And the recent Economic crash
By de Andréa,
Opinion Editorialist for
‘THE BOTTOM LINE’November 01 2008
With all the talk about what the cause is, and who caused the financial crisis, no one is asking why…
This may prove to be a little lengthy but very informative and worth the time.
Part I: A little historyThe idea of a Cue de taunt to change America from a Capitalistic free economy to a Socialist Elitist economy was born already in the late eighteen hundreds. The ground breaking for this new regime began in 1910; the foundation of a United Socialist State of America was laid in 1913.
Despite the best, richest, highest standard of living, of any people any where in the world, it wasn’t long before a group of elitists began to emerge out of the bowels of the old world; they just had to control it, someone just had to be in control.
Barely a hundred years into the experiment of a free capitalist economy and a constitutional republic, a few supremacist elites begun their socialist manifesto, laying plans to build the giant powerful controlling central national government that the ‘Framers’ were so afraid of, with unlimited funds to recreate the kingdom of days gone by.
The formation of this new ‘Free’ and independent country of America; required the separation from the oppressive socialist aristocracy of Europe. The architects of our constitution promoted the philosophy of Capitalism. Private Enterprise-- a long term personal incentive that would drive an economy to its highest standard of living for everyone that wished to participate in it.
Today, siting in front of my computer, with two TV sets, a sports car, two race cars, a pick-um-up truck, three trailers, an acre+ of wooded land, and oh, don't forget a digital camara from my kids, I am counted among the poorest citizens of America and yet I am richer than the average person anywhere else on the planet.
From the earliest record of an economy established on this continent, collectivism had failed. It failed to the point that the whole idea of colonizing this continent for the advancement of the socialist economy of England was a bust. That is until the banished British separatists living in the Netherlands decided to petition King George to pay their way to the ‘New Continent’.
Contrary to previous attempts at establishing a collective colony in Virginia, in the first year it was established the ‘Separatist’ establishment of a private economy in Plymouth Massachusetts provided an instant high standard of living exceeding that of the common British subject of the United Kingdom; and all they had was a few seeds to plant.
The second year in the new colony of Plymouth, the only poor people were the ones that chose not to participate, those were the few remaining kings-men left from the previous year after another failed collative.
John Carver was the first governor of the newly formed colony of Mass bowing to the aristocracy of the Kings-men that accompanied the Separatist on their voyage from England in September of 1620 established a collative according to law, and as a result many starved the following winter.
William Bradford, Elected by the Separatists following the death of James Carver was the pioneer and father of the private enterprise system of ‘Capitalism’ in America. The newly elected Governor Bradford, divided up the land surrounding Plymouth, equally and according to family size, witnessed the nearly starving separatists cultivate and plant their own farms and reap their own bounty.
So great was the harvest that the separatists had more than enough to store for the following winter with leftovers to share with the local Indians that had become their best friends. The celebration of this bounty was later called the first thanksgiving.
By the end of the nineteenth century the restless elite socialist philosophy began once again to raise its ugly head. Born out of the party of Thomas Jefferson, a small number of members of the Democratic-Republic party as it was known then began to give in to the perverted philosophy of ‘Liberal Socialism’.
Socialism promotes corruption
A successful Capitalistic economy is not going to give way to a central government run social collective over night. I don’t know if it is ignorance of equality or the abuse of equality that powers the engine of socialism. But there is no equality in a socialistic sociaity; there are simply the haves and the have-nots, the elites and the dependants.
In order to perpetuate a social economic platform in America, the government would have to become enormous. However with the plethora of restrictions that keeps the tiny U.S. Federal Government in bondage to the people, the ideology of socialism could not become a reality. So in February 25, 1913 the Liberal Socialist Elites were able to push through the first amendment of the constitution since 1870. This new amendment, the Sixteenth would effectively grow government to unlimited proportions. It was the beginning of the IRS. Sold to the American people as a temporary voluntary tax, it wasn’t even ratified by the needed two thirds of the States.
And then on May 31, 1913 with the passing of the Seventeenth Amendment the one hundred year old Republic and Federal Government of the United States of America came to an abrupt end. And in its place, a pure Democracy, and a National Government was installed to pave the way to socialism. Federalism and the Republic will now become a memory of history.
Now with the potential of a huge, rich, and powerful National government that was no longer a representative republic the social elites had the makings of a future grand provider. All that was needed was to centralize the banking and the monetary system taking it out of the hands of the Treasury Department. By the end of the year the so-called Federal Reserve Act was past, note: the Federal Reserve Bank is a fraud, it is about as Federal as “Federal Express”. It is a stock owned Company. In one year, a quantum-leap from a Constitutional Representative Republic to the foundation of the fundamental philosophy of socialism in one fell swoop.
The following several years despite the attempt of government control the new social society, the Capitalistic economy grew and grew, with the obvious need to have oversight on the runaway economy. In the 1920’s the liberal social elites purposely encouraged the false economy until it crashed in 1929 and in spite of the central Federal Reserve bank the market crashed and the banks failed. It was credit, credit, credit, that was encouraged by the liberal socialists that finally brought the economy to its knees. Shucks you were able to by stock futures on credit and didn’t have to pay for them unless they lost value. The liberals created a paper economy that had no substance.
Herbert Hoover in 1928 got on board with the new socialist philosophy, and promised “a chicken in every pot and a car in every garage”. Seven months after his election to the presidency in 1929, the stock market crashed and plunged the country into the Great Depression, the people eventually lost confidence in Hoover. And with the Depression at its lowest point, voters elected Franklin D. Roosevelt to replace Hoover in 1932. Roosevelt in the nineteen thirties also promoted socialism by introducing the “New Deal”
One would think that all these moves, changes, and promotions were to enhance the Capitalistic economy and cause everyone to be better off. Not so. All of these changes from 1913 to today were to create and promote the utopia of Socialism. Before socialism can be totally introduced Capitalism must be destroyed.
The illegally created IRS, purposely denied by the architects of the Constitution to prevent the unrestricted growth of government by the 16th Amendment -- the destruction of the Representative Republic by the 17 Amendment -- the creation of the private Federal Reserve Bank by the Federal Reserve Act, all in 1913 were all designed to lay the foundation for the new oppressive liberal socialistic economy.
Monopoly Capitalism was designed by the liberal socialists to aid in the implosion of Capitalism. Nearly anything carried to its extreme will untimely fail. Whether it is uncontrolled pure Capitalism allowed to become abusive, or pure socialism causing a total dependence on government.
By promoting the ‘no tomorrow’ expansion of credit, the totally uncontrolled economy headed toward the inevitable crash of 1929 a boon for the socialists or so they thought.
The Second World War and the death of Roosevelt may have thrown a monkey wrench into the gears of the Liberal Socialist machine. And then the resulting post war economic boom sort of diminished the impact of the crash of the previous fifteen years.
So back to the drawing boardFrom the 1950’s to the 1980’s there was a volatile upswing in the economy. After the death of President Kennedy the socialistic ideology got its second wind with the creation of the Great society by Precedent Johnson. The war on poverty was launched after his inauguration in 1963. Through the Carter years 1977- 1981 the economy suffered through double digit inflation, price controls, shortages, and high interest rates. In 1981 Ronald Reagan became the 40th President of the United Stares, with lowering taxes and encouraging the supply and demand philosophy of Capitalism he dragged the slumping economy out of the sluggish quagmire that Jimmy Carter in only four years time managed to create.
On through the nineties to date, the Clinton, and the two Bush administrations both father and son, the congress again began to repeat the same historical scenario that was created in the 1920s. Promoting a combination of the ‘chicken in every pot and a car in every garage’, the ‘New Deal’, the ‘Great Society’ and adding yet another Socialist plan to destroy Capitalism as the 1929 crash laid plans for the crash of the new millennium. Extending the chicken in every pot and a car in every garage of Herbert Hoover’s brain child, now we needed ‘a house for every family’ as well, to park the car and cook the chicken in.
Credit, credit, credit, it almost worked the first time maybe it will work this time.
Enter Senator Barack Hussein Obama who may not be a Muslim but he is surely a liberal socialist of the Marxists type, big time…
We need to spread the wealth around he told “Joe the Plummer” and who better to do that than “Big Oil” - well…“Big Government” of course. Take from the rich and give to the poor, is the platform of Obama. Blatantly now! No longer behind the cloak of surreptitiousness, no, no. right on ABC TV.
Robin Hood, a socialists?Some people ignorantly misunderstand the story of Robin Hood to read that he stole from the rich and gave to the poor, making him out to be a socialist hero. This is absolute spin, by the Liberal Socialists. Quite on the contrary Robin was actually a conservative capitalist activist. Stealing, not from the rich, but the government, they stole from the people. Plunder… It wasn’t even socialism on the part of the government; it was out right theft because after stealing from the people the government didn’t spread the wealth around as is Obama’s philosophy.
Part II: To each according to his need,
to each according to his contribution and or ability
This Marxist principle is ultimately a stowaway from capitalism, a "bourgeois right" as Marx explained: that will vanish as the proletarian state vanishes and society becomes more equalized.
To each according to his contribution, has been mentioned in various forms by many members of the labor movement, from Ferdinand Lassalle's and Eugen Duhring's hazy statements to Leon Trotsky. However it was Lenin who claimed the principle to be a founding pillar of socialism within Marxist theory.
The term means simply that in a socialist society, each worker is rewarded in accordance with the amount of labor that they contribute to society. This translates into productive workers earning substantially more than mediocre workers. It could also be extended to mean that the more difficult one's job is (whether this difficulty is because of greater training requirements or intensity) the more one is rewarded for one's labor.
The purpose of the principle, as Trotsky would later state, is to promote productivity. This is done by creating incentives to work harder, longer, and more productively. Sounds like a capitalistic ideology doesn’t it?
This of course is an incremental surreptitious introduction to socialism that Marx said would later equalize society thereby eventually reducing the need for incentive. Herein lays the fallacy of socialism to be embraced on its own. It will then be necessary, in order to continue a productive non incentive ideology in society, to force the equality of socialism onto society by a totalitarian dictatorship.
When everyone is seen as equal even if one does not produce equally, then soon the incentive to out produce or to produce a better product at a lower price is gone, and socialism would collapse; hence the ultimate need for a forced society rather that a free society. Remember in the old USSR a doctor earned the same as a garbage collector. This is the Socialist philosophy of equality. As a dependant socialist you will never be any better off than you are right now.
When the Government owns the businessesAs is happening as I write, the U.S. Government is buying up companies by just printing paper money. Empty dollars; as the Sheriff of Nottingham the U.S. Government is stealing the source of money and power by buying business with phony money. The Cue may not work altogether, even this time, just as it didn’t in the 20’s, but it will surely put us another step closer to the acceptance of socialism. Every time Capitalism can surreptitiously be destroyed and the Liberal Socialists can convince the people…”see Capitalism doesn’t work” we move closer to the dependence of socialism. Read: “Wall Street Bail Out” Who’s Fault for the recent crash? ‘Watch a Video’ . You decide…
Part III: So Where Did All The Money Go The banks are broke the lending institutions are broke, the investment institutions are broke, the people are broke, the stock markets are broke, the government is printing money because it is broke, the foreign banks are broke. Giant corporations are broke. Who has all the money?
During the 1920s, most people in the United States enjoyed prosperity.
But the affluence of the Roaring Twenties began to evaporate in 1929. By 1932, 12 million people were out of work. The American economy went from an unprecedented economic growth in the 1920s to unprecedented misery in the 1930s. Why? Among the major reasons for the Great Depression included overproduction, restrictive trade policy, speculation in the stock market based on buying stock on credit, problems with the banking system, and tax policy. What began as a mild recession following a lengthy period of economic expansion soon became a depression. By the 1930s the amount of money in circulation had drastically decreased. Not because someone was hording it or using it to heat their house but because there was too much product chasing to few dollars. In a nut shell run away credit.
In the twenties the biggest use of credit was buying stock. The stock market grew with paper stock, credit, no money. When it came time to pay the piper there was more product, in this case stock, than there was money to pay fore it.
So what is the answer to where did all the money go today?The same place, again we just do not learn from history. This time is was the housing market, the banks were loaning paper, and there was no money to pay for it because the borrower did not have even the potential of paying the mortgage on their house. Again, it was a case of too much product chasing to few dollars. So the money didn’t really go anywhere, we just have too much product/houses not represented by real currency/money. This is why the banks are now in the Real Estate business with a glut of houses and no money coming in to loan. No circulation of money and the economy stops…
Trillions in the stock market value are gone. Trillions in retirement savings are gone. A huge chunk of the money you paid for your house, the money you’re saving for college, the money your boss needs to make payroll — gone, gone, gone.
Whether you’re a stock broker or Joe Six-pack, if you have a 401(k), a mutual fund, or a college savings plan, tumbling stock markets and sagging home prices mean you’ve lost a whole lot of the money that was right there on your account statements just a few months ago. But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?
Or is it just gone?
If you’re looking to track down your missing money and try to figure out who has it now, maybe ask to have it back…you might be disappointed to learn that it was never really money in the first place.
Robert Shiller, an economist at Yale, puts it bluntly: “The notion that you lose a pile of money whenever the stock market tanks, is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth. “It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.” Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000. “In a sense, $50,000 just disappeared when he said that,” he said. “But it’s all in the mind.”
Though something, of course, is disappearing as markets and real estate values tumble. Even if a share of stock you own isn’t a wad of bills in your wallet, even if the value of your home isn’t something you can redeem at will, surely you can lose potential money — that is, the money that would be yours to spend if you sold your house or emptied out your mutual funds right now. And if you’re a few months or years away from retirement, or hoping to sell your house and buy a smaller one to help pay for your kid’s college tuition, this “potential money” is something you’re counting on to get by. For people who need cash and need it now, this is as real as money gets, whether or not it meets the technical definition of the word. Still, you can run into trouble when you think of potential money as being the same thing as the cash in your pocket or purse or checking account.
“That’s a big mistake,” says Dale Jorgenson, an economics professor at Harvard. There’s a key distinction here: While the money in your pocket is unlikely to just vanish into thin air, the money you could have had, if only you’d sold your house or drained your stock-heavy mutual funds a year ago, most certainly can. “You can’t enjoy the benefits of your 401(k) if it’s disappeared,” Jorgenson explains. “If you had it all in financial stocks and they’ve all gone down by 80 percent — sorry! That is a permanent loss because it wasn’t real money in the first place.
Real moneyThere was a time when nobody had to wonder what happened to the money they used to have. Until paper money was developed in China around the ninth century, money was something solid that had actual value — like a gold coin that was worth whatever that amount of gold was worth, according to Douglas Mudd, curator of the American Numismatic Association’s Money Museum in Denver. Back then, if the money you once had was suddenly gone, there was a simple reason — you spent it, someone stole it, or you have a hole in your pocket.
THE BOTTOM LINE: But now, much of the money that you think you have lost; lets face it, you never had it. As long as the banks lone money they don’t have, or we borrow money we can’t pay back, we are creating money that doesn’t otherwise exist. So you see we really haven’t lost anything but a piece of worthless paper with a lot of little numbers on it… So where did all the money go? Answer, it didn’t go anywhere, it just never existed.
Now however, if we replace the paper with newly printed money as the government has done, by 700 billion, theoretically we should be back where we started. However replacing the phony money with more phony money just inflates the total amount of currency in the market, so at the very least it will be able to buy that same percentage of less product with the same money. More money now chasing fewer products; just the opposite of what caused the resent collapse. Inflation!
So at best, look for all the prices to go up, that’s everything, not just gas and food.
But not to worry soon the government will own everything all the business, all the money, all the gas, all the houses, all the food and they will spread the wealth around as Obama says. To each according to his need… as his mentor Karl Marx says…