Category Archives: Great Depression

No More Tax Payer Bailouts: WHAT WALL STREET REFORM IS DOING FOR YOU

This morning, a group of public servants showed up to work at a brand-new agency created to protect everyday Americans from the abuses of Wall Street.

They’re the folks of the Consumer Financial Protection Bureau, and they’ll be the cops on the beat protecting consumers from predatory credit card and mortgage lenders, bait-and-switch creditors, and anyone trying to make a quick buck by deceiving or manipulating Americans who are just trying to secure their financial future.

Many Americans don’t know it, but this bureau is just one part of a sweeping Wall Street reform law — the most pro-consumer and pro-taxpayer reform of our financial system since the Great Depression — that President Obama signed a year ago today.

Watch this video to get a quick overview of the law, and a briefing on the special interests trying to undermine it:

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Filed under consumer protection, financial reform, Great Depression, President Obama, tax payer bailouts, Wall Street

Want to avoid another Depression? Try understanding the first one.

By Robert S. McElvaine
the Washington Post /published July 10th,2011

“I have seen the future, and it works,” journalist Lincoln Steffens famously said of his 1919 visit to Bolshevik Russia. Guided by his economic faith, Steffens saw the future as he wanted it to be, not as it would be.

What excuse do we have when we follow people who, guided by a different economic faith, see the past as they want it to have been, not as it was? Today, under the influence of leaders blinded to facts by certain faith, we are careening toward a repetition of mistakes that led to catastrophe.

A CNN poll conducted in June found that almost half of Americans now think that another Great Depression is “very likely” or “somewhat likely” to occur within the next 12 months.

There is a genuine danger that the already weak economy could turn into a second coming of the hard times of the 1930s. The focus of many politicians today on cutting spending and avoiding tax increases on the wealthy is based on a misunderstanding of what led to and extended the Great Depression — and it is setting us up for a new collapse.

Most people realize that a failure to raise the debt ceiling could be catastrophic. But the drastic cuts in federal spending that some Republicans are demanding in exchange for an increase in the debt ceiling would be a repeat of the mistakes that prevented a full recovery in the 1930s and then caused a secondary collapse in 1937.

With the economy in a precarious position, slashing spending, concentrating ever more wealth and income at the top, and blocking effective regulation is a
prescription for disaster.

In fact, the first part of this prescription is very similar to one written by Dr. New Deal himself. Fearful of massive budget deficits, President Franklin Roosevelt cut back on spending as soon as his 1936 re-election was secured, plunging the economy into a renewed free fall that introduced the word “recession” into our lexicon so as to avoid calling the collapse a renewed depression.

Yet that is the course upon which a unified Republican Party is insisting. For their part, President Barack Obama and many Democrats have ceded the battlefield and are just trying to reduce the number of casualties.

Conservatives appear to be united behind a set of beliefs that are dangerously wrong. Theirs is a faith-based economics that contrasts with fact-based economics; their god is named the Market. Their economics is as immune to facts as its opposite, Marxism. Call it Marketism. A devout Marketist believes that the Market is always right and any government intervention is, well, sinful.

For more than two generations, the Great Depression discredited this religion. But beginning around 1980, with the election of Ronald Reagan, the Marketists staged a revival.

One of my students brilliantly, if accidentally, captured the essence of this economic fundamentalism in a journal entry a few years ago: “During his presidency, Reagan implemented sloppy-side economics.” It is that sloppy-side economics that conservatives have been pushing ever since, and the more it fails, the harder they push it.

During the Great Depression, Roosevelt called for “bold, persistent experimentation” and said: “It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”

But the position of faithful Marketists, then and now, is this: Take their method and try it. If it fails, deny its failure and try it again, and again, and again. But above all, keep trying the same thing.

Since the beginning of the Obama administration, Republicans have been working unstintingly to misread the history of the Depression and implement policies similar to those that led to the collapses of 1929 and 2008. “One of the good things about reading history is you learn a good deal,” Senate Minority Leader Mitch McConnell, R-Ky., declared early in 2009. “And we know for sure that the big spending programs of the New Deal did not work. In 1940, unemployment was still 15 percent. And it’s widely agreed among economists that what got us out of the doldrums that we were in during the Depression was the beginning of World War II.”

Well, yes — but that fact demonstrates just the opposite of what Marketist fundamentalists argue.

It is plain that the reason the New Deal failed to end the Depression is not that Roosevelt and Congress overspent, but that they underspent. The New Deal was not too reckless in its spending; it was too cautious. The war ended the Depression precisely because it obliged Roosevelt and Congress to spend greater and greater amounts without worrying about where the money was coming from.

The basic reason that the Obama administration has not yet ended the economic disaster it inherited is the same reason that prevented the New Deal from ending the Depression FDR inherited: It hasn’t spent enough. The 2009 stimulus staved off a
second Great Depression, but it should have been much larger to produce a genuine recovery. Subsequently, even with majorities in both houses, the Democrats let the GOP define the argument and failed to force through needed programs to get the economy back on its feet.

It has been the alleged “socialism” of the New Deal that has prevented another Depression for seven decades. While a market-based economy is clearly the best system, it carries serious risks. Government intervention minimizes those risks for businesses and for people — just a spoonful of “socialism” helps the capitalism go up.

“History doesn’t repeat itself, but it rhymes,” Mark Twain is said to have remarked. To the extent that our current history sounds like the 1930s, it is because of the lack of sense on the part of politicians. We know better than to slash spending and allow the rich to become even richer in a weak economy, but we’re set on doing it anyway.

If there is a new Great Depression, it won’t be without rhyme, but it will be without reason.

Robert S. McElvaine, a professor of history at Millsaps College, is the author of The Great Depression: America, 1929-1941.”

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Filed under Bolsheviks, capitalism, CNN, Conservatives, Franklin D. Roosevelt, Great Depression, great recession, Marketism, marxism, repeating history, Ronald Reagan, socialism

>NJPP Monday Minute 11/1/10: Employee benefit funds in question

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With unemployment levels nationwide hovering at just below double digits for more than a year now, the focus on unemployment insurance (UI) benefits has never been more intense.

One of the items at the top of the to-do list when Congress returns for its lame duck session later this month will be consideration of another extension of federal-state UI benefits. Supporters say an extension is necessary because unemployment levels have been so high for so long. Opponents argue that cutting off UI benefits will push the unemployed to find a job, any job. One candidate for the U.S. Senate in Nevada told the Los Angeles Times, “You can make more money on unemployment than you can going down and getting one of those jobs that doesn’t pay so much but is an honest job.”

Let’s be clear: unemployment insurance benefits are not lottery winnings. A UI check is an earned benefit from a trust fund that both workers and employers pay into to protect workers when they are unemployed. UI benefits equal 60 percent of a worker’s previous wages up to a maximum weekly payment that varies by state.

In 2009, nationally, UI benefits kept 3.3 million people, including 1 million children, out of poverty. In New Jersey, 414,600 workers are currently receiving benefits. Unemployed workers receive up to 26 weeks of state unemployment payments and then may be eligible to collect federal unemployment benefits for another 90 weeks or more.

According to the New Jersey Department of Labor and Workforce Development, the maximum UI benefit in 2010 in New Jersey is $600 a week but the average benefit is $397 per week. Twelfth District congressional candidate Scott Sipprelle has publicly suggested that benefits are too high and should be lower than minimum wage-about $290 a week for 40 hours of work. At $15,080 a year, that is about $6,000 below what the federal government estimates a family of four needs to live in New Jersey.

The UI benefit was created in 1935 in response to the Great Depression, a time when up to 25 percent of the workforce was unemployed; when people were regularly losing their homes to foreclosures; when Americans were migrating across the country looking for work and shanty towns, called Hoovervilles. Hungry and homeless unemployed people were forced to rely on charities, churches, good-hearted neighbors and strangers to survive.

The circumstances preceding the creation of UI are described In the US Department of Labor’s, Beginning the Unemployment Insurance Program – An Oral History: 1935-1985: “In the welfare field the States and local governments, which had been handling the unemployed as well as welfare cases, didn’t have any unemployment insurance. There wasn’t any kind of help for these people; a lot of them were absolutely helpless. They stayed in their homes; couldn’t pay rent. Housing went to pot. The whole economy just went to a disaster. What happened then is that the local authorities began to come to Washington and say, ‘Can’t you do something down here to help us.'”

In his book, Hard Times: An Oral History of the Great Depression, Studs Terkel reported Roosevelt official Gardiner Means’ 1933 account of how UI reflected a change in thinking brought about by the extreme economic crisis faced by millions in the country: “People agreed that old things didn’t work. What ran through the whole New Deal was finding a way to make things work. Before that, Hoover would loan money to farmers to keep their mules alive, but wouldn’t loan money to keep their children alive. This was perfectly right within the framework of classical thinking. If an individual couldn’t get enough to eat, it was because he wasn’t on the ball. It was his responsibility. The New Deal said: Anybody who is unemployed isn’t necessarily unemployed because he’s shiftless.”

The present day equivalent of bread lines and shanty towns are homeless shelters and community food banks. The Star-Ledger reported earlier in October that New Jersey food banks are seeing a 46 percent increase in demand.

Unemployment insurance is a vital safety net that supports families and allows them to meet their basic needs. In good times New Jersey and many other states used the program’s funds to balance the state budget. These diversions started in 1993 and mostly ended by 2006, but by then much damage had been done. In March 2009, the non-partisan Office of Legislative Services said the state’s UI fund was completely depleted. Restoring the funds solvency required the state to either increase contribution rates or borrow from the federal government. New Jersey chose to borrow.

These funding maneuvers have led to a ballot question which tomorrow will allow voters to express their opinion about these practices. Ballot Question #1 asks whether the state constitution should be amended to prohibit the state from using any employee benefits funds (including UI, paid family leave, temporary disability and workers compensation) for purposes other than paying benefits to workers. Both unions and businesses recommend voting “yes”on the question. Voting in favor of the question will provide constitutional protection for these funds but will add further complexity to the constitution and tie public officials’ hands in the future. It’s a complicated question with no easy answer. Tomorrow voters will provide an answer.

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Filed under Ballot Questions, Great Depression, Monday Minute, New Jersey, New Jersey Policy Perspective, pension fund, unemployment benefits

12 Ways To Prepare For The Next Great Depression

A friend of mine sent me this piece of infomation a long while ago and I have been holding onto it since waiting for just the right moment to post about it.

Now, with the stock market down to it’s lowest point in a dozen years and the economy on the brink, seems to be about the right time to dicuss the “12 Ways To Prepare For The Next Great Depression” .
A few of the tips are a little out dated, but they still ring true:  
Our economic future could be even bleaker than you expect — and last year was the moment to unleash your inner survivalist. If the financial system suffers any more crises of confidence, credit gets even tighter, and the fed falls into a liquidity trap, we could be in for several hardscrabbling dystopian years. Forget maintaining your current shiny standard of living — how will you feed and clothe yourself, in the worst case scenario? We’ve compiled a few suggestions for things you can do now to brace yourself.

Avoid debt at all costs. If anything, you’ll want to save up as much money as you can, in case you have to live off your savings. Thanks to recent changes in bankruptcy law, it’s much harder than before for an individual to declare bankruptcy. So if you’re stuck in debt with little or no income, you’ll still be working for the banks. And as this guy points out, the banks will be hurting, so the moment you miss a payment, they’ll be quick to try and liquidate your collateral for whatever they can get.

Get out of your mortgage before the housing market collapses any further. As this site says, if you paid $300,000 for your house and it sells for $200,000, you could end up not owning your house and owing the bank $100,000.

Buy some cheap land in a rural area. Build a house, or just get a used RV. Either way, make sure you own your home free and clear, so you can live rent-free and mortgage-free for as long as you need to.


Go off the grid. Get your own power generator — or, better yet, some of those solar helium balloons. Or some wind turbines. Don’t be dependent on the power company to keep all your necessities running.

Cultivate some skills that will always be in demand. Become a decent electrician, handy-person, carpenter or cook. There may not be much need for someone who understands content management systems during a total economic shutdown, but someone who can build a house will always have a place to crash.

Offshore yourself. As the dollar gets weaker and weaker, U.S. white-collar service workers will be the cheap overseas employees for Europeans and Asians, predicts Robert Scoble in his roundup of how to recession-proof yourself. So as long as someone, somewhere, is still making use of those white-collar service skills (like programming, or customer support) you may be able to offer yourself to overseas companies as a cheaper alternative.

Invest in the ultimate counter-cyclicals. Some industries will always be in growth mode — like any business that caters to the rapidly growing senior population. Also, “sin and comfort” industries, like cigarettes, gambling and booze, do well during downturns and will probably make bank this time around as well. (Too bad booze and cigs are generally part of huge diversified conglomerates these days.) Also, movie companies are quietly bragging that the movie industry had one of its biggest growth spurts ever in the 1930s, as people craved escapism.

Invest in some Euros, or some other currency that’s not the dollar. Chances are the U.S. dollar will keep getting weaker, so you’ll be better off holding a more stable currency. You could also try investing in gold or silver, but those commodities are already skyrocketing in value.

Have some liquid funds on hand. MSN Money suggests reducing your contributions to your retirement plan or 401(k) (if you have one) so you can put more money into your savings instead. And remember, the banks are still FDIC insured, so your savings are probably safe — but other investments have no such guarantee. or take part in a community garden in your neighborhood. Try to position yourself so you can get as much of your diet as possible from food you’ve grown yourself, instead of being hooked on sushi.


Learn to hunt. These fine people claim that hungry people are already hunting small animals in the parks of San Francisco, and during the 1930s deer and squirrels were hunted almost to extinction. Learn how to trap, kill, prepare and eat a squirrel now, so you’ll be ahead of the curve.

Stockpile medications. Your biggest problem, in an economic meltdown, could be getting health care. If you’re dependent on prescription meds, try to get some extra pills now so you’ll have some on hand later. Just make sure you’re always taking the oldest meds you have, to minimize the risk of taking expired pills, these folks advise.

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Filed under cheap land, debt burdened, ecomonic outlook, Great Depression, medications, mortgage crisis, prepare for the next great depression, Tips

Where Do We Go from Here?

Sen. Bernie Sanders  from Vermont has an interesting essay posted on the Hill’s Congress blog today. It outlines some of the failures of the past eight years and what will be waiting for Barack Obama when he takes office on January 20th. 

Sanders also lists a few initiatives that he will be working on in the Senate come the new year, it’s good stuff:

The next few months will be a pivotal period in the history of the United States and for much of the world. The Bush Administration, perhaps the most reactionary and incompetent that our country has ever seen, is leaving office after eight disastrous years. President Barack Obama and an increased Democratic majority take power amidst the worst economic crisis since the Great Depression.

The decisions that are made early on will send an important signal as to whether Obama’s campaign of “hope” and “change” will be seriously pursued and realized, or whether the power of the Big Money interests will persist — regardless of which president is in office or which party has the majority. Will a new president and a new and more Democratic Congress finally respond to the needs of the middle class and working families of our country, or will Wall Street, insurance and drug companies, the military-industrial-complex, the oil and coal companies, big media, and the other powerful special interests continue to hold sway?

Here are just a few of the issues that President Obama, the Congress and all Americans must confront:

The middle class is continuing its steep decline with unemployment soaring, and millions of people in danger of losing their homes, savings, and health insurance. The dream of a college education is fading away for many working families as college costs go up while incomes go down. This year, as a result of the economic downturn, the bailout of Wall Street, ongoing tax breaks for the very rich and the war in Iraq, our nation will have a record-breaking deficit and a huge $10.4 trillion national debt. The United States continues to have the highest rate of childhood poverty of any major country, and the most unequal distribution of wealth and income.

As a result of Wall Street greed, recklessness, and dishonesty, our entire financial system is in danger of collapsing. The taxpayers of this country have seen trillions of their dollars placed at risk in the largest bailout in world history.

Our incredibly inefficient health care system is disintegrating. Despite spending far more per capita than any other country, 47 million Americans have no health insurance. Even more are underinsured. And we pay the highest prices in the world for prescription drugs.


Finish reading Berinie Sanders’s blog posting >>>Here

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Filed under Barack Obama, Bernie Sanders, Congress, Congress Blog, Democratic Majority, Great Depression, Healthcare, Iraq War, national debt, poverty, President Bush, The Hill, Vermont, Wall Street

>Where Do We Go from Here?

>Sen. Bernie Sanders  from Vermont has an interesting essay posted on the Hill’s Congress blog today. It outlines some of the failures of the past eight years and what will be waiting for Barack Obama when he takes office on January 20th. 

Sanders also lists a few initiatives that he will be working on in the Senate come the new year, it’s good stuff:

The next few months will be a pivotal period in the history of the United States and for much of the world. The Bush Administration, perhaps the most reactionary and incompetent that our country has ever seen, is leaving office after eight disastrous years. President Barack Obama and an increased Democratic majority take power amidst the worst economic crisis since the Great Depression.

The decisions that are made early on will send an important signal as to whether Obama’s campaign of “hope” and “change” will be seriously pursued and realized, or whether the power of the Big Money interests will persist — regardless of which president is in office or which party has the majority. Will a new president and a new and more Democratic Congress finally respond to the needs of the middle class and working families of our country, or will Wall Street, insurance and drug companies, the military-industrial-complex, the oil and coal companies, big media, and the other powerful special interests continue to hold sway?

Here are just a few of the issues that President Obama, the Congress and all Americans must confront:

The middle class is continuing its steep decline with unemployment soaring, and millions of people in danger of losing their homes, savings, and health insurance. The dream of a college education is fading away for many working families as college costs go up while incomes go down. This year, as a result of the economic downturn, the bailout of Wall Street, ongoing tax breaks for the very rich and the war in Iraq, our nation will have a record-breaking deficit and a huge $10.4 trillion national debt. The United States continues to have the highest rate of childhood poverty of any major country, and the most unequal distribution of wealth and income.

As a result of Wall Street greed, recklessness, and dishonesty, our entire financial system is in danger of collapsing. The taxpayers of this country have seen trillions of their dollars placed at risk in the largest bailout in world history.

Our incredibly inefficient health care system is disintegrating. Despite spending far more per capita than any other country, 47 million Americans have no health insurance. Even more are underinsured. And we pay the highest prices in the world for prescription drugs.


Finish reading Berinie Sanders’s blog posting >>>Here

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Filed under Barack Obama, Bernie Sanders, Congress, Congress Blog, Democratic Majority, Great Depression, Healthcare, Iraq War, national debt, poverty, President Bush, The Hill, Vermont, Wall Street

Trends Analyst Gerald Celente: Great Depression of 2009 Coming

Unless you’re a night owl, or happen to work the overnight shift, you propbaly did not hear the latest interview of Gerald Celente, the worlds leading authority on trends. Celente appeared on the Coast to Coast AM radio program this past Thursday night with host Art Bell.

Celente’s predictions for the coming year is extremely gloomy, you may or may not, want to heed his advice. Either way this interview made good radio. 

Trends analyst Gerald Celente shared his dire economic outlook for the coming year. By February, there’ll be major bankruptcies in the retail sector, leading into the collapse of the commercial real estate market that’ll be worse than the problems with home mortgages, he warned. He sees a global depression taking hold in 2009, and protests by students and/or workers related to the economy coming in the Spring.

Celente’s predictions for the coming year is extremely gloomy, you may or may not, want to heed his advice. Either way this interview made good radio.
Here is Art Bell’s interview broken down into 4 parts:
Gerald Celente Economic Update 12/18/08 pt. 1

Gerald Celente Economic Update 12/18/08 pt. 2

Gerald Celente Economic Update 12/18/08 pt. 3

Gerald Celente Economic Update 12/18/08 pt. 4

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Filed under Art Bell, bankruptcy, Coast to Coast AM, ecomonic outlook, Economic Crisis, Gerald Celente, global depression, Great Depression, protests

Trends Analyst Gerald Celente: Great Depression of 2009 Coming

Unless you’re a night owl, or happen to work the overnight shift, you propbaly did not hear the latest interview of Gerald Celente, the worlds leading authority on trends. Celente appeared on the Coast to Coast AM radio program this past Thursday night with host Art Bell.

Celente’s predictions for the coming year is extremely gloomy, you may or may not, want to heed his advice. Either way this interview made good radio. 

Trends analyst Gerald Celente shared his dire economic outlook for the coming year. By February, there’ll be major bankruptcies in the retail sector, leading into the collapse of the commercial real estate market that’ll be worse than the problems with home mortgages, he warned. He sees a global depression taking hold in 2009, and protests by students and/or workers related to the economy coming in the Spring.

Celente’s predictions for the coming year is extremely gloomy, you may or may not, want to heed his advice. Either way this interview made good radio.
Here is Art Bell’s interview broken down into 4 parts:
Gerald Celente Economic Update 12/18/08 pt. 1

Gerald Celente Economic Update 12/18/08 pt. 2

Gerald Celente Economic Update 12/18/08 pt. 3

Gerald Celente Economic Update 12/18/08 pt. 4

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Filed under Art Bell, bankruptcy, Coast to Coast AM, ecomonic outlook, Economic Crisis, Gerald Celente, global depression, Great Depression, protests