If anything will be remembered from this administration, it will be the divisive stratification of the population. They have given lobbyists and industry CEO's unprecedented access to the White House, the administration, as well secrets as any and all information from the general public. Defying courts, subpoenas, and the law, this administration and its party, that have for so long decried the litigious nature of American society, have used it as their mightiest bulwark.
By any metric used, the wealthy grow more wealthy while every other economic category struggles to hold on or slides completely off the cliff of prosperity. The administration and the complicit media describe this situation with euphemisms and code words. Understood and accepted by those at the top, misunderstood and misinterpreted by their faithful minions. For example, pundits point to the low savings rate of the average American as one of the causes of America's economic troubles. Saving, however, is an activity of the prosperous, not the struggling to put food on the table folks.
No one asks the question, what is the savings rate among the refugees in Darfur. It's a ridiculous question, as only those who earn more than the cost of survival can save. Successful economies circulate currency through their communities; there is no economy in Darfur. This circulation is what allows manufacturers, farmers, and merchants to prosper and create wealth and growth in the economy. When that circulation is crimped or siphoned off, the economy sickens and dies.
The Reagan revolutionaries of the 1980's sought to dismantle the surviving vestiges of the New Deal, proclaiming them as the cause of economic malaise. Under the banner of getting government off your back, they dismantled the safeguards that had protected the middle and working class. Unions curtailed, student loans privatized, industries deregulated, but how did they manage to pull that off? Do the math; if you were a voter in 1930 how old were you in 1980? The generation that knew better was aging into insignificance. The original purpose of the New Deal had been to act as a safety valve, to recirculate money back to the working class to prevent a repeat of the 1930's.
Many Republicans like to point out the Smoot-Hawley Tariff as the cause of the Great Depression. A fanciful and nonsensical notion, like saying the candy bar caused the sickness, not the roller coaster ride. After World War One, American bankers lent billions of dollars to Europe to rebuild. After ten years of exporting manufactured goods and farm commodities, Europe was finding its feet and agriculture was reviving. The German's choice to hyper inflate their currency in response to the Treaty of Versailles left American bankers holding loans repaid in worthless scrip.
The prosperity of the previous decade and the advance of the automobile and other labor saving devices had changed the American landscape. Tractors, pumps and combines enabled a family farmer to farm larger and larger acreage, causing farm income to rise. At the same time, industrialization lured more and more farm labor to the cities in search high factory wages. It was a situation that couldn't last; eventually too much acreage was farmed, and the production of goods exceeded the demand. The banks eagerly encouraged the boom; the growth of consumer and farm loans helped to cover their losses from overseas.
The speculation boom lured the general public into the stock market with the prospect of easy riches. Farmers were told to buy now, as the prices would only go up next year. A bubble, a bubble used to cover massive losses in overseas loans. The Hoover administration tried with all their might to revive the economy, but couldn't understand that, despite all their loans to industry and big business, they could not relight the pilot light on the engine of prosperity.
As the bubble burst, stock prices and real estate prices collapsed, consumer credit collapsed, and the depression had begun. Hoover's failure was to not understand that Ford and Dupont and the railroads had money, what they didn't have was customers. That ten years of encouraging farmers to grow fence-post-to-fence-post was the Dot com boom of its generation. The farmers produced in ever-greater amounts as markets shrank. Like its namesake, the economic bubble expands until it pops.
Just four years ago, George Herbert Hoover Bush was promoting the use of Social Security funds for investment in the stock market. Praising the new mortgage vehicles that allowed millions to join the ranks of home owners, he told Americans the patriotic thing to do after 9-11 was to shop. The global agenda's major flaw is that there are no policemen, it is a global Wild West. American bankers took bad mortgage loans and wrapped them up with the good loans. Foreign bankers around the world accepted them without question.
American banks were regulated; they wouldn't perpetrate such a fraud, would they? Yes, they would. Just as the Chinese export poison medicines and cat food, American bankers export toxic financial instruments. Whereas last time it was the German national pride and international politics, this time it was American greed and greed alone. Once the fraud was uncovered, markets quaked around the world. In the US, the Federal Reserve moved to rescue the banks with repeated interest rate cuts and then by opening the discount window to any and all comers. Each rate cut was an extra measure of profit for the banks. The credit window guaranteeing liquidity, no matter how bad their books look.
Like the Hoover administration, the goal is to save the banks and to hell with the people. Forgetting that the banks need customers. But good news! They've got customers, they just aren't us. The banks, broken and hemorrhaging, are looking far afield for new customers in Qutar and Abu Dhabi. Customers, as they like to say euphemistically, that have a higher savings rate. An economic strip mine that takes all that it can get, and when the profits go away, they pack their bags and move on to greener pastures. There is something intrinsically treasonous about the whole scheme.
As GM labels itself The Heartbeat of America, while building it's new plants overseas, it bloodies and brow beats its domestic employees into lower wages and benefits, while it wraps itself, with unmitigated gall, in the American flag. I use GM as the example but Ford is no different and Daimler sold Chrysler because they could see the stratification of the American economy coming. Two Americas, one prosperous, one struggling; two school systems, one private and prosperous, one public and struggling. Two Americas, one affluent and happy, one outsourced and bitter; the wealth class and the service sector class.
The Bush administration, planning its getaway, has again revived the scheme of sending out money that we don't have in the form of rebate checks. Of course, in what has become the standard issue, they are sending the most to those who need it the least and the least to those who need it the most. Sending the most to those John McCain calls the middle class, those who earn less than 200 thousand dollars a year. As for the rest of us, they have no plans; we don't count, don't matter, our problems are our problems and we should just pull ourselves up by our own bootstraps.
Stratified, Katrinaized, in a Kentucky coal town economy, the stock market rises on the stabilizing markets. The administration is plugging dikes with every finger because, come January, this will be the Democrat's depression. Until that time the administration plays its strongest hand by signaling that they won't stop the dollar's slide, forcing the European Central banks to intervene to keep the US economy from taking them over the cliff with us. It is insanity as a management tool. The Europeans are well aware that Bush has no concern for the welfare of his own people and that the falling dollar helps the balance of trade. They see the German leveraging of the '20's reversed.
This time the ECB must prop up the dollar, or by God, he'll do it! He's out of here in January, instead of crazy Ivan or Hienrich, this time crazy George. The ruse buys him time as the average American struggles just to get by. Soaring food and energy costs, record levels of home foreclosures, record levels of credit card defaults and of car repossessions. Wal-Mart reported that the highest percentages of its Christmas gift card redemptions were spent on food. The retailers are already offering bonuses to customers who redeem their rebate checks for in-store gift cards, wolves fighting for the last scraps.
The two Americas, one struggling from the crash, the other soon to discover it.