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Forum Post: I have been criticized by a small army for my hatred of the rich and my particular brand of protest. These people just don't understand. Let me put it this way. If everyone felt the way I do about greed, and made a statement to that effect with their wall

Posted 7 years ago on Dec. 23, 2011, 10:23 p.m. EST by ModestCapitalist (2342)
This content is user submitted and not an official statement

Let me put it this way. If everyone felt the way I do about greed, and made a statement to that effect with their wallets, the wealth would be significantly less concentrated in one year.

Whats that you say? Massive job loss?

No. I'm not proposing that we stop spending our money alltogether. Just that we stop giving so much to the rich. Support small business more and big business less. The little guy more and the big guy less. Poor and middle class communities more and rich communities less.

I don't believe that one single person out there will take that seriously until they understand the severity of concentration and the horrible downside.

They are even less likely to make that statement with their wallets if they make or accept any excuses for the rich. Like:

"The rich create jobs." "The rich pay more taxes." "The rich 'give back'."

BULLSHIT! THE RICH CONCENTRATE WAY TOO MUCH GOD DAMN WEALTH! THE RICHEST ONE PERCENT HOLD MORE PERSONAL WEALTH THAN THE BOTTOM NINETY PERCENT COMBINED. THIS IS TRUE EVEN AFTER THE JOBS, THE TAXES, AND THE FAKE HUMANITARIAN CRAP. ITS GETTING WORSE. AMERICA'S WEALTH IS BECOMING MORE CONCENTRATED AS WE SPEAK. I WANT AS MANY PEOPLE AS POSSIBLE TO UNDERSTAND THIS AND TAKE IT AS SERIOUSLY AS A FUCKING HEART ATTACK! UNTIL THEY DO, WE ARE FUCKED! THERE IS NO CHANCE IN HELL FOR A TRUE RECOVERY WITHOUT A PARTIAL REDISTRIBUTION OF WEALTH! THE GOVERNMENT WILL NEVER MAKE IT HAPPEN! ITS UP TO US! PERIOD!

40 Comments

40 Comments


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[-] 10 points by nucleus (3291) 7 years ago

The surest way to correct the problem of wealth accumulation is taxation.

1945-79 saw top bracket tax rates of 70-91%. During this period, the US paid down debt from 120% of GDP to just over 30%, built a nationwide infrastructure, had the longest period of growth and a booming middle class.

We need to tax the living shit out of the rich, and then tax them whatever is left over when they die. This will fund a civil society by ending the aristocracy and eliminating the plutocracy.

[-] 6 points by demcapitalist (977) 7 years ago

Thank you ! can we spend some of the money that we get from taxing the highest brackets at 70-90% to give tax breaks to folks who want to move manufacturing back to the US? Can we get rid of corn subsidies? and oil subsidies? can we bring back Glass Steagall too? can we reduce the fraction in fractional banking from 30 back to 10ish? can we please?

[-] 2 points by maplehead74 (60) from Brooksville, FL 7 years ago

Awesome, this is the conversation we need to be having.

[-] 1 points by demcapitalist (977) 7 years ago

You know what would be interesting ? lets look a bit more at the Eisenhower administration. He had that high % tax bracket, he warned about the military industrial complex, he thought social security was great,he increased the minimum wage, he was interesting, a republican back when they were fiscal conservatives.

[-] 1 points by maplehead74 (60) from Brooksville, FL 7 years ago

Sounds good to me :-) I am a big fan of the Bull Moose Party (President Roosevelt ) and there modern counter part The Vermont Progressive Party.

[-] 1 points by demcapitalist (977) 7 years ago

Both look good to me --------It will be interesting to see where Vermont ends up with their single payer healthcare.

[-] 2 points by hidden (430) from Los Angeles, CA 7 years ago

Why not?

[-] 1 points by ModestCapitalist (2342) 7 years ago

Demcapitalist. You and I agree most of the time. I've noticed you're more into the technical aspects of our crisis than generalizations. I'm with you 100% on those subsidies and Glass-Steagall. 100%. But reducing the fraction in reserve banking even lower? I thought it was already well under 30%. Way under in fact. I could be wrong about that but I strongly support higher reserves over lower ones. I'll tell you why.

I am extremely critical of the financial industry. I don't trust their executives, advisers, or accountants. I also don't want share holders compensated for profits made resulting from any form of crony capitalism. You already know how I feel about greed. I see it as a growing epidemic wrecking havok around the world. Smashing through moral character like a runaway train.

There is no doubt in my mind that more insider fat cats are cooking the books as we speak. Coming up with more complicated financial gimmicks to cash in on that don't even resemble actual services to the community. I don't want anymore business capital converted into private wealth for those executives, accountants, advisers, or share holders. I don't want anymore wealth concentrated, I don't want anymore bailouts, and I sure as hell don't want ordinary people left out in the cold when the global depression hits.

It hasn't happened yet but I strongly suspect that a day will come when the FDIC tanks. I believe that day will come when the US and Europe economies tank. There will be a run on the banks and the masses will be left with only a fraction of their savings. Their nest eggs will have essentially been converted into more personal wealth for the rich. I can't prove this. There is no president to refer to. But I know that day will come.

For this reason, I support higher fractional reserves. Much higher than 10%.

[-] 1 points by demcapitalist (977) 7 years ago

Not 30%. 30 to one leverage, can't quite do it in my head but more like %3.3 reserves That's what the banks were using when they crashed. Not only that but some of the collateral was those POS CDO's MF Global was using 44X leverage for that bad bond deal that ruined them and would have been no problem with 10% reserves ---Yes you are right and really we are on the same page. Yes we need much higher reserves.

[-] 3 points by ModestCapitalist (2342) 7 years ago

Damn good points. I wish our leaders had the moral character and the courage to raise those marginal tax rates. But I don't think they ever will. Its astonishing just how sold out our government has become. Its a nightmare.

Note: A knowledgable and trustworthy contributor has gone on record with a claim that effective tax rates for the rich were considerably lower than book rates during the years of redistribution that I have made reference to. His point was that the rich were able to avoid those very high marginal rates of 70-90% under the condition that they invested specifically in American jobs. His claim is that effective rates for the rich probably never exceeded 39% and certainly never exceeded 45%. My belief is that if true, those effective rates for the rich were still considerably higher than previous lows of '29'. Also that such policies still would have contributed to a partial redistribution by forcing the rich to either share profits and potential income through mass job creation or share income through very high marginal tax rates. This knowledgable contributor and I agree that there was in effect, a redistribution but disagree on the use of the word.

[-] 3 points by demcapitalist (977) 7 years ago

How bad would it be if they invested it in US jobs? now they just stash it overseas.

[-] -1 points by Jflynn64 (337) 7 years ago

The problem is GDP growth began waning as global competition increased forcing Kennedy to begin lowering taxes in 1962. Both unemployment and inflation increased to such levels during the '70s that we created a new definition - the misery index. The surest way to correct the problem of wealth accumulation is a recession.

[-] 4 points by BlueRose (1437) 7 years ago

You have some of the best posts on here, the trolls don't like it. I agree, we need to be VERY conscientious how we spend our money, support the 99%, not the 1%.

[-] 3 points by ModestCapitalist (2342) 7 years ago

Thanks for the support. I feel the same way about your comments. I've seen them all over the site. Like I told you before, I'm glad to be on the same team.

[-] 3 points by ModestCapitalist (2342) 7 years ago

The ugly truth. America's wealth is STILL being concentrated. When the rich get too rich, the poor get poorer. These latest figures prove it. AGAIN.

According to the Social Security Administration, 50 percent of U.S. workers made less than $26,364 in 2010. In addition, those making less than $200,000, or 98 percent of Americans, saw their earnings fall by $4.5 billion collectively.

The incomes of the top one percent of the wage scale in the U.S. rose in 2010; and their collective wage earnings jumped by $120 billion. In addition, those earning at least $1 million a year in wages, which is roughly 93,000 Americans, reported payroll income jumped 22 percent from 2009.

Overall, the economy has shed 5.2 million jobs since the start of the Great Recession in 2007. It’s the worst economic downturn since the Great Depression in the 1930’s.

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. In 1928, the rich were already way ahead. Still, they were given huge tax breaks. 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 44 percent of all United States wealth. The upper, middle, and lower classes were left to share the rest. When the lower 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 public works program, 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, some US wealth was gradually transferred back down to the majority. This redistribution of wealth continued until the mid seventies. By 1976, the richest 1 percent held less than 20 percent. The lower majority held the rest. And rightfully so. It was the best year ever for the middle and lower classes. This was the recovery. A partial redistribution of wealth.

Then it began to concentrate all over again. Here we are 35 years later. The richest one percent now own 40 percent of all US wealth. The upper, middle, and lower classes are sharing the rest. This is true even after taxes, welfare, financial aid, and charity. It is the underlying cause. If there is no redistribution, there will be no recovery.

Note: A knowledgable and trustworthy contributor has gone on record with a claim that effective tax rates for the rich were considerably lower than book rates during the years of redistribution that I have made reference to. His point was that the rich were able to avoid those very high marginal rates of 70-90% under the condition that they invested specifically in American jobs. His claim is that effective rates for the rich probably never exceeded 39% and certainly never exceeded 45%. My belief is that if true, those effective rates for the rich were still considerably higher than previous lows of '29'. Also that such policies still would have contributed to a partial redistribution by forcing the rich to either share profits and potential income through mass job creation or share income through very high marginal tax rates. This knowledgable contributor and I agree that there was in effect, a redistribution but disagree on the use of the word.

One thing is clear from recent events. The government won't step in and do what's necessary. Not this time. Book rates for the rich remain at all time lows. Their corporate golden geese are heavily subsidized. The benefits of corporate welfare are paid almost exclusively to the rich. Our Federal, State, and local leaders are sold out. Most of whom, are rich and trying to get even richer at our expense. They won't do anything about the obscene concentration of wealth. 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.

For the good of society, stop giving so much of your money to rich people. Stop concentrating the wealth. This may be our last chance to prevent the worst economic depression in world history. No redistribution. No recovery.

Those of you who agree on these major issues are welcome to summarize this post, copy it, use any portion, link to it, save it, show a friend, or spread the word in any fashion. Most major cities have daily call-in talk radio shows. You can reach thousands of people at once. They should know the ugly truth. Be sure to quote the figures which prove that America's wealth is still being concentrated. I don't care who takes the credit. We are up against a tiny but very powerful minority who have more influence on the masses than any other group in history. They have the means to reach millions at once with outrageous political and commercial propaganda. Those of us who speak the ugly truth must work incredibly hard just to be heard.

[-] 2 points by Durandus (181) 7 years ago

Yes...boycott all Corporate goods and services and sponsored entertainment...not one red cent to any Corporate enterprise.

Starve the Beast!!!

[-] 2 points by ModestCapitalist (2342) 7 years ago

On Saturday the 10th of December, I promised all of you that CNN would use their new show about 'ordinary people' heroes as yet another excuse to plug their army of filthy disgusting rich fake humanitarian celebrity pigs. All of which are promoting new CDs, movies, tours, ect. ITS ALWAYS ABOUT MARKETING.

I just did some checking. They did exactly as I promised they would. Those 'ordinary people' were exploited. The entire show was just another gimmick to sell product. Below is the exact entry I posted on Saturday the 10th.

CNN. The Celebrity News Network. What a bunch of rotten sold-out pigs. It's bad enough that they constantly praise celebrities for their bogus fake humanitarian crap every time they have a new movie, show, CD, fashion line, or some other over-priced crap to promote. All while COMPLETELY IGNORING the record high concentration of wealth that filthy rich celebrities represent. That's bad enough. But now, they have the nerve to hype up a new show about 'heroes' and claim that its about ordinary people. It's not. It should be but it's not.

IT SHOULD BE BUT ITS NOT. Those 'ordinary people' are being exploited for ratings and PR. How do I know this? That's easy.

The show will be hosted by Anderson Cooper. The CNN poster boy. His face appears on every single ad for the show. EVERY SINGLE ONE. That wasn't necessary. The show will be attended by the same filthy rich celebrity pigs that CNN commentators constantly praise for their bogus 'good will' fake humanitarian crap. That isn't necessary.

Mark my words: Those celebrity pigs won't be upstaged by 'ordinary people'. No way in hell. THEY REFUSE TO BE UPSTAGED BY ANYONE. They won't stay seated. They won't stay in the background. They have agreed to attend the show in part, to give the ILLUSION that they are humble and modest. They are not. They all have ulterior motives. Every single one of them.

Mark my words: Those filthy rich celebrities have already negotiated with CNN for their own airtime. Their faces will be shown OVER AND OVER AND OVER during the show itself. They will be mentioned by name and invited to appear on stage during the show.

FILTHY RICH CELEBRITY PIGS WHO ALL HAVE NEW PRODUCTS TO PROMOTE. EVERY SINGLE ONE OF THEM. THEY ALWAYS HAVE ULTERIOR MOTIVES. ITS AWAYS ABOUT MARKETING. ITS ALWAYS ABOUT PROMOTING THEMSELVES. THIS IS NO EXCEPTION. THEY CANT EVEN STEP ASIDE AND LET A FEW REAL HEROES HAVE THEIR OWN FUCKING DAY WITHOUT SHOWING THEIR ROTTEN CELEBRITY FACES. ITS A SHAM. ANOTHER ROTTEN MARKETING TRICK.

Of course, there will be scripted lines. The ordinary people were chosen in part, for their willingness to show love for their favorite celebrities or fake it for the camera. Of course, there will be celebrity praise. Maybe, even fake tears. Just remember: Commercial airtime is incredibly valuable. Each minute of commercial airtime is worth six or seven figures. They aren't allocated unless there is a profit to be made. These shows don't just happen. They are carefully planned and rehearsed ahead of time. Every single participant has been coached on what to do and what to say. This includes the ordinary people. Most of whom probably don't realize that they are being exploited by CNN. The Celebrity News Network.

CNN. It's bad enough that they constantly praise filthy rich celebrity pigs for their bogus fake humanitarian crap. They even devoted an entire segment in December of '09' to Madonna and her now disgraced 'Raising Malawi' foundation. That's bad enough. But they can't even throw a bone to a few ordinary people without including a bunch of filthy rich fake humanitarian celebrity pigs.

ALL OF WHICH HAVE NEW PRODUCTS TO PROMOTE. EVERY SINGLE ONE OF THEM.

It makes me sick.

Good will has become big business.

Thats what I posted on Saturday the 10th. The show aired Sunday the 11th. It was basically a two hour long commercial with a gimmick. Those 'ordinary people' were exploited by CNN to give the illusion of heart felt appreciation when in fact, the entire event was sold out to the entertainment industry.

If you search the phrase "CNN heroes", the vast overwhelming majority of entries make immediate reference to the filthy disgusting rich fake humanitarian celebrity pigs who attended the event. All of whom have new products to promote. Ch'Ching!

If you search the phrase 'CNN heroes' on the 'image' page most of the photos that show up are of the filthy disgusting rich fake humanitarian celebrity pigs who attended the event. All of whom have new products to promote. Ch'Ching!

I wish I could tell you that 1 out of 10 of those photos on the 'image' page were of those 'ordinary (decent) people'. But I can't. Its more like 1 out of 100. The rest of the photos are of Anderson Cooper and the filthy disgusting rich fake humanitarian celebrity pigs who attended the event. Ch'Ching!

Like I said on Saturday the 10th, those filthy disgusting rich fake humanitarian celebrity pigs negotiated with CNN for their own air time. Their own close-ups. Their own introductions. Otherwise, they wouldn't have bothered to show up. Its now obvious that they have also instructed their publicists to plaster the entire web.

Ch' God Damn Fucking Ching!

Those bastards. They couldn't even step aside for one fucking event and let those 'ordinary (decent) people' have their own fucking day. They just had to show up and exploit ANOTHER event for maximum publicity. Maximum sales. MAXIMUM PROFIT.

Anderson Cooper, Miley Cyrus, Kid Rock, Taylor Swift, and the whole bunch of those filthy disgusting rich fake humanitarian celebrity pigs suck. THEY SUCK. They have some God Damn nerve.

HEY CNN. YOU FILTHY SOLD-OUT PIGS. I HAVE A CHALLENGE FOR YOU. ITS MORE THAN A CHALLENGE. ITS A FUCKING DARE! THATS RIGHT. I DARE YOU TO PROVE ME WRONG. I FUCKING DARE YOU. PRODUCE ANOTHER TWO HOUR LONG SHOW ABOUT 'HEROES'. THATS RIGHT YOU FUCKING SELL-OUT PIGS. I DARE YOU TO DO ANOTHER ONE. THIS TIME, LEAVE THE CELEBRITIES OUT OF IT. LEAVE THEM OUT. LEAVE THEM OUT. LEAVE THEM OUT. LEAVE THOSE FILTHY DISGUSTING RICH FAKE HUMANITARIAN CELEBRITY PIGS OUT OF IT!

No? THATS WHAT I THOUGHT. You miserable fucking sell-out pigs. THATS WHAT I THOUGHT!

[-] 2 points by deGrene (199) 7 years ago

I agree with you Modest. When you buy from a small, locally-owned business, not only to do support the little person trying to make a living, but you also support your neighbor, maybe your friend. The money spent at corporate stores, chains and big boxes all flows directly out of your community. When you buy from a business owner in your own community, the money is more likely to remain there.

People too often think about doing what is convenient, easy, and cheap before tye think about doing waht is right and most beneficial to others. It's a shame upon our society, but it is most often true. It's also time it changed. Communities have to start taking care of their own -- not isolationism, but becoming, once again, the real definition of "community." People working together for their own common good.

[-] 1 points by ModestCapitalist (2342) 7 years ago

Well said. Very well said. Glad to be on the same team.

[-] 1 points by deGrene (199) 7 years ago

Likewise.

[-] 2 points by ModestCapitalist (2342) 7 years ago

"The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself." -Allen Greenspan testifying before congress in spring of '05'.

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society." -Albert Einstein 1949

" The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions." -Albert Einstein 1949

"The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop." -Mariner Eccles Chairman of the Federal Reserve under FDR

Robert Reich and a dozen more prominent economists have gone on record with similar views.

You're probably wondering. If these guys were/are right and the wealth was heavily concentrated just prior to the Great Depression, how did we recover?

That's simple but not well known.

There was a partial redistribution of wealth from the mid '30's to the mid '70's.

So why are we in this mess all over again?

Again, very simple. The wealth has become concentrated all over again. We have allowed the rich to become too rich. Now, we are paying for it.

[-] 0 points by Jflynn64 (337) 7 years ago

So explain how wealth concentration caused the great depression.

[-] 1 points by ModestCapitalist (2342) 7 years ago

The buying power of the many was concentrated into the buying power of the few. This ultimately reduced overall demand. This reduced production resulting in mass layoffs reducing demand even further. and so on.

[-] -1 points by Jflynn64 (337) 7 years ago

The money is in the system. If what you are saying is that the few had most of the money and they weren't spending the money but putting it in the bank then the bank will lend that money out. The money is still in the system. What matters more is confidence.

Here is an extract from christina Roemer's paper. I did not copy the whole section that discussed the gold standard but it is there if you want to read it:

Causes of the Great Depression

The fundamental cause of the Great Depression in the United States was a decline in spending (sometimes referred to as aggregate demand), which led to a decline in production as manufacturers and merchandisers noticed an unintended rise in inventories. The sources of the contraction in spending in the United States varied over the course of the Depression, but they cumulated into a monumental decline in aggregate demand. The American decline was transmitted to the rest of the world largely through the gold standard. However, a variety of other factors also influenced the downturn in various countries.

Stock market crash

The initial decline in output in the United States in the summer of 1929 is widely believed to have stemmed from tight U.S. monetary policy aimed at limiting stock market speculation. The 1920s had been a prosperous decade, but not an exceptional boom period; wholesale goods prices had remained nearly constant throughout the decade and there had been mild recessions in both 1924 and 1927. The one obvious area of excess was the stock market. Stock prices had risen more than fourfold from the low in 1921 to the peak reached in 1929. In 1928 and 1929, the Federal Reserve had raised interest rates in hopes of slowing the rapid rise in stock prices. These higher interest rates depressed interest-sensitive spending in areas such as construction and automobile purchases, which in turn reduced production. Some scholars believe that a boom in housing construction in the mid-1920s led to an excess supply of housing and a particularly large drop in construction in 1928 and 1929.

By the fall of 1929, U.S. stock prices had reached levels that could not be justified by reasonable anticipations of future earnings. As a result, when a variety of minor events led to gradual price declines in October 1929, investors lost confidence and the stock market bubble burst.

Panic selling began on “Black Thursday,” October 24, 1929. Many stocks had been purchased on margin, that is, using loans secured by only a small fraction of the stocks’ value. As a result, the price declines forced some investors to liquidate their holdings, thus exacerbating the fall in prices. Between their peak in September and their low in November, U.S. stock prices (measured using the Cowles Index) declined 33 percent. Because the decline was so dramatic, this event is often referred to as the Great Crash of 1929.

The stock market crash reduced American aggregate demand substantially. Consumer purchases of durable goods and business investment fell sharply after the crash. A likely explanation is that the financial crisis generated considerable uncertainty about future income, which in turn led consumers and firms to put off purchases of durable goods. Although the loss of wealth caused by the decline in stock prices was relatively small, the crash may also have depressed spending by making people feel poorer. As a result of the drastic decline in consumer and firm spending, real output in the United States, which had been declining slowly up to this point, fell rapidly in late 1929 and throughout 1930. Thus, while the Great Crash of the stock market and the Great Depression are two quite separate events, the decline in stock prices was one factor causing the decline in production and employment in the United States.

Banking panics and monetary contraction

The next blow to aggregate demand occurred in the fall of 1930, when the first of four waves of banking panics gripped the United States. A banking panic arises when many depositors lose confidence in the solvency of banks and simultaneously demand their deposits be paid to them in cash. Banks, which typically hold only a fraction of deposits as cash reserves, must liquidate loans in order to raise the required cash. This process of hasty liquidation can cause even a previously solvent bank to fail. The United States experienced widespread banking panics in the fall of 1930, the spring of 1931, the fall of 1931, and the fall of 1932. The final wave of panics continued through the winter of 1933 and culminated with the national “bank holiday” declared by President Franklin Roosevelt on March 6, 1933. The bank holiday closed all banks, permitting them to reopen only after being deemed solvent by government inspectors. The panics took a severe toll on the American banking system. By 1933, one-fifth of the banks in existence at the start of 1930 had failed.

By their nature, banking panics are largely irrational, inexplicable events, but some of the factors contributing to the problem can be explained.

Economic historians believe that substantial increases in farm debt in the 1920s, together with U.S. policies that encouraged small, undiversified banks, created an environment where such panics could ignite and spread. The heavy farm debt stemmed in part from the response to the high prices of agricultural goods during World War I. American farmers borrowed heavily to purchase and improve land in order to increase production. The decline in farm commodity prices following the war made it difficult for farmers to keep up with their loan payments . The Federal Reserve did little to try to stem the banking panics. Milton Friedman and Anna J. Schwartz, in the classic study, A Monetary History of the United States, argue that the death of Benjamin Strong, the governor of the Federal Reserve Bank of New York, was an important source of this inaction. Strong had been a forceful leader who understood the ability of the central bank to limit panics. His death left a power vacuum at the Federal Reserve and allowed leaders with less sensible views to block effective intervention. The panics caused a dramatic rise in the amount of currency people wished to hold relative to their bank deposits. This rise in the currency-to-deposit ratio was a key reason why the money supply in the United States declined 31 percent between 1929 and 1933. In addition to allowing the panics to reduce the U.S. money supply, the Federal Reserve also deliberately contracted the money supply and raised interest rates in September 1931, when Britain was forced off the gold standard and investors feared that the United States would devalue as well.

Scholars believe that such declines in the money supply caused by Federal Reserve decisions had a severe contractionary effect on output. A simple picture provides perhaps the clearest evidence of the key role monetary collapse played in the Great Depression in the United States. Figure 1 shows the money supply and real output over the period 1900 to 1940. In ordinary times, such as the 1920s, both the money supply and output tend to grow steadily. But, in the early 1930s, both plummeted. The decline in the money supply depressed spending in a number of ways. Perhaps most importantly, because of actual price declines and the rapid decline in the money supply, consumers and business people came to expect deflation – that is, they expected wages and prices to be lower in the future. As a result, even though nominal interest rates were very low, people did not want to borrow because they feared that future wages and profits would be inadequate to cover the loan payments. This hesitancy, in turn, led to severe reductions in both consumer spending and business investment spending. The panics surely exacerbated the decline in spending by generating pessimism and a loss of confidence. Furthermore, the failure of so many banks disrupted lending, thereby reducing the funds available to finance investment.

[-] 1 points by ModestCapitalist (2342) 7 years ago

No. The ratio between economic activity, wealth, and M1/M2 money supply has never been equal. Not even close. When too much financial wealth is concentrated, demand is reduced, production is reduced, economic activity is reduced, profits decline, mass layoffs occur, and finally the masses run on the banks. Desperate people out of work or in fear of hardship want their money to survive. Banks fail because the ratio between economic activity, wealth, and M1/M2 money supply was never equal to begin with. Not even close. None of this would have taken place 80 years ago if it weren't for that heavy concentration of financial wealth.

Without buying power, confidence means nothing. Tell you what. Call the store of your choice and let them know you'll be there to pick up a new TV. Be 'confident'. They have a great selection. Then, give all but $10 of your money to your best friend to hold onto for one day. She represents the rich doctor who charged you $150 for 5 minutes of undivided attention. You represent the shrinking middle class. Then visit that store of your choice 'confident' that you'll return home with a new TV. Harsh reality will hit home when you realize that your best friend "the rich doctor" has most of your money. Bottom line. No TV. No sale.

I've read that spun up half true half propaganda article before. Its all over the web. Its a shallow conservative take written specifically to discredit Einstein, Eccles, Reich, Wolff, Krugman, and every prominent economist who has gone on record attributing the Great Depression and current economic crisis to a heavy concentration of wealth. It fails to explain that 'booms' generally result in a concentration of wealth. For example; the 'roaring twenties" were a 'boom'. This period was one of great 'speculation'. By 1929, the richest one percent owned 43% of all private wealth in America. This concentration inevitably reduced the relative buying power of the middle class. This resulted in less 'aggregate demand'. The rest is history.

That spun up half true half propaganda article you posted makes reference to steps taken by the Feds anticipating instability along with 'speculation' and financial gimmicks like 'marginal' trading and ultimately bank 'panic' but incorrectly refers to these steps and gimmicks as part of the 'cause' when in fact, they were the result of instability caused by a heavy concentration of wealth.

The author in a desperate attempt to spin a conservative take on the Great Depression, threw any credibility she may have had out the window when she failed to acknowledge the record high concentration of wealth in 1929 and the words of Albert Einstein, Mariner Eccles, and FDR. All of which LIVED through the Great Depression and attributed the event primarily to a HEAVY CONCENTRATION OF WEALTH. Two of which ACTED on the Great Depression and officially ENDED the Great Depression by enacting POLICIES designed to PARTIALLY REVERSE that HEAVY CONCENTRATION OF WEALTH.

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society." -Albert Einstein 1949

" The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions." -Albert Einstein 1949

"The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop." -Mariner Eccles Chairman of the Federal Reserve under FDR

You can not under any circumstances preserve stability in any market when that market relies on profits made from a shrinking middle class. All financial gimmicks regardless of their complexity ultimately rely on a transfer of wealth from one party to another. Therefore, with a shrinking middle class resulting in less 'aggregate demand', it is illogical to attribute the resulting instability to the financial gimmicks which ultimately rely on the ability of that shrinking middle class to support their share of a consumer driven economy.

It was true 80 years ago. Its true now.

"The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself." -Allen Greenspan testifying before congress in spring of '05'.

If Christina Romer can not do simple math or acknowledge the words of Einstein, Eccles, Roosevelt, or Greenspan, then Christina Romer is either an idiot or a spin doctor.

With that kind of reckless disregard for historical fact, the article may as well have been written by Rush Limbaugh.

[-] 0 points by Jflynn64 (337) 7 years ago

She is hardly a conservative:

Christina D. Romer (née Duckworth; born December 25, 1958) is the Class of 1957 Garff B. Wilson Professor of Economics at the University of California, Berkeley and a former Chair of the Council of Economic Advisers in the Obama administration.[1][2] She resigned from her role on the Council of Economic Advisers on September 3, 2010.[3] After her nomination and before the Obama administration took office, Romer worked with economist Jared Bernstein to co-author the administration's plan for recovery from the 2008 recession.[4] In a January 2009 video presentation,[5] she discussed details of the job-creation package that the Obama administration submitted to Congress.

Christina D. Romer (née Duckworth; born December 25, 1958) is the Class of 1957 Garff B. Wilson Professor of Economics at the University of California, Berkeley and a former Chair of the Council of Economic Advisers in the Obama administration.[1][2] She resigned from her role on the Council of Economic Advisers on September 3, 2010.[3] After her nomination and before the Obama administration took office, Romer worked with economist Jared Bernstein to co-author the administration's plan for recovery from the 2008 recession.[4] In a January 2009 video presentation,[5] she discussed details of the job-creation package that the Obama administration submitted to Congress.

[-] 2 points by ModestCapitalist (2342) 7 years ago

I didn't call her a conservative for a lack of ties to a more liberal state or a lack of former affiliation with a president who is viewed by many as a liberal.

I called her take on the Great Depression conservative because it shows a reckless disregard for the most profound and striking circumstance of the Great Depression (record high concentration of wealth in 1929), a reckless disregard for the liberal policies (higher taxes, public works, and increased spending) enacted which ultimately and officially ended the Great Depression under FDR, a liberal, and a reckless disregard for the statements made by Einstein, Eccles, and Roosevelt who were all liberal and all went on record attributing the Great Depression to a heavy concentration of wealth. Two of which actually devised and enacted those liberal economic policies (higher taxes, public works, and increased spending) ultimately and officially ending the Great Depression under FDR. A liberal. She didn't acknowledge any of it. Instead, she mentioned everything EXCEPT that record high concentration of wealth in 1929. Everything EXCEPT those liberal policies which ultimately and officially ended the Great Depression under FDR. Considered the opinions of people like Friedman and Schwartz but NOT those three liberals (Einstein, Eccles, and Roosevelt) who all went on record attributing the Great Depression to A HEAVY CONCENTRATION OF WEALTH.

"Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society." -Albert Einstein 1949

" The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions." -Albert Einstein 1949

"The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop." -Mariner Eccles Chairman of the Federal Reserve under FDR

Romer's decision to write such an essay excluding every circumstance, fact, and quote which may be taken as a bone thrown to liberals shows a reckless disregard for historical truth. Its astonishing.

Like I said, the article may as well have been written by Limbaugh.

[-] 1 points by DKAtoday (33799) from Coon Rapids, MN 7 years ago

This is why we are here this is why you are needed.

http://occupywallst.org/forum/inside-job-documentary/

Share, circulate, educate, inspire.

[-] 1 points by JadedCitizen (4277) 7 years ago

"In the rich man's house there is nowhere to spit but in his face" ~Diogenes

[-] 1 points by ZenDogTroll (13032) from South Burlington, VT 7 years ago

I do agree with the principle, I much prefer to see my money remain in the community than siphoned out by international companies.

I rarely buy coffee at Starbucks - and there are two in my area. I much prefer the local coffee shop.

The problem is that places like Wallmart offer products at lower prices than most other stores - and that means that those with the lowest incomes don't really have the choice.

And anyone working for a company won't see much direct benefit either - even if the company does because it is a local firm - unless the owners are progressive minded individuals.

I think the real solution is to break up monopolies, and where they cannot be broken up, regulate them. That has the potential to lower costs of telecommunications, electricity, etc.

Burlington Vermont has the lowest electric rates in the State. It's owned by the City of Burlington.

I don't mean to put down the concept of buying locally - it's a great idea. I advocate it whenever it is reasonable.

I'm just saying that there are some obvious drawbacks, and there are other measures, more radical in nature, that can have much more widespread and immediate impacts. If every electric company in the country were public, the share holders in effect become the users of the company.

Same with telecommunications.

I hate comcast. Can you tell?

[-] 1 points by Jflynn64 (337) 7 years ago

Walmart and Costco allow me to provide for my family and give them quality goods at a cheaper price. I then can take the money I save to pay for their school. How is this bad? Are you a parent, have you ever had that responsibility?

[-] 0 points by ZenDogTroll (13032) from South Burlington, VT 7 years ago

I think I attempted to make that point - thanks.

[-] 1 points by ModestCapitalist (2342) 7 years ago

When I say support small business and the little guy, I 'm not just trying to reduce support for international companies. I'm trying to reduce support for most big business and all of the richest one percent. All of them without exception. Even those with lower incomes are partly to blame for this country's horribly concentrated wealth. If it weren't for our thoughtless spending habits and love-affair with the rich going back decades, then big business never would have become the juggernaut that it is today. The wealth of this country never would have become so horribly concentrated to begin with. The middle and lower classes would have been much better off. We wouldn't be having this discussion and we wouldn't be in this mess. For the most part, its our fault as a society. This includes the poor.

That being said, I understand the need for those with lower incomes to find the lowest prices on some products some of the time. For example, food. This is a necessity. In some communities, Wall Mart SuperCenters may be the only option. But those circumstances are rare. In fact, I don't know of any. I live in a lower middle class community. There are three grocery retailers in town (Not counting gas stations and drug stores.). Wall Mart, K Mart, and a regionally owned grocery store with only two locations. I prefer the later. My next choice would be K mart, followed by the juggernaut.

Even the poor should be doing their part to reverse this obscene concentration of wealth. If they need a manufactured item, they can almost certainly find a great deal at the local GoodWill, a locally owned thrift store, a yard sale, garage sale, or Craigslist. The later three don't directly support jobs but the transfer of funds would directly increase the income of the local recipient. 100% of the transfer would go directly in his/her pocket. 0% to a CEO, stock holder, celebrity, pro athlete, ect.

I could make similar points regarding the purchase of virtually any product or service. There is virtually no excuse for anyone in this country to continue their voluntary support for the rich. We must reduce that support significantly. If it weren't for our thoughtless spending habits and support for the rich, the wealth of this country never would have become so concentrated to begin with. The middle class never would have become so weak.

Small business (Total annual revenue of under $500,000) creates more jobs 'dollar for dollar' and shares more revenue with its workforce. There are no CEOs, stock holders, nationally known celebrities, pro athletes, ect directly affiliated with small business. The owners of small business (Total annual revenue of under $500,000) are not rich. Except maybe in very rare cases where the owner represents the entire workforce. Only then can he/she personally reap anywhere near the full revenue.

I'm all for breaking up Monopolies and passing regulation to lower costs. But I have virtually no faith in our leaders to do so. Thats not to say that we shouldn't make a statement in the voting booth. Its worth a shot. There may never be a perfect candidate but there will always be a lesser of two evils. Of course, I'm all for pressuring our leaders to act in our best interest. Again, its worth a shot.

[-] 1 points by ModestCapitalist (2342) 7 years ago

The rich and famous do not want to be seen as 'pigs' or go down in history as 'villains'. They want to be seen as 'heros' and go down in history as 'humanitarians'. The market for their product has become global. The fan base has become global. Therefore, the 'humanitarian' effort and 'good will' PR machine has gone global. These 'humanitarian' efforts and 'good deeds' are not chosen to address the greatest need or injustice. They are chosen almost exclusively to appeal to the largest demographic for their respective commercial products. The largest fan base. Efficiency or effect is of little or no concern. Its all about PR, marketing, image, and fame.

This is why the rich and famous have all taken up 'philanthropy' or 'good will' around the world. This is why so many have 'schools' or 'foundations' in their name. This is why so many play golf or appear on a TV game show for 'charity'. This is why so many sign motorcycles, other merchandise, or auction off their own 'personal effects' for 'charity'. This is why so many have TV shows with a 'charitable' gimmick. This is why so many arrange photo ops with wounded veterans, firefighters, or sick children. This is why so many have adopted children from around the world (Which they always pay others to care for full time. The hired professionals are sworn by legal contract to confidentiality. Not allowed to discuss or appear in public with the children they care for. Those 'photo' and 'interview' opportunities are reserved exclusively for the rich and famous 'adoptive' parents.). This is why every 'humanitarian' effort and 'good deed' is plastered all over the media worldwide. Its not about 'humanity' or 'good will'. Its all about marketing, image, fame, and PROFIT. This is why we are so often reminded of their respective 'good deeds' or 'humanitarian' efforts shortly before or after the release of their latest commercial product.

Charitywatch.org and Charitynavigator.org are both non-profit charity watchdogs. Of all the well rated charities (about 1500) only three are closely affiliated with celebrities. Michael J Fox (not the primary donor), Tiger Woods (not the primary donor), and Bill Clinton (not the primary donor). That's three well rated celebrity foundations out of 1500. In general, celebrity foundations run like crap because they blow half the money on private jet rides, five star accommodations, and PR crews.

The fans have been terribly misled. For example:

Virtually every penny 'donated' by Angelina Jolie and Brad Pitt to date has come from repeated sales of baby photos. With each sale, the baby money goes to the 'Jolie-Pitt' foundation. A foundation which has never done anything but shelter funds. The 'donation' is immediately publicized worldwide.

When Jolie or Pitt have a new movie to promote, a portion is then donated from their own 'foundation' to a legitimate charity. This leaves their ignorant fans under the impression that 'another' donation has been made. When in fact, its the same baby money being transferred again and again. Another portion is blown on private jet rides, super-exclusive accommodations, photo ops, and PR crap. This saves Jolie and Pitt millions in travel/stay expenses and their respective studios tens of millions in advertising. It's all very calculated.

Of course, Jolie and Pitt could simply endorse any of the 1500 most efficient and effective charities. Of course, the baby money would go much further and do far more good if it were donated to such charities to begin with.

But that would be too boring.

The 'Make it Right' Foundation took in over $12,000,000 the first year alone. Tens of millions overall. Brad Pitt has never been the primary donor, planner, or designer. He is a figurehead and salesman with a position on the board of advisors. Nothing more. Still, he has been showered with glorious praise by fellow celebrities and media outlets around the world. Again, the fans have been terribly misled.

In order to move into a 'green' home, the innocent victims of Katrina are required to provide a property deed, meet a number of financial requirements, and pay an average of $75,000 UP FRONT. The difference is offered in cheap loans or on occasion (according to the website) forgiven. To date, only a few dozen former home owners have qualified.

The 'Make it Right' foundation was never intended to help the lower income residents of New Orleans reclaim anything lost in Katrina. In fact, 'Make it Right' is part of a calculated effort to rebuild the Lower Ninth Ward without them. Part of a calculated effort to raise property values in the area by displacing the poor. They are by design, excluded. Unable to qualify. Of course, Brad Pitt could have simply endorsed 'Habitat For Humanity'. A well known, proven, and efficient home building operation. Of course, the tens of millions in funding would have gone MUCH further.

But that would be too boring. Big name celebrities have no desire to make the world a better place.

Their primary goal is to appear as if they do.

It's a sham. Good will has become big business.

[-] 1 points by TIOUAISE (2526) 7 years ago

WHAT IS IT with the infantile, "don't-you-dare-touch-my-toys" fear of wealth redistribution? The idea is NOT EXACTLY NEW, it is in fact thousands of years old... Jesus - and all the other Great Jewish Prophets before him! - constantly upbraided the rich who were too selfish and addicted to "the bucks" to share with the poor.

EVEN SOME OF THE 1% are finally "getting it"... Former Canadian Prime Minister and billionaire businessman Paul Martin has actually come out IN FAVOR OF REDISTRIBUTION. It is a matter of COMMON DECENCY:

"An unexpected voice is joining the chorus of support for the Occupy movement — former prime minister Paul Martin.

Martin says protesters have sparked a global debate that may help save the free market system.

“This idea that [the Occupy protestors] don’t have clear goals, I don’t think anybody buys it,” Martin told The Huffington Post, even as city governments across Canada step up their efforts to end the occupation.

“These young people have touched a chord that is being discussed in every family across North America and in Europe, as well. I think it’s a very important thing they’ve done.”

Since Occupy Wall Street launched in New York two months ago, spreading like wildfire across the Western world, many public figures have come out in support of the protests against the growing gap between rich and poor. Most, however, have been celebrities, such as Gordon Lightfoot joining his daughter at Occupy Toronto and Anne Hathaway marching in yesterday’s Day of Action in New York.

Martin — who enacted controversial social service cuts during his time as Liberal finance minister from 1994 to 2002 — says he’s gone down to Occupy Montreal and spoken to the protestors personally.

“The fact is that the free market system works, but unless governments and people are constantly on the watch out for rampant inequality, unless they understand the need for redistribution programs, unless they understand the need to invest in education and better health care and a better environment,” Martin said, “then effectively the free market system will fall on its own accord.”

http://www.huffingtonpost.ca/2011/11/18/paul-martin-occupy-wall-street_n_1101886.html?ref=fb&src=sp&comm_ref=false

[-] 0 points by Jflynn64 (337) 7 years ago

It's pretty simple, why should the government have the control to redistribute wealth and impact somebody's livelihood. If you believe it is a moral decision then that decision should be made by an individual, not somebody else in DC who the person doesn't know.

By the way, Canada cut spending, lowered their tax rate to lower than the US, and flattened their tax code about 10 years ago due to sluggish growth. It all comes down to growth. You have to get growth.

[-] 0 points by HarryPairatestes2 (380) from Barrow, AK 7 years ago

"Support small business more and big business less."

Then when small businesses become more wealthy will you have to stop supporting them?

[-] 1 points by ModestCapitalist (2342) 7 years ago

Are you suggesting that Floyd's Delicatessen may become Floyd's International Delicatessen Super Center? I'm not aware of such plans. But if and when they do, I will propose that we reduce our support for Floyd's International Delicatessen Super Center.

[-] -2 points by focus01 (21) from Queens, NY 7 years ago

stop class envy

[-] 2 points by ModestCapitalist (2342) 7 years ago

Next.