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Forum Post: Another few words about the Great Depression. This is what really happened.

Posted 12 years ago on Oct. 20, 2011, 5:43 p.m. EST by Mcc (542)
This content is user submitted and not an official statement

Another word about the first Great Depression. It really was a perfect storm. Caused almost entirely by greed. First, there was unprecedented economic growth. There was a massive building spree. There was a growing sense of optimism and materialism. There was a growing obsession for celebrities. The American people became spoiled, foolish, naive, brainwashed, and love-sick. They were bombarded with ads for one product or service after another. Encouraged to spend all of their money as if it were going out of style. Obscene profits were hoarded at the top. All of this represented a MASSIVE transfer of wealth from poor to rich. Executives, entrepreneurs, developers, celebrities, and share holders. By 1929, America's wealthiest 1 percent had accumulated around 40% of all United States wealth. The upper class held around 30%. The middle and lower classes were left to share the rest. When the majority finally ran low on money to spend, profits declined and the stock market crashed. Of course, the rich threw a fit and started cutting jobs. They would stop at nothing to maintain their disgusting profit margins and ill-gotten obscene levels of wealth as long as possible. The small business owners did what they felt necessary to survive. They cut more jobs. The losses were felt primarily by the little guy. This created a domino effect. The middle class shrunk drastically and the lower class expanded. With less wealth in reserve and active circulation, banks failed by the hundreds. More jobs were cut. Unemployment reached 25% in 1933. The worst year of the Great Depression. Those who were employed had to settle for much lower wages. Millions went cold and hungry. The recovery involved a massive infusion of new currency, a World War, and higher taxes on the rich. With so many men in the service, so many women on the production line, and those higher taxes to help pay for it, the lions share of United States wealth was gradually transfered back to the middle class. This redistribution of wealth continued until the mid seventies. This was the recovery. A massive redistribution of wealth. 

Then it began to concentrate all over again. Here we are 35 years later. The richest one percent now own well over 40 percent of all US wealth. The lower 90 percent own less than 10 percent of all US wealth. This is true even after taxes, welfare, financial aid, and charity. It is the underlying cause.   No redistribution. No recovery.

The government won't step in and do what's necessary. Not this time. It's up to us. Support small business more and big business less. Support the little guy more and the big guy less. It's tricky but not impossible.

No redistribution. No recovery.

41 Comments

41 Comments


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[-] 1 points by jeyowell1 (57) 12 years ago

Good post. Unbalanced wealth concentration is like sucking all the oxygen out of the room, and wondering why nobody has enough air to breath. It has happened repeatedly throughout history, and humans just never seem to learn the lesson that it always ends badly with the same refrain before it does: "but this time is different".

[-] 1 points by Mcc (542) 12 years ago

Good analogy. Thanks for the comment.

[-] 1 points by OurTimes2011 (377) from Arlington, VA 12 years ago

According to the organizer,

"Together we can ensure that these banking institutions will always remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won't support companies with unethical business practices.

• Research your local credit union options • Open an account with the one that best suits your needs • Cancel all automatic withdrawals & deposits • Transfer your funds to the new account • Follow your bank's procedures to close your account before 11/05"

http://facebook.com/nov.fifth

Here is what I suggest:

Do not move all of your funds. To put this big of a strain on the system may be irresponsible. Move some of your money out. Just opening an account will send the signal we need.

To find a Credit Union: http://www.findacreditunion.com/ http://locator.cucentral.com/ http://www.findyourcreditunion.co.uk/

[-] 1 points by Mcc (542) 12 years ago

Another good one. Interesting points.

[-] 1 points by Bleego (28) 12 years ago

It is commonly accepted as myth among macro economists that wwII pulled us out of the depression. War can only ever hurt economy. The debt spending did help a bit in the short term in '42, however serious economists generally agree that it was programs like WPA & 'the new deal' that boosted us out of the depths of the depression. Ironically the supreme court ruled such programs unconstitutional. Which may explain in part why Obama hasn't taken similar steps now. At the time Roosavelt claimed that he was instituting such radical measures to save the American aristocracy from being overrun by populist revolution. Now it seems there will be no saving them.

It really goes to show you how the supreeme court has sold out the working man time and time again. I mean, corporations are people? Really?!?

[-] 1 points by Mcc (542) 12 years ago

We can agree On the WPA (I should have included that in my little essay) and the New Deal. Definitely agree. I guess we can disagree on the effect of WWII. I'm convinced that WWII was a huge boost for the middle class. We can agree that today's wars are much different. No benefit. I think it's primarily because of incredible health care expenses and pensions which have to stack up against this record high cost of living and record high corporate profits. No bid government contracts. Different tax structure. Possibly importation (I don't know who produces the bulk of military equipment. Do you? I'd like to know.).

Even the supreme court is sold out. Amazing.

[-] 1 points by Bleego (28) 12 years ago

War produces nothing, but it's expensive. It can of course be required to survive, but in the long term it can only put drag on economy. Part of the reason that so many people think that wwII helped the economy is that the fifties were a time of great prosperity for the middle class, however this has much more to do with advances in American oil production and contracts than with any residual economic effects related to wartime production.

[-] 1 points by Mcc (542) 12 years ago

My views regarding the economic benefit of WWII regard specifically to the redistribution of wealth that followed. Huge benefit for the middle class. I also suppose the victory inspired people but that's about it.

[-] 1 points by misunderstood101 (68) from Los Angeles, CA 12 years ago

wow a war saved our economic butts....so we have 2somewhat wars now and doing no better...and we will be bringing more troops home from Iraq to what??? higher unemployment?

[-] 1 points by Mcc (542) 12 years ago

Entirely different tax structure. WWII was paid for with higher taxes (mostly on the rich) and new currency. The dollar lost some value but the middle class ended up with a net gain in buying power. Today's tax structure is nowhere near as progressive. No policies to reverse or prevent further concentration of wealth. Then you have Haliburton. Giant no-bid government contracts, diversion of funds. The women have to work anyway in part, because of the higher cost of living which is directly tied to record high corporate profits. Its a train wreck. We are headed for the worst economic and cultural crisis of all time. This is only the beginning.

[-] 1 points by newdawn (11) 12 years ago

I'm not quite sure what is being suggested here. Are you talking about a jobs strategy, massive government investment in infrastructure to spur job growth, new social contract, progressive taxation for the higher incomes?

What does support small businesses more translate into? I know you're talking of the welfare state for the rich getting dismantled and moving priorities to smaller entities and reduction of huge concentrations of wealth. Anything specific you have in mind, or something more along the lines of FDR 2.0?

[-] 1 points by Mcc (542) 12 years ago

The government will not take any steps to address the concentration of wealth. Except maybe, to make it worse. Therefore, the masses need to think in detail about every dollar we spend. Spend less money up and more money down or across. I'll give just one specific suggestion for now but I will post at least 25 later.

If you want to see any movie, wait for the DVD to show up at the local resale shop and buy it used for a few bucks. This would mean a tad less for the filthy rich producers and actors and a tad more for the local resale shop.

There is no perfect answer. Jobs will be lost either way. But if we spend less money up, the little guy would end up with a slight gain in relative buying power after a few years. The big guy with a slight loss.

No redistribution. No recovery.

Thanks for the response.

[-] 1 points by thoreau42 (595) 12 years ago

"Support small business more and big business less."

That might be the only true sentence in the entire post.

Why are poor people poor? Is it because they don't have enough money? What if we redistributed all the money in the country evenly right now? You know what would happen? A year from now, all the rich people would be rich again, and most of the poor people would be poor again. Why?? Being poor isn't about having no money. Being poor is about not having the abilities or means to sustain yourself and grow, economically. Skills and opportunities are what get people out of poverty, not wealth redistribution. Small business is a KEY part of this.

[-] 1 points by Mcc (542) 12 years ago

I've heard this flawed argument many times. You're forgetting one very important statistic. It took 35 years for the nation's wealth to go from somewhat concentrated to extremely concentrated. Now, would you like to take another shot? And this time, get real.

[-] 1 points by thoreau42 (595) 12 years ago

And it keeps getting concentrated why? I mean, you're telling me that Bill Gates and some random bum have the same wealth-generating capacity? Is that real enough for ya?

[-] 1 points by Nulambda (265) 12 years ago

You are right. Redistributing wealth through taxation does nothing exact devalue the dollar and create a system where peoplevare dependent on the State. Actively engaging people, providing education, job training, access to resources, and economic mobility are how you createvwealth and put that wealth creation in more hands.

"if I give you a fish, I feed you for today. If I teach you to fish, you can feed yourself (and others) for a lifetime"

That is the key to economic prosperity.

[-] 1 points by Mcc (542) 12 years ago

Tell me how wealth redistribution through taxation devalues the dollar. I want to hear this.

What about those college grads out there who can't find a job in their chosen fields? Should they take up fishing instead?

Next.

[-] 1 points by Nulambda (265) 12 years ago

Because the dollar looses its 'working' value. To understand this you have to understand supply/ demand. If the government distributes dollars to people who are not providing any 'work' like welfare, then the dollar ceases to be valued as high. This means everybody's work is devalued to make up the difference. Also, if the government borrows or prints money to distribute money more equally, then this creates inflation (which is really a tax) which devalues the dollar.

The reason students can't find jobs is because main street is being taxed too high, and because of an inflated economy, cannot afford to higher. Also, instead of students looking for someone to give them a job, maybe they should startnlooking at how to make a job for themselves in their field of industry. Also, I have liitle sympathy for the student who chose to study some obscure field and then can't find work. Be more responsible with your investments. I mean, if somebody decides to study fishing with poles,when everybody else is learning fishing with nets, well you should have learned how to fish with nets.

It is not we the peoples responsibility to make sure that you are not foolish. You are free. With that comes responsibility. And, with freedom, comes bad choices. We are all human. We all make mistakes. The point is to learn from them, nt make them everybody responsibility.

I do agree that corporations have an unfair advantage based on their size, resource accumulation, and tax advantages. I would deffinetly argue that monopolies and corporations that basically function as monopolies, should be broken up, nationalized, and sold back out to the American public. But when you talk about redistributing wealth through progressive taxation, you lose me. This hinders progress.

Education, ease of excess to education (debt free loans would be a start) are absolutely necessary. Job training programs, even government public works spending are all reasonable ideas. But proggressive taxation, and the Soros model, are apart of the old paradigm that OSW wants to change.

And fuck you and your irogant 'next'. Pompous little shit. :P

[-] 1 points by Mcc (542) 12 years ago

First of all, I apologize for the wise-ass comment. But you have no idea how many people I have been debating over the last 48 hours. Almost all of them have been die hard conservatives. The same points over and over. Most of which have been thoroughly disproven. I see the 'fuck you'. I'm not intimidated but I do apologize for the wise-ass comment. I'll try to save them for when I'm insulted first. I get plenty.

Ok. Now for the issues.

I understand supply and demand. But you're comparing your apples with my oranges. I have said many times that I don't want a welfare state. You're assuming that I want a redistribution through taxation to support a welfare state. What I want is a redistribution through taxation (in part) to effect a reasonable scale of income opportunity for all those willing and able to work and an adequate safety net for those who can't. So your answer was in part, to a question that I didn't ask. Definitely apples and oranges.

We can agree that currency loses value as more is printed. But that's not what I was asking. Apples and oranges.

I disagree with the entire second paragraph except for the valid points about forethought on the part of the student. We'll have to disagree 100 percent on the rest. You're convinced that jobs are not available to those students in large part, because of taxation. I'm convinced that product/service demand is lower because of the COW and because of more people in need of work to cover the record high cost of living which is tied directly to record high corporate profits. We disagree entirely on every point except for those regarding forethought on the part of the student.

Again, I don't want the masses carried over every little hurdle. I don't want a welfare state and I don't want the government to wipe any tears over spilled milk. I really wish you people would stop making these assumptions over and over and over and over and over and over and over again. I wish you would stop putting words in my mouth and greatly exaggerating my views on redistribution over and over and over band over and over and over and over again. Again. I want a partial redistribution through taxation, new currency (I know. Thats ok), and drastic changes in the spending habits of the masses. I don't want equal. Not even close. I want reasonable. That's all.

Partial agreement on fourth paragraph. Total disagreement on the last two comments regarding distribution and taxation. Hinders progress? No way. Not in the longterm as people begin to fall back down to earth. This epidemic of greed is great for $400 cell phones that aren't reliable and become obsolete in 5 years. Great for $400 operating systems that are full of bugs and become obsolete in 5 years. Bad for healthcare, energy, finance, economic stability, and society in general. I don't want a sky high pay scale. I don't want a flat pay scale. I want a reasonable pay scale. It worked for 30 solid years after WWII. It worked very well. We even landed on the moon and built the most sophisticated vehicle in history. It worked because we as a society were inspired in part by a desire to provide well for our families and in part by a desire to innovate. Now, we are OBSESSED by a desire to get filthy disgusting rich as quickly as possible. No way in hell will I ever agree with you that a reasonable pay scale would hinder progress. Not when you consider the big picture. No way. Never.

I have no issues with the 5th paragraph except for our profound disagreement on taxes and your harsh view of the OWS supporters. Of course Soros is a bitch. I hate the man. I'll give you one guess why.

Again, I'm sorry for the wise-ass comment but I get incredibly frustrated with the same conservative views over and over and the reckless assumptions.

[-] 1 points by Nulambda (265) 12 years ago

I should have read more of your post. I think I misintetpet your argument. Everything you say, I agree with. A lot of debates with people who dont understand inflation and debt.

You are right. I assumed you were coming from a lack of understanding of this principle. To mebthis is the real issue because this is what has to be dealt with before we can even begin to think about wealth redistribution though taxation.

My point on the student loans is that taxation in the firm of inflation is what stagnates the COW because it devalues today's earnings because you are paying for yesterday's spending. I think that is what you are arguing as well.

I like this open forum. But I think a lot of confusion comes in because most of us are self taught about the problems we are facing (due to an irresponsible media) and, though our conclusions are similar, the paths are very individualized.

One question:

Why do you disagree with the arguement that students should start to look at creating their own jobs, rather than being given a job? Figuring out a way to acquire resources and distribute them to the public is the chief function of business, and what generates wealth. Instead of waiting for someone to tell them what to do, start doing it. As value is created, then income is created. Is my thinking limited to the reality that acquiring the resources is near impsible in a monopolistic corporate environment, so not practical in the current state, or is there a fundamental economic principle that I am missing?

[-] 1 points by Mcc (542) 12 years ago

I don't want to misinterpret your 3rd paragraph. Can you reword it? Then I'll respond. I didn't disagree with your suggestion that students should try creating their own jobs. That was one that I basically agreed with. It's worth a shot anyway. I still say that income isn't 'created' unless your income grows from the tree you planted. I prefer the term 'transferred'. That's how I see it. I understand the infusion of currency but if you have an income in the form of currency, someone within the economy must take a loss in relative buying power. Thats the way I see it. I'm not crazy about the phrase 'generate wealth' for a similar reason regarding resources. If you grow a tree from nothing, cut it down, plant a new tree, and build your house, then hell yea. You've generated wealth for yourself. But if you build a Wal-Mart in one city and a neighboring city is deindustrialized as a direct result, then its not 'net wealth' in my book.

Yea. I'd say those students or graduates would have an issue acquiring resources in this economy. Depends on what they plan to produce and who they plan to sell it to. Still, I keep coming back to that primary issue. When too much wealth is already concentrated, demand drops. Not equally in every industry but in general. I still have my very strong views about the COW.

[-] 1 points by Nulambda (265) 12 years ago

I think I may be confused on COW. Please explain.

Inflation is an invisible tax because it devalues the dollar. Inflation is caused by credit lending/ debt acquiring. Therefore, as we acquire more debt,the price of goods and sources go up to reflect the loosing valebof the dollar. Inflation would be fine if everything rose equal. Like in math 1/1 = 5/5. However, this does not help Wall Street, where they are legally bound to prdueva profit for the share holders. For there to be a "growth" or profit, wages must be stagnated, turning the formula to 1/1 = 1/2... with 1 being wages and 2 being inflation. As this continues it creates a problem for the wage earners to meet their debt obligations (especially when interest is attached) because the cost if living is rising, while their wages are stagnate.

I would argue that this is not the problem, only a symptom of a larger problem, which is how our Federal Reserve Banking System works,and the consequences of a debt driven economy.

So this taxation (inflation) is what is causing wages to stagnate, living cost to rise,while corporations show record profits. This is how, if you look at thirdvworld countries, the middle class is destroyed, especially, like in Greece,Ireland, Spain,and England, when the global banking cartels start pushing for austerity measures to finance their debt-to-wealth system.

Is that better? This forum isvreally helping me learn to put my thoughts into words, I tell ya.... :)

[-] 1 points by Mcc (542) 12 years ago

Concentration of wealth. I've spent 20 hours on this in two days. I'll respond tomorrow.

[-] 1 points by thoreau42 (595) 12 years ago

You get it. Thanks.

[-] 1 points by Mcc (542) 12 years ago

How much wealth do firefighters preserve by saving lives and property every single day? What if none of our fires had ever been extinguished? How much wealth would we have then?

Now tell me. How many US firefighters would have to combine their assets to match the wealth currently held by Bill Gates?

Answer: The United States doesn't have that many firefighters. If every one of them combined their wealth, Bill Gates would still have more.

Until you people think on a deeper level, you have no chance in hell to match me in any debate.

[-] 1 points by thoreau42 (595) 12 years ago

This is what I hate about "debates" rather than discussions. In a "debate" it's all about proving who is right and who is wrong. You can be right. Do you feel better now? Got a huge boner? Discussions are all about finding out what is real. I'm more interested in the truth of the matter, whether I am right or wrong, then having a pissing contest with you. You win! Go celebrate!

[-] 1 points by Mcc (542) 12 years ago

I don't get any satisfaction getting arrogant like that. In fact, I almost didn't make the wise-ass comment. But I get incredibly frustrated when I debate most of you. It's like you listen to Limbaugh every day and take it as gospel. It's downright predictable.

Still, I am sorry about the wise-ass comment.

[-] 1 points by thoreau42 (595) 12 years ago

Fair enough. Thanks. I reallllllllly dislike Limbaugh, for the record. I am not able to be measured on the fake left-right paradigm. Everyone who views themselves on the left imagines me on the right, and vice versa. I am against the consolidation of power.

If we can agree that power corrupts, then it is in EVERYONE's best interest to not consolidate it. Historical examples of the benefits of consolidation of power are few and far between.

[-] 1 points by Mcc (542) 12 years ago

We can agree 100 percent on that. Good post.

[-] 1 points by thoreau42 (595) 12 years ago

And a centralized bank is the consolidation of power.

I'd rather risk ups and downs of a less-managed economy than the certain corruption and tyranny of a consolidated one.

[-] 1 points by cristinasupes (145) 12 years ago

In addition, support small companies that support their employees. For instance, how are the employees at your local grocery store treated? Do they have health benefits, allowed to join a union? How about the local eatery you go out to lunch at? When you go shopping for new clothes, are they American made?

[-] 1 points by Mcc (542) 12 years ago

Great points.

[-] 1 points by cristinasupes (145) 12 years ago

I have this thing where I need to study with some noise. So in between by four classes and two jobs (lol)... So I checked out the places near me that have WiFi and food and don't mind students who lurk for hours. I actually did a lot of research and asked a lot of questions before I chose a place. I study there about 4 times a week. I buy my lunch, tea and sometimes breakfast there too. I feel good knowing that the employees all have health insurance and fair wages.

[-] 1 points by Mcc (542) 12 years ago

Very observant. It would be nice if the free market worked for the little guy as well as we were told it would. Unfortunately, it doesn't. If we want anything remotely resembling economic justice, we need to think about every dollar we spend.

[-] 1 points by cristinasupes (145) 12 years ago

Amen. Don't even get me started on how I ended up being a student again at 32...after being told all I would need to get ahead in the world is determination and a college degree. I'm currently on my second masters.

[-] 1 points by Mcc (542) 12 years ago

Hope you get the career you're hoping for. Good luck with this screwed up economy. It's going to get worse.

[-] 1 points by cristinasupes (145) 12 years ago

I am studying to be a high school math teacher. A more worthy job I feel, than when I worked in finance. And best of luck to you too.

[-] 1 points by stevonbi (85) 12 years ago

Agree completely; makes me want to upchuck hearing about how we are commies when WE want wealth redistributed........ it was fine to do it all along when it was going THEIR way. We will not give up. WE will have change, and we will have economic justice, and we will regain control of the broken-down system.

[-] 1 points by Mcc (542) 12 years ago

I hope so. In fact, I'd be happy to see a positive sign within my lifetime.

[-] 1 points by stevonbi (85) 12 years ago

You're seeing it right here....and right now. This is it!!! The 1% isn't going to give us anything without a fight. We all need to stand up and be counted, let the bough-and-paid-for politicians know the game is up.