By Alan Caruba
Over the weekend of August 6-7, the Wall Street Journal’s lead headline was “U.S. Loses Triple-A Credit Rating.”
On Monday, August 8, the Journal’s headline was “Markets Brace for Downgrade’s Toll.”
By Tuesday, August 9, it was “Downgrade Ignites a Global Sell-Off.”
On Wednesday, August 10, it was “Markets Sink Then Soar After Fed Speaks.”
Thursday, August 11, the Journal cast its eyes across the Big Pond noting that “Italy’s Woes Weigh on Europe.”
On Friday, 12, the headline said, “Stocks Swing Up in Wild Week.”
A week after the Standard & Poor’s downgrade of the U.S. credit rating from AAA to AA+, in the August 13-14 edition, the Journal took note of a “Global Crisis of Confidence”, adding that “World Policy Makers’ Inability to Agree on Fixes Led Markets on Wild Ride.”
As the new week dawned on August 15, the Journal said, “Markets Gird for Fresh Drama.”
It was a great week for dramatic headlines and a horrible week for the rest of the world. Mostly, though, it was a fulfillment of former British Prime Minister Margaret Thatcher’s observation that socialism works just fine until you run out of “other people’s money.”
That is a perfect definition of “redistribution” or, as President Obama once observed, “At some point you’ve made enough money.” A more un-American statement has rarely been uttered by an American President.
The U.S. has been engaged in a huge experiment in redistribution since the years of the Great Depression when Franklin D. Roosevelt, a man who knew absolutely nothing about running a business and who had spent most of his life living off an allowance from his mother, tried everything he could think of to get the economy going again.
FDR could have tried cutting taxes. He could have encouraged Congress to avoid voting for trade barriers in a fit of protectionism. Instead, he came up with Social Security, among an alphabet soup of government programs which were a disaster when it came to encouraging private sector job creation. Not unlike President Obama's "stimulus" and other doomed-to-fail experiments
The history of Social Security is one long succession of lies that Americans have been told. By the time Lyndon B. Johnson was President, the funds set aside for Social Security payments were moved to the general fund where they could be plundered by Congress. Under President Clinton Social Security payments began to be taxed as income.
World War Two arrived in the U.S. on December 7, 1941, and full employment followed to defeat the fascists in Germany and Japan. The government that had expanded during the FDR years continued to expand.
Americans emerged from the war without a scratch on the homeland. With the exception of Hawaii’s Pearl Harbor, none of our cities were bombed. We had a million battle-tested young men returning home in 1945, the GI bill let them go to college if they wanted, and by the 1950s we were on our way to being the greatest military power in the world and the greatest economy ever known.
And the federal government never stopped expanding. It needed more money, but the stock market, with occasional recessions, just kept growing too. As time went along, Great Britain and Western Europe rebuilt, alliances such as NATO were created to thwart the Soviet Union’s ambitions, while Eastern Europe stagnated under Soviet imposed communism.
In Asia, Japan became an economic powerhouse and South Korea too. China which had suffered under Chairman Mao waited until he died to convert its economy to a capitalist model, while retaining all the worst aspects of an Orwellian communist government. In the Middle East, oil allowed nations led by a handful of tribal chiefs and assorted despots acquire wealth beyond belief. Their populations remained oppressed. Now they are in the streets demanding freedom and justice. They will get Sharia law and more oppression.
Economies became increasingly global and interconnected. Europe became the European Union, a huge bureaucratic mess with the Euro as a common currency. Western bankers purchased Europe’s securities and vice versa. When the housing market imploded in September 2008, they discovered that most were de-linked from the original mortgage assets and were essentially worthless to the tune of billions.
The Federal Reserve responded by shipping $600 billion to prop up European central banks and Congress responded by authorizing the Treasury Department to “bail out” U.S. banks and the huge insurance company, AIG, with public funds--your money.
So what have we learned from all this? Foremost of all, socialist economies are inherently unfair and disconnected from the real world of hard work, property ownership, and capital investment. We learned that bankers are greedy and take greater risks than they should.
Great Britain, which has become one of the greatest welfare states in the world, was rewarded for its generosity with looting and rioting by youths whose families had lived on the dole their entire lives. Greece had already had its spate of riots.
Everyone keeps saying that the U.S. must not become Greece, but the U.S. has become Greece and that accounts for all those horrible headlines from last week.
The Obama administration, which has steadfastly ignored every previous “commission” that has studied the economy, has now engineered “a super committee” in Congress. It is composed of the twelve worst ideologues on either side of the economic policy divide in an effort to cut some spending, any spending! Failure has been baked into that cake.
The old way of conducting the affairs of nations, particularly their economies, is coming apart at the seams. It has exposed the hypocrisy of socialism here in the United States and everywhere else it has been practiced.
© Alan Caruba, 2011
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Alan Caruba's commentaries are posted daily at "Warning Signs" his popular blog and thereafter on dozens of other websites and blogs. If you love to read, visit his monthly report on new books at Bookviews. To visit his Facebook page, click here For information on his professional skills, Caruba.com is the place to visit.
Living Through History
By Alan Caruba*****************
We live our lives one day at a time and, at best, understand them only in hindsight. The chief advantage of old age is the ability to look back and, hopefully, to draw some lessons from the history through which we have lived.
My chief regret is that so many among the generations coming up behind me have so little real knowledge of America’s or the world’s history, be it recent or long past. Indeed, history books in our nation’s classrooms have become a battleground between competing ideologies because those who determine what history is taught will shape what history is to come.
The destruction of our education system since the 1960s is not an accident. It has been deliberate.
I have lived through seven decades of history. Born in 1937 in the midst of the Great Depression, I have lived to see a comparable Depression.
Anyone who persists in calling our present economic crisis a Recession is whistling passed the graveyard. You cannot have as many unemployed people as we do today, owe as much as we do to foreign central banks, and continue to spend as senselessly as the federal government, and not call this a Depression.
The main difference, as I see it, is that while Franklin D. Roosevelt and his advisors were sincerely, but ineptly, trying to turn the economy around, the Obama administration sees it as an opportunity to totally destroy the nation by bankrupting it, by refusing to seal off its southern border from an invasion of illegal aliens, by imposing a healthcare act that nationalized one sixth of the economy, and via other comparable abuses.
I have been thinking about the seven decades of my life because I have been reading about them in an excellent book, “American Dreams: The United States Since 1945” by H. W. Brands ($32.95, Penguin Press).
What struck me most forcefully and personally was the fact that I was so utterly clueless throughout much of my early years, despite having graduated from university, served in the U.S. Army, and been a working journalist until I approached my thirties. Even then, jobs with the New York Housing Finance Agency, followed by a stint with the New Jersey Institute of Technology, did not connect me with the events swirling around me.
It was not that I was unaware of events. My childhood coincided with the Cold War that had shaped national policy under Truman, Eisenhower, Kennedy, Johnson, and Nixon. I graduated university the same year Fidel Castro took over Cuba in 1959 and I finished out my Army service waiting for the outcome the Cuban missile crisis, grateful that it passed like a quick storm. The only thing I knew with certainty was that Communism was evil.
My politics were not particularly nuanced. My parents were Democrats and liberals. I followed suit because I knew no better. To their credit, they both began to have doubts with the advent of the Vietnam War and the Great Society spending. They had, however, benefited from the tremendous prosperity that followed the end of WWII, owned their home, had happily purchased all the new appliances that enhanced everyone’s lives, and raised my older brother and me in comfort.
I, along with other Americans, had seen the nation put a man on the Moon, had seen the enormous productivity of our manufacturing sector and assumed it could not end. It not only could end, it began to end as globalization undermined domestic growth. America has increasingly become a service industry economy, one dependent on easy credit, and an ever-expanding federal government.
I was into my 40s by the 1980s and only beginning to connect the dots of the history happening in the nation and the world. By then I was enjoying a career in public relations that took me all over the nation and introduced me to a wide variety of people in business, industry, and agriculture. Until then I had not realized the enormous inhibiting effect the federal government had on the economy through its intensive, expanding regulatory powers.
The environmental movement had gained momentum by then and in time it would determine how much water a toilet could use, how many miles per gallon autos must provide, and the soon to be enforced edict that literally bans the incandescent light bulb! Significantly, the Greens have seen to it that more and more of the nation’s vast sources of energy were put off limits.
The era of Ronald Reagan transformed my thinking. I became a Republican. Others did too, but it was the Clinton years in the 1990s that confirmed my distaste for the Democrat Party. When the GOP regained control of Congress in 1994, Clinton was smart enough to adopt much of the legislation they proposed and take credit for it.
The collapse of the Soviet Union was followed by the most transformative event since WWII. September 11, 2001 and the subsequent military engagements in Afghanistan and Iraq flowed from that Islamic treachery. I suspect that history will judge George W. Bush less harshly than his peers. The financial crisis in 2008 plunged the nation into a downward economic spiral that brings us to today. The election of Barack Obama has only served to exacerbate it.
The Internet loosened the grip of the “mainstream” news media as Americans with access to information as no previous generation, discovered they had been betrayed for decades by the liberal “spin” the news included. The advent of talk radio was a revelation for many.
At a time when what is most needed is serious investigative journalism regarding a virtually fictitious President, Americans must depend heavily on Rush Limbaugh and Fox News to inform them of the damage being inflicted on the nation.
You cannot be, as I was, indifferent to who is in public office, intent only on your personal life as if some mysterious force will intervene to make things turn out right.
There is nothing mysterious about “the consent of the governed.” There is nothing mysterious about the ability of Americans to put things on the right path again. The American Dream can be made to work if we elect the right people to represent us and begin to shrink the federal government. That is the lesson I have drawn from my years and one I hope to see reignited in the years to come.
© Alan Caruba, 2010
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