Lincoln's Grave Warning Realized

...a letter from President Abraham Lincoln to William F Elkins on 21 November 1864:

"I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country...corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

Our American Objectives

"Our national goals must be to rejuvenate the domestic economy; transfer the economic basis of our nation from consumptive to productive; recapitalize education and the technologies industries; achieve complete energy independence; move towards renewable energy sources;
restore public confidence in the government's ability to undertake large national infrastructure projects, and re-assert its right to set goals and policies to ensure those projects proceed smoothly; define the overarching standards for a reconstructed America including a federal review of the building and planning codes now in use, and probably the writing of new mandates that set out 21st-century standards and priorities for energy use, urban and transportation planning, and environmental design, which once put into law and accepted into general use, will be very difficult to change; commit funding for a massive 10- or 20-year program that will upgrade or replace failing components of America's infrastructure as the nation is broke (as it was in FDR's day) and this kind of spending needs to be seen as the long-term investment in our economic future that it is; restore a fair, honest, broad-based system of public contracting that will put large numbers of Americans to work on these new projects (and write the new rules in a way that ensures that the firms doing the most innovative work don't have to compete with unfair behemoth corporations like Halliburton and Lockheed for the lion's share of the funding) so that once there is a healthy, competitive construction industry that knows how to build sustainable projects—and is relying on the government to keep it in business—we will get a political constituency that will fight to ensure that the rebuilding will continue for the next several decades, regardless of what political party is in power; use the forces of globalization and information to strengthen and expand existing democratic alliances and created new ones; employ these alliances to destroy terrorist networks and establish new international security structures; lead, through our historic principles, on international cooperative efforts in spreading economic opportunity and democratic liberties, nation building, counter-prolification, and optimum environmental protection and safeguards; and cherish, honor, and protect our history and traditions of liberty and freedoms domestically particularly with respect to the Bill of Rights."

"The renewed social contract for America with its middle class and poor must:
  • Raise the minimum wage still higher and on a regular basis. It has fallen far behind increases in inflation since the 1970s, and that affects higher level wages as well.
  • Encourage living-wage programs by local governments. Governments can demand that their contractors and suppliers pay well above the minimum wage. There is substantial evidence that this does not result in an undue loss of jobs.
  • Enforce the labor laws vigilantly. Minimum-wage and maximum-hour laws are violated to a stunning degree. American workers shouldn't be forced by their employers to understate the number of hours worked or be locked in the warehouse so they can't leave on time. Workers often make only $2 and $3 an hour.
  • Unions are not seeking a free pass to organize secretly when they advocate for open check-offs on cards to approve of a union vote. They are seeking to organize without persistent and often illegal management interference. Penalties for illegally deterring such organizing are so light, it makes little sense for management not to pursue strategies to stop organizing even at the cost of prosecution.
  • Request that trading partners develop serious environmental standards and worker-protection laws. This is good for them, bringing a progressive revolution and a robust domestic market to their countries. It is good for America, which will be able to compete on a more level playing field.
  • Demand that the president, governors and mayors speak up about unconscionable executive salaries and low wages. The influence from the top cannot be underestimated. A president who looks the other way sends a strong signal to business. A president who demands responsible treatment of workers will get a response. Business does not like such attention.
  • These measures should be accompanied by serious investment in modernized infrastructure and energy alternatives, which can create millions of domestic jobs that pay good salaries. It should also be accompanied by a policy that supports a lower dollar -- contrary to Rubinomics -- in order to stimulate manufacturing exports again. Accomplishing this may require a new system of semi-fixed currencies across the globe. The unabashed high-dollar policy of the past twenty years has led to imbalances around the world that have contributed fundamentally to US overindebtedness.
  • And finally, the nation needs more balance on the part of the Federal Reserve between subduing inflation and creating jobs. Americans can live with inflation above 2 percent a year. There is no academic evidence to support a 2 percent annual target, although the Fed has made this its informal target."

Monetary Cost of Iraq War

11 October 2008

"It's the End of the World as We Have Known It, and Not Too Many of Us are Feeling Fine !"

This was the worst week financially for the world in our lifetimes and in memory (unless one was born before 1920): at least since the early to late 1930s. Indices across the board lost about 20 % of their value in just several days, making their cumulative losses around 40 % and more in the last year. The outlook ahead is not promising whatsoever. The foundations of capitalist economies have turned to slop and the news ahead will be even more troubling and startling to most. The basis of the looming bad news will be continued declines in home values, slumping home sales, increasing unemployment, reports of business failures and setbacks, collapses of banks both nationally and abroad, and perhaps most importantly, the beginning of the consequences of wild financial instruments such as derivatives and credit default swaps that reportedly total tens of trillions of dollars that will swamp the financial and banking institutions across the planet with oceans of red ink and losses that are all but incomprehensible. Markets everywhere are in a panic and a meltdown. And credit remains completely unavailable as those markets are being described as totally frozen.
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Most people that have any sensibility have already pulled much of their money from the collapsing markets and put their financial assets wisely into islands of relative security such as banks and treasury bills and notes, while others have put their money unwisely under a mattress or other perceived kind of safe place. Sensible people have ceased spending money on all but essentials and only on the minimal of pleasures; in essence they are hoarding their cash and trying to be prepared as much as possible for the immediate future in light of the ongoing crash and the uncertain major side effects that may occur. Anyone buying real estate, making large purchases such as automobiles and appliances, making investments on anything (except for gold), and wasting money on trivial and selfish foolish pursuits is absolutely stupid at this time.
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Financial experts and world leaders are conferencing in hopes of finding an answer to this crash and crisis, but it is probable they will not go beyond what steps have already been taken. Here in the US, we have a lame duck administration ( in more ways than one) that is already impotent and without the political will, capital, or standing to do anything further or meaningful. With a national election coming in slightly more than three weeks, the time for massive changes to be made by the Bush people has now past. Changes will come, but not until after the inauguration of Barack Obama in January. Some small policy actions make take place in the interim, as a secondary financial incentive program is being bandied about by Democratic leadership in Congress, but it is by no means a certainty and probably will not be enacted until after Thanksgiving at the earliest and what it will consist of is still be to be specifically determined and strongly subject to political bickering, infighting, and horse trading. One thing is for certain: any legislation that does make it out of the Congress will be swollen with pork and earmarks as in the recent bailout bill, as is any and all legislation for that matter.
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What will develop in the coming few years will be serious reforms and legal measures to deal with the crash and crisis and all of its origins and consequences . One important measure that must occur is a serious restucturing of our tax system that ends the long free ride wealthy elites and corporations have been on with out paying what is fair into the federal as well as state treasuries. A just progressive tax system hopefully will be put into place in 2009. There are a number of other serious reforms to our economic system that must be implimented.
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The absolutely amazing thing about all this is the all but complete repudiation and surrender of Absolutist Market Capitalism by powerful and influential individuals throughout business and government. This was completely unimaginable just a few months ago. The frightening thing, however, is a worse development: State Capitalism, where taxpayer money is directly invested into banks and other financial institutions in a desparate move to save capitalism as a viable economic system. This move has grave consequences in the future for the middle class, working class, and poor, as democracy is sure to suffer under such a system with a loss of rights, liberties, and freedoms in order to satisfy the state capitalists and their clients. Many of these people are criminals or abettors to criminals directly or indirectly responsible for our current crisis and crash and should be dealt with harshly including prison time and virtual complete personal assets forfeiture.
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How bad will things get during the week of 13 to 18 October 2008 ? I hope I am incorrect, but I foresee the Dow Jones Index dropping below 7000, perhaps even 6500; the S & P 500 dropping beneath 500; and the NASDAQ sinking to less than 1200. Other indices will be as ugly in their continuing downturns.
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And we still will not be at the bottom of all of this, nor will we anytime soon. The worst is yet to come...
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Posted by "The Cowboy Professor" or "THE Big J !" at 19:45

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