this action is that the rich need more money because they are the ones who invest in new industry.  Without them there would be no growth in the economy.

 

This argument that has been endlessly repeated over the years sounds wonderful.  But it is a myth.  It has never happened.  The rich invest their surplus incomes in old established industries that pay a set reasonable income or they, like Mitt Romney, bank some of it overseas where somehow they pay no taxes on the interest received.

 

Taxes are geared so the less an individual earns the higher a percentage of his/her income is paid in taxes.

 

The United States is the wealthiest nation in the history of the world.  Yet its unequal taxation system taxes the poor and middle class far more than the wealthy, they pay a higher percentage of their income in taxes.  It also has an underclass that is so poor they live in the streets and even though these people pay no income tax they also pay a higher percentage of their incomes in other taxes than the rich.  The national distribution of income is today a farce.  Someone like Warren Buffet has remarked that it’s a strange situation where he pays a smaller percentage of his income in taxes than his secretary.

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In 2016, the year of the next Presidential Election, this created a strange phenomenon within both political parties within the nation.  Currently there is a Republican majority in both Houses of Congress.  Very little if any needed legislation is being passed.  This situation has existed since 2011 when the Republicans took control of the House of Representatives.  In both major political parties there are large numbers of people who are totally frustrated with their Federal Government.  Many of whom are not overly well educated or generally too busy with their lives to follow what is actually happening in Washington D.C.  Their knowledge of the government is what they’re told by the news media, which can be tilted to the right or the left by which channel they are watching.  This doesn’t really answer their questions or needs. 

 

What exists today are large segments of the population which are looking for easy answers to what seems impossible questions or problems.  They want a simplistic solution which, in essence, is a return to a past which never existed.  They want a simplistic solution to their economic problems, to bring the manufacturing jobs back to the United States and allow people to earn more money so they will no longer be economically stressed out.  Whether this is real or not is beside the point; there is a strong desire among many for a simplistic change within the society.

 

For the Republicans the person who will do this is Donald J. Trump.  He claims that he will force the companies that have moved their manufacturing overseas or to Mexico to bring these jobs back to the U.S.  In addition he will get rid of all illegal foreigners in the U.S. and lessen competition so that there will be jobs available for everyone who wants to work.  He will also make the U.S. safer by not allowing alien radicals to migrate to the U.S. and keep Mexicans out of the country by building a wall between the United States and Mexico.  And so on.  He will bring us to a golden age that never existed in the U.S.

 

In essence Trump is feeding on all the basic prejudices and fears that seem to still exist in this country.  He is opposed to Mexicans, Hispanics, Muslims, Syrians, Blacks, Women having a right to deal with their own bodies, and the list goes on.  Trump has promised to take us all to-never-never land if he becomes president.  He seems to open up all the hidden prejudices in a large percentage of his followers.  He has also increased bullying among the children of his followers.

 

For the Democrats there is Senator Bernie Sanders, a Democratic Socialist.  Over a year ago he changed his party registration from an Independent Socialist who always caucused with the Democratic Party to a Democrat.  Sanders now calls himself a Democratic Socialist.  This has enabled him to run as a Democratic candidate for the presidency in 2016.

 

I strongly suspect that Bernie Sanders initially expected to run as a protest candidate with no chance of winning.  However he inadvertently tapped into the younger generation of voter; those who had been too young to vote in prior Presidential Elections.  To these people and the others who have joined them he offers a utopian future. Free education from pre-school through college and free medical coverage for everyone.  He supports abortion rights and a more liberal drug policy.  He believes in gun control, immigration reform, LGBT rights, expanding social security, and tax reform.  Among other things he has stated: “We need to get big money out of politics and restore our democracy,” and “Climate change is real, it is caused by human activity.”

 

He has also brought large numbers of Independents and some older Democrats to his cause.  His campaign took off like a rocket shooting upward and Bernie could almost taste victory.  But he never quite caught up with his competition, Hillary Clinton. 

 

He is promising a new society with benefits for everyone.  And all this will be paid for by the rich who have up to this point exploited their position in society.  The image is wonderful but the reality doesn’t exist.

 

I suspect that the majority of the population agrees with most of if not all of Senator Bernie Sander’s goals.  But they would have to be paid for if they were to be put into laws.  And his solution to this is rather naïve.  He says he would put a tax on Wall Street’s excess profits.  Traditionally in United States history, going as far back as the Revolutionary War from 1776 on the practice has been to make someone else pay for what you want.  The Southern planters owed millions to English merchants which they never paid after the Revolutionary War.  Afterwards Daniel Shay, a Revolutionary War veteran, led Shay’s Rebellion where the inland farmers refused to pay taxes that were brought into being by the Tidewater merchants in the coastal cities.  In recent years there was an attempt on the California side of Lake Tahoe to tax the Time Share facilities to pay for the public schools in the region; it failed.  It’s always nice to get someone else to pay for what is needed or wanted but generally it doesn’t work.

 

The term Wall Street is an abstraction; it has no specific meaning.  Are they talking about the banks or the large commercial corporations, or any company that sells stock?  An excess tax on the sale or purchase of stock or company profits would bring about economic disaster.  A tax on profits already exists, increasing it could destroy incentive.  Senator Bernie Sanders funding solution sounds just but it is nonsense.

 

Hillary Clinton is much more pragmatic.  The very existence of Senator Bernie Sanders has pushed her farther to the left in her own position.  She may be able to achieve many of Bernie’s goals which he should be able to get into the 2016 Democratic Platform. 

 

Sanders, on the other hand, as President would face endless frustration, even if he were to get Democratic majorities in both Houses of Congress, which is a low probability.  In all likelihood the House of Representatives will retain its Republican majority.  And even if Senator Bernie Sanders were to get an all Democratic Congress he would still have trouble both passing and funding his program.

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In the early 1800s England began the Industrial Revolution in the cotton industry.  Eli Whitney invented the cotton gin which allowed the cotton plant to be quickly separated from it many seeds.  Machinery was developed for spinning the cotton plant into thread and machinery was also invented for weaving the thread into cotton cloth.  Overnight spinners and weavers became obsolete, their occupation ceased to exist.  Some became luddites, breaking into factories and destroying the new machines in an attempt to bring back the past when they had a functioning occupation.

  

 Even if Trump, by some strange miracle, were to get elected the probability is that the results of the 2016 Presidential Election would leave a number of people totally dissatisfied  with the changes that don’t seem to be happening,  You can’t bring back the past, real or otherwise. 

 

Can conditions be improved?  Jobs are available in the United States.  The problem is that they require training and mobility.  It now requires a trained skilled employee for the jobs that pay a decent wage.  For those who refuse to undergo any training or move to where these jobs exist there are public sector occupations that do not pay much but that take almost no skills to do.

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

English: Seal of the President of the United States Español: Escudo del Presidente de los Estados Unidos Македонски: Печат на Претседателот на Соединетите Американски Држави. (Photo credit: Wikipedia)

 

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