Tapsearch Com EditorCauses of the Great Depression
February 21st 2009 00:23
Bizarre Politics Reports:
Trade and protectionism were mute issues in the Great Depression. Even the connotations of the terms were different.
By Ray Tapajna, editor and artist at Tapart News - Workers Dignity Betrayed
What caused the Great Depression?
There are many similar circumstances today and others are quite different.
This follows our last posts relating to Free Traders blaming tariffs and protectionism for the Great Depression.
The Cleveland Plain Dealer, top newspaper in Ohio, USA, is not the only news outlet which promotes a bias about protectionism and Free Trade but they sure are single minded in their efforts in promoting Globalism and Free Trade. The editors use Thomas Friedman to launch their crusade for insourcing.
This bias is widespread and it ignores the facts relating to the causes of the Great Depression and the current economic crisis, however, it seems the Cleveland Plain Dealer goes out of its way in evangelizing so called Free Trade while major cities like Cleveland suffer the destruction of workers' dignity within their midst.
Many similar comparisons can be made between the Great Depression and our times but there is no comparison possible when it comes to the issues surrounding Free Trade and protectionism. The connotations of the terms have changed and do not compute with the past. You have to go to alternate news sources or to web pages like mine to get an objective review. In our last two posts at our Bizarre Politics web site, we covered other contradictions in the Globalist Free Trader World.
The major news channel played their version of Free Trade and protectionism like a broken record. First let us start with the causes of the Great Depression. The direct causes can be debated but not in terms of definitions of trade. The connotation of this term has dramatically changed. Free Trade is not trade as historically defined and practiced. The U.S. Federal Government started shipping factories outside the USA starting in 1956. This evolved into the Maquiladora factory program in Mexico and then later evolved into what is called trade. History never defined trade as shipping production from place to place worldwide for the sake of cheaper labor. The main commodity in Free Trade are human beings as workers.
We subsequently now have more than a fifty years of so called Free Trade versus just a year or two of so called protectionism. The Great Depression actually started in 1920. Farming was a major part of our economy and farm mortgage debts increased dramatically from 1920 to 1930. Farmers were going bankrupt at a record pace. However, the stock market speculation flourished. Radical speculation was creating vast amounts of money values while the farming depression was ignored. Farmers were crying out for duties on imported food for the sake of survival.
Then in 1929 the stock market crashed. The money value of our economy was virtually lost. The Great Depression was more of a money crisis than anything else. Factory production immediately decreased prior to any new trade agreements. The whole world was in turmoil. The depression was worldwide. Money became a rare commodity. There was very little left for any kind of trade in the world.
Consequently, in terms of goods, supply exceeded demand . By Nov 13, 1929, $30,000,000,000 was lost after the stock market crash. In a single week, brokers loans fell from $8,500,000,000 to $1,000.000.000. In todays' terms these numbers would have to be multiplied by at least 15. I do not even have a calculator that can deal with that many digits. The Great Depression was primarily about a money crisis. Tariffs and protectionism were mute issues. Few countries had any money to support trade. This coupled with overproduction, supply exceeding demand and no customer base left, were the main causes of the Great Depression. The depression had been going on for a decade in the agricultural sector.
The Smooth-Hawley trade act was passed in 1930. Free Traders show a decline in trade after its passage but this decline would have come no matter what since the money was not there to support any kind of trade. Countries ran out of money. Just imagine if our budding auto industry would have had to compete on a global level. Just imagine if we had our telephone industry taken over by global outsiders. Would there be an America?
In 1920, the U.S. had a trade surplus of about 30 percent. In 1930, it was about even.
Compare this to more than 15 years of record breaking Trade Deficits in our times. In 1932, President Roosevelt was elected and in 1934, just four years after Smooth-Hawley was passed , the new Trade Agreement Act was passed. It gave President Roosevelt the equivalent of what is call Fast Track today. He had the option of lowering or raising tariffs at will. Then 16 new trade bills were passed, but none instigated any real trading. Finally, President Roosevelt said he was not going to let the dollar sign stand in his way and initiated the Lend Lease Act which start shipping goods to the allies without worrying how they would pay for the goods and food.
This ramped up our industrial and agricultural base. ( We fed Russia for many years during World War 2. and yoiu can thank Communism for that.) When this war came, the U.S. was ready and produced the greatest industrial might in history . (There were even small 5 employee machine shops behind barber shops making things for the war effort.)
Protectionism is a word that is use to contradict this all. Protectionism was a mute issue and non-applicable in those times and in our times having shipped our industrial might that won the second world war to other countries. The terms imports and exports have no comparisons with the past. How can something be described as an import if it comes from a factory that was formerly in the USA. How can an export be an export if it goes to factories that were formerly in the U.S. It does not make any sense
However, it is the Trade Deficit that marks the massive lost of value. The Trade Deficit is actually based on all the parts of our local value added economies that we shipped out to other countries. The Trade Deficit has broken records for more than 15 years now. This has proved to be a terrible lost money value.
So called Free Trade has more than a fifty year history of these kinds of failures and still major news outlets do not tell the full story. They only can bring up the term protectionism to counter this massive lost of value and the massive devaluation in the value of workers and labor. It should be obvious to all, that these are the causes of our current economic crisis. This thing they call Free Trade that is not trade has caused our current economic crisis.
Simply put Free Trade is not trade but a system that cuts off the hand that adds value to all the money products with the value of workers an labor actually being a money standard. This standard goes down to the lowest levels of wage slave and even child labor. Our economies based on making money on money instead of making things have ignored this part of the scenario and are now suffering the consequences. We chopped up the golden goose into pieces that laid the golden eggs.
Call it Free Trade or whatever you want to call it but it has not worked for many years.
Big money and government, thought they could make an economy based on making money on money instead of making things. The system has failed.
The gold standard was done away with. It was too firm as a money standard to let the financial communities play their monopoloy games. This made the real tangible value of workers and labor a money standard. So called Free Trade has smashed this very important value. The U.S. actually has suffered a severe unreported deflation in the value of workers and labor and impacted all the money products in the process. The Free Traders apparently forgot that consumers are workers too and need adequate capital themselves to support a global economy.
Our times are similar to the 1920s in this respect. During the supposedly roaring 1920s, The U.S. Department of Labor worked out a "minimum health and decency buget - necessary to maintain a family of five at a level of health and decency". They stated it would take from $2,000 to $2,500 a year to establish this level. Yet, studies of wage-earners' income quickly revealed that more than nine tenths fo American wage-earners failed to achieve such a minimum. Don't forget this was a time when the 1920s were proclaimed as years of prosperity. It can be compared to the Clinton years when President Clinton proclaimed prosperity and NAFTA a success after having to rush billions of dollars to Mexico to save the peso and their economy. This was the first stimulus package and it went to a foreign nation. The second stimulus package was an artificial one but it was a massive one.
Greenspan talks about it in his book but neglects to tell his reader how it created a false economy for a few years. Billions if not trillions of dollars were spent by both governments and private companies to fix the Y2k crisis. The Y2k crisis came because more than a million workers in the computer industries had lost their jobs and nobody was at home to support the proper necessary systems or housekeeping.
The poveryty numbers above translated in today's values, should be $30,000 to $35,700 Today, it takes two both spouses in a family to make this kind of money. Many even make much less in the giant retail and servcie sector that has taken over our economy.[B]
This I do know. I worked in several factories while going to college in the 1950s. I made $1.50 to $2.00 an hour. There were periods when I made much more getting paid double time for overtime. In today's terms, this would be about $15 to $25 an hour. My overtime jobs would add up to twice as much. These jobs were plentiful. Friends who went to work out of high school at larger union factories even made more. It took those of us who were college graduates about ten years to catch up with them.
If these jobs, were available today, we would have thousands standing in line to get them.
If you want to call this protectionism, then so be. I do know this, the Free Enterprise system does need to be protected. The American Dream is all about Free Enterprise and not Free Markets that strip the human diginity of workers away. I implore all in the world to protect this common good.
No stimulus plan will work until someone unlocks these chains
What caused the Great Depression?
There are many similar circumstances today and others are quite different.
This follows our last posts relating to Free Traders blaming tariffs and protectionism for the Great Depression.
The Cleveland Plain Dealer, top newspaper in Ohio, USA, is not the only news outlet which promotes a bias about protectionism and Free Trade but they sure are single minded in their efforts in promoting Globalism and Free Trade. The editors use Thomas Friedman to launch their crusade for insourcing.
This bias is widespread and it ignores the facts relating to the causes of the Great Depression and the current economic crisis, however, it seems the Cleveland Plain Dealer goes out of its way in evangelizing so called Free Trade while major cities like Cleveland suffer the destruction of workers' dignity within their midst.
Many similar comparisons can be made between the Great Depression and our times but there is no comparison possible when it comes to the issues surrounding Free Trade and protectionism. The connotations of the terms have changed and do not compute with the past. You have to go to alternate news sources or to web pages like mine to get an objective review. In our last two posts at our Bizarre Politics web site, we covered other contradictions in the Globalist Free Trader World.
The major news channel played their version of Free Trade and protectionism like a broken record. First let us start with the causes of the Great Depression. The direct causes can be debated but not in terms of definitions of trade. The connotation of this term has dramatically changed. Free Trade is not trade as historically defined and practiced. The U.S. Federal Government started shipping factories outside the USA starting in 1956. This evolved into the Maquiladora factory program in Mexico and then later evolved into what is called trade. History never defined trade as shipping production from place to place worldwide for the sake of cheaper labor. The main commodity in Free Trade are human beings as workers.
We subsequently now have more than a fifty years of so called Free Trade versus just a year or two of so called protectionism. The Great Depression actually started in 1920. Farming was a major part of our economy and farm mortgage debts increased dramatically from 1920 to 1930. Farmers were going bankrupt at a record pace. However, the stock market speculation flourished. Radical speculation was creating vast amounts of money values while the farming depression was ignored. Farmers were crying out for duties on imported food for the sake of survival.
Then in 1929 the stock market crashed. The money value of our economy was virtually lost. The Great Depression was more of a money crisis than anything else. Factory production immediately decreased prior to any new trade agreements. The whole world was in turmoil. The depression was worldwide. Money became a rare commodity. There was very little left for any kind of trade in the world.
Consequently, in terms of goods, supply exceeded demand . By Nov 13, 1929, $30,000,000,000 was lost after the stock market crash. In a single week, brokers loans fell from $8,500,000,000 to $1,000.000.000. In todays' terms these numbers would have to be multiplied by at least 15. I do not even have a calculator that can deal with that many digits. The Great Depression was primarily about a money crisis. Tariffs and protectionism were mute issues. Few countries had any money to support trade. This coupled with overproduction, supply exceeding demand and no customer base left, were the main causes of the Great Depression. The depression had been going on for a decade in the agricultural sector.
The Smooth-Hawley trade act was passed in 1930. Free Traders show a decline in trade after its passage but this decline would have come no matter what since the money was not there to support any kind of trade. Countries ran out of money. Just imagine if our budding auto industry would have had to compete on a global level. Just imagine if we had our telephone industry taken over by global outsiders. Would there be an America?
In 1920, the U.S. had a trade surplus of about 30 percent. In 1930, it was about even.
Compare this to more than 15 years of record breaking Trade Deficits in our times. In 1932, President Roosevelt was elected and in 1934, just four years after Smooth-Hawley was passed , the new Trade Agreement Act was passed. It gave President Roosevelt the equivalent of what is call Fast Track today. He had the option of lowering or raising tariffs at will. Then 16 new trade bills were passed, but none instigated any real trading. Finally, President Roosevelt said he was not going to let the dollar sign stand in his way and initiated the Lend Lease Act which start shipping goods to the allies without worrying how they would pay for the goods and food.
This ramped up our industrial and agricultural base. ( We fed Russia for many years during World War 2. and yoiu can thank Communism for that.) When this war came, the U.S. was ready and produced the greatest industrial might in history . (There were even small 5 employee machine shops behind barber shops making things for the war effort.)
Protectionism is a word that is use to contradict this all. Protectionism was a mute issue and non-applicable in those times and in our times having shipped our industrial might that won the second world war to other countries. The terms imports and exports have no comparisons with the past. How can something be described as an import if it comes from a factory that was formerly in the USA. How can an export be an export if it goes to factories that were formerly in the U.S. It does not make any sense
However, it is the Trade Deficit that marks the massive lost of value. The Trade Deficit is actually based on all the parts of our local value added economies that we shipped out to other countries. The Trade Deficit has broken records for more than 15 years now. This has proved to be a terrible lost money value.
So called Free Trade has more than a fifty year history of these kinds of failures and still major news outlets do not tell the full story. They only can bring up the term protectionism to counter this massive lost of value and the massive devaluation in the value of workers and labor. It should be obvious to all, that these are the causes of our current economic crisis. This thing they call Free Trade that is not trade has caused our current economic crisis.
Simply put Free Trade is not trade but a system that cuts off the hand that adds value to all the money products with the value of workers an labor actually being a money standard. This standard goes down to the lowest levels of wage slave and even child labor. Our economies based on making money on money instead of making things have ignored this part of the scenario and are now suffering the consequences. We chopped up the golden goose into pieces that laid the golden eggs.
Call it Free Trade or whatever you want to call it but it has not worked for many years.
Big money and government, thought they could make an economy based on making money on money instead of making things. The system has failed.
The gold standard was done away with. It was too firm as a money standard to let the financial communities play their monopoloy games. This made the real tangible value of workers and labor a money standard. So called Free Trade has smashed this very important value. The U.S. actually has suffered a severe unreported deflation in the value of workers and labor and impacted all the money products in the process. The Free Traders apparently forgot that consumers are workers too and need adequate capital themselves to support a global economy.
Our times are similar to the 1920s in this respect. During the supposedly roaring 1920s, The U.S. Department of Labor worked out a "minimum health and decency buget - necessary to maintain a family of five at a level of health and decency". They stated it would take from $2,000 to $2,500 a year to establish this level. Yet, studies of wage-earners' income quickly revealed that more than nine tenths fo American wage-earners failed to achieve such a minimum. Don't forget this was a time when the 1920s were proclaimed as years of prosperity. It can be compared to the Clinton years when President Clinton proclaimed prosperity and NAFTA a success after having to rush billions of dollars to Mexico to save the peso and their economy. This was the first stimulus package and it went to a foreign nation. The second stimulus package was an artificial one but it was a massive one.
Greenspan talks about it in his book but neglects to tell his reader how it created a false economy for a few years. Billions if not trillions of dollars were spent by both governments and private companies to fix the Y2k crisis. The Y2k crisis came because more than a million workers in the computer industries had lost their jobs and nobody was at home to support the proper necessary systems or housekeeping.
The poveryty numbers above translated in today's values, should be $30,000 to $35,700 Today, it takes two both spouses in a family to make this kind of money. Many even make much less in the giant retail and servcie sector that has taken over our economy.[B]
This I do know. I worked in several factories while going to college in the 1950s. I made $1.50 to $2.00 an hour. There were periods when I made much more getting paid double time for overtime. In today's terms, this would be about $15 to $25 an hour. My overtime jobs would add up to twice as much. These jobs were plentiful. Friends who went to work out of high school at larger union factories even made more. It took those of us who were college graduates about ten years to catch up with them.
If these jobs, were available today, we would have thousands standing in line to get them.
If you want to call this protectionism, then so be. I do know this, the Free Enterprise system does need to be protected. The American Dream is all about Free Enterprise and not Free Markets that strip the human diginity of workers away. I implore all in the world to protect this common good.
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