The Weiner Component #173 – A Short History of Political Parties

The Republican Party came into existence with the election of Abraham Lincoln as President of the United States in 1860.  It was a combination of different political groups that didn’t agree with the Democratic Party, which was the major political party that existed throughout the entire United States. The other political parties were all reginal.  It should be noted that in this election the Republicans were not on the ballet of any one Southern state.  The election in the Southern States dealt only with the Northern and Southern Democratic Parties.

 

With the exception of the issue of slavery the Republican Party supported business and its growth.  In fact largely so did that of the Democrats with a slight emphasis on agriculture.  This period was the era of business growth in the country.  The Industrial Revolution had begun in Great Britain at the turn of the 19th Century; it spread to Europe by the 1830s; and thereafter moved to the United States where it began slowly speeding-up during the Civil War and then growing even more rapidly in the post war period.

 

Politically the Republicans would stay in power for most of the balance of the 19th Century.  With the death of Lincoln, Andrew Johnson, the Vice-President, would become President.  He was a former Southerner and Democrat who had been elected during Lincoln’s second term when the Republicans had run under the National Union Ticket.  During his presidency the Congress was almost totally Radical Republican and did what they wanted even to the point of unsuccessfully impeaching Johnson.

 

Johnson served out his term, 1865-1869, and was followed by the Republican Union General, Ulysses S. Grant who served two terms, from March 4, 1869 – March 4 1877.  In 1876 the Republican Rutherford B. Hayes stole the Presidential Election from the Democrat Samuel J. Tilden.  Tilden won the popular vote but there were two sets of electoral votes from several states and the Republicans were the ones who prevailed.

 

In 1880 the Republican James A. Garfield was elected President.  He served 200 days in that office and was shot by a dissatisfied office seeker.  His Vice- President, Chester A. Arthur, then became President.  In 1884 the Democrat Grover Cleveland won and four years later in 1888 he lost to the Republican, Benjamin Harrison.  In that election Cleveland won the popular vote but Harrison won the Electoral College vote.  But in 1892 the Democrat Grover Cleveland won his second term.  In 1896 the Republican William McKinley was elected to the presidency. 

 

It was during this post-Civil-War period that the United States began turning into an industrial giant.  And it was during this time that the country underwent the rise of a new class, the plutocrats.  These were essentially the “robber barons” who owned most of the new industries that arose.  They had largely bribed their way through the State and Federal legislatures.  It was a time of intense corruption in all levels of government.  Shortly after this period that the people would get the right to directly elect senators through their votes and the Progressive Movement would take off in an attempt to return the country to its people.

 

As we’ve seen the Republicans, more or less, stayed in power during this time.  But the nation was going through intense growing pains.  It didn’t matter which political party was in charge the country was changing on almost a daily basis and it was impossible to keep up with everything that was going on.  These Presidents did their best; but, I suspect, no one totally understood or could have done what was really necessary with the speed of change.  In many respects the corrupt political machines, both Democratic and Republican, that existed then in the cities served the poor in return for their votes.  There were no government or other services.

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

In 1900 the Republican William McKinley was elected to a second term.  His new Vice-President, Theodore Roosevelt, was put into that position to get him out of New York.  Jokingly it was stated that “Teddy,” the former governor of New York, “had taken the veil;” he could no longer bother anyone in government.  At that time the most nonfunctional job in Washington was that of Vice-President.  In the musical satire “Of Thee I Sing,” there is a scene with the Vice-President taking a tour of the White House so he could see what it looked like since he’d never been their otherwise.

 

On September 6, 1901, less than a year after he had begun his second term, William McKinley was shot by an anarchist.  Theodore Roosevelt became the 26th President of the United States.  To the Republican leadership it was “that damn cowboy in the White House.”

 

From the 1890s on until shortly after America’s entrance into World War I the United States went through the Progressive Movement.  It was a time of reform on all levels of society.  Its goals were to eliminate city political machines and their bosses, to bring direct democracy to the people, and to regulate monopolies and corporations through anti-trust laws.  Theodore Roosevelt became known to his admiring public as the Trust-Busting President.

 

The Progressive Movement brought about prohibition, women suffrage, the direct election of senators, and the Federal Reserve Act.  The three presidents who were directly involved with this movement were the Republicans, Theodore Roosevelt and William Howard Taft and the Democrat, Woodrow Wilson. 

 

Roosevelt was President from 1901 to 1908; then he choose Taft to replace him from 1909 to 1912.  In 1912 Roosevelt dissatisfied with Taft decided to run again for the office.  The Republican Party supported Taft.  Roosevelt ran as a third party candidate in the Bull Moose Party.  In this Presidential Contest Roosevelt came in second, Taft was third, and the winner with a little over 40% of the vote was the Democrat, Woodrow Wilson.

 

The Progressive Movement, with these three presidents, ended shortly after the Great War (World War I), with woman suffrage and prohibition, the 18th and 19th Amendments to the Constitution in 1919.

 

At the end of the war the Senate had a Republican majority which refused to ratify the Treaty of Versailles, which ended World War I.  The Republican, Warren Harding, was elected President in 1920.  He signed a separate peace treaty with Germany.  The following two administrations that of Calvin Coolidge and Herbert Hoover were also Republican.  The Secretary of the Treasury for all three administrations was Andrew Mellon, the millionaire industrialist and banker.

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

In 1776, Adam Smith, a professor at the University of Edinburgh published a book based upon his lectures entitled, “An Enquiry of the Wealth of nations,” that defined the functions of capitalism.  The work and its theories are still the basis of modern capitalism.  The study was a vigorous attack upon an earlier economic system called mercantilism which defines national wealth as gold and the amount of gold a nation possessed as its wealth.  Smith defined national wealth as the amount of goods and services a nation produced in a set amount of time, a fiscal year.  The motivating force that caused the economy to work was, according to Smith, the invisible hand, the profit motive.

 

The Republicans not only accepted this idea they have been utilizing it ever since.  The only problem is that the unregulated profit motive has continually led to economic disaster.

 

From 1920 to 1929, under three Republican presidents, allowing the market system, the profit motive, to freely function, brought about the country’s collapse into the Great Depression.  Hoover and his Treasury Secretary, Andrew Mellon, the multi-millionaire industrialist and banker, didn’t know what to do.  For over three years of economic decline they kept talking about “prosperity being around the corner.”  They expected the Market to balance itself and prosperity to return.  It didn’t happen.  Conditions went from bad to worse and continued to stay there.  The industrial world foundered in misery.  Some countries like Italy, Germany, and Japan ended up in dictatorships.

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

As in had happened in the 1920s, under President Ronald Reagan in the 1980s, the Federal Government did away with all banking regulations.  The Free Market would determine which way the economy would go.  The motivating force for the Free Market was Adam Smith’s “invisible hand;” this was the profit motive.  In 2008 the Housing Market crashed and the major banking houses were on the point of bankruptcy after about 30 years of constant growth.

 

In the 1920s the Stock Market became crazier and crazier.  On Black Tuesday, October 23, 1929 the Stock Market, after a decade of intense growth, collapsed. 

 

The collapse continued.  By 1932 the Gross National Product had dropped 15%, unemployment was down 25%, and farm prices were down 80%.  In many cases it cost the farmer more to raise the crop than the amount for which it could be sold.  The Hoover administration and the Secretary of the Treasury’s constant response was that prosperity was just around the corner.  Hoover did make some attempts to deal with the situation but they were totally inadequate.  Neither he nor Andrew Mellon, the Secretary of the Treasury, were capable of dealing with this situation, the country and its people floundered.

 

What happened, happened on a world basis.  All the industrial nations were affected by the Great Depression.  It was far worse outside of the United States.  In some countries unemployment was far lower than 25% and the level of misery was far greater than in the United States.

 

The various governments, including that of the United States, put high tariff walls around themselves in order to protect what jobs still existed.  This, in turn, made many prices far higher than they should have been.  Living standards hit an all-time low, with many people dying of malnutrition.  People wandered over the country looking for work.  We had the age of the hobo.  Many, and that included those in the government, did not understand what was happening.

 

In 1932, four years after the Great Depression began, the former Democratic governor of New York, Franklin D. Roosevelt (FDR), ran for the Presidency of the United States.  The Republicans ran Hoover for a second term.

 

 During this period many of the veterans of the First World War descended upon Washington, D.C.  They had been promised a bonus in the future for serving in the war.  This was the Bonus March.  They demanded it at that time.  The veterans set up a massive camp at the outskirts of the city.  The Federal Government felt it was in no position to pay the bonus early.  President Hoover ordered the commanding general, Douglas MacArthur, to break up the camp but to not harm any of the veterans.  Two men were killed.  This move absolutely destroyed most Republican support that may have still existed in the country.  Roosevelt was overwhelmingly elected President of the United States. He received 57% of the popular vote and carried all but six of the forty-eight states.

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

As President Roosevelt offered the country a New Deal.  The term came from poker.  His program consisted of the 3Rs: Relief, Recovery, & Reform.  Relief for the unemployed and the poor, Recovery of the economy to normal levels, and Reform of the financial system to prevent future depressions. 

 

Money at that time was gold and silver.  The Federal Government would pay for this by collecting all the gold coins in circulation, melting them down into bricks of golds, storing the gold in depositories like Fort Knox, and then issuing paper money.  In 1932 a gold coin that weighed an ounce was a twenty dollar gold piece.  The Federal Government bought all the gold mined in the United States at $16 an ounce.  In 1933, after the gold was collected and replaced with paper money its value was legally increased to $32 an ounce.  The Roosevelt administration doubled the money supply.  This would pay for the New Deal.

 

They issued paper money, called Federal Reserve Notes which were then theoretically backed by the gold bricks stored in the government depositories.  No one ever checked to see that the amount of Federal Reserve Notes (paper money) matched the amount of gold in the underground depositories.  The Federal Government could print and issue money as needed, which it did during the New Deal and later during World War II.  In essence the country went off the gold standard in 1933.

 

FDR changed the function of government.  Up to that point, historically, it had run the nation and the people were responsible for themselves.  From 1933 on the Federal Government officially assumed responsibility for the people where they could no longer care for themselves.  Actually the change had been begun during the Progressive Movement, but it was under FDR made into official government policy. 

 

In addition the Federal Government passed laws to regulate industry.  The basic concept was to have a level paying-field for all participants.  It also encouraged unionization of labor.

 

These, in essence, became the major issues between the Democratic and Republican Parties with the Republicans slowly giving in to the Democrats.  After the death of Roosevelt President Harry S. Truman would continue this policy with his Fair Deal.  The next President Dwight David Eisenhower would be a middle-of-the-road Republican building, among other things, a national highway system.

 

Eisenhower was followed by the Democrat, John F. Kennedy, who would serve as President from January 1961 to November 22, 1963 when he was assassinated.  Kennedy was succeeded by his Vice President Lyndon B. Johnson who was elected in his own right in 1964.  These two presidents were responsible for bringing the Federal Government into the Civil Rights Movement, which, in turn, legally enabled Blacks to vote throughout the South and integrated society making all the nation’s citizens equal.  It also turned the South into Republican voting states.

 

Johnson was followed by, Richard M. Nixon, who was also a moderate Republican.  During the middle of his second term he was forced to resign over the Watergate Scandal and was replaced by his Vice-President Gerald Ford.  Ford officially ended the Viet Nam War.  He was replaced by the Democrat, Jimmy Carter.

 

After one term Carter was succeeded in 1981 by the Republican, Ronald Reagan, who would serve for two terms and leave a definite imprint on American politics.  President Reagan implemented sweeping political and economic changes, bringing supply side economics (Reagonomics), lowering taxes in order to spur growth while actually increasing government spending.  He brought about government deregulation of industry and banking and reduced government spending in social programs for the poor and needy.  He massively increased military spending, starting an arms race with the Soviet Union and raised the deficit to over one trillion dollars for the first time.

 

Reagan brought into government the conservative Republican prospective that had first been demonstrated when ultra-conservative Barry Goldwater ran against Lyndon B. Johnson in 1964.  Reagan’s supply side economics was a large tax cut for the wealthy and small tax cuts for everyone else.  The theory being that the rich would invest the new monies into new economic expansion and all sorts of new jobs would be created.  Thus the monies would trickle down to all parts of society.  It never happened. The money was actually invested in old productivity, like the stock market, and produced no new employment.  However to Republicans this was the Conservative Revolution. 

 

Reagan’s military spending brought the National deficit up to over a trillion dollars for the first time.  It also began an arms race with the Soviet Union that would bankrupt them.

 

Reagan was followed by his Vice-President, George H. W. Bush, who had to deal with a Democratic Congress, and ended fighting an unnecessary war against Iraq, Operation Desert Storm, which more than doubled the national deficit.

 

Bush, after one term, was followed by the Democratic President Bill Clinton, who served two terms, from 1993-2001.  Clinton as President reversed or ignored the Reagan economic changes.  During his third year in office, 1994, the House of Representatives acquired for the first time in 40 years a Republican majority.  From 1998 to 2000, the last three years of the Clinton presidency the United States government had a budget surplus and was able to reduce the deficit.

 

Clinton was followed into office by the Republican George W. Bush, who won the electoral vote but not the popular vote.  Like Clinton he served two terms.  He was initially elected in a controversial election, receiving less votes than the Democratic candidate, Al Gore.

 

The September 11, 2001 terrorist attack on the Twin Towers in New York City occurred eight months in his first term as President.  George W. Bush’s response to this was to declare War on Terror and send a military force to Afghanistan in 2001 to take control away from the terrorist organization, Al-Qaeda.  He was successful in doing this but he was not successful in setting up a Democratic government that could maintain control of the country.  After 15 years in Afghanistan we are still there.  Bush also later decided, for personal reasons, to set up a Democracy in Iraq.  Saddam Hussein, the ruler of Iraq, had tried to have his father assassinated.  We are also still in Iraq.  

 

Following Republican policy Bush lowered taxes for the well-to-do and somewhat for the middle class while he massively fought two wars and destabilized the Middle East.  Under Bush the National Debt rose from six trillion dollars to ten trillion dollars.

 

During his presidency he signed into law the Patriot Act, a Partial Abortion Ban Act, and Medicare Prescription Drug Benefits for seniors.  In 2008, his last year as President, the Housing Market crashed and Bush and his Treasury Secretary loaned billions to some banking houses to keep them from going bankrupt. 

 

His presidency has been ranked among the worst by historians in the entire history of the United States.

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

In the Election of 2008 the Democrats took both the presidency and both Houses of Congress.  In 2008 the country was on the brink of a Depression that would have made the Great Depression of 1929, which lasted for a little over a decade, look like a weekend affair in comparison.  The new President, Barack Obama, through massive government spending was able to turn it into what has been called The Great Recession.  And, as of early December 2016, unemployment fell to the level it had been at prior to 2007, 4 ½%.

 

During his first two years in office President Obama with the cooperation of a Democratic controlled Congress was able to avoid a massive depression.  He also passed the Affordable Health Care Bill.  From 2011 on he had to deal with a Republican dominated House of Representatives and thereafter was able to gradually continue his economic reform through the use of creative Monetary Policy with the Federal Reserve.  The House forced through some legislation which actually exacerbated what then became called The Great Recession.

 

Barack Obama has been President for two terms.  He will end his tenure on January 20, 2017, when Donald J. Trump becomes the 45th President of the United States.  What the new President-Elect will or will not do is unknown, outside of the fact that he is erratic in his behavior.  His current appointments to his staff and cabinet would indicate that he is moving far to the right.  The appointments indicate also that he is doing the opposite of what he initially proposed, bringing Wall Street and the military into his Cabinet. 

 

As of January 20th the three main parts of the Federal Government will all be Republican dominated, the Presidency and both Houses of Congress.  The Republicans in Congress have been talking about doing away with Obamacare (Affordable Health Care) but if they do that 20 million people would lose their health coverage and numerous millions more would have their young adult children removed from their policies.  In addition those individuals with a prior condition, who the insurance companies were forced to accept, would be dropped from their insurance policies.  The effect of these changes would no doubt cause the Republicans to lose control of both Houses of Congress in 2018. 

 

As I understand the current issue the Republican dominated Congress will do away with Obamacare immediately but the plan will not go into action for three years, not until after the next Congressional Election in 2018.  The Republicans in Congress feel that they can come up with a better replacement over that period of time.

 

Unfortunately the current universal medical plan is an expanded Republican Plan that was developed by a Republican Think-Tank and was first successfully used in Massachusetts when Mitt Romney was governor.  The only alternate plan, which would successfully lower costs, would be a single payer plan run by the government covering everybody in the United States.  In fact it could be successfully financed by an increase in income taxes and no premiums being paid by anyone.    This plan would be unacceptable to the Republicans.  The only basic one that they could in principle support would be Affordable Health Care, which was the Republican plan.  They have opposed it for the last seven years.  2019 should be an interesting year. 

 

And also there is what Donald Trump has promised and will do or try to do.  It is interesting to note that the current Republican dominated Congress does not really trust Donald Trump.  They have only partially funded the Federal Government for a second time this year.  It will have to be funded again in four months during Trump’s presidency.  This action can be used to force him to cooperate with them.

                   *************************************.

What should emerge from this article is that the political parties were close together around the 19th Century.  The Democrats emphasized the rural or agricultural areas and the Republicans the urban or business cities.  Other than that the two parties tended to, more or less, cooperate.  The Progressive or Reform Movements that came about from the 1880s to 1920 was a function of men from both political parties.

 

From 1921 on, with the assentation of President Warren Harding we have the modern Republican Party.  Presumably because of scandal Harding died in office and was replaced by his Vice-President, Calvin Coolidge, who was then reelected to serve another term.  It was under these two men that modern Republican principles were developed and continued under the next President, Herbert Hoover.  The forms of government regulation that had been brought about by the Progressive Movement were done away with.  The Free Market was allowed to function unhindered.  This brought about the Great Depression of 1929.

 

Four years later, in 1933, the Democrat FDR became President.  He brought about the New Deal, experimenting with all forms of socialism to put the country back on its feet.  He kept was worked and discarded what didn’t.

 

FDR changed the function of government, making it responsible for the welfare of its people.  This was a new concept excepted in the 20th Century by virtually all the industrial nations.  This concept was actually carried on by both political parties in the United States until the election of Donald Trump as President of the United States.  Will it continue?  There are many who feel strong doubts.  We are at an interesting or frightening point in our history.

 

Trump’s election seems to indicate a return to the policies of the 1920s.  Could we be facing the possibility of a return to the Depression of 1929 or to the Housing Debacle of 2008, to the potential of a far greater depression than that of 1929?  It is a distinct possibility considering Republican control of the Presidency and the Congress.  And, of course, there are Trump’s attitudes and his appointment to important government jobs.  Republicans seem to have a short historic memory!

The Weiner Component #169 – Part 2: The Presidencies & Political Parties in the United States

English: Partisan makeup of the Senate at the ...

English: Partisan makeup of the Senate at the beginning of the 107th United States Congress, January 3, 2001. Democratic Party – 50 Republican Party – 50 Tie broken by the Vice President of the United States (Al Gore to 2001-01-20, Dick Cheney thereafter) (Photo credit: Wikipedia)

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

English: Abraham Lincoln, the sixteenth Presid...

If you draw a horizontal line across a sheet of paper and put a mark in the center then the right side proceeding to the end of the line tends to be conservative getting more reactionary as you move farther toward the right end and the left side tends to be liberal, getting more radical as it moves to the left end.  Today the left side represents the Democratic Party and the right side is the Republican Party.

 

This model of right and left was initially created by the way the Chamber of Deputies placed themselves in the hall during the period of the French Revolution in late 18th Century.   The difference then was that the legislative body was divided into three groups, the right were the reactionaries who wanted to bring back the king and his form of government; the left were the radicals who wanted to get rid of the king and brought about the “Reign of Terror.”  They wanted a representative government, essentially led by a dictator.  The majority of the Chamber was called the Mountain.  It was the center which contained the majority of delegates.  They were the moderates.  France would eventually become a Representative Democracy.

 

Today in the United States legislature there is no center.  We have a right, the Republicans and a left side, the Democrats.  And between the two major groups, in the center, there is an empty space, which, in turn, makes it difficult for any type of compromise to be reached or even for any real communication to occur.  As far as the far right is concerned compromise is giving in to their position.

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

In 1797, when the Constitution was written, there were no thoughts of political parties.  By 1789, when it took effect, Alexander Hamilton, the First Secretary of the Treasury, had organized the Federalist Party, which basically supported the tidewater mercantilist groups rather than inland yeoman farmers.  Thomas Jefferson, who supported the latter group at the very tail end of the 18th Century organized the Republican Party as a solution to the Federalists and ran as its first candidate for the presidency in the year 1800.  The Federalists, as an insult, rechristened it as the Democratic-Republican Party.  This first name has stuck through the years and is still used today.  The Presidential campaign in the year 1800 was a very raucous one with Jefferson being denounced, among other things, as an atheist.

 

Jefferson won the election and the Federalists were never again able to win a Presidential Election.  They ceased to exist as a political party after the War of 1812.  In that war with England they had refused to support the government against Great Britain.

 

President Thomas Jefferson, following his philosophy of leading a country of small yeoman farmers, in 1803 bought the Louisiana Territory from France for $11,250,000, adding 828,000 square miles to the new United States and doubling its size.  He calculated that he had added enough land to allow it to freely grow with small farms for at least one hundred years.

 

The Federalist position had been favoring a strong central government, close ties with Great Britain, a centralized banking system and close links between the government and men of wealth.

 

What followed after the War of 1812 was the Era of Good Feelings which ended in 1824 when John Quincy Adams was appointed to the Presidency by the House of Representatives after an election in which none of the four regional candidates achieved enough of a majority to win the election.

 

In 1828 the Democratic-Republican Party split into Jacksonian Democrats and the Whig Party.  The Jacksonian Democratic Party became the modern Democratic Party.  They supported the primacy of the President over the other branches of government.  The Whig Party advocated the primacy of Congress over the executive branch.  In the 1850s the Whig Party declined.  Its leaders had died out and it split over the issue of slavery.  The Democratic Party also split into two section, Northern and Southern, anti-slave and pro-slave.

 

In the Election of 1860 the remnants of the Whig Party and remnants of other third parties like the Abolitionists and other dissatisfied groups coalesced into the new Republican Party while the Democrats split into two separate political parties, one Northern and Western and one Southern.  The Northern Democrats ran Stephen A. Douglas while the Southern Democrats put forth John C. Breckenridge.

 

Douglas and Breckenridge had over 50% of the vote together but neither one had as much as Lincoln.  Lincoln won the election with under 50% of the popular vote.  No one Southern State had his name on their ballot.  It was as though two totally separate elections had occurred.  In point of fact one can easily say that the Civil War actually began with this election.

 

At the end of the Civil War Radical Republicans dominated both Houses of Congress.  The President of the United States was a former Southern Democrat, Andrew Johnson.  He had been a senator from Tennessee who remained in Washington and refused to join in the Secession from the Union.  Johnson ran with Lincoln during his second term as the Vice-presidential candidate under the slogan of the National Unity Ticket.

 

Lincoln was assassinated early during his second term and Andrew Johnson became president from 1864 to 1867.  The Radical Republicans had a super majority in both Houses of Congress; consequently they were able to do whatever they wanted.  Johnson was unsuccessfully impeached toward the end of his term.  In 1868, the Republican, former General Ulysses S. Grant, became the 18th President of the United States.

 

In the election of 1876 the Republican Rutherford B. Hayes ran against the Democrat, Samuel J. Tilden.  The Republicans desperately wanted to retain the presidency.  Tilden had the greater number of popular votes.  Several states ended up electing two sets of electors, both Democratic and Republican.  The crisis was not resolved until the night before the new President was to take office.  A back-door deal was made by which the Republicans got the presidency and the Southern States had the Northern armies of occupation removed and became independent states again, ending all the remnants of the Civil War.  The United States reemerged as a two party nation.  At this time the Blacks systematically lost their rights as freedmen, although they kept that title.

 

The Republican Party adopted many of the economic policies of the Whigs: national banks, railroad expansion, and high tariffs.  They were the businessman’s political party.  Their anti-slave policy and the Civil War had brought the Black population, the freedmen, into their party and kept them dominant in Congress until this time.  The Southern States returned to the Democratic Party which maintained its traditional values.  The Republicans also attracted shop owners, skilled craftsmen, clerks, and professionals who were attracted to the party’s modernization policies.  These political coalitions lasted almost to the end of the 19th Century.

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

The Civil War expedited economic change in America.  From its end through the 1920s there was a rush of new immigration into the United States, mainly from Eastern Europe and Ireland.  The Industrial Revolution in all forms of rapid economic growth took hold of the country at this time generating a rapid settlement of the entire continental United States.  The late 19th Century was the period of the Gilded Age, rapid industrial growth, the confluence of money into the hands of a few brought about the rise of the “robber barons,” monopoly and oligopoly; phenomenal affluence for a small number and sweat-shops and twelve to fifteen hour shifts for large groups of children, women, and men in factories.  The country went from a rural nation to an urban one during this period.

 

Small towns became cities virtually overnight with almost no understanding or regulations about supplying clean water to large populations and housing or sewerage or food regulation laws.  The government performed no social services.  Political machines developed by both political parties in the urban areas.  Epidemics became common, particularly in warmer weather.  Death tolls, particularly in slum areas were inordinately high, especially among infants and young children.

 

Among this environment, within the urban areas, individual states, and the Federal Government the Progressive Movement developed and grew.  It would continue until the United States got involved in the Great War (World War I).  Both major political parties would at different times lead this movement, which, to a large extent, would be fed by magazine articles and books demonstrating the horrific conditions that existed in the factories, slums, and cities.

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

All the presidents from Lincoln’s death until Teddy Roosevelt’s accession were decent men but weak presidents.  They and Cabinet members were continually hounded by jobseekers and political machine operators looking to collect on campaign promises.

 

The major issues of this period were the protective tariff, currency reform, and civil service reform.  President James A. Garfield was shot by a dissatisfied job seeker.  Even with this civil service reform came slowly over the course of the late 19th Century.

 

Tariff and currency reform lasted throughout this period and led to the Progressive Movement.  Business interests supported protective tariffs and tight or hard money (gold).  They lobbied and spent freely to achieve these goals, which the Republicans tended to support.  The Democrats largely backed a loose money policy, using both gold and silver.

 

From 1876 through 1900, Congress was known for being rowdy and inefficient and the Presidents as more or less capable of doing their jobs but not much more.  The two major political parties tended to be similar in their outlook with the exception that the Republicans favored business and the Democrats vied slightly toward farmers.  And the government was considered highly corrupt.

 

With one exception, and that was Grover Cleveland, the Democratic candidate, who was twice elected to a four year term in 1884 and in 1892, all the other presidents had been Republicans.  All of them, from both political parties had served in the Civil War.

 

In addition, among the farmers, at this time, the Granger Movement gradually developed and it in turn become part of the Populist Movement, which pushed for Agrarian Reform in the United States.  The Populist Movement and urban conditions and corruption throughout the country gave birth to the Progressive Reform Movement which existed on the both the state levels and on the national level.

 

The early Progressive Movement rose on a grass root level.  It was supported by the farmers who wanted a loose money policy.  This would allow them to pay back their debts with less expensive currency.  The businessmen and bankers preferred a tight money policy.  They wanted the debts paid back with more expensive money than they had initially spent or loaned out.  Into this mix came magazine and book writers, the muckrakers, who tended to expose the corruption that existed on all levels of society.  Also at this time the giant industrial cities came into existence with no initial rules or regulations on how they had to be governed or function, in areas like hygiene, sanitation, and city government and social services to the newly arrived immigrants.

 

All this gradually ended with the accession of Theodore Roosevelt to the presidency after the assassination of William McKinley by an anarchist in 1901.  Teddy Roosevelt, a Republican, would be the first of the Progressive Presidents.  He would be followed by William Howard Taft, another Republican.  The third Progressive President would be Woodrow Wilson, a Democrat.  This period would end with the First World War

 

During this period corruption was exposed in numerous aspects of the nation and a certain amount of regulation was promulgated throughout the various levels of the society: local, state, and national.  The Senate up to 1913 had been appointed by the different state legislatures and had become, usually by bribery, largely an extension of large corporations like Standard Oil’s attorneys.  It thereafter, through the 17th Amendment to the Constitution, was directly elected by the people within the individual states.  Oregon introduced in 1902 the initiative and the referendum process, which, in turn, was copied by numerous other states.  The recall election was also introduced whereby an elected official could be unelected from his office.  In addition Women Suffrage (the vote) came about at this period.  The tide of reforms ended with the World War.

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

At the end of the war Woodrow Wilson went to Europe to develop the Treaty of Versailles.  He brought the treaty to Washington where it was rejected by the Republicans in the Senate.  There was a struggle to pass the Treaty, and, during that time, President Wilson suffered a heart attack from which he never totally recovered.

 

The Treaty could have been modified to satisfy the Republicans but Wilson refused to compromise.  The United States never signed it.  Instead they eventually signed a separate treaty with Germany.  The major item in the Treaty was the establishment of a League of Nations, which the United States never joined.

 

At the end of his term the invalid, Woodrow Wilson, was replaced by the Republican, Warren Harding, who died in office after a number of corruption scandals emerged.  He was replaced by his Vice President, Calvin Coolidge, who later ran on his own and won.  He, in turn, was replaced by Herbert Hoover.  These three Republican presidents fully believed Adam Smith’s theory that the market-place would make all the proper economic decisions for how the country should be run.

 

The motivating force according to Adam Smith was the “invisible hand,” the profit motive.  This brought the country in 1929 to the Great Depression.  Neither Hoover nor his staff knew how to really deal with this situation.  The United States and numerous other industrial nations went through periods of unbelievable misery with the governments trying to function in periods of massive unemployment and chaos.

 

In 1933, four years later, the new President, the Democrat Franklin D. Roosevelt, working on almost an experimental basis saved capitalism and the country by adopting socialistic principles.  He called his policy “The New Deal,” a term taken from poker.  The Federal Government assumed responsibility for those who could not care for the mselves.  They created jobs and projects like Hoover Dam, which was originally called Boulder Dam, throughout the United States and he brought about social security.  It was a time of rapid experimentation, anything that worked and solved problems was utilized.

 

But even with all this many of the aspects of the Great Depression remained.  The country was better off but many still suffered.  What ended the last remnants of the Great Depression was World War II.  The spending required to fight and win the war and the army the U. S. raised ended the last remnants of the massive economic turndown.  In point of fact, the country entered the war in December of 1941 with the majority of the population being in the lower class and ended the war in 1945 with the majority of the population belonging to the middle class.  The economy had changed considerably.

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

During the Second World War both political parties concentrated on fighting the war.  Roosevelt died during the last year of the fighting and was replaced by his Vice President, the Democrat: Harry S. Truman.

 

Truman in 1945, after the war ended, sponsored, what he called, the Fair Deal, as a continuation of the prewar New Deal.  The Republicans derided Truman and his program as a poor man’s version Roosevelt’s politics.  In 1948 they ran Thomas E. Dewey against him.  They also passed the 12th Amendment to the Constitution, which limited presidential tenure to two terms in office.  While the Amendment did not affect Truman; it would come into being with the next president; still it gave him a strong hint.  Franklin D. Roosevelt had died in office during his fourth term in office.

 

In 1948 the Republicans were positive that they would win the election.  At that time, before television, victory celebrations were held on radio.  On the night of the election there was a victory celebration for Dewey.  The Chicago Tribune headline the next morning was “Dewey Wins.”  But when the votes were counted Harry S. Truman had won and was still President of the United States.  All the polls had predicted Dewey as the winner; they all ate crow that year.

 

For the next four years there were a lot of frustrated Republicans in both Houses of Congress; but Congress still worked.  The fear after the war was that with the massive return of the military to civilian life the country would go into a deep recession with massive unemployment as it did directly after World War I.  But with intense rationing, the continual sale of war bonds, and unlimited employment during the war there was lots of money available.  All the automobile factories had been producing only for the war effort for the last four years; they now converted to civilian production, everyone wanted a new car.  A new industry, television came into being.  Other positive things happened.  There was no recession.  The returning veterans found jobs, started their own small business, returned to school: finishing high school and colleges.  The country smoothly went back to peacetime.  In fact, veterans received a government allowance if they went back to school.

 

Unfortunately, even with the new Organization, The United Nations, to which all the allied nations now belonged, peace did not come.  On June 25, 1950 until July 27, 1953 the United States and other United Nation countries were involved in the Korean War, which ended at the 38th Parallel, where it had begun.  This was the line splitting Korea into two parts: Communist in the North and non-communist in the South.  It would seem that almost every succeeding president from Truman on would have their own specific war.

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

Truman was followed in the presidency in 1953 by Dwight David Eisenhower, the general who had led the war in Europe.  Eisenhower, initially had never voted in a presidential election.  He did not know which political party he belonged to.  Finally he decided he was a Republican and ran as their presidential candidate.

 

Eisenhower ended the Korean War by threatening to use atomic weapons.  It ended in a draw, which still continues to this day.

 

As a replacement for Truman the Democrats came up with Adlia Stevenson, the governor of Illinois.  Stevenson ran against Eisenhower twice and lost both times.  Eisenhower considered himself a middle-of-the-road Republican, that is, a moderate or liberal Republican.  The two parties functioned well together during his eight years in office.

 

In 1960 Richard M. Nixon, Eisenhower’s Vice President, ran against the Democrat, John F. Kennedy, who was a member of the House of Representatives from Massachusetts.  Kennedy won that election by less than one per cent of the vote.  The two parties were able to function together and more or less pass all the necessary legislation.  /there were problems with his civil rights reform attempts.  In Viet Nam There was action, but not a major crisis.  It was during Kennedy’s presidency that the Bay of Pigs debacle occurred and later the Cuban Missile Crisis came about.  The Soviet Union had installed atomic missiles in Cuba.  Kennedy, short of war, got Russia to remove them.  His frustration came about in being limited in passing civil rights legislation.

 

Kennedy, while getting ready to run for a second term in 1963, was in a motorcade in downtown Dallas, Texas, when he was shot by an assassin.  His Vice President, Lyndon B. Johnson became the next President of the United States.  President Johnson was reelected in 1964.  He ran against the arch-conservative Barry Goldwater and overwhelmingly defeated him.  Johnson attempted to force the war in Viet Nam toward an American victory by massively increasing U.S. forces there.  He was not successful.  In the United States he declared War on Poverty.  Again he was not successful.  As an essentially defeated man Johnson announced that he would not run for the presidency in 1968.

 

Where Johnson was eminently successful was in pushing through Congress both his and John F. Kennedy’s plan for civil rights reform in the nation.  Segregation was essentially legally ended throughout the South and in other parts of the country.  The statement that “all men are created equal” in the Declaration of Independence was expanded to include Blacks and Women.  It was a major achievement.

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

In the 1968 Election the Republican Richard M. Nixon ran against the Democratic Vice President, Hubert Humphrey.  A third party candidate, former Alabama Governor, George Wallace, ran representing the American Independent Party, which supported separation of the races in public education.  Nixon won with 43.4% of the vote; Humphrey got 42.7%, and Wallace received 13.5%.

 

The election year was tumultuous, being marked by the assassination of Martin Luther King and Robert F. Kennedy.  The Democratic Convention had open warfare between Viet Nam protestors and the Chicago police.  Nixon won the popular vote by .07 percentage points and the Electoral College vote by 301 to 191 for Humphrey.

 

Besides economic problems Nixon faced a massive protest throughout his presidency over the Viet Nam War.  He presumably had a secret plan to end the war.  This came down to a return of American prisoners of war and withdrawing with honor.  That was making a defeat in war not look like a defeat.

 

Negotiations were begun.  The initial problem was the shape of the Negotiating Table.  There were people from North Viet Nam, from South Viet Nam, and from the United States, and there was also the National Liberation Front, who were from South Viet Nam but favored the North.  The issue was resolved by using a round table with two smaller ones nearby.

 

Nixon’s strategy was to bring increasing pressure on Communist North Viet Nam by increasing the war so they would be willing to compromise.  He expanded the war to Cambodia and bombing along the Ho Chi Minh Trail.  Supplies were being brought into North Viet Nam into the South over this route.  There was both warfare and peace negotiations that would be going on during Nixon’s term as President.

 

In 1972 Nixon ran for a second term as the Republican candidate.  The Democratic candidate was the highly liberal senator from South Dakota, George McGovern.  The Republicans were so sure he could not win that they contributed money secretly to his campaign wanting to make sure he was the Democratic candidate.

 

McGovern ran on an Anti-War Campaign against the incumbent, Richard Nixon.  McGovern was perceived by many voters as a left-wing extremist.  Nixon won in a landslide, gaining 60.7% of the popular vote.  He received 18 million more votes than McGovern, carrying 49 states.

 

Unfortunately, during the election, because of some paranoid tendencies of Nixon, a group of his employees called the plumbers  burgled Democratic Headquarters at the Watergate Hotel in Washington, D.C. several times in order to find out what the Democrats were doing and planning.  The final time they did this they were caught and arrested.

 

The question became: What did Nixon know?  And when did he know it?  It took two years for this to unravel.  And then the answer was that he knew about the burglary from the very beginning.  Nixon resigned from the presidency two years after being elected for a second term.  He resigned the day before a Bill of Impeachment was to be voted upon in the House of Representatives.

 

Interestingly his vice president, Spiro Agnew, had resigned earlier.  The government had an 80 page inditement against him for extortion, going back to when he was governor of Maryland.  Because of the Watergate controversy the Justice Department allowed him to plead, no contest, and resign from the vice-presidency.

 

The irony was that Nixon chose a new Vice-President, Senator Gerald Ford, who assumed the Presidency in 1974.  President Ford later issued a Proclamation on September 8, 1974 pardoning Richard Nixon from any crimes he may have committed.

 

President Gerald Ford ended the Viet Nam War.  This was the first war that the United States lost.  Today Viet Nam trades with the United States and is a relatively inexpensive tourist attraction.  It cost a lot less to visit Ho Chi Minh City (formerly Saigon) than to go to a city in Hawaii.

 

In 1978 Republican President Gerald Ford ran against the Democratic contender, James Earl (Jimmy) Carter.  Jimmy Carter won by a margin of 57 Electoral votes.  He had a Democratic majority in both Houses of Congress during both congressional terms.  On his second day in office President Carter pardoned all evaders of the Viet Nam War.  He created the Departments of Energy and Education.  He brought about the Camp David Accords between Israel and the Palestinians.

 

The country suffered from Stagflation at this time, a combination of both high inflation and high unemployment.  Carter could not bring himself to allow the Draconian program that would solve this problem.  The next President, Ronald Reagan would do this and bring about a large homeless problem throughout the United States which still exists today.

 

President Carter signed the Panama Canal Treaties, giving the canal to Panama.  It was during his term in office that the Iranian Revolution occurred and the American Embassy personnel were held as captives by the new government of Iran.  They were returned to the U.S. shortly after the next president took office.  Carter was defeated in the 1980 Election by Ronald Reagan.

 

Ronald Reagan was elected to the presidency on January 20, 1981 and served two terms through January 20, 1989.  He was a Republican and a conservative, bringing about changes that the conservatives had wanted for years.  He was also the oldest man elected to the presidency.

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

Forgetting the post-Civil-War Period when the Radical Republicans, wanting to punish the South and controlled Congress from 1865 to 1878 when Rutherford Hayes stole the presidency from the Democrat, Samuel Tilden.  At that time the Republicans had a super majority in both Houses of Congress and could and did pass any law they put forth without the President’s signature.

 

Outside of this relatively short period in the nation’s history the two major political parties essentially got along and, more or less, cooperated with one another in passing the necessary laws for the nation.  The point has been made in an earlier blog that Democratic President Jimmy Carter was more conservative that Gerald Ford’s Republican Vice President, Nelson Rockefeller.  On the political line mentioned at the beginning of this blog Rockefeller would be placed left of center and Carter would go right of center.

 

This was true of many Congressmen.  There have historically been many conservative Democrats and moderate or liberal Republicans.  There was no separate void between them in terms of political positions.  There was always a slight difference in basic philosophy but there was always open communication and the possibility of compromise.

 

This has been a fact of United States history.  There was generally cooperation between both political parties.  The Conference Committee, which met after a bill was passed in slightly different versions in the two Houses of Congress, has been able to continually come up with a compromise bill for both Houses of Congress to successfully vote upon.

 

This system has existed until Barack Obama became President of the United States.  What has occurred from that time on has essentially been the development of the Tea Party, an extreme right arm of the Republican Party that is largely uneducated in the function of government and modern economics.  In the House of Representatives they are the Freedom Coalition.  In point of fact their aim seems to be to do away with the Federal Government

[b1]

The Weiner Component #133 – The Free Market & the Cost of Gasoline

English: A typical Valero gas station, in Moun...

English: A typical Valero gas station, in Mountain View. Photographed by user Coolcaesar on August 23, 2005. Category:Images of California (Photo credit: Wikipedia)

Valero Energy Corporation

Valero Energy Corporation (Photo credit: Wikipedia)

Not many weeks ago, on July 31st 2015, there was a short article in the Los Angeles Times entitled “Valero profit rises on high gas prices.  It stated that California’s sky-high gasoline prices brought about a record high second quarter profit for refiner Valero Energy Corporation, that operating income from its two California refineries had soared to $295 million for the quarter which ended June 30 or to more than eleven times more than the $24 million earned in that quarter a year earlier.  Valero had posted a second quarter profit net income of $14 billion up from $651 million for that quarter a year earlier.

About a week earlier, on July 26th there was a one paragraph blurb in the same newspaper: “Record profits at refineries – The surge in California’s gasoline prices this year, coming as oil prices have fallen and refining costs have remained stable, has helped refineries collect record gross profits on each gallon of gasoline – as much as $1.17 a gallon in May.  That compares with a more typical gross profit (equal to refinery costs plus profit) of 49 cents a gallon in recent years, state data show.”

With Exxon Mobil’s Torrance refinery operating at less than 20% of its capacity other refineries in the state have seen a dramatic increase in their profits.  The capacity of the Torrance refinery is ten percent of the state’s total and twenty percent of Southern California’s total refined oil.  The Torrance refinery had an explosion in February of this year and probably will not return to full service until the end of the year.  It seems that one or another refinery in California is always partly or completely off line and there always seems to be a shortage of gasoline in the state.  Presumably these problems seem to continually raise the cost of gasoline at the pump to about one dollar or to one dollar and fifty cents higher that in the rest of the country.  We are supposed to be living in a free market economy where the consumer gets the best product at the best price.  Is this true?

At the end of July of 2015 the price of gasoline at the pump had dropped to slightly less than four dollars a gallon while the price of crude oil had gone down to under fifty dollars a barrel.  About a year ago a barrel of crude oil was one hundred dollars or more.  There are generally 42 gallons of refined gasoline that comes from one barrel of crude oil.  At $4 a gallon that means that $168 is the amount made from each barrel of oil.  That is a profit of over 66 percent on each barrel of crude oil.   Valero has its own gasoline stations and sells its gasoline retail at the going price.

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

The Free Market as envisioned by the Scottish economist, Adam Smith, in his 1776 book, An Inquiry into the Nature and Causes of the Wealth of Nations, was a reaction to the accepted economic system of the day.  At that time mercantilism was considered a proper approach to economics.  That theory stated that the wealth of a nation consisted of how much gold that country possessed.  The more gold it had, the richer it was.  And these economic systems then were usually controlled by the kings.  Smith’s theory brought about the modern development of capitalism and the market economy.

Briefly and simply: The nation’s true wealth is based upon the productivity of the country.  This is all the goods and services produced within a given time, a fiscal year expressed in the currency of the nation, which was mainly gold.  Money, at that time, being precious metals, mainly in the form of gold coins.  The value of goods and services, that is, all the productivity would be exchanged for their specific value in precious metals.  The value of the specific goods and services would be determined by both the levels of skill of the population, the extent of natural resources that are available or can be acquired by the particular nation, and what other people were willing to pay for the product or service.

In terms of what is going to be produced Smith’s theory of production was based upon the concept of supply and demand.  Entrepreneurs would supply certain goods and services in return for the profit they could make by doing so.  This was Smith’s “invisible hand,”  the profit motive which caused the system to operate.  If the item or service was highly desired then the price people were willing to pay for the item would rise because the supply was below the level of demand.  The higher price, in turn, would bring more producers into the field greatly increasing the supply of the particular item.  As the amount of the item increased beyond the demand the price would drop.  It could actually drop below the cost of its general production.  This would force the less efficient producers out of business and the price, as the supply dropped below the demand, would rise again.  Eventually a state of equilibrium would be reached where the supply would equal the demand.  With a large number of product producers it would be difficult to maintain the equilibrium and the price would continually oscillate.

The consumers, on the other hand, would attempt to get the goods or services at the lowest price possible.  Presumably the lower the price the greater the demand.  This would be their part of the “invisible hand.”  Both sides would be motivated by profit and cost.  There would be a continual process of exchange going on that would allow the consumers to eventually have most of their needs met by getting the goods and services they need at the best possible price and at the most efficient level of production.  Both the successful entrepreneur and the consumer would emerge positively from this exchange.  The inefficient entrepreneurs would have gone bankrupt.

To work properly this system requires a very large number of producers so that the consumers would have a large variety of choices as to how to spend their money and acquire the various products they require.  Today outside of regional agriculture, which produces perishable food products, and the stock market, which can work on rumors or general assumptions that may or may not have any relationship to reality, the principles of supply and demand only function in a very general way or not at all.

The reason for this is the fact that the number of producers of goods and services is limited.  Product manufacture is expensive, setting it up requires large amounts of money.  Consequently the factory system was developed from the 19th Century on.  Having limited producers or factory owners gave them more control over price than the consumer had over demand or price.  This, in turn led to monopolies toward the end of the 19th Century.  These gradually fell under partial control from the governments of the countries in which they existed.  Outside of the two examples of the free market has never really existed.

It is also important to realize that monopolies are not just giant concerns like Standard Oil was at the beginning of the 20th Century, they can also be regional or contained within a small city.  If a city contains only one hospital or only one supermarket, or, for that matter, one anything that provides some product or service, then that is a monopoly and it can charge virtually any amount for the good or service.  Of course it can’t be so high that it will force the consumers to go to other areas to acquire the good or service, but the price could be higher than it would cost in other places.  And that, it seems, is the situation with gasoline in the state of California.  To a slightly lesser extent it is the situation with gasoline throughout the United States.

Presumably the goods and services, the productivity of the country would constitute the wealth of the nation and the people of the nation would determine by their demands for the various products of what that wealth would consist.  Is this theory true?  The answer is obviously sort-of.

The products needed for a society to exist can be rated as necessary, pleasurable, and extravagant.  Necessary services and products are what is needed for life: food, clothing, a proper shelter, in most areas of the country an automobile for necessary transportation.  Anything that is required to maintain a functional standard of living would fit into this category.  Pleasurable items would be raising the necessary items to a higher level of comfort.  The choice of foods would be much more varied and expensive, clothing and housing could be carried to the level of ostentation.  The automobile would be far more fancy and expensive and there would probably be additional vehicles for every member of the family.  The extravagant level would mean that he or she could afford to have anything that money could buy.  All this would be bound to levels of income or in the case of many executives to their level of compensation.

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

In the United States during the period after the Civil War (1865) to shortly after the turn of the 20th Century, 1917, when the U.S. entered the Great War (W.W.I), the country underwent a rapid movement into industrialization.  The railroads were extended westward from shore to shore, the westward movement occurred, the country changed from being mostly a rural nation to an urban centered one, and the factory system developed and became universal.  It was during this time that the country moved from being a nation of multitudes of small concerns to oligopolies and monopolies.  Virtually every major industry had become a monopoly or oligopoly.  John D. Rockefeller, the owner of Standard Oil, had a reputation of refining not only oil but also many of the state legislatures and even parts of the Federal Government.

It was at this time in 1913 that the 17th Amendment to the Constitution was passed bringing about the direct election of U.S. Senators by the citizens of each state.  Prior to that time the Constitution had the Senators directly elected by the State Legislatures.  The Senate was originally set up as the direct agent of the individual states and represented the states.  What had happened was that by the late 19th Century the Senators had become agents of the monopolies and oligopolies elected by bribed legislatures to represent the companies to which they were originally and still operated as their lawyers.  The monopolies and oligopolies had subverted many of the state legislatures through bribery.  The 17th Amendment was a reform amendment by the Progressive Movement to return the government of the United States to the People.

The Sherman Anti-Trust Act of 1890 went into operation around the turn of the century when both the Progressive Movement and Teddy Roosevelt became President after the assassination of former President William McKinley.  During his term in office Roosevelt became known as a Trust Buster.  The Reform Movement would end with the emergence of World War I in 1914 and would not begin again slowly with the Great Depression of 1929.  It would emerge strongly with the Administration of Franklin D. Roosevelt from 1933 on.  The Great Depression would not end completely until about 1940 with the emergence of World War II.

Since 1945, the end of World War II, the United States has gone continually in and out of social reform.  The Republicans generally have represented big business and the Democrats generally have pushed social reform.  Currently many large companies (corporations today) have been going through mergers and getting bigger.  Even though the Federal Government watches and attempts to keep monopolies from coming into being we seem to be moving in that direction with, it seems, an ever-growing tendency toward companies that are “too big to fail.”

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

In the United States and in many other industrial countries of the world the individual owned automobile has become a necessity for general existence.  The distances are too great to walk from one place to another.  The children are taken to school and brought home by car or bus; general shopping requires an automobile; going to and coming home from work requires an automobile.  Virtually most of the general population requires a car.  And, of course, the key to having a car is availability and price of gasoline (oil).  As an example, I have spent my entire working life driving to and from work.

During my lifetime the cost of gasoline has gone up from well under a dollar a gallon to a high of five dollars a gallon.  It currently dropped from over four dollars a gallon to  under three dollars a gallon.  The price of o barrel of oil is currently under $50 a barrel and going down.  If the agreement with Iran is ratified and becomes a treaty there will be a major increase in the world’s oil supply.

In the state of California just enough oil is refined to just meet the demand.  If one of the refineries has to limit its production for any reason then there is a shortage and the price of gasoline and oil profits goes up.  If this isn’t price gouging then I don’t know what is.  Either we need more refineries in Southern California or enough gasoline storage so that the price can follow the supply.  Perhaps the State or Federal Government needs to set up its own storage and supply facilities or/and its own refinery.  After all, the biggest employer in the country is the government.  They sell water and electricity in many municipalities directly to the consumers.  The Federal Government also run agencies like the Tennessee Valley Authority.  If the so called Free Market gouges consumers for their own profit why can’t the Government equally provide the needed goods or services at a reasonable price?

The Weiner Component #103 – Is the United States Moving to Become an Autocracy?

U.S. Supreme Court building.

U.S. Supreme Court building. (Photo credit: Wikipedia)

For the last decade many articles have appeared in numerous newspapers and there have also been many comments made on TV about the disparity in salaries, increasing exponentially for the rich and wages being essentially static or barely going up for everyone else; that the economic upper class’s incomes have risen significantly while everyone one else’s have stayed largely frozen. This has been not just within the United States but also in the entire industrial world. If this continues throughout this century all these nations could end up at some point becoming autocracies with a small percentage of the population, the rich, ruling everyone else, and ruling them for their own benefit.

We could, in a sense, be going back in time to when the European states were ruled by autocrats, that is rule by the nobility. The nobility in the United States today are the very rich, the upper ten percent and the assorted companies and corporations that they control.

It is interesting to note that the United States in the post-Civil War period, from 1865 until the early 20th Century underwent a rapid industrial growth, essentially the Industrial Revolution. A number of small businessmen became multi-millionaires. This was the period of the “robber barons:” Rockefeller, Carnegie, Mellon, J.P. Morgan and many others; the so-called “400.” They had their hands in both the states and federal legislatures, freely using bribery, having or not having laws passed that benefited themselves. The Senate, which at that time was elected by the state legislatures, was considered a millionaire’s club, each major company, through bribery or otherwise, having its own man in that body. The U.S. was then largely ruled by the wealthy upper mercantile class for their own benefit.

What changed this was the Progressive Movement and the muckrakers. Initially there had been no laws regulating industry or urban growth. No regulations about employment of women and children, the length of the working day, safety rules at worksites, employer responsibility or sanitary or any other conditions in the rapidly growing cities. This was the time of the growth of urban centers from small towns to megalopolis.

The nation had gone from a rural country with relatively small cities to a society of giant urban areas and factories. Everything by the owners of industry was aimed at profit, nothing else seemed to matter. Wages were low, hours were long for six days a week, women and children worked these hours and days, slums abounded in these new cities, in many cases sanitary conditions were non-existent, and overall misery and disease abounded, particularly in summer seasons.

Gradually over several decades, up until World War I, laws and regulations were gradually passed regulating slum conditions, factory employment, and food production. The many monopolies and oligopolies were mostly broken up and became regulated by the government. Autocratic control by the wealthy became limited. The Constitution was amended and the Senate became elected directly by the voters.

It should be noted the every single health and safety law was passed because of abuses. The ages and hours for working children and women became limited, safety rules were introduced into both the factories and slum housing making the owners responsible for mishaps, and working hours became eventually limited to 40 and days to five. The list goes on and on.

By 1914 the United States had become mostly an urban nation. We had a small upper class, a growing middle class and a large lower class. The upper class, the autocrats still exercised a large amount of influence in the running of the country.

————————————-

Today we are again in a period of autocratic growth with the wealthy getting richer and everyone else’s income being frozen or shrinking in the face of a very slow inflation. For the last decade or more compensation for executives and successful entrepreneurs have at least doubled or trebled while wages for middle class workers have remained static or shrunk. For the lower class, essentially unskilled worker the minimum wage has remained at $7.25 an hour for the last seven years. CEO’s salaries are in the millions while at the bottom of the economic scale a worker takes home $290 before withholdings.

Inflation has generally been below 2%; but over a decade that is well over a 10% increase in the cost of living. The result is that even though most people are earning as much or slightly more than they did earlier the money is buying a lot less. It cost considerably more to live in terms of food, housing, and transportation. This has actually caused a slowing down of the GDP. People buy less because they have less.

————————————–

While people like the Koch Brothers of Kansas, whose holdings mostly in the oil industry is over 41 billion dollars each, spend well over 200 million dollars a year on causes enhancing their businesses and their far-right beliefs. They are just two of a host of billionaires or corporations that are spending billions each year to sensitize the public to their largely self-interested causes.

Through the use of money the billionaires and their Republican allies by limiting the voting franchise, particularly to Blacks, Latinos, college students, and other minorities in states where the Republicans control the governorship and legislatures they have been able to successfully espouse their agendas.

In Texas for the 2014 Midterm Election the Republican legislature and the Republican governor have been able to require certain types of identification that many registered poor Blacks and Hispanics do not have. There is a cost to getting these IDs which according to a Supreme Court Justice is tantamount to paying a pole tax in order to vote. This excluded over 500,000 registered Democrats, about six percent of the voting population, from being able to cast their ballot in the November Midterm Election.

The candidates to the governorships and state and federal legislatures need endless amounts of money to both run their campaigns and stay in office. It is in this fashion that the wealthy gain and maintain control of the government. The Koch Brothers, for example, who control oil pipe lines, oil refining, and oil wells, have themselves and through legislators they have funded and control, attempted to get laws passed making use of the green energies illegal. They seem to see the nation as existing for their benefit.

It is into this milieu that the wealthy have and are gaining more and more control over Congress and the means of communication. Millions of dollars are coming into important state elections which strongly help determine who the governors and senators will be, what initiatives and referendums will pass. The Republicans feel they will retain, with the current gerrymandering of electoral districts, control of the House of Representatives and that they will also gain control of the Senate by adding six additional Republican Senators. The origins of much of this out of state money does not have to be disclosed. This has happened.

What we are seeing is an ever-rising level of autocratic control of our government. What we are moving toward is a concept of: Even though all men are created equal, some Men are created ever more equal than the rest. This has been the result of the 2014 Midterm Election. Will it continue in 2016, the next Presidential Election?

English: First page of Constitution of the Uni...

The Weiner Component #74 – Corporate Resonsibility

1950 General Motors Cars Ad

In the post-Civil War period, as the Industrial Revolution emerged and grew in the United States, there were no laws protecting the consumer from the multitude of products, foods or otherwise, sold to the American public.  Butter, for example, was sold to stores called Dairies, which sold bread, milk, and cheese products. This came in twenty-five pound vats from which the public could buy a few ounces at a time for home use.  Refrigeration at that time was the use of ice in what was then called an ice box.  Unsold butter stored in ice boxes eventually became rancid.  The rancid butter was bought up, re-churned with fresh butter, and then sold in the poor sections of the cities as fresh butter.  It was still rancid but looked like fresh butter.  In slaughter houses in Chicago and elsewhere sick, diseased, and even dead cows and steers were killed, cut up and sold as good meat and sausage.  The maxim was “Let the buyer beware!”  It was the purchaser’s responsibility to see that he or she was sold proper goods in a situation in which he or she had no control.

What emerged at the time were a group of writers who were known as muckrakers and exposed many of these corrupt and unsafe business practices.  As a result of this and other factors from the late 19th Century on there was the Progressive Movement in which innumerable laws were passed providing for safe food, safe products, safe and sanitary living conditions in the emerging cities.  Both the state and federal governments have continually passed laws throughout the 20th and 21st Centuries providing for safe sanitary conditions, clean air, and clean water, and in every other way attempted to protect the general public.  In fact it has become a battle of sorts between industry, and the environmentalists.  The motif now is “Let the producer beware for he can be sued and fined for illegal practices.

In New York a federal judge recently ratified the deal in the criminal prosecution of the Toyota Motor Corporation.  The company admitted that it misled (lied to) regulators and consumers about two defects that caused unintended sudden acceleration incidents and that it avoided recalling vehicles to fix the problem. In fact that it continued producing and selling these vehicles.   As a result there were numerous deaths.

They entered the plea as part of a deal known as a Deferred Prosecution Agreement which gives Toyota three years to fulfill a number of commitments.  One of these is to pay 1.2 billion dollars to the Justice Department by Tuesday, March 25, 2014.  This is the largest fine imposed upon an automaker and the money cannot be used as a tax deduction.  It should also be noted that this amount constitutes around 6% of Toyota’s yearly profit.  Toyota will work with a federal monitor who will review its safety policies and statements over the next three years.

Another automobile company that followed similar practices was General Motors (GM).  Eight years ago, fifteen year old, Amy Rademaker died in a Chevrolet Cobalt.  This was one of the vehicles the automaker now admits had a deadly safety defect, a faulty ignition switch that shut off the car, leaving its teenage driver without power steering, brakes, or air bags.  GM has acknowledged 12 deaths that were caused by this problem but the Center for Auto Safety estimates that number could be more than 300

Interestingly more than half of these cases occurred before GM’s bankruptcy, which ended the existence of the old company.  With the Government bailout a new company rose from the ashes of the old one named General Motors (GM) and presumably it does not bear any liability for any act committed by the old company.  It is, however, liable for any tragedies that occurred after the 2008 bankruptcy.  This comes despite the automakers public apologies and its eventual recall of 1.6 million vehicles to fix ignition switches.  Recently GM had recalled another 829,000 vehicles.

The report released Sunday, March 30, 2014, added new details to a controversy endangering the new company.  There have been lengthy delays in recalling the vehicles.  GM also allowed the defective part to be installed in millions of vehicles after testing showed it did not meet the company’s own specifications.

Here is a problem that existed over a decade dealing with a faulty ignition switch which caused engines to turn off, disabling the air bags.  In total the automaker has recalled over 2.6 million cars.

It is estimated that the auto producer will lose 88% of its profit in 2014.  This is its major punishment.  If an individual commits an act that causes the death of another person he can not only be sued but also tried in criminal court for causing a death.  But when malfeasance occurs in the case of a major corporation, which according to Mitt Romney is legally a person, it and especially its employees cannot be criminally liable.  This is absurd.  Someone or some group made the decision not to accept responsibility or to lie about a death causing defect in their product which was purchased in good faith.  Someone or some group, including the CEO, caused the problem.  They should be criminally charged, tried for the crime, and, if found guilty, sent to prison.

I suspect if this were to occur these types of cases would disappear.  If the penalty is just a payment of money, and paid by the company, then these incidents will continue to occur.  There is currently no real penalty for any decision that is made in a corporate board room by any of the executives.  At the very least the CEO is responsible for these actions since he is responsible for the running of the company.  If he receives millions for compensation for his position he is also responsible for what the company does.  And if the corporation is legally a person then it and its members are equally responsible for any crime the corporation commits.

Enhanced by Zemanta