I believe that it was Albert Einstein that stated: “The definition of insanity is doing the same thing over and over again, and expecting a different result each time.”
With this in mind, why are we in the mess we are in today? Ignorance, Plain and simple.
After the Great Depression there were safety nets installed in our government and in our society that would keep the economy afloat, and provide for the commons. Some of these things include: Social Security(initially just a retirement fund and purely optional to opt in), Unemployment benefits(I think we’ve all found ourselves without a job from time to time, wondering what to do to bring bread to the table in between jobs), The high income tax rate–after making what is equivalent to about 3.2 mil. dollars(today), the individual was taxed at nearly 91%, the ability to Unionize quickly and easily became prevalent, which directly led to the rebuilding of the middle class, and one of the most important acts to be passed was the glass-steagal act number 2, which was also known as the “banking act,” which regulated the difference between investment banking, and commercial banking. This was an integral part in fixing so many problems in the economy.
All of these took place at a time when people were in desperate need of help, they were struggling to feed, clothe, and house their families, and would wait in lines for jobs that did not pay much, because that was all that there were. It was a time of despair for many Americans, and the despair was eased with F.D.R.’s “fireside chats”, which raised peoples spirits because he would give them hope. He explained to them in a way that, yes times are tough and may get tougher before they get better, but to have faith in his New Deal and to have faith in the govt. and in the banks. This simplistic approach to calm the public and re-invigorate the economy with added income to the treasury(given the increase of the tax on the most wealthy) and also that he created jobs by building roads, bridges, schools, buildings, and eventually over time things fell into place.
The Glass-Steagal Act 2(Banking Act), passed in 1933 gave government the right to dictate what a commercial could and could not do, and what an investment bank could and could not do. To shorten up the scope of this act, The commercial banks were limited to simply making money off of interest in loans, and in what people put in to their banks, this was to keep that bank from using the people’s money to “invest” in crazy things like buying up pieces of mortgages, then re-selling after splitting it back up again(also known as credit derivitives.) The investment bank were the gamblers, people with money could put their money in there to risk losing, or gaining large sums of money on “whims”. The passage of this act alone was the biggest safety net against another bank crash, other than the F.D.I.C(lets face it though, if the govt. is broke, they can’t necessarily pay all of it out, and it doesn’t cover every bit of money you put in to a bank, only up to 100k in most cases and depending on the acct up to 250k.)
This tax rate was basically held above 50% until Ronald Reagan came in and dropped it back down to pre-depression numbers(if my memory serves me correctly), he then “busted up the unions” by removing much needed regulations in many of the industries, which set a precedent that he was not in favor of Unions and would not back them, so more and more large businesses became less afraid of the pushback from removing themselves from a union.
Do you see where I’m going? for 50 years….this country had no major occurences with economic collapse/crash. Obviously there were some ups and downs in the stock market, but for the most part it kept the brunt of “bubbles” from forming, which in turns keeps them from popping. Any healthy economy will rise and fall, it is the nature of the best and cannot ever be avoided, but keeping it within’ margin is the key, you don’t want it to go extreme on either end, but one inevitably leads to the other(more often far far up leads to crash crash crash), and this has been proven time, and time again.
So, given the fact that we have figured this out before, why can we not get back to the ways it once was when it worked? Why is it that Blue-collar workers are not viewed as equals to white, don’t we need both for a healthy society, and economy….yes, so they should be treated as equally putting back to the system, and when I say equally I mean(tax burden) and productivity levels. Banking does not create anything of actual value, it simply moves money around. Manufacturing is what we need in this country again. We need to be able to take raw materials, turn them into a substance, take that substance and turn it to an item. We now have outsourced this, and people wonder why we are struggling the way we are struggling. I can tell you why…..Loss of the middle class.
Lets stop bickering, and shouting moral values, and lets start talking principle. We all want the same thing, A good job that we enjoy and that pays well. We all want to lead a life without having to worry about every next paycheck, but our wages have been in steady decline since Reagan came into office, and all the way through bush, clinton, bush. So lets rally around Obama and beg for change. Become active in your community, plant a garden, and give out your vegetables for free, do something that benefits everyone around you, not just yourself, and if we do all of that…we can never go wrong.
Vote for the many, not for the money.