There are several movies I will watch every time they are aired on one of my generally useless 600 cable channels. They all have the same thing in common – a compelling character portrayal which keeps you riveted and mesmerized by how the protagonist deals with adversity and circumstances beyond their control. The movies I can’t resist include: The Godfather I & II, The Green Mile, Shawshank Redemption, Apocalypse Now, and Patton. Another captivating movie, which didn’t do well at the box office, is Cinderella Man. The portrayal of Depression era heavyweight boxing champion James J. Braddock by Russell Crowe is inspirational, with a rousing and improbable victory by the champion of the common man. While watching this great movie a few weeks ago I found myself equating the themes to the current presidential campaign.
The Greater Depression
Braddock was an inspiration to all downtrodden demoralized Americans during the Great Depression. The parallels between the 1930’s Great Depression and today’s Greater Depression are uncanny, despite the propaganda emitted by the establishment politicians, media and banking cabal that all is well. The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930’s.
The Obama administration has used the identical failed fiscal policies utilized by FDR. $800 billion stimulus packages, cash for clunkers, payroll tax holidays, student loans for anyone with a pulse, and hundreds of other useless Keynesian claptrap ideas have driven the national debt from $10 trillion in September 2008 to $19.4 trillion eight years later, a 94% increase. The national debt in October 1929 was $17 billion. Eight years into the Great Depression, after billions in wasteful New Deal programs the national debt stood at $36.5 billion, a 115% increase.
The Great Depression lasted from 1929 through World War II despite the tens of billions spent on fiscal stimulus. After eight years of the largest budget deficits in history, the economy is still dead in the water, with GDP barely growing. And its pitiful growth is from the surge in consumer spending due to the calamitous Obamacare program and the continuous wars we wage across the world.
It’s the black and white photographs of disheartened men and hungry children from the 1930’s that define the Great Depression for present day generations. Of course after years of government run social engineering disguised as education, most people couldn’t even define when or what constituted the Great Depression. These heart wrenching portraits of average Americans suffering and in despair capture the zeitgeist of the last Fourth Turning crisis.
Apologists for the status quo contend the last eight years couldn’t possibly be classified as a depression. The narrative of economic recovery has been peddled by corporate media mouthpieces, feckless politicians, Too Big To Trust Wall Street bankers, Federal Reserve puppets, and government apparatchiks flogging manipulated data as proof of economic advancement. They point to the lack of soup lines as proof we couldn’t be experiencing a depression.
First of all, if there were soup lines, the corporate media would just ignore them. If they don’t report it, then it isn’t happening. Secondly, the soup lines are electronic, as the government downloads the “soup” onto EBT cards so JP Morgan can reap billions in fees to run the SNAP program. Just because there are no pictures of starving downtrodden Americans in shabby clothes waiting in soup lines, doesn’t mean the majority of Americans aren’t experiencing a depression.
If the country has actually been experiencing an economic recovery for the last seven years, why would 14% to 15% of all Americans be dependent on food stamps to survive? When the economy is actually growing and employment is really below 5%, the percentage of Americans on food stamps is below 8%. If the government economic data was truthful, there would not be 43.5 million people living in 21.4 households (17% of all households) dependent on food stamps. More than 100 million Americans are now dependent on some form of federal welfare (not including Social Security or Medicare). If the economy came out of recession in the second half of 2009, why would 6 million more Americans need to go on welfare over the next two years?
Federal, state, and local governments will spend approximately $1.08 trillion on welfare programs in 2016, including $600 billion for Medicaid and $480 billion for the rest. In 2009, 18.6% of the population was participating in at least one means-tested benefit program. After three years of “economic recovery” that number was up to 21.3% by 2012. If we were in the midst of an expanding economy why would 41.6% of African Americans and 36% of Hispanics be receiving means-tested benefits each month? The social safety net during the Great Depression was sparse. Spending in excess of $1 trillion per year to sustain over one-third of the U.S. population sure sounds like a Depression to me.
The appalling optics of Americans waiting in food lines and/or living on the streets is not being broadcast by the mainstream corporate media, as their duty is to sustain the establishment narrative of economic recovery at any cost. As I drive to work through West Philly, every Thursday the Grace Lutheran Church at 36th & Haverford Ave. distributes food to the local community and the line at 7:30 a.m. in the morning extends around the block.
This scene is duplicated in crumbling urban enclaves and deteriorating suburban municipalities across the land. Food banks and homeless shelters throughout the country are being inundated by those who haven’t benefited from the Fed’s QE and ZIRP “Save a Wall Street Banker” monetary schemes. One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families.
There are 600,000 homeless Americans on any given night. In June 2016, there were 60,000 homeless people, including 15,000 homeless families with 23,000 homeless children, sleeping each night in the New York City municipal shelter system. Meanwhile, the sociopathic Wall Street titans pillage and plunder the nation’s wealth on a daily basis with their high frequency trading supercomputers, rigging the game with help of their Federal Reserve benefactors and captured politicians in D.C., and retire to their penthouse suites each night while spending their weekends in the Hamptons.
The divergence between the obscene levels of wealth acquired through illicit means by the chosen few and tens of millions experiencing extreme poverty due to the immoral and illegal actions of those chosen few has only been this extreme once before. It isn’t a coincidence that wealth inequality hasn’t been this high since the Great Depression.
Every monetary and fiscal action taken by the establishment since 2008 has been designed to benefit the rich, powerful, connected crony capitalists. Boosting the stock market to all-time highs, while impoverishing senior citizens and middle class savers, has left a stagnating economy on life support with no hope of revival. The hopelessness, despair, and anger of those not part of the establishment or profiting from establishment schemes is palpable.
The most blatant attempt by the ruling class to subvert the truth regarding our ongoing depression is the despicably absurd propaganda churned out by the government apparatchiks at the Bureau of Labor Statistics. With a working age population of 253.9 million people and only 151.6 million of them employed (27 million part-time, 15 million self-employed, 7 million working multiple jobs and worst of all 22 million government workers), the BLS has the gall to report only a 4.9% unemployment rate. There are 102.3 million working age Americans not working, but only 7.8 million of them are unemployed according to the highly educated establishment lackeys at the BLS. The other 94.5 million non-working Americans must be frolicking in the surf, sipping margaritas and counting the millions they’ve made in the rigged Wall Street casino.
Would the labor participation rate and employment to population ratio be hovering at levels last seen in 1978 if the jobs market was booming? And don’t blame it on Baby Boomers retiring. With 28% of people over 55 years old with no retirement savings and the median retirement savings of those 55 to 61 years old of $17,000, few Boomers can afford to retire on $12,000 of Social Security per year. The percentage of those over 55 years old working is at an all-time high, while the percentage of men 25 to 54 (prime working years) working is at an all-time low. Since 2007 the country has added 5.6 million mostly low paying service jobs, while 15.7 million Americans have supposedly left the labor force of their own free will, and the unemployment rate is virtually the same. Only an Ivy League educated economist or highly paid CNBC pundit would believe such malarkey.
If job growth was as strong as government and corporate media proclaim, how could weekly wages be growing by only 1.5% annually today and averaging only 2% over the last five years. When inflation on things you need to live (rent, healthcare, energy, food, education, autos) tallies in excess of 5% annually, you’re earning .25% if you have any savings and your wages have been going up at less than 2% per year, your daily existence is depressionary. Real median household income is lower than it was in 1989, even using the hugely understated and manipulated CPI.
Back before seasonal adjustments, birth death model phantom excel spreadsheet created jobs, pretending working age people weren’t in the workforce and the existence of government bureaucrats whose job it was to paint a rosy picture, we had actual unemployment figures. Every able bodied American was in the labor force during the Great Depression. The true unemployment rate fluctuated between 15% and 25% during most of the 1930’s. They had to stand in line for their relief checks and food. It wasn’t wired into their bank accounts or downloaded onto an EBT card.
The government approved false unemployment rate (U3) regurgitated by the corporate mainstream media with no qualifications or clarifications is 4.9%. The U-6 unemployment rate is the broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. It stands at 9.7%, almost double the mainstream media reported rate. You never hear this figure mentioned by the compliant lackey media.
But, if you want the true unemployment rate you must adjust the government figures for the misinformation which began in 1994. Long-term discouraged workers were defined out of official existence in 1994. If you stop looking for a job because there are no jobs available, the BLS pretends you no longer exist and you are dropped from their unemployment calculations. John Williams at Shadowstats rightfully adds these discouraged workers, who are willing to work, back into the calculation and surprise, surprise, the real unemployment rate in this country has been between 18% and 23% for the last seven years. Those rates are identical to the worst years of the Great Depression.
Once you obliterate the false economic propaganda peddled by the purveyors of the establishment, they fall back onto their one remaining false idol – the stock market. How could we possibly be in a depression when the stock market has gone up by 165% since its March 2009 bottom? It’s within 2% of its all-time high. This is after a 55% plunge from 2007 highs to the March 2009 lows. We know history might not repeat, but it certainly rhymes.
The market fell 86% from its 1929 highs to the 1932 lows. Those in control didn’t think to suspend mark to market accounting so the Wall Street banks could falsify their financial statements, like our beloved leaders did in March 2009. But, even though the entire 1930’s constitute the Great Depression, the stock market soared by 260% between 1932 and 1937, making the current cyclical bull seem puny in comparison.
Did the 260% increase in the stock market over five years in the midst of the Great Depression benefit the average American in any way whatsoever? Absolutely not. They didn’t own stocks. The 0.1% benefitted, just as they benefited from the crony capitalism New Deal programs that poured money into their coffers. Fast forward 80 years to the next Fourth Turning and you have the same dynamic.
The 160% increase in the stock market over the last seven years has enriched the Wall Street sociopaths, billionaire oligarchs, corporate chieftains, and the leeches and cronies who prop up the fetid establishment. The Federal Reserve QE and ZIRP monetary policies, along with the Obama fiscal debt expansion machinations, were solely designed to benefit Wall Street, not Main Street. The beneficiaries in NYC, D.C., S.F. and L.A. are rolling in the dough, while grandmas across the land are forced to eat Friskies for dinner.
Again, we refer to the entire 1930’s as the Great Depression despite the fact real GDP surged by 40% between 1933 and 1937. If today’s mainstream media existed during the 1930’s they would have been proclaiming the “tremendous” GDP growth and “spectacular” stock market gains. They would have really boosted the spirits of the millions receiving government relief and standing for hours waiting for a cup of soup and some stale bread. The real GDP in this country has grown by a pathetic 15.4% since the 2009 low. Using a true measure of inflation reveals we’ve essentially been in recession since the early 2000’s, with a depression since 2008.
Central bankers around the globe have all implemented identical monetary schemes to sustain the unsustainable. They have always had only one tool in their toolkits – printing money and creating enormous amounts of unpayable debt to prop up crooked corporate cronies, their morally bankrupt banker puppeteers and the slimy snakes slithering within the halls of Congress. Total credit market debt to GDP peaked at 261% in the mid-1930’s as FDR’s debt financed New Deal programs did absolutely nothing to lift the country out of its Great Depression. Obama and his Keynesian acolytes have tried the same solutions since 2009, with an equally dismal result. Total credit market debt to GDP peaked in 2010 at 381%, but six years later still stands at 345% as the stagnant economy grinds to a halt.
The debt end game approaches. With a national debt of $19.4 trillion (106% of GDP) poised to skyrocket by $1 trillion per year as entitlement programs on automatic pilot explode under the weight of Baby Boomers, interest rates at 5,000 year lows, a willfully ignorant iGadget distracted populace, and spineless corrupt politicians unable or unwilling to address the debt crisis, this depression is poised to go down in history as the Greater Depression.
As the Fed talks as if they have everything under control, their actions and/or inactions reveal an extreme level of desperation. As corporate profits soared to record highs and unemployment fell to 2007 levels, the Federal Reserve discount rate should have been elevated to 4%. Instead they keep it locked at an emergency crisis level of .25%. This proves they are lying about economic recovery narrative.
And now they are pondering negative interest rates, which have failed across Europe already. These academics, who’ve never worked a day of their lives in the real world, impose their demented monetary theories and guesses upon the citizens of the world, leading to havoc, chaos, heartache and ultimately war. When did capitalism devolve from saving and investing to borrowing and spending? Does 1913 ring a bell? Stanley Fischer, the vice chairman of the Federal Reserve revealed his disdain and contempt for the commoners in an interview this week:
“Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.”
To paraphrase George Carlin, “he doesn’t give a fuck about you”. He knows there are more than 90 million American over the age of 55 in this country who are risk averse. Eight years ago they could earn a relatively risk free 4% in a money market fund. A retired couple with $250,000 could generate $10,000 per year in interest to supplement their Social Security. Today, due to the policies promoted and implemented by Fischer, Yellen and their cohorts, that couple can earn about $600.
And now he wants the elderly to pay him for keeping their money in the bank. These demented Federal Reserve schemes are guaranteed to blow up pension funds, endowments, and any other investor in bonds. The hubris and inhumanity of Fischer and his ilk makes me want to wretch. Fischer’s sole purpose in life is to serve his Wall Street and establishment masters. Screw the peasants. They are expendable.
There are now $11 trillion of negative yielding government bonds floating around the planet. No one in their right mind would buy a negative yielding bond. It’s not an asset. It’s a liability. An investor is guaranteed to lose money. You know the debt endgame approaches when governments issue negative yielding bonds that are then bought by central bankers and the banks that control them. It’s nothing but a stalling tactic to fend off the imminent collapse. Bill Gross, a relatively honest financial titan, contends Yellen and her contemporaries have taken reckless actions which are destroying capitalism:
“I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models – those dependent on a yield curve spread or an interest rate that permits a legitimate return on saving, as opposed to an incentive for spending.
They also keep zombie corporations alive and inhibit Schumpeter’s “creative destruction” which many argue is the hallmark of capitalism. Capitalism, almost commonsensically, cannot function well at the zero bound or with a minus sign as a yield. This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough.”
In Part One of this article I’ve made the case most people in this country are experiencing a Depression, on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast the lives and influence of James J. Braddock and Donald J. Trump, while assessing their impact on the American people during times of economic despair.