Immediate Gratification?

Immediate Gratification About Your Future?

Henny-Penny, the sky is falling. Washington Mutual and Wachovia have gone belly-up, and General Motors fell from $27.23 to $4.83, from 2007 to 2008.

McCain admits it is all a mystery to him, and Obama looks presidential by being calm and promising a simple solution after he is elected. Is there a tried and true
solution?

Once upon a time there was a Great Depression (1929-1939), and Henny-Penny, the
sky really did fall. It was no metaphor, almost 24% unemployment reduced the
American economy to stagnation.

Did you know the U.S. was not always a rich country? In 1929 up to 50% of Americans were living below the minimum subsistence level. Get this – the average income was $750 annually, and for farmers, $273 a year. Your grandparents had very low life expectations. And you and I are living like royalty and expect more.

Answers Really Are Out There

In life we do not have the Windows Systems Restore to return to the past when our 401K was worth twice as much. The Government cannot return General Motors to $27. What can Washington and the Federal Reserve do?

John Maynard Keynes (1883-1946)

Intellectuals like academic economists are quick to remind us there are no panaceas
for recessions. They offer suggestions like, Ride-it-out! The natural order of supply
and demand will improve things, government intervention will only bring more disorder, and even, we must have a balanced budget or our grandchildren will suffer.

English economist J.M. Keynes was a contrarian and said; interest-rates, taxation and public projects would get us out of a recession or depression. The secret was Deficit Spending by the government.

First off reduce interest rates to banks, slash taxes on the public, and spend, spend, and spend on the infrastructure like bridges, highways, and public housing for the chronically deprived thirty percent of the population.

The three elements to positive economic change according to Keynes:

1. Boost the amount of money in circulation called M1.
2. Increase the Government budget by spending more and not worry about a balanced budget.
3. Offer easy credit to business to create jobs. Government loans are hot because two-thirds of new jobs are created by small businesses.

Are You Nuts

J.M. Keynes was ridiculed by other economists, his government, and world capitalists. International governments including the U.S. continued to believe
in a balanced budget through out the Great Depression of 1929-39, and unemployment rose, and the economy tanked.

Roosevelt and his New Deal did not get it until 1938 and war preparations.
Get this – unemployment fell from 17% to 1.1% from 1939 to 1945. The army squeezed out excess labor, and defense work used the rest of the employables.

One country, not his own Great Britain, primed-the-pump with Deficit Spending
by the government. Sweden recovered from the world depression in 1934 through
printing more Miljoner Krona (MKR) Swedish money.

Today the Krona is 0.13936 or 7.17570 for the U.S. dollar.

The rest of the world who refused Deficit Spending would suffer to 1939, and then World War Two required cannon fodder, and laborers to support the military.

Today

The International Monetary Fund advocates raising taxes and slashing government budgets to overcome recessional economies. They never read Keynesian economics
in The Economic Consequences of The Peace (1919) or The General Theory of Employment, Interest and Money (1936).

JMK predicted massive unemployment after World War 1 because the Germans et al. could not pay the war reparations. It was the direct cause of WW2.

What did the U.S. learn after the Great Depression?

After WW2 we did not burden Germany and Japan with war reparations, and even
sent them capital to rebuilt their economies through the Marshall Plan.

Employment Act of 1946

At the end of WW2 Congress passed a law requiring the U.S. government to maintain a policy and take responsibility (Federal Reserve) to promote maximum
employment, production, and consumer purchasing power.

The administration in Washington and the Congress, are legally responsible to use
Fiscal and Monetary policies to fine-tune our economy for growth.

That means fiscal policies of the treasury and its revenues are to spend money and collect taxes to improve the economy. Monetary policies are to be used to increase the availability of money and capital to expand purchasing power and assist business growth for greater employment.

While Keynes lived (up to 1946) the opposition to Deficit Financing were his peers and the top 1% of the U.S. Please underline this: in 1929 the richest one-percent (1%) owned forty-percent (40%) of the U.S. wealth. The middle-class was 15-20% of the population.

In 2007 the richest two-percent (2%) owned forty-percent of the U.S. wealth. You
decide how easily our economy changes direction or control.

Advice in 2008

During the Depression the Wall Street billionaires advised the government to let market forces work out the price of stock and bonds, the bank supply of money for loans, and the economy. It was their mantra that supply and demand would prevail in the long-run.

In 1936 Keynes said, don’t tell me about the long run. In-the-long-run, we-are-all-dead!

Last shot:

Not one person out of a thousand we asked ever heard of U.S. Major General Smedley D. Butler (Marines) and the Business Plot of 1934. We suggest you Google the name General Smedley Butler, 1881-1940 because history does repeat itself, and people do not change their instincts, reflexes and conditioning.

The Du Ponts, Grayson Murphy of Goodyear, Bethlehem Steel, and the J.P. Morgan
banks requested General Butler to head a military coup to overthrow Roosevelt in
1934.

The conspiracy included Al Smith, former governor of New York and democratic presidential candidate in 1928, and John Davis, another democratic candidate for president and agent for J.P. Morgan.

They wanted a fascist government like Mussolini of Italy to replace Roosevelt. They had the millions to bribe officials, and owned the newspapers, magazines and media
to influence public opinion. It was a close call.

The multimillionaires who wanted a coup included Henry Ford, John D. Rockefeller, and John and Allen Dulles (later Eisenhower’s Secretary of State and his brother Allen, head of CIA).

How come you never read or heard about the Business Plot?

General Butler informed Roosevelt of the coming conspiracy, and later
testified in front of the McCormack-Dickstein committee (House Unamerican
Activities) and the villains ran for cover. Who controls the media today?

Could Obama be deposed from the White House by a coup of influential Republicans? Nah, nyet, no way? Maybe. Some folks are hard losers.

Endwords

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See ya,

copyright © 2008
H. Bernard Wechsler
www.speedlearning.org
hbw@speedlearning.org
1-877-567-2500
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