Saturday, November 26, 2011
The World Changes
I finally got to finish three parts (5 1/2 I hour) PBS documentary by Ken Burns titled “Prohibition." The documentary was an eye-opener. It made me realize as to how we have not changed a bit, all we do is change the characters. For example, remember all the hoopla about Muslims erecting a mosque at Ground Zero and Republican legislators changing the name of French fries to freedom fries. According to the documentary during WWI, the name for German sourdough bread was changed to freedom bread, and people were killing German dachshund dogs, and one man was hanged because he was overheard speaking German to his neighbor. That was our initial world war, and we overreacted and 9/11 was the first time our mainland had been attacked and we did the same .The 2008 Financial Crash was the first financial crisis since the 1929 Great Depression, yet we still don't have regulations in place to prevent "Too Big to Fail."
Ron Paul would've felt at home in the 20th century because the 18th amendment banning the use of alcohol (Prohibition) for public recreational purposes was considered the most liberty destroying legislation of our lifetime. Police chiefs across the nation reluctantly stated that over 40% of their forces were involved in the illegal sale of alcohol. It was legal to brew a small amount of alcohol for personal consumption, or for a doctor to prescribe rum and whiskey for medicinal purposes but those exemptions led the honest shopkeeper and the small-time doctor yielding to the temptation of making a lot of bootlegger money. The documentary was more about life lessons, than it was about the illegal consumption or the selling of alcoholic beverages. The people of that time over consumed alcohol which led to domestic abuse, poverty, medical problems, but it was a classic case for the reason we cannot legislate morality.
I would like to think that we're much more intelligent these days but we may not be. Democratic presidential nominee, Al Smith, lost his election to Herbert Hoover because he was a Catholic running on an anti-prohibition ticket. The KKK printed thousands of hate pamphlets that predicted the Pope would occupy the White House, openly burned crosses and marched in anti-Smith rallies. The Klan publication, Fellowship Forum, showed a Cabinet meeting with the Pope and a dozen fat priests sitting happily around the table, with Smith, in bellboy livery, serving them liquor. No Klan tale, however, surpassed the story that the Holland Tunnel secretly connected to the Vatican! The Republican Party never admonished the tactics. I can see the similarities without the openness, in the Mitt Romney campaign. It's funny because Al Smith's opponents would have liquor at all their strategy meetings.
Today, one of our biggest problems is income inequality, but we cannot get a handle on it until we know its cause. I'm convinced that this started in the Reagan era when they started implementing tax policies to favor the rich. During the past 30 years, the gap between the wealthy and the middle class is as large as it has ever been. Income inequality was one of the causes for the 1929 Great Depression where wealth accumulated at the top and never trickles down, so when the stock market crashed there was no one left to revive the economy. The scapegoats of that time were the poor farmers, and today we have a 9.0 unemployment rate, yet people are chastising the poor for not working.
I've seen where some posters are just parroting what they hear from the single source articles they read every day, or they try to incorporate their pet peeves into every argument. Let's take this “taxing the rich" argument. That's just a diversion that emphasizes the point by saying that if we confiscated all their assets, and we still wouldn't have enough money to balance the budget. That's not the point at all. For argument's sake, let's skip the reasons, of how we got in this predicament for right now but let's concentrate on how we will get out.
We need a plan to start reducing the debt and deficit just when we start showing signs of recovery because you can't do both at the same time. We can immediately cut out the wasteful spending but eliminating programs creates layoffs (consumers) who just might go on the public dole. We still have to invest in education, research and development, infrastructure and innovation. Revenues will have to be part of the mix even though some right-wing partisans are starting to say that a balanced approach is just a liberal socialist talking point. You don't have to be a mathematician to know that if you don't cut defense spending or tax the top 2%, the cuts will all come on the backs of the poor, the elderly, and education. We will never reduce the debt to zero in our lifetime, and the best we can do is to start seeing a downward trend in the foreseeable future. All the talk about reducing capital gains rates and reducing the corporate rates to zero are just smoke and mirrors because, once the economy starts to revive, the unemployment rate will go down, as well as deficit reduction as the tax revenues increase. We can restructure our income tax code later when cooler heads prevail. We're treating this economy like we reacted to 9/11 because it's not a situation that we are accustomed to. We don't need a reactionary economic policy.
There's not a day that goes by where we don't read about some elaborate plan to fix our economy in our local newspaper and public forum. It's as if it's a sure-fire fix without giving thought to history or established economic theories. Some posts their proposals multiple times, as if the more you see them, the likelihood they will take hold. The posters want a flat tax because they don't know or care about the income inequality we're suffering from. Some favor "austerity only" not recognizing that it will do more harm than good and one would have to look no further than to our European trading partners as proof. They talk about a "strong dollar" but fail to grasp that even though that is desirable in the future, it would leave our goods on the shelf right now. Think about it, Dillard’s, Macy’s, Tiffany, and Neiman Marcus don't have Black Friday sales but Walmart, Target and Best Buy do.
In the meantime you can't place all the blame on the Federal government and allow the multinational corporations to go untouched. We have a DEMAND problem right now, of which the government can't do anything about. On of our biggest trader (Europe) is having a financial crisis of their own. Once consumers start spending, some of our jobs will come back but we still don't have a lot of manufacturing jobs that usually gets an economy up and going like Germany did. We have a service based economy. I hope some of these little tidbits will help you understand some of the problems we are having,you might disagree,so feel free to share where I might be wrong. It's the only way we all learn together,so we don't have to keep repeating the myths of the past.