Several experts have recently said that our current economic crisis is unlike any other financial disaster in US history since the Great Depression, which began in 1930 and finally ended in 1954. A good comparison? Sorry, I don't buy it.
Now if my memory serves me correctly, the reason for the onset of the Great Depression can be attributed to just a few cliff notes. Everyday people were able to invest in the stock market due to the increasing use of telecommunications systems and mass urbanization. Investors were able to purchase on margin, often at a 10% rate. Our currency was pegged to an asset which could rise and fall in value - gold. There was literally no federal banking system in place, so people's deposits weren't insured.
When the stock market crashed, people went to withdraw their money from the local bank, and it just wasn't there and neither were their jobs when they got back. Of course, the environmental catastrophe called the Dust Bowl also played a factor. Unemployment at its peak hit around 30%.
While on the surface these two periods in American history can look similar, there are more reasons why they are very different.
Why are they so different? Today it's credit not margin that's killing us. After the roaring 20s, our government was sitting on a huge stockpile of wealth and enjoyed a substantial trade surplus (due to the export of oil and other natural resources). Now, our government is perhaps the largest holder of debit. Instead of being a net exporter, we are a nation that survives primarily from imported goods. Back then, there was no real system in place to regulate the financial industry. Now it's the industry itself that has spawned a legacy of greed through deregulation.
You might say things started looking bad for us around the time of Hurricane Katrina when so many people's lives were devastated never being able to recover. Unlike the Dust Bowl however, environmental disasters like Katrina are the result of a global climate crisis which shows no signs of recovery, not because of over-farming in soil depleted regions.
I guess I could go on, but suffice it to say we are looking at something much larger in scope than the problems faced by previous generations.
Great projects like the Hoover Dam, Mt. Rushmore and the Golden Gate Bridge were built as government projects that employed people and injected money into the the system by providing jobs. Currently, our government is seemingly committed to injecting money it doesn't have anyway (by simply printing, or borrowing more) into the capital market.
Now unlike then, it seems they have committed to bail out mortgage companies Fannie May and Freddie Mac as well as hundreds of banks and investment brokerage firms through the Fed and FDIC. According to this article, total debit could be in the range of 70+ trillion dollars. The FDIC has 54 billion in reserve. Social Security, at most, 11 trillion.
Try to picture this. You're going to the bank to take out all of your money in exchange for cash because credit doesn't look so good anymore. OK sounds good, there's no reason to panic. Now picture everyone doing this at the same time, and in effect shutting down the bank itself. Your bank. OK, still no problem because you'll manage to get some of it back seeing that your deposit is federally insured right? Wrong.
Looks like instead of building great projects and employing people putting wages back into our hands, our tax money is being used instead to bail out the very financial institutions that have played a role in creating this crisis.
Soon there won't be enough money left in our pockets to fuel the huge tanker ships that come from China which supply us with the meaningless trinkets we used to make ourselves.
This time it won't be like the last time and it shows every sign of being dramatically worse. So, until the entire nation wakes up and our government starts actually working for us, we as a nation will continue our perilous journey into uncharted territories.
Wednesday, July 16, 2008
Tuesday, July 15, 2008
I told you so?
You know that old saying, "I told you so," which is usually precluded by two or more people entering into an agreement, where one person has already predicted the correct outcome? Of course, we all have.
Well, this brings me to one night I vividly remember watching the news as a young child. After Reagan announced to the President of the Soviet Union, Mikael Gorbachev, "Mr. Gorbachev, tear down this wall" while standing in front of a half million German's at the Brandenburg Gate, I turned to dad and told him that I believed the end of the communist nation had begun and that the wall separating East and West Germany would come down soon. Dad just laughed at me in response and continued reading the newspaper. A few years later, and that was another I told you so moment.
Here is another one to think about. It's similar to an I told you so, but a little different. Probably similar (in exactly the opposite way) to the following riddle ...
An enthusiastic young archeologist emerges from an extensive dig and announces to the media that he has discovered the remains of Adam and Eve. How did he know this? We are all then supposed to guess, how he knew these bodies were actually Adam and Eve.
Except I don't think this is a riddle, but more of a sad reality really. We of course, shouldn't or couldn't say something like, I told you so at the end of this event because for us there really isn't an after to talk about. History will just continue, except that we won't be a part of it. Would it still be history?
The only way that part would work (for me anyway), is if it were said by a drunken Englishman, who by that point had no idea that he was actually the only person left alive but just didn't know it. Sad irony. Something the British are great for.
But dash it all, we are just about at the end here. May be not to the extreme of total extinction, but close enough. According to the genetic experts, there was a time in human history when we did face a near extinction of our species. At that time in our early years, there were only 2,000 women or so left living which created a huge "genetic bottleneck". Fortunately those that were left survived and reproduced.
It is supposed that possibly a great flood may have caused this, but whatever legends persist, I am sure Noah may have been thinking, "I told you so" which he tried to do often despite harsh ridicule before the rain came.
From my limited knowledge, I understand that God had become sick of us because, well we just weren't good people anymore and He decided that it was time to scrape the project and break the mold, almost.
Now here we go again. Whatever your beliefs may be, one thing is for sure, you have to be one deranged person not to think that this definitely looks like the end of the world is approaching. What that may look like when we try to picture it using our limited powers of imagination, I am sure will be nothing like the actual events that take place.
Because the world is so large, things may happen in some places before others, but eventually it will affect everyone to the point where life itself may not be viable.
Activists think there is still hope, but fail to realize the true scope of the problem and feel that if only they do their part, things may just improve. It won't. People are powerless this time as well.
Unfortunately, the dice has already been cast and all we can do is wait until it bounces off the backboard and stops. Where we are and what we are doing when this happens will just provide us with time enough to ponder the bitterly sad remark, I told you so ...
The problem is that we as humans are far to removed from life itself. Almost everything we create, or consume has a net negative balance for life.
Take cell phones for example. We cannot live without them. There is no changing that fact, and there is nothing that will change us to change that fact. Now cell phones are actually very bad for us. Given long enough use, we will almost certainly develop a brain tumor, or two. That is fine. Even though scientific research has concluded for years that putting a magnet to your brain can cause cancer, cell phone use keeps increasing. In fact, these magnets and magnetic fields, (not to mention the radiation) which is created only gets stronger as new models come out.
This strange behavior in humans to caste aside their personal health, just for the benefit of immediate gratification (which is what a cell phone really represents) reminds me of breast implants for some strange reason.
Anyway, not only is a cell phone bad for us, but its very bad for the earth itself. Now, try hard to imagine that we as humans cannot exist without food, and that almost all grown food sources, such as oranges, must be pollinated by a bee. There are actually very few things that don't need to be pollinated via insect assistance.
Someone should really compile a list though because pretty soon those foods will be all we will have left to eat. It will be a short list. Einstein once said that if the bees were gone, that people would only have a few years left. What's the correlation?
Bees hate cell phones, and especially cell phone towers. In fact they hate them so much, that these thriving colonies just evaporate leaving a scattered few behind and a dying Queen.
Used to be farmers would tend their own bee colonies, or use a local bee keeper. Now, bees are treated like a simple commodity going by freight to where ever they are needed at the time.
Like the trout which used to spawn in so many of America's west-coast tributaries, the bees are rapidly facing extinction here and across many parts of the world.
Of course, this is just one small example of the plight we all face. Some are just feeling things a little sooner. Someone from California I met today, said things are just crazy over there right now.
One thing that struck me was that the problems seemed to touch everyone in some way both in their personal lives and in things surrounding them. That is, she said, except those rich people seem to be doing just fine.
Well they may be somewhat insulated for now, but they also have to notice that it's 110 degrees in San Francisco and those beautiful bay-area fogs are gone to realize something is coming that may even be bigger than them.
Well, this brings me to one night I vividly remember watching the news as a young child. After Reagan announced to the President of the Soviet Union, Mikael Gorbachev, "Mr. Gorbachev, tear down this wall" while standing in front of a half million German's at the Brandenburg Gate, I turned to dad and told him that I believed the end of the communist nation had begun and that the wall separating East and West Germany would come down soon. Dad just laughed at me in response and continued reading the newspaper. A few years later, and that was another I told you so moment.
Here is another one to think about. It's similar to an I told you so, but a little different. Probably similar (in exactly the opposite way) to the following riddle ...
An enthusiastic young archeologist emerges from an extensive dig and announces to the media that he has discovered the remains of Adam and Eve. How did he know this? We are all then supposed to guess, how he knew these bodies were actually Adam and Eve.
Except I don't think this is a riddle, but more of a sad reality really. We of course, shouldn't or couldn't say something like, I told you so at the end of this event because for us there really isn't an after to talk about. History will just continue, except that we won't be a part of it. Would it still be history?
The only way that part would work (for me anyway), is if it were said by a drunken Englishman, who by that point had no idea that he was actually the only person left alive but just didn't know it. Sad irony. Something the British are great for.
But dash it all, we are just about at the end here. May be not to the extreme of total extinction, but close enough. According to the genetic experts, there was a time in human history when we did face a near extinction of our species. At that time in our early years, there were only 2,000 women or so left living which created a huge "genetic bottleneck". Fortunately those that were left survived and reproduced.
It is supposed that possibly a great flood may have caused this, but whatever legends persist, I am sure Noah may have been thinking, "I told you so" which he tried to do often despite harsh ridicule before the rain came.
From my limited knowledge, I understand that God had become sick of us because, well we just weren't good people anymore and He decided that it was time to scrape the project and break the mold, almost.
Now here we go again. Whatever your beliefs may be, one thing is for sure, you have to be one deranged person not to think that this definitely looks like the end of the world is approaching. What that may look like when we try to picture it using our limited powers of imagination, I am sure will be nothing like the actual events that take place.
Because the world is so large, things may happen in some places before others, but eventually it will affect everyone to the point where life itself may not be viable.
Activists think there is still hope, but fail to realize the true scope of the problem and feel that if only they do their part, things may just improve. It won't. People are powerless this time as well.
Unfortunately, the dice has already been cast and all we can do is wait until it bounces off the backboard and stops. Where we are and what we are doing when this happens will just provide us with time enough to ponder the bitterly sad remark, I told you so ...
The problem is that we as humans are far to removed from life itself. Almost everything we create, or consume has a net negative balance for life.
Take cell phones for example. We cannot live without them. There is no changing that fact, and there is nothing that will change us to change that fact. Now cell phones are actually very bad for us. Given long enough use, we will almost certainly develop a brain tumor, or two. That is fine. Even though scientific research has concluded for years that putting a magnet to your brain can cause cancer, cell phone use keeps increasing. In fact, these magnets and magnetic fields, (not to mention the radiation) which is created only gets stronger as new models come out.
This strange behavior in humans to caste aside their personal health, just for the benefit of immediate gratification (which is what a cell phone really represents) reminds me of breast implants for some strange reason.
Anyway, not only is a cell phone bad for us, but its very bad for the earth itself. Now, try hard to imagine that we as humans cannot exist without food, and that almost all grown food sources, such as oranges, must be pollinated by a bee. There are actually very few things that don't need to be pollinated via insect assistance.
Someone should really compile a list though because pretty soon those foods will be all we will have left to eat. It will be a short list. Einstein once said that if the bees were gone, that people would only have a few years left. What's the correlation?
Bees hate cell phones, and especially cell phone towers. In fact they hate them so much, that these thriving colonies just evaporate leaving a scattered few behind and a dying Queen.
Used to be farmers would tend their own bee colonies, or use a local bee keeper. Now, bees are treated like a simple commodity going by freight to where ever they are needed at the time.
Like the trout which used to spawn in so many of America's west-coast tributaries, the bees are rapidly facing extinction here and across many parts of the world.
Of course, this is just one small example of the plight we all face. Some are just feeling things a little sooner. Someone from California I met today, said things are just crazy over there right now.
One thing that struck me was that the problems seemed to touch everyone in some way both in their personal lives and in things surrounding them. That is, she said, except those rich people seem to be doing just fine.
Well they may be somewhat insulated for now, but they also have to notice that it's 110 degrees in San Francisco and those beautiful bay-area fogs are gone to realize something is coming that may even be bigger than them.
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