My quest to understand the recent boom and bust started when I frantically sought information about anyone who would forecast the boom and then the bust. That search led me early on to Stiglitz, Steve Keen, Michael Hudson, Ann Pettifor, George Soros, Dirk Bezemer, Nouriel Roubini, even before the bust began; Thus a new school of thought. I watched them over time, especially Keen when he first started developing his Boom warnings. He predicted the boom long before, at least 5 years before and so did Roubini, before the bust and I watched them and Stiglitz and the others to see whether they were in the same flow and if they were making sense to me. They were. I realized banks built new building and homeowners built huge mansions, even as I recognized the stagnation of wages starting 1975. But timid old me ... I fell for the charge "SOCIALIST", and hid behind the bushes, reading and thinking unnoticed and unnoticeable. Then the bust hit and I knew they were on to something.
First off, capitalism has repeated booms and busts and it is designed into the system. There was a "Gilded Age" and the Chicago's World Fair in 1893. A Big Boom followed by a Big Bust in 1895.
" thousands of businesses were ruined and more than four million were left unemployed, (President) Cleveland did little. He believed, like most people of both major parties, that the business cycle was a natural occurrence and should not be tampered with by politicians." emphasis mine.
Children were sent away from their homes because parents couldn't feed them. Parents sent their children by railroad to the west hoping they would at least have food. Our families moved west and settled in Emida, St. Maries, Tekoa and this general area.
Grandad Denoo came from Belgium in about 1900 trying to escape the human meat grinder of the European wars, and Grandma came west for a job in Emida, Idaho, after completing her nursing training. "Slit! Slash! Blood and Gore, We're the class of 1904". They worked hard, built businesses, raised their family, started sending them off to college, and the Great Depression hit. Grandad and Grandma never did recover financially, their children struggled through as young adults, starting at the very bottom. When WWII came along, many of our family worked in war industries or supported the war effort by working on farms and food-related enterprises. Some returning military had access to the GI Bill.
Our parents worked as hard as our grandparents, established families and work-histories and businesses, and started sending us off to college or we went on our own. We had the great advantages of having in place education opportunities that were a direct result of the recovery from the Great Depression and WWII. USA reached the apex of growing a middle class in 1975, and then the support for working class men and women began to erode with growing speed. The erosion of middle class values and opportunities and protections began in earnest.
Over the years from 1975 to today, there have been many "little depressions" and were given the names, "recessions." Loss of earning power is depression for those who lose jobs, health insurance, retirement plans, and live off savings or credit.
Krugman's capitalist economy does not include banks, money, or debts. Because of these exclusions, booms and busts cannot be predicted. Although I liked his liberal politics, he was not seeing what I thought I was seeing. So I watched him closely, waiting to see how things would turn out.
Government has the ability to print money, even as homeowners do not. Creating money from nothing accelerated the boom with families borrowing to keep up with "progress" and all the toys the new industrial age and information age afforded us. However, Krugman did not take into account the role credit played in the bankruptcies of families. Small business had the same problem; mom & pop stores that have been in business for three generations had to shut their doors because of decline in demand, and they had to borrow to keep their businesses afloat. The Bust hit them, and it will take their families as long to recover as it took my grandparents' families.
Our systems fail us.
1. Economic systems, principles and practices create a growing spread of poor from rich. More about that in the videos I recommend.
2. Political systems with conservative values led by such people as Bernanke, Pete Peterson (he is such a nice looking man), Henry Paulson, Rahm Emanuel, Larry Summers, Tim Geithner, Robert Rubin, Alan Greenspan, Ron Paul, John Stossel, Clarence Thomas and others led our country over the brink.
3. Religious systems with conservative values led by such people as Jerry Falwell, Bob Jones, James Dobson, Pat Robertson, Billy Graham, Oral Roberts, Strom Thurmond, Jesse Helms, Richard Nixon, Richard Viguerie, Ronald Reagan, GHW Bush, Newt Gingrich, GW Bush, Phyllis Schlafly, Ralph Reed, ... I had better stop before I get sick. They fail us.
Here is a series of videos that give highlights of the INET "Paradigm Lost Conference" in Berlin, April 12-15, 2012. You can access many other videos from the conference that may interest you. Stiglitz, Steve Keen, and Michael Hudson make powerful statements that support need for a new paradigm. There are those speakers who disagree with this direction and you will recognize them easily. The good thing is, they don't get into quarrels or fist fights. They make their statements and go on about their business. It is up to us to listen, think and then make our statements.
INET's "Paradigm Lost: Rethinking Economics and Politics" conference in Berlin, April 12-15, 2012; "Best of Berlin."
Hi Joan, To me the one part of this story that's not getting enough press is the reality that Americans are going to have to get use to a new economic norm. In my opinion, it will be years until the fictional unemployment number used by the government is around five percent again. The inventing of the Internet and the fraudulent housing market helped mask serious economic flaws that are only now starting to be understood. Decades of living above our means--both individuals and the government--is really catching up with us. If nothing's done about the entitlements--especially Medicare--really soon I think our economy will go over the cliff in the next ten years. I'm sorry to be so negative but that's just how I see things right now.
Jonathan, I agree and that has been my concern since I noticed the shifts taking place starting in 1975. I had my first computer a couple of years after that and had a statistical package in which I could run U.S. Census raw data and could follow trend lines. Each year the gap between rich and poor grows, and each year I see the rise of religious fundamentalism. Fear, coupled with fantasy does not bode well for anyone. That is why I see the three systemic failures occurring. I would be "sorry" about your negativity if you were in denial about what is really happening.
Steph, the real advantage we have is being able to compare, contrast, and clarify events as well as have access to information from places other than popular media of print, radio, and TV. We can get raw date if we want to know facts instead of propaganda.
During the Great Depression and WWII, information was very delayed and sparse. We listened to news on crystal radio sets and once a week we saw news at the movie theater but the news was days and sometimes weeks old
During the Viet Nam war, I could see the battlefields and bombs, deaths and destruction virtually the same day. War correspondents were very different from todays talking heads.
Today, we can access research reports, such as the latest things Ruth so generously provides, and we can check alternative points of view. For those such as myself who perceive the failures of our society and speak out about them, and who get called all kinds of names, especially "SOCIALIST" as if that is some terrible social system to be avoided at all costs, or "ATHEIST" or "FREE THINKERS", we become the modern 'NIGGER", the "SLAVE", to be manipulated and exploited.
The good news is, we have a very nice community of people here at Atheist Nexus who want to know the best information we can possibly find and set aside beliefs that keep us bound. With your lovely postings, and sharing of your enthusiasms, and desire to protect bird populations can only bode well for all of us. You are a real treasure and part of a valuable group who seek and find better ways to live together as a human species.
I think you are really special.
Sadly the poor people overwhelmingly support the policies that drive the continuing wealth gap.
That is exactly the problem, Jonathan! The poor, the uneducated, the "patriotic" who believe the words of economists, politicians, and fundamentalists who distort facts until one cannot recognize reality. We are either going to have to stand up and speak out or we will go a whole lot farther down the black hole than we are in right now. Enough of us don't oppose foolish wars, we fall for advertising for goods and services we don't need, we willingly pay for junk coming from global enterprise as our production goes down, we obey and submit to what others say is fair and just instead of demanding fairness and justice.
It is not only those who deliberately exploit and manipulate the public in foolishness, it is the habit or tradition or custom to be quiet, to not be strident, to acquiesce to authority. Who benefits by the status quo? What of value are we conserving? Is there not a better way to live?
The government doesn't figure in those who can't find work and who don't qualify for unemployment benefits. It also doesn't calculate those who are very much underemployed. If we counted that number I think the percentage would be around 25 percent or higher. The latest forecast says that Social Security will be bankrupt in 2033. For Medicare the deadline is currently 2024. If the Supreme Court says health care reform is unconstitutional we can move that date up a few years. All of that and very few people have the courage to make the sacrifices that are needed to fix the problems. It's a scary time. In case you haven't noticed, I'm kind of a nerd when it comes to politics. lol
Ok, I think we have a little bit of a grasp of the scope of the problems. Now, I believe that imbedded in the problem is a solution.
First, we can value work, not wealth. What good is a $3 million bonus if pay is so low for crafts and trades people, few can benefit by working for wages. Where is the incentive? Why should a plumber or electrician, or nurse, or teacher, or childcare worker perform those tasks if they cannot receive living wages?
Second, households carry an outrageous debt load that keeps them pinned down for life with now way out. Banking and financial institutions rig the system to suck wealth out of working class into the assets of owners of capital. Banks put carrots on sticks to entice more debt and when debtors go underwater and lose homes and property, one can become either passive or aggressive. Personally, I like the aggressive option better.
Third, fear and obedience to authority keeps people in line and conserves the status quo, but the Earth pays a terrible price for such submission.
Fourth, imagine! What are the probabilities things will stay the same? What are the possibilities of better lives lived by more people on the planet? What are the preferable goals worthy of striving toward?
Surely there are other options.
Hi Joan, You always make interesting points. There is no question that the "news media" is largely a tool used to misinform rather than educate; however, the truth is out there if you want to look hard enough. Many of us on this site are evidence to support that statement. But a majority of Americans have been so beatten down that they simply can't muster a fight anymore. They just make excuses for why they aren't involved. The hopelessness that dominates so much of our society is really bringing us down and allowing the abusers to continue abusing us for their benefit. I wish I could find a way to bring about large-scale systemic change but I just can't think of a way to do that right now.
Jonathan, your comments are valid and it is hard to find a thread of optimism amidst all the chaos. I guess I want large scale systemic change but realize that won't happen until there is a critical mass of people who want change and are willing to take risks. I have a Native American friends who said her tribe could never get ahead because those who seemed to rise above the alcohol and dysfunctional behaviors were pulled back down by those too afraid or discouraged to make any effort.
Who knows how long the earth will be patient with foolish decisions made by humans, putting an anthropomorphic lens on current events. So, I guess the trick is to act as if we will survive, the earth will heal and future generations will inherit a planet able to sustain life. I have to think that way because I have great-grandsons; I want them to have clean air, water, and soils uncontaminated by deadly unseen rays of whatever humans devise. Or, may they live free of volcanic and other natural disasters, and have the ability to grow and develop into whatever they want to be.
I want my descendants to experience joy and pride and self-respect and compassion and care ... so I can model these attributes to them. That is about all I can do.
In the meantime, I surely enjoy our conversations, Jonathon, knowing another shares my optimism, even as we realize the huge challenges facing us.
Joan, If that's "all" you're doing I'm here to say that we need more parents and grandparents to live up to your example. Please keep the thoughtful posts and comments coming; they are really worth reading!
What a nice thing to read, Jonathan, and I appreciate your kind words. Not to worry, I have a lot to say and love sharing ... on the condition that others will share with me. With good two-way communication, we all win.