"Lessons Of The Greatest Generation, Now Forgotten By Too Many" Part Two

This was first published in July 2014


As the grip of the Great Depression eased somewhat, fascist dictators Adolf Hitler and Benito Mussolini became allies, later adding a number of other countries to their fold, including growing Asian power, Japan. Events in Europe and Asia gradually overtook American reluctance to become involved in another military conflict far from home, but December 7, 1941 dramatically changed all of that. On that day, Japanese aircraft attacked the American fleet stationed at Pearl Harbor, Hawaii (then an American territory, not a state). President Franklin Roosevelt asked Congress to declare war, which it did. A few days later both Hitler and Mussolini declared war on the United States and Americans turned their attention away from the era of the Great Depression and toward the era of defeating reactionary fascism. Millions of Americans entered the armed forces and the nation's industrial production rose to new heights, as the United States produced weapons of war to supply not only its own forces, but to "help supply" the forces of its allies. Americans bought war bonds to help finance the war, women went to work in factories to replace men gone off to the military, and the country cared for its wounded, but barely had time to mourn its dead, as the main focus remained in defeating fascism, which was accomplished during 1945.

The end of the war brought new confrontation, however, as the United States, elevated to the status of world power by the just ended war, faced off against communist dominated countries, especially in eastern Europe, led by the Soviet Union, and in Asia led by China, known then to most Americans as "Red China." Large American forces remained in Europe and parts of the Pacific, but then even more troops were called upon to serve in Korea, then even later, in Southeast Asia, in Vietnam. These areas of war did not completely unite Americans, and little by little the unity of the clear cut cause of World War Two was forgotten, as not all Americans saw the need for the United States to be so militarily involved in many parts of the world, especially in Southeast Asia, a notion which only increased among Americans, as U.S. casualties mounted there.

Economically business people will always try to get the best possible deal for themselves, and just as World War Two unity drifted from memory, so did the focus to combat greed for the benefit of the few. The Great Depression saw Americans pull together to help one another, and in 1932, the worst year of the economic scourge, giving to charities actually INCREASED.* Changes came as the national government passed laws separating investment banking (also known disparagingly as, "casino banking," and not without reason) from commercial banking, like what most think of as their bank down the street, with checking and savings accounts, and various loans, like for homes and vehicles. Deposit insurance was implemented to protect Americans from the loss of their money, which often was their life savings. Change was implemented for the buying of stocks on credit, as the previous low down payment had "helped" bring about the catastrophic plunge to Wall Street in the fall of 1929. Instead, in order to buy stocks on credit (called "margin") under the new regulation, you needed to put up 90% of the purchase amount. New public works projects were implemented to fix, or to build anew, roads, bridges, dams and schools. Other such public projects cleaned up waterways, river banks and forest lands, with reforestation part of the project. Workers were given protections like minimum wage, regulated work hours, overtime pay, easier union organizing, and better Federal unemployment insurance. Minimum wage was an attempt to provide workers with at least enough income to buy the basics of life. As time passed, Americans, still connected to the activism of the Great Depression and World War Two eras, saw the need to try to clean up massively polluted rivers, creeks and streams, and to deal with choking air pollution engulfing many an urban community in the U.S. Both Pittsburgh and Los Angeles became targets of jokes and derision for their air pollution, but there were far more than those two communities. Here in Cleveland in 1969, industrial pollution in the Cuyahoga River actually caught fire, bringing derision, but also a wake up call for change, before the nation itself burst into flames or choked to death in its own air pollution. Laws aren't often perfect, maybe they never are, but at least Americans saw problems and chose to confront them. Do we really want to go back to the times prior to these laws? If you say, "Hell yes, I don't live near any of those areas, let 'em pollute and give people jobs," or, "get rid of the minimum wage and let businesses work people to near death, or the whole way, for a pittance, and do away with food stamps and other public welfare services so that these 'moochers' won't just resort to getting help to pay for their lives of working for low wages," you are part of the problem, and you seriously need to look into the mirror and do some self evaluation. If articles like this make you a bit uncomfortable, and I hope they do, you still have time to recapture a bit of your younger days, and you are NOT a lost cause reactionary, as long as you haven't descended into denial or fear of hearing ideas that may challenge ideas you are afraid to have challenged. You can start by listening to the counter views to some of the right wing nonsense espoused by the likes of Limbaugh, Hannity, Beck, and often by Fox News, a television station founded with the express purpose of promoting a political philosophy. Changing your reactionary views is not weakness, it is strength! Don't be afraid to change!

"More in Part Three ..."

* For a good history of the era, see "The Great Depression, America, 1929-1941," by Robert S. McElvaine, first published in 1984 and republished in 1993.

WORD HISTORY:
Token-This word, related to both "teach" and "toe," among several others, goes back to Indo European "deik," which meant "to show, to show how to do, to point to." This gave its Old Germanic offspring the noun "taiknam," which meant "sign, symbol." This gave Old English (Anglo-Saxon) "tacen," with the same meaning, but also "evidence/proof;" that is, "something that shows or points to truth, a sign/symbol of truth." This then became "taken" (not the same as the word from "take"), before the modern version. "Token" also later came to be applied to "a metal or wooden disc used to symbolize coins." Common in the other Germanic languages, all with the same general meaning as their English cousin: German "Zeichen" (German "z" is pronounced like English "ts," as in the end of "hits"), Low German Saxon, Dutch and West Frisian "teken," Danish and Norwegian "tegn," Swedish "tecken," Icelandic "tákn.

"The Banker in the Monopoly Game"

Most Americans have undoubtedly heard of the game "Monopoly," * and most likely, a lot of those folks have even played the game. Usually one of the players acts as the banker. The bank initially holds the title to the various properties and the banker collects all fees and such, and pays out money according to the various rules of the game. The banker is supposed to keep his/her personal money and properties (as a player) separate from those of the bank. According to the rules, the bank can never go broke; sort of a forerunner of "too big to fail." The game began to grow in popularity back during the time of the Great Depression, when banks and big businesses were under scrutiny for regulation, following the financial and economic meltdown begun by the Great Crash of the stock market in October of 1929.

In order to bring the game up to date and to make it more realistic, the rules need to change so that the banker never has to go to jail, even if he/she mixes the banks funds and properties in with their own. Further, the banker should be able to pay themselves whatever bonuses they want. If the banker gets into financial difficulty, regardless of how irresponsibly he/she has acted, the other players have to contribute "bailout money" to keep the banker going. This "bailout money" is technically a loan, but it is given with no strings attached to the banker's management of his/her personal, I mean, bank funds ... well, it's difficult to tell exactly what this should mean. And remember, unlike the other players, the banker NEVER goes to jail. Have fun ......

* The game was owned and distributed for decades by Parker Brothers, which became a part of "Hasbro" in the early 1990s, along with "Monopoly."

WORD HISTORY:
Need-This word goes back to Indo European "nau/naw," which had the idea of "corpse," which then expanded to "brought to exhaustion" (as in, "dead tired"). This gave its Old Germanic offspring "nauthiz," which had the broad meaning "distress, difficulty, hardship, necessity, force." This then gave Old English (Anglo-Saxon) "nied/ned," with many of the same meanings. This then became "nede," before the modern version, although the meaning narrowed to "a necessity, a requirement, poverty (that is, 'lack of necessities').^ A verb form goes back to Old Germanic times, which carried into Old English and the other Germanic languages, as well, all from the same source. The other Germanic languages have: German "Not" (pronounced much like "note," but besides meaning "necessity," the German word also means "distress" and "emergency"), Low German "Noot" (poverty, distress), Dutch "noot" (need, distress), Danish "nød" (need, distress), Norwegian "nød," (need, emergency), Icelandic "nauð"and "neyð" (=nauth and neyth, meaning 'emergency, distress'), "Swedish "nöd" (need, distress). I could not find a modern form in Frisian, but it is a difficult language to research and there could well be a modern form, as it once had "ned."

^ English borrowed words for some of the other, previous meanings of "need": "distress," "requirement" and "poverty," all are Latin derived words that gradually left "need" with its more limited meaning in modern times.

The Ship That Sailed

Note: While originally publish in March of 2014, I modestly updated this September 28, 2014.

When Barack Obama became President of the United States the ship of economic change had come into the dock. In my opinion, the fact that he was the first African American to be elected president was essentially irrelevant on the economic front, although it was significant in that it pointed to the "changing feelings" in the country regarding race, but the idea that Obama's election signaled a "post racial" era, was nonsense, as notice, I didn't say "completely changed feelings regarding race." No, the ship of economic change came calling, because when Barack Obama was elected, the nation's economy was in meltdown. Americans were fearful for their jobs and for their overall well being, and certainly for their futures. Surging oil and gasoline prices in prior years had sapped the purchasing power of many, a purchasing power already diminished for some by the transfer of jobs overseas, with the resulting cuts in wages for a number of Americans, and a continuing "transfer of wealth" to the very upper incomes. Republicans, much diminished in political power in both houses of Congress, as well as in opinion polls, generally decided to make a stand against the new president by opposing just about anything and everything he either proposed or supported, including things many Republicans had once supported, or had even proposed.* No question in my mind that some, but certainly not all, of this Republican opposition was based upon race and the new president's non typical name, but it was also, in my opinion, based upon $$$, as the nation's greed mongers feared the new president would curtail and corral their run wild activities, which they slyly love to call "free markets." As it turned out, no major banker went to prison over the absolutely scandalous mortgage mess, and strict proposals to curb such activity were successfully watered down before they were enacted by Congress and signed by the president, and no new tax on derivatives' and futures' transactions for Wall Street traders became law. Even with their relatively successful efforts to limit public control over their endeavors, the whiny rich bankers kept... well, whining.

President Obama had a chance to hit the "reset button," and to ride the issues of bank/financial reform and the tremendous economic inequality in the country to bring about significant change and to improve the lives of millions of Americans by helping to make the system fairer. As I've noted in previous articles, Barack Obama is not a politician; he's more of an intellectual, with some political skills, primarily the ability to give great speeches. Both Teddy Roosevelt and Franklin Roosevelt understood the populist undercurrents of their times, and both men used those undercurrents to propose and to help enact change to a system that had been dominated by business interests and wealthy individuals, although neither man had to worry about his next meal or having a roof over his head. Obama's choice, however, while certainly related to income disparity, was to tackle the massive thing we call "the health care system" in this country. Various figures suggest "the health care system" makes up something like one sixth or even one fifth of the American economy. We Americans can be tough to please on just about any issue, but to please Americans on reforming such a massive part of the nation's economy was virtually impossible, and his decision helped the wealthy to escape from the position they had put themselves into when the economy imploded, and it led to a Republican resurgence in the midterm election, giving the, by then, even more conservative Republicans control of the House of Representatives, numerous governorships and state legislatures, all with the nation's congressional and state legislative districts about to be redrawn, but with Republicans then often in control of the process.** The President and his administration, seemingly unable to comprehend the potency of the healthcare issue, even after the blow torch was put to their behinds in the 2010 election, could not even get the roll out of THEIR new health care law right, as website snafus and postponement of certain provisions have proven to be an embarrassment, if not yet a fatal blow. On top of all of that, the president and those in his administration had to know the law, or at least parts of it, would be challenged in the court system, with eventually a likely hearing before the Supreme Court. This of course happened, and the law was upheld, but let's be honest, who would have thought this law would be upheld by the vote of conservative John Roberts! Of course, a win is a win, but "my guess" is, further decisions on various parts of the law will not see Roberts ever stray from the conservative line again, as he has already demonstrated in the "Hobby Lobby" case. The thing is, it looks to me that the President and his administration did not anticipate the challenges in the Supreme Court, a group which leans to the conservative side, a fact they already certainly knew.

So President Obama let the ship of economic change sail, with him waving goodbye to it from the dock. The President, Democrats and average and poor Americans better hope it doesn't return to the dock on his watch. Cuts to programs for the poor have already taken place and that's been with Obama as President. More power is now concentrated in a hand full of banks than when he became President, when many banks were called "too big to fail." The overwhelming percentage of economic gains have gone to the wealthiest Americans since the President took office in 2009, and median household income has so far declined every year of his presidency.*** If Republicans get control, look for even worse, as the wealthy will continue to move to cement their wealth within their families by the removal of estate taxes (and dare I say, more tax cuts for them from Republicans, who have a terrible case of worry over the plight of millionaires and billionaires) and the move toward further rule by the rich ("plutocracy") will accelerate. The problem is, with the ship having sailed, it looks like many of us will be able to say about the President is, "He wasn't as bad as having a Republican." Not exactly a good legacy.

* Republicans were divided over the bailouts of the auto industry, initiated by the administration of George W. Bush, and of the banks, a major program proposed and pushed by President Bush and his administration, both of which did get Republican support, but with many dissenters. Obama expanded the auto industry bailout, and continued with the bank bailouts, often drawing the ire of Republicans, who acted as if Obama had started both of these programs and seemingly disavowing any Republican association with either. Health care reform, including mandates for individuals to get insurance, had been pushed by Mitt Romney in Massachusetts and also supported by Newt Gingrich, among other Republicans. Once health care reform was proposed by Obama, the Republicans were almost unanimous in their opposition to the proposal, forcing the two former prominent supporters, Gingrich and Romney, into contorted reversals. So called "cap and trade," also was largely a Republican idea, dating back in some form a few decades. This was the general idea that limits for certain air pollutants would have "caps" placed on them by the government, and that permits would be issued to companies regarding these pollutant emissions. Companies that successfully limited certain or many pollutants could then sell their permits to other companies not as successful in these endeavors, giving them added time to comply (thus the idea of ''trade"). See this Politifact article for the general history of both Republican and Democratic involvement in "cap and trade" over time:   http://www.politifact.com/florida/statements/2014/may/23/debbie-wasserman-schultz/cap-and-trade-legislation-was-originally-republica/

** For more on the importance of the 2010 midterm election, see my article at this link:  http://pontificating-randy.blogspot.com/2013/05/why-2010-was-such-important-election.html

*** For details about income, see the Huffington Post article at this link:  http://www.huffingtonpost.com/2013/09/17/median-income-falls-inequality_n_3941514.html

WORD HISTORY:
Well (2)-English has a couple of words "well," this is the noun, "a hole in the earth where liquid or gas comes, or is brought, to the surface." (I already covered "well," the adverb, which is a different word.) Actually, the noun comes from a verb, which goes back to Indo European "wel," which had the notion "roll, move or turn violently." This gave its Old Germanic offspring "wellanan/wallanan," with much the same meaning, but also the related "bubble up." This gave Old English (Anglo-Saxon) "weallan," with the meaning "to toss up violently, to seethe, to bubble up." This later became "well," with the sense "to surge/flow up" (example: "The leak caused water to well up around us"). The original Old English word produced the noun form "wielle," meaning "water hole, spring," which then became "welle," and then "well," where it has remained for many centuries. The other Germanic languages have forms with various meanings, some examples of which are: German has the verb "wallen," which means "boil up, surge forth, churn," also another verb, "wellen," which means "to become wavy (or uneven, as in carpet ... get it?) and the noun "Welle," which means "wave" ("water that churns up"); Low German has "Well," also meaning "wave," Dutch has "wel," meaning "source" (a well or spring is "the source" of life around it), and the verb "walsen," "to roll." By the way, "well" is also distantly related to "waltz," the dance performed "with a rolling motion."

What We Got With Obama/Part Two, The Bankers and Healthcare

First published in August 2013


While THE major issue when Barack Obama took office was halting the economic plunge, the President faced other issues and the country undoubtedly had unrealistic super high expectations, more so from the center, to the left of center, to the far left, on the political spectrum. Campaigning on certain issues and promising certain things in an initial campaign is one thing, but if you win, people are actually going to expect that you try to do the things you campaigned on. Both major American political parties are coalitions with various factions forming a part of the whole. For Obama and Democrats, they faced a number of choices as to how to proceed after the "stimulus" measure was passed. There has been a particularly tight lipped inner circle around this president, and we'll have to wait for someone to break the code of silence, either accidentally or in some "tell all," otherwise we'll have to wait until Obama leaves office, when "presumably" some will talk, to find out many things, so this is just a guess, but I'd say his economic team correctly told him that there was only so much he could do about the economy, and that with the stimulus in place and the Federal Reserve working more behind the scenes, that it would take time for the crisis to ease and then for recovery to begin, and that it would be a long road back. So what to do next?

Not only was the country in a depressed mood over the economic situation, Americans were angry at the many moneygrubbing shenanigans (I'm being kind here, because it was outright criminal, or should have been, except they got laws changed) that had helped to bring about the crisis, the soaring number of foreclosures, the plunging economy and the fast escalating number of unemployed. These actions had been orchestrated by the nation's financial sector and there were calls for reforms to curb the many abuses and schemes concocted by elements of that sector. These schemes, coupled with huge salaries and bonuses paid to executives in finance, made action on financial sector matters a high priority to many Americans, in my opinion, and even some Republicans were outraged, although they seemed more outraged with efforts by President Obama to halt the economic slide and with his birth certificate, than with financial sector abuses. Democrats controlled a majority of the U.S. House of Representatives 255 to 179 (one vacant)* and a majority of the U.S. Senate 57 Democrats + 2 independents (who caucused  with the Democrats) to 41 Republicans.** Symbolism in politics is important, I'd say especially so in the ultra modern era, when information is on cable television and on the Internet within seconds, or even carried in real time. In my opinion, a couple of the President's choices for his economic team sent the wrong message, unless of course he meant to send a comforting word to the bankers, Wall Street and others in the financial sector. The choices of Larry Summers and Tim Geithner put two men with strong ties to Wall Street, banking deregulation and deregulation of financial services, part of which included the non regulation of "derivatives," in notable positions in the new administration.*** Summers has often been touted as "a brilliant economist;" whatever the hell that means, but I'm not sure the President needed a "brilliant economist" to tell him to pump money into an economy that had lost trillions. This was not new economic policy, and even some Republicans over time came to accept the need to use such measures to counter downturns. Ronald Reagan spent money like a broken water main, all the while telling gullible Americans how he was against deficit spending,**** a sort of "don't pay attention to my actions, just listen to what I say." Through the decades though, many Republicans and business people have opposed deficit spending (unless they're in trouble) dating back to the Great Depression, often because they fear some "addiction," but then again, if you are possibly dying and in terrible pain, should the doctor say, "Sorry, I can't give you narcotics, you might get addicted, but don't worry, once you die it will 'kill' the pain. Ah ... sorry about that, but the pun IS intended ."

President Obama made a crucial decision to first pursue the reform of American's huge and complicated  health care sector (complete, for better or for worse, with many entrenched "interests"), before pursuing financial system reform. The decision was flawed to say the least. Yes, the decision was bold, but the ensuing negotiation over the measure was not as bold, and the early compromises over the stimulus and in health care reform earned the President the reputation of being quick to compromise, often seemingly with himself. Certainly the President's advisers had to know how divisive a fight would develop over this decision, although the White House seemed stunned and unprepared by the ferocity of the attacks. Further, the political advisers had to know that health care reform was not a high priority for most Americans at that time; after all, both parties use pollsters to gauge public opinion. Republicans, hammered with losses at the polls in the 2006 and 2008 elections, connected to unpopular former President George W. Bush and his policies, which were linked to the economic meltdown, and tainted by Republican politicians' sex scandals***** saw a path to new life, and they took it with vigor and vengeance. An expanding conservative movement called the Tea Party had already been active from early in Obama's term by organizing protests, where people waved tea bags (in representation of the Boston Tea Party) and where some openly carried firearms (presumably loaded) and some others dressed in apparel from the 1700s; a pretty clear indication the century to which these folks, at least, want to return. The President's health care decision provided a boost to his opponents like no other, as the previously dispirited conservatives rallied to defeat the President at all costs, although the blueprint for the reform came from former Republican governor of Massachusetts, Mitt Romney, and elements of the proposal had been previously touted by none other than Newt Gingrich and the conservative organization the Heritage Foundation.******

The rancorous health care debate carried a heavy political cost to the President and Democrats, as well as to reform of the financial sector, as the delay gave special interests time to regroup from the financial meltdown and to marshal their lobbying forces to take on proposed changes. The political disarray and public confusion over the health care law also allowed opponents of financial reform to use public anger at the President and Democrats to their favor. The massive amount of attack ads by conservative groups reinforced public fears and disapproval of the health care law, as the White House and Democrats could never concisely explain the  law; largely because, there IS no concise way to explain the law covering such a vast part of the American economy. Change always creates anxiety, and conservatives exploited that anxiety. It was far easier for conservatives to hammer away at parts of the law in ads to create doubt and fear, and to pick it apart, as every segment of American society would be affected by the law in some way. Day after day the spectacle played out on television screens and on radio as the attack ads mounted. Progressive groups, including unions, were, in my opinion, never totally sold on the health care law that emerged, but they rallied to the cause to keep Barack Obama's presidency from going down in flames early on. Further disappointment would come to progressives when the President scrapped the "public option" from the reform legislation. This was a provision that would have permitted non insured individuals to choose a government sponsored insurance plan in competition with private insurance companies' plans, something that likely would have lowered costs substantially. I'm sure the White House would argue that in order to keep insurance companies from actively opposing the reform, they had to drop the provision, which just further shows how complex the overall reform was. Even with progressive support, opponents far outspent supporters of the law, which was clearly reflected in polls showing the law decisively unpopular, giving opponents another angle of attack: "They're trying to ram this law through against the wishes of the American people." There were certainly many distortions and outright lies, but when have American political campaigns (and that's what this was) ever been truthful and fair? Certainly the White House should have expected such, and while the President seemed to be the only trooper in the game for the pro-reform side, and he performed superbly in some instances, even when taking face-to face questions from congressional Republicans, the law remained highly unpopular with the public.

Meanwhile, the banks that had been dubbed "too big to fail" during the initial part of the economic meltdown, became even larger, and financial sector CEOs never spent one day in jail, let alone prison, bringing about the saying that they were "too big to jail." The general defense by the CEOs was that they hadn't known about the risky and complicated financial ventures made by THEIR companies. Of course none made any attempt to therefore return their salaries or bonuses. While to me the amounts paid these individuals was, and is, obscene, the fact that they essentially admitted to incompetence ("they didn't know," not that I buy that explanation for one second) should have been cause for immediate dismissal, but with corporate boards stacked with like-minded members, and with super wealthy stockholders owning most of the stock in these entities, that just hasn't happened. So they got to have it both ways: they got huge salaries and bonuses while being incompetent, and they didn't go to prison for all of the manipulation and deceit in the industry. Further, their ravaged companies were bailed out, stabilized, and made even larger by America's taxpayers. America ... the land where crime DOES pay! And let's not forget, while all of the worst came during the administration of George W. Bush (although as I noted elsewhere in this article, much of the deregulation came under Democratic President Bill Clinton), the aftermath took place under Democrat Barack Obama and with both houses of Congress under Democratic control (at least until after the 2010 election, when Republicans took control of the House of Representatives and the Democratic majority in the Senate was considerably lessened).

Grades:
Obama on agenda setting after the stimulus: "F"
Obama on health care reform "I" =incomplete, as the law is not yet fully implemented
Obama on curtailing the economic power of elements of the financial sector: "F"    

More on financial reform in "Part Three" .... 

* The breakdown by party affiliation at any given time for the House can be complicated because of deaths, resignations, or appointments to other positions. The thing to remember is, the House operates on a simple majority vote. 

** Pennsylvania Senator Arlen Spector had been elected as a Republican in prior elections, but switched to the Democratic Party in the spring of 2009 giving Democrats 58 plus the two independents to 40 Republicans, but Massachusetts Democratic Senator Edward "Ted" Kennedy was frequently away from the Senate with serious illness and Minnesota Democratic Senator Al Franken was involved in a contested election outcome that was not settled until the summer of 2009, after which he took office, so the Democratic majority was not quite what it seemed on paper. The Senate has its own rules and most, but not all, legislation requires at least 60 votes to pass, so it is important to note that Democrats did not always have the necessary 60 votes from among their own party caucus members, again, which included the two independents.

*** Summers served in the Clinton administration and actually became Secretary of the Treasury late in Clinton's second term. He had previously been Deputy Secretary under Treasury Secretary Robert Rubin, another proponent of deregulation. He later became President of Harvard University, where the university got involved in risky and speculative derivative markets, which led to hundreds of millions of dollars in losses to the university. It's all far too complicated to explain here, but the main thing is, Summers approved the university getting involved in derivatives, the non regulation of which he had supported while in the Clinton administration (the overall legislation which included non regulation passed Congress and was signed by Clinton late in 2000). Summers also supported the law to essentially repeal the Glass-Steagall Act, a law passed and implemented during the Great Depression to separate traditional commercial banking, like checking and savings accounts, auto loans, home loans, etc, and the far riskier investment banking, which involved investment in various stocks, bonds and commodities. This law too passed Congress and was signed by Bill Clinton in 1999. For more information on this law see:  http://pontificating-randy.blogspot.com/2009/03/understanding-crisis-part-three.html 

**** For more on government deficits, see my article:  http://pontificating-randy.blogspot.com/2011/02/gop-keynesians-in-disguise.html

***** Republican Senator John Ensign of Nevada was involved in an affair with the wife of one of his administrative aides, who was a campaign staff worker herself. The whole matter was complicated by attempts to keep the affair quiet by providing work and money to the couple. Ensign eventually resigned, but not until 2011. Then Mark Sanford, the Republican governor of South Carolina, was "missing" for a number of days, supposedly on a hiking trip in the Appalachian Mountains. He obviously failed geography in school, as it turned out he was in Argentina with a woman with whom he was in a relationship (Sanford was married). The South Carolina legislature later censured Sanford. (Censure= strong disapproval.) Let's see, Appalachian starts with "A" and Argentina starts with "A," maybe that's where he got confused. Also a little while before this, Idaho Republican Senator Larry Craig had been arrested for soliciting sex in an airport mens' room. He thought of resigning, but then changed his mind and remained in office until his term expired, which only kept the matter lingering in the news and in jokes in comedy acts. During his career, Craig had supported anti-gay measures, but I guess he took a page from Reagan's deficit playbook, "don't pay attention to what I do, just listen to what I say."

****** For more detailed information on previous Republican support of provisions of what now is called  "Obamacare," see: http://healthcarereform.procon.org/view.resource.php?resourceID=004182

WORD HISTORY:
Cleave-English has two words "cleave;" this is the word meaning "to split, to cut." It goes back to Indo European "gleubh," which had the meaning "to cut." This gave its Old Germanic offspring "kleubanan," with the same meaning. This gave Old English (Anglo-Saxon) "cleofan," with the meaning "to split." which then became "cleven," before the modern version. The derived noun "cleaver" retains the meaning as "a sharp ax-like implement for splitting large slabs of meat." The past tense form of "cleave" gave modern English "clove;" as in "clove of garlic;" that is, "separated, split pieces of garlic," and the participle form, "cloven," is often used for an animal's hoof, or of feet in general. The other Germanic languages have: German has "klieben" (now used much more in Bavaria and Austria for "to split/to cleave logs or wood"), and German also has the now archaic noun "Kliebeisen" (literally "cleaving iron;" that is, "cleaver"), Low German Saxon has "klöven," Dutch has "klieven," Danish and Norwegian (dialect?) has "kløve," Icelandic "kljúfa," and Swedish has "klyva." All these forms retain the same general meaning as their English relative, "to split, to cleave."  

Herbert Hoover: March Toward Reactionary, Part Three/Final

While Herbert Hoover took the Federal government into the economy and into direct relief aid to the states, his words did not keep pace with his actions, as he spoke as if his America of old was still there all the same and unchanged, as such a great system would never need the programs he had just initiated. This was one of the reasons Hoover received little credit for his actions, since he himself denied they were changes to the system, although his limitations on his own programs left these programs far from achieving their potential to stabilize the economy, which was much more the reason for the lack of acknowledgement to Hoover. When smacked in the face by reality like bankers not wanting to make loans and charities being overwhelmed by impoverished citizens, Hoover did indeed change, but he could not bring himself to acknowledge that change. It is tough to tell what Hoover actually believed, as he later became one of the main critics of the New Deal; yet, later still, he admitted that he likely would have signed the same legislation that FDR signed; that is,  ... THE NEW DEAL! And the New Deal had its roots in many of Hoover's own policies.

Upon leaving the presidency, Hoover was one bitter man. He had shown signs of such during his time in office, as he seemed bitter at the terrible hand he had been dealt for the pinnacle of his career, the presidency. Hoover the humanitarian leader, Hoover the businessman and Hoover the Secretary of Commerce was used to giving orders and lecturing others, not having to garner votes from politicians or listen to their lecturing. He was very shy, but supremely self confident in his ideas to the point that when they failed, he kept going, almost contemptuous of others' ideas. Hoover, in my opinion, had a weak ego; that is, he was insecure to the point where a criticism of one of his plans was like a personal insult. In the rough and tumble world of politics, all of this took a toll on Herbert Hoover. He and FDR had been friends for years, but Hoover ended up detesting Roosevelt, partially because of Roosevelt's criticisms during the presidential election of 1932, when Roosevelt easily defeated Hoover, and Hoover took the criticisms  personally, as he had not come up in the give and take world of politics, and that insecurity of his was always there. When Roosevelt initiated the New Deal, taken in part from Hoover's ideas and policies, Hoover blasted it, in my opinion, because someone else came up with the necessary changes needed to make the ideas more successful. This created resentment in Hoover and it spilled out into the open as he bitterly attacked FDR and his administration and moved himself into the role of something of an arch conservative hero, a place he would pretty much hold until his death. Maybe someone should have tried to convince Hoover early on that the New Deal, at least in part, was really his idea and he might then have supported it, but in fact, Roosevelt and the Democrats didn't need Hoover's blessing, as the very mention of Hoover's name could draw highly negative responses at public events for many years, including when his image appeared in newsreels at theaters. As sensitive a man as he was, all of this negative use of his name embittered him all the more, and it wasn't until some Democrats began to feel a little guilty that Hoover mellowed a tad, and that first came when Harry Truman was president. Hoover, at Truman's request, helped to reorganize the federal government to save money, and he and Truman developed a friendship of sorts, but Hoover, ever hypersensitive to criticism, didn't trust Truman either, as old Harry was a politician, and he used Hoover's name to scare the hell out of some Americans at various political events. I'm sure Truman just saw it all as politics, but Hoover was furious at what he saw as personal insults.

Hoover has links to conservatives even today, except he was never as mean and nasty while in office as some of today's "take me back to the good old Stone Age" conservatives, and while he lived in something of a dream world about his policies and an idealistic America; in fact, he saw problems and at least he made an effort to solve them, albeit with limitations. The desire of today's conservatives to repeal the estate tax would have made Herbert Hoover furious, as he believed great fortunes should not be allowed to be passed on intact, with the biggest being broken up to give others a chance to share in the wealth, and his tax program was highly progressive, not regressive like that of Ronald Reagan, George W. Bush or Paul Ryan. Like today's conservatives though, Hoover wasn't too crazy about facts that disproved his own ideas, although he didn't have Fox News to cover for him. He did spout a lot of things along the line of today's conservatives about "America is the best at _______" (fill in the blank), although facts would contradict some of those things, just as today. Declaring that we're the best at everything was not a way to deal with problems and flaws in Hoover's time, nor today, but Hoover often eventually relented. Some modern conservatives have done everything they can to disavow Hoover, since they are NEVER wrong, just as their philosophy of deregulation had nothing to do with the financial meltdown in 2008. If you believe that, would you like to buy the Washington Monument? I'll sell it to you. Like today's conservatives, Hoover also tried to revise his role in history by continuing to advocate for his policies, pretty much stating they would have succeeded had the country stuck with him instead of turning to Roosevelt. The ultimate thing was, Hoover and his administration misjudged the severity of the economic downturn more than just at its beginning and therefore Hoover's  prescription of trying to restore confidence by helping banks, railroads, and business in general was inadequate to deal with it,* as too many Americans had little or no money left to up demand for goods and services. Confidence helps when people HAVE money, but are afraid to spend it, or even deposit it in banks. Even the larger expenditures by New Deal programs under Roosevelt couldn't quickly help the beleaguered economy to recovery quickly; that's how bad things were.

Over time Hoover's image did recover to some degree, but some people still detested him decades later. It bears repeating, Hoover was not a true progressive nor a true conservative during his presidency, but he most definitely took on the mantle of conservatism after he left office, accompanied by that delusional belief that he had not deviated from American individualism and by his extreme bitterness. The passing of time and the political atmosphere surrounding Hoover had progressives eventually discover (or perhaps rediscover) Hoover's progressive side, which then gave reactionaries something to point to, in the sense, "If progressives like some things about Hoover, he can't be a conservative."

The economic and financial meltdown in 2008 rekindled interest in Herbert Hoover, Franklin Roosevelt and the Great Depression, in general, as people wanted to see how that major historical event developed and was handled all of those decades ago. The problem is, in more recent times, many people obviously knew little or nothing about the Great Depression, as they seemed to want to experience such an event in their own lifetime; thus we had awful policies put into place, or policies that were not enforced, bringing instability and a virtual total collapse of the American and world economies. While most of the perpetrators have been Republicans, some Democrats seemed anxious to be a part of this "let's see what kind of a great depression we can create" philosophy. Throughout the build up to the 2008 meltdown lay the bizarre and troubling idea of "the country should be concerned with the plight of millionaires and billionaires; they've got it tough," instead of what had been happening to the middle class and the poor. These groups would suffer even more from the economic mess of what has been called "the Great Recession." While Republicans scoffed at President Obama's remedies (also often at Ben Bernanke's policies, the Federal Reserve Chief), the economic plunge of late 2008 and early 2009 was halted, and matters never got out of hand as they did in the early 1930s, but recovery has been slow, just as it was in the 1930s. The problem this time was, some of the structural problems were not corrected, like with the banking industry, which has made me think Democrats too haven't studied the policies of their own political icon, Franklin D. Roosevelt. In my opinion, while health care reform was a very important policy, financial reform should have been the first item on the agenda after the stimulus package, but it was not. By the time financial reform was put on the front burner, the political situation had changed drastically, with a resurgent, ideologically fire-breathing GOP, invigorated by the unpopular health care law debate at that time, able to get a substantial watering down of financial reform. We'll see if all of this comes back to haunt us.    

Almost all that I've written in this three part series about Hoover comes from memory, and over the years, I've read a lot of books (some many times over) and articles about him, including his own memoirs. With so much done from memory, it's tough to "credit" specific authors for the information I've put into these articles, and some might not want to be "credited," since it is given from the perspective I've developed on Hoover over the decades (I mean this both seriously and humorously). I guess the biggest compliment to any and all of the authors is that I read their material and retained a good deal of it, that's how good the information was. What I've decided to do is to list a number of books I've read over the years which dealt in large part with Herbert Hoover. Some were more specific biographies of Hoover, others were not just about Hoover, but they dealt with parts of his life, most especially his presidency and his attempts to halt the Great Depression. Some of these books I no longer have on hand, and this list will certainly not be complete, as I'm sure I've read some books or articles years ago, the names of which I no longer recall.

"Herbert Hoover" by William Leuchtenburg; "The Memoirs of Herbert Hoover," 3 volumes by Herbert Hoover (there may be abridged/condensed versions available, but I'm not sure); "American Individualism" by Herbert Hoover; "Herbert Hoover: Forgotten Progressive" by Joan Hoff; "An Uncommon Man-The Triumph of Herbert Hoover" by Richard Norton Smith; "Herbert Hoover-A Public Life" by David Burner; "The American Political Tradition" by Richard Hofstadter (has a very good chapter on Hoover: "Herbert Hoover and the Crisis of American Individualism"); "Herbert Hoover and the Reconstruction Finance Corporation" by James Stuart Olson; "The Great Depression" by John Garraty (obviously not just about Hoover); "The Great Depression-America 1929-1941" by Robert S. McElvaine (again, not just about Hoover, but with very good info and opinions on him-one of my favorite books on the subject); "Herbert Hoover and Harry S. Truman-A Documentary History" edited by Timothy Walch and Dwight M. Miller; "The Great Crash of 1929" by John Kenneth Galbraith; "The First New Deal" by Raymond Moley (has some info about the New Deal's ties to Hoover)

* To be honest, Democrats didn't know what the hell to do about the Great Depression either, thus they really didn't put forward many plans during Hoover's term, fearful they would then take part of the blame if the plans didn't work. FDR talked about "experimentation" in his inaugural speech, which tells you he wasn't exactly confident about specific plans either. 

WORD HISTORY:
Boor/Bower-These closely related words go back to Indo European "bu/bhu," which meant "dwell, live upon/on." They are closely related to the second part of "neighbor" (British spelling: "neighbour"), as neighbor simply means "a person (or people) who dwell(s) nearby," literally "nigh-dweller." The Indo European form gave its Old Germanic offspring "buraz," with the meaning "place where one dwells." This gave Old English "gebur," which meant "dweller, farmer," and also "bur," which meant "dwelling, cottage, hut, room for dwelling," but also meant "farmer, peasant," likely from the notion, "one who dwells in a hut/cottage in the countryside." This then became "bour," before "bower," by which time it also had taken on the meaning "lady's living quarter's in a palace/castle," as well as the "area in a garden sheltered by trees or leafy plants." "The Bowery" of New York City was simply a continuation of the Dutch term for what was then (the 1600s) an area with farms. As for "boor," it seems to have died out, but came back to English as a borrowing in the earlier 1500s from either Low German "bur," Dutch "boer," as England had much trade with northwestern Europe. It came into more prevalent usage in the late 1800s and early 1900s from contact and conflict with Dutch settlers in southern Africa who were called "Boers." The conflict between the Boers and British settlers and colonial authorities was termed "the Boer Wars" (there were two). The term "boorish," meaning "rude, ill-mannered or crude behavior," came from the notion of "behavior by farm/rural residents, as compared to the sophisticated behavior of city dwellers." The other Germanic languages have lots of relatives to English "bower" and "boor," some of which are: German has "Bauer" (pronounced very much like "bower"), which means both "farmer/peasant" and "birdcage" (from the sense "room, enclosed dwelling area"); Low German Saxon has "buur" (farmer); Dutch has both "buur" (neighbor) and "boer" (farmer);West Frisian has "boer" (peasant/farmer); Swedish, Danish and Norwegian have "bur" (cage); Icelandic has "búr" (cage).

Do We Need Traffic Laws? Ask The NRA

According to the NRA we don't need background checks or other gun laws because criminals will always get guns. How many of you drive 30 ... 35 ... or more, in a 25 mph zone? So we have speed laws, but we don't obey them anyway. How many of you want to do away with speed limits? I mean do AWAY with speed limits! Kids playing in the street? The hell with the little brats, run over them! 88 year old Mrs. Jones crossing the street? Kiss her goodbye! You'll find her up the street real quick. You see, if you listen to the political right, which includes the leadership of the NRA (that's the National Rifle Association, for those unaware), the problem with the country isn't under regulation, it's over regulation; we've just got too damned many laws. We heard the same thing about banking. We needed "deregulation," and we got it, pushed heavily by that stalwart American (then) Senator Phil Gramm, known for calling Americans "a bunch of whiners" during the 2008 presidential election campaign, because people complained about the economy.* Some conservatives even believed the banking industry could regulate itself! Yeah right, and I'm going to grab that pot of gold from the next rainbow I see.

Folks, this is all part of the same bunch of malarkey that has come from that bunch of reactionaries for decades. They pushed deregulation for banking, but when the industry proceeded to get itself into trouble, I don't recall the right wingers taking ANY responsibility for the meltdown, but you have to understand their philosophy, business is NEVER wrong. The free markets are always right. Now it's about gun laws. Have we learned any lessons?

* Gramm was then working for John McCain's campaign. He was an.. ahh, "economic adviser."

WORD HISTORY:
Speed-First the noun form of this word, which traces back to Indo European "spe," which had the notion of "success." This gave its Old Germanic offspring "spodiz," with the same meaning. This then gave Old English (Anglo-Saxon) "sped," presumably with a long "e" sound, with the meanings "success, prosperity, good fortune, good luck," but also "quickness." Just a total guess, but perhaps like the saying "the early bird catches the worm," the idea of "success" being often associated with "quickness," and even "quickness of mind," may have given the word the secondary meaning which eventually became primary in English and other Germanic languages. Anyway, the word then became "spede," with the secondary meaning of "quickness" gaining momentum, and by the time the word became "speed," the "quickness" meaning had prevailed, undoubtedly helped along by English borrowing foreign words like "prosperity" and "success," which filled those respective meanings. Old Germanic had a verb form, "spodijanan," which meant "to succeed." This then spawned Old English "spedan," which meant "to succeed, to prosper, to have success, to move with haste." Like the noun form, this eventually became "speed," with the "move with haste" meaning becoming the main meaning. The other West Germanic languages^ had/have forms of the word too, although from what I can tell, only Dutch ("spoed"=haste) and Low German Saxon ("spood"=success) have surviving nouns, although Dutch has the compound noun "voorspoed," which means "success." Verb forms have endured in German, which has "sputen" ("to hurry, to hasten"), in Dutch, which has "spoed maken" (literally "make haste"), Low German Saxon "spoden" ("to hurry, hasten"). I could not find a form in Frisian.

^ North Germanic apparently did not use forms, or if there were forms, they died out without any record being left behind. 

It's About Coalitions Not Purity, Part Thirty

"The Clinton Era and the 1990s Near An End"

During 1996, Congress and the President again crossed swords, this time over welfare reform. Some Republicans wanted very strict limits for the program, and the President vetoed a couple of attempts to impose such strong limits on the system, but negotiations produced a compromise bill passed by Congress and signed by the President which had a provision to require work, termed "Workfare," as a part of the new law.*

In the late 1990s, Republicans, along with some Democrats, pushed for deregulation of the banking industry by removing the "Glass-Steagall Act," a law, implemented in the era of the Great Depression, to prevent the mixing of investment banking (also termed "casino banking," as it can be highly risky) from "traditional" banking; that is, savings and checking accounts, car loans, etc. Democrat-turned Republican Phil Gramm, a senator from Texas, led the charge for the deregulation, which was then signed by President Clinton.**

Anti government sentiment had been on the rise, certainly not discouraged by conservative attacks on government at all levels, and the sentiment came accompanied by hate groups and fascist-like militia extremists. In 1995 a terrorist bomb attack on the Federal Building in Oklahoma City killed more than 160 and injured nearly 700. The main perpetrator, Timothy McVeigh, had ties to militia groups and seemingly hated the government over issues like taxes and gun control.***

Late in Clinton's presidency, he concentrated on trying to get an agreement between Israel and Palestinian leader Yasser Arafat, a festering sore and the source of world tensions for decades. The President met with the opposing sides, and after hopeful signs, the situation deteriorated, leaving the matter to continue to this day.****

Next, "The Contentious 2000 Election"

* The number of welfare recipients dropped thereafter, but the economy was steadily improving in the mid to late 1990s and the effects of trade agreements had not really fully hit home. Those agreements, in my opinion, cost many workers jobs, as operations shifted overseas. Coupled with technological changes, which also replaced many workers, these two things brought a later rise to welfare rolls in various forms, as well as a rise to poverty numbers. 

** In my opinion, this legislation had much to do with the financial collapse in 2008, the pressure for which continued to build during George W. Bush's time in office, and also led to the bank bailouts, trillion dollar deficits, and the almost catastrophic demise of the economy, a situation we have not fully exited even to this day. I don't recall the show ("maybe" The Today Show?), but in about 2009 or 2010 Bill Clinton actually said he regretted signing this legislation, but advisers like Bob Rubin, who had strong ties to Wall Street banks, urged him to sign it. Clinton's "admission" almost led old Randy to fall off of his seat. I give Republicans lots of hell, but I don't let Democrats off the hook for shameful mistakes.

*** As is so often the case, one thing leads to another, and the Oklahoma City bombing also traces back to a 1993 incident in Waco, Texas, but all of this is far beyond the scope of this article. For those interested, there are many sources on the subject, so check out your local library.

**** The Israeli-Palestinian conflict is far too complex for this article, so again, please go to your local library and see what sources they have available, which I'm sure will be substantial.
 
WORD HISTORY:
Hop-This is the verb meaning "to jump, to leap, to dance, to spring," and the derived noun meaning "a short distance jump." "Hop," the plant, usually in the plural, "hops," is assumed to be from another source. At first I didn't really buy this, but even some German sources have it, so I'll say it this way, hop "may" go back to Indo European "kheub," which had the notion of "to bend/bow." This gave Old Germanic "hup(p)ojanan," with the meaning "to spring, to leap, to jump, to dance." If the tie to Indo European "kheub" is correct, the Old Germanic meanings "may" come from the notion of stooping/crouching over before you hop/jump, with similar for dancing (we're not talking about "slow dancing, swaying to the music," here). The Germanic form is possibly the source of English "hope," and its relatives in the other Germanic languages, with the idea being "jump for joy at anticipation of positive news or events" (the history for "hope" was covered in Part 29 of this series on coalitions). Anyway, the Germanic form gave Old English (Anglo-Saxon) "hoppian," with the same meanings. This then became "hoppen," before the modern version. The noun was derived from the verb. The other Germanic languages have the following verb forms: standard German "hüpfen," some German dialects "hoppen" and "hupfen," Low German Saxon "hüppen," Dutch "huppen/hoppen," Icelandic "hoppa," Danish "hop," Norwegian "hoppe," and Swedish "hoppa." Apparently West Frisian doesn't use a form in the modern language; at least I could not find one.

The World In Protest, Revolution or Civil War, Part Fourteen

This was first published in May 2012.


"The Battle Over Budgets" Part One/Overview

While technically the "Great Recession" ended a couple of years ago, the effects of the crisis continue to linger. In America, new home sales remain at low levels, thus keeping the home building industry, and its associated businesses, slow. Hiring has been relatively steady, but not robust, bringing down the unemployment rate at what seems an agonizingly slow pace, although it must be noted that government employment cuts at all levels have negated part of the gains in the private sector. Further, we can't forget that just as the economy turned the corner from severe downturn to the upside, the Gulf oil spill brought new economic problems, as well as a literal mess to the states along the coast there. Then Japan was rattled by a major earthquake, shaking not only that country, but bringing the economic jitters to many, especially the then recovering American auto industry. We have to remember folks, like it, not like it, nations, including America, are no longer just dependent upon their own economies and resources, they are all entangled to varying degrees of, well, "entanglement." If a major nation, or group of nations, sneezes, other nations catch cold too.

Further, the attempts to rein in the "casino-like" atmosphere of the banking industry has not been very successful, although higher reserve requirements mean banks have had to take money from other parts of their business to meet these requirements. Bankers undoubtedly argue that this reduces the number of loans they can make, thus limiting economic expansion, and there's certainly truth to that, but we can't have things both ways folks. This is what happens when we let things get out of hand, which is what happened. The banks went wild, the collapse came, and now we're trying to get the cat back into the bag, but it is a painful process. Attempts to regulate the banks more directly has essentially failed, as banks, along with largely, but not exclusively, Republican allies, fought tooth and nail to keep regulation as lax as possible. They succeeded, but common sense failed. The result has been a very recent new revelation that super bank J.P. Morgan Chase has suffered an admitted two billion dollar loss, which might actually be four billion (do I hear five? Six?), from risky investments.*

One of the effects of the "Great Recession" has been on government budgets. As I noted above, in the U.S., at the federal, state and local levels (including schools), contractions in revenue,** and rising costs for certain things, have brought great budget squeezes. Federal stimulus money helped some communities keep layoffs to a minimum, especially of police and fire personnel, but the money was really a one time, short term shot in the arm. Once it was gone, major decisions had to be made to keep budgets in balance, and many a worker lost their job. Meanwhile, similar has been happening elsewhere in the world, in particular in Europe.

* Okay, anti-regulation people argue that you can't have freedom if you have regulation. "Freedom," however, is in the eye of the beholder. In the 2000s, the banks went wild and laid their very solvency on the line in all sorts of risky investments, much of it based on an overheating mortgage business. The resulting collapse in 2008 brought America and the world to an economic crisis not seen since the Great Depression. Quick action by many nations, including the U.S., even initially by the "free market" Bush administration, contained the damage, although the aftereffects are still with us. Banks are not just playing with their own money, they are playing with YOUR money, and with the nation's (and the world's) economic security. If you boarded a commercial airliner and the captain decided to start all sorts of risky maneuvers, I seriously doubt  you would say, "Oh that's okay, it's a free country, you can't tell the captain or the airlines how to fly their planes. Keep government regulation out of my air travel." Be careful in this election year when you hear politicians telling you they want to cut or eliminate regulation. You might just get on an airplane with a crazy captain.

** There has been a "double whammy," if you will, in that lower employment and business activity have naturally curtailed tax revenue, but also tax cuts, enacted at the national level and also at many state levels to promote growth, have taken a bite out of income. Less spending has meant less revenue from sales taxes. The dramatic decline in home prices has meant less money from property taxes.  

WORD HISTORY:
Budget-This word goes back to Indo European "bhelgh," which had the notion of "swell, inflate, bulge." This spawned a number of forms in Indo European's offspring, including Celtic, which had "bulgos/bolgos," meaning "stomach, bag," and this gave Gaulish "bulga(s)," with the same meanings. This then was borrowed into Latin as "bulga," which meant "leather bag, pouch." A leather pouch was used to hold money. Old French, a Latin-based language, inherited the word as "bouge" (initially "boulge") also with the meaning "leather pouch/bag, often used for money." This later became "bougette," which meant "small pouch/bag." English borrowed the word from French initially as "bouget" in the early 1400s, and the word expanded in meaning beyond the actual pouch/bag, but also to its content. By the 1700s government finance people kept their financial plans in such a "pouch/bag," thus modern "budget." The verb form developed from the noun in the 1800s.

McCain Steps Up To The Plate

Finally!!! John McCain has returned once again as the guy many Americans, including many in the media, fell in love with in 2000. McCain, a Republican, has joined forces with Maria Cantwell, a Democrat, to propose legislation to restore some sense of sanity to the banking system. Their idea isn't new; rather it is about 76 years old. By proposing such legislation, McCain is making the admission that at least part of Franklin Roosevelt's New Deal was effective. What is this proposal, you ask? (Ah, you DID ask, didn't you?) It is a proposal to reinstate the "Glass-Steagall Act of 1933." This law kept commercial banks in their traditional banking role. It prohibited banks from using depositors' money in casino-like ventures and investments. That role was left to investment banks. The law worked, too! It worked so well for decades that some "free market" conservative (libertarian?) politicians couldn't stand it! As wealthy investors (better known to me as, "the sit on their ass class") gained political strength since the early Reagan years, one of their best front men, Phil Gramm, a conservative Texas Democrat turned Republican, took a lead position in dismantling this regulatory law.

You remember Phil, don't you? About six months before the final plunge of the economy in 2008, old Phil declared that there was nothing wrong with the American economy except that "Americans are a bunch of whiners!" I tell ya, I was so hurt, I couldn't stop sobbing all day. With his statement all over the news, just days later old Phil stepped down as the chief economic advisor to the presidential campaign of.......John McCain!

Now, old Phil was not alone in his efforts to return the country to pre-Depression lack of regulation, no siree! Most, if not ALL, congressional Republicans voted for the measure, but they were joined by a number of Democrats, and enjoyed the support of the Clinton economic team, including one Larry Summers. Let's see...where have I heard that name lately? Oh! He's the Obama Administration's economic advisor!

At least McCain has seen the damage wrought by the lack of regulation and is now attempting to rectify matters. So, government DOES have a role! What is particularly troubling is that this rectification has not been sought by the current administration! I've been telling you folks, too many Wall Streeters in the Obama Administration!

Don't assume that the McCain-Cantwell proposal will pass both houses of Congress and be signed into law by the President, as that would make too much sense and be much too easy. The long arms of the bankers and the "sit on their ass class" will undoubtedly do just about anything to stop such common sense legislation, and they will rely heavily upon their many Republican allies to go to the mat for them; so, this is far from a done deal. Throw in some campaign contributions by the above mentioned to key congressional Democrats and this legislation may never make it onto the floor of either house. I've been preaching here for several years that WE have to step up and put the heat on the politicians of BOTH parties, in order to get our country back from the wealthy interests. With OUR help, maybe McCain and Cantwell can get this legislation passed. If that happens, I guess we can forgive McCain for giving old Phil such a high-level position in his presidential campaign. Now, as for forgiving him for selecting Sarah Palin as his running mate, NO WAY, Jose!

WORD HISTORY:
Tarnish-I can't trace this word back to some Indo European base, but I could swear I've seen such somewhere in the past. English got this word in the late 1500s from a form of French "ternir," which meant "dull, dim, lack brightness." This form had developed from French "terne," which meant "dark, dull, lacking brightness." French got the word from Frankish, a Germanic language/dialect. Old Germanic had "darnijaz," which had the notion of "conceal, hide, darken." This gave Old English "dyrnan," which meant "to conceal, to darken." (From what I found, another form in Old English, "dierne," meant "obscure.") In that same time period of long ago (600-800 A.D.), Old High German had "tarnjan," with the same basic meaning, and Old Saxon, the Germanic dialect that remained in northern Germany after part of the Saxons left for Britain, had "derni." It "seems" that the word form died out in English,* except for a distant relative form, "dark," and that English acquired our modern form "tarnish" from French. Modern German still uses the basic form as "tarnen," which means "to camouflage, disguise." In English, the verb form came first, followed by the noun about a hundred years later.

* I say "seems," because one never knows about these things, as many common people could not read nor write in those times, but old words long abandoned by the educated folks remained in use by these people, often in relatively isolated rural areas.

Some Movement On Financial Reform

Finally, the Democrats in Congress have made a move to reform the financial system and thus they began to act like Democrats. We don't need TWO pro-business, pro-wealthy political parties. No Democrat need worry about someone looking out for the interest of the above mentioned, as there is one party seemingly committed heart and soul to concern for the plight of billionaires and millionaires. We need a political party to be concerned about the plight of the middle class and working people; something we've been lacking for awhile. Do you think there's a connection between the concern for wealthy interests and all the money sloshing around in the political process? Nah, couldn't be.

Anyway, I'll have to look over the details of what passed the House of Representatives, but I didn't hear anything about breaking up those companies deemed to be "to big to fail." Since that term was coined more than a year ago, many of those companies have become even bigger!!! Why? Because some banks were allowed to fail and were then merged with others, thus making the big bigger, and also removing competition for those "to big to fail." From what I understand, almost three quarters, get that now folks....THREE QUARTERS of all banking deposits are now in the hands of just a few banking companies!

Let's see...do you think that all the money sloshing around in the political process has anything to do with politicians not trying to whittle down the size of some of these...ah...institutions? Nah, couldn't be. (Don't forget, the Senate also must pass some form of legislation on this important matter before any actual law can then be brought before both houses for passage and a signature by the President, so the House passed version is NOT a law.)

WORD HISTORY:
Nether-This word is now not as common in English, except for "The Netherlands," as it has essentially been replaced by "low/lower," but a form still is commonly used in both "beneath" and "underneath." The word goes back to Indo European "ni," which meant "down or below." Old  Germanic developed the offshoot "nitheraz" or "nith" (I found both). In Old English there were "nithera" and "neothera," (I suppose depending upon dialect) both meaning "down, beneath, below." Old Saxon, the Saxon dialect that remained in northern Germany after some Saxons departed for Britain, had "nithar." While modern English no longer commonly uses the word, the close cousins of English still use it extensively, as Dutch has "neder" and German has "nieder;" both still with the meaning "low, below." The Netherlands name comes from the geography of that area, much of it reclaimed from the sea, which is restrained by dikes; thus "Netherlands=lowlands."

Will The Dems Finally Act?

Regular readers know that I've been preaching here for quite some time about how the country has been taken over by the wealthy business interests in the country. There are many important issues in this country, war and peace certainly being one, but in my opinion, in the end, what will destroy the country is how we deal with the economy and the standard of living for all Americans, not just the rich. The philosophy that spawned the take over by the "interests" was put in place just shy of thirty years ago. In the early Reagan years, many Americans could not have foreseen how the mighty would truly become THE mighty in the country within just a couple of decades. We have two major political parties to help balance things out in how the country operates. During much of the last thirty years many Democrats in Congress supported a lot of conservative policies. I said "many Democrats," but certainly not all. Some of those Dems were so conservative, that they switched parties and became Republicans. Additionally, during his two terms, President Clinton, a Democrat, also signed into law a number of policies that were heavily supported by conservatives in the country, including the repeal of some significant regulation of the banking industry, proposed mainly by then Senator Phil Gramm, Republican of Texas.* So, I'm not just picking on Republicans, but it was their favored philosophy that prevailed for almost thirty years, and it was that philosophy that helped put the country into the predicament it is now in economically.** In essence, however, WE are to blame.

We watched oil and gasoline prices spiral to heights never believed possible. We watched as higher energy prices drove the price of just about everything higher. We watched as the price of many other food products soared, because of "supposed scarcity." We watched the country's wealth dissipate in trade imbalances that boggled the mind. We watched as middle class Americans saw their collective incomes shrink. We watched as Wall Streeters and other wealthy Americans "cleaned up" on high prices for everything, transferring money from OUR pockets into THEIR bank accounts. We watched as Wall Streeters and other wealthy Americans used that money to drive prices even higher, thus perpetuating the transfer of wealth from low and middle income Americans to the very wealthy. We watched as these same greed mongers helped (unwittingly, I'm NOT saying this was a conspiracy) foreign nations, some of them openly hostile to America, reap the benefits of higher oil prices, "fueled," if you'll pardon the expression, by the obsessive greed of our own greediest people. We watched as home prices surged to absurd levels, driven higher by mortgages granted to anyone who had a heartbeat, and maybe even to some who didn't. We watched as people who hated the idea of government, be put in charge of the government! Then these same imbeciles charged that the government doesn't work right! If you ever wanted to know what the Wild West was like, this stuff was pretty much comparable; that is, no law and order, except for the wealthy, who were a law unto themselves.

Now we've had a new President since late January. We've had Democrats in control of the House of Representatives. We've had Democrats in charge of the U.S. Senate. So what's been done to change all of the absolute nonsense that had been going on? Ah...NOTHING! Well, I guess there is going to be a policy to cut back on Wall Street bonuses announced some time today, supposedly for one year, but that is insufficient for the magnitude of the problem. The whole system was taken over by wealthy interests. Corporate board members have been as cozy as cucumbers on a vine with CEOs and other corporate officers. These folks approved all of these bonuses and exorbitant salaries. The average shareholder is just like dust on the floor.

We have the greedy back to driving oil and gas higher. Let me tell you, how much do you want to bet that many a Wall Street business is behind that? They'll destroy the country, because they are so obsessed by greed and ego trips that they don't even see how they hurt the country by taking money from the pockets of average Americans AND helping transfer more of our wealth overseas to oil producing countries. I know many people don't agree with me on this at this time, but you watch, if nothing is done, many Americans will be screaming for Uncle Sam to nationalize the oil industry in this country, just to get a handle on the abuses that have gone on. Survival will outweigh all this "socialist" malarkey shouted by some people who don't even see their own self interest. And they are urged on by people who fully understand their own self interest. Can you guess who they are? All of the negative ads appearing on your television screen didn't get there by magic. They were funded by someone. Any attempts to change the system that now favors the "big boys," will face well funded opposition, and you can put that in a Wall Street bank account. (A "Word History" is below the notes)

* Gramm was one of those former Democrats who changed parties.

** Very concisely, but not all inclusive, that philosophy entailed big tax cuts for the very wealthiest Americans, free trade policies with countries whose workers earned only a fraction of what American workers made, thus putting our own workers at a serious disadvantage, and the idea of "the best regulation is no regulation." That last notion was in place as the conditions mounted that would cause the economy to melt before the very eyes of those who opposed regulation so much, like Christopher Cox, George W. Bush's head of the Security & Exchange Commission, better known by its initials, SEC, but he was not alone!

WORD HISTORY:
Now-This very common word goes back to Indo European "nu," and meant "at the present time." This gave many of the Indo European dialects (later separate languages) a form of the word, as Sanskrit, an ancient relative of English, had "nu," and Latin had "nunc," and Greek had/has "nun/nyn/nu" (I found three different versions). The Germanic languages also kept a form of the word, and this gave Old English "nu." The other Germanic languages also still have forms: German has "nun," Dutch has "nu/nou," Norwegian has "na," Danish has "nu/na," and Swedish has "nu."

Understanding The Crisis, Part Three

I hope that all of you will try your best to follow this series. I also hope that I’ll explain things in a way that you can understand them, although certain aspects can be VERY complex. I know, too, that there is some really DRY stuff here, but please try to stick with reading it, as it is all VERY important, as I’m sure Congress and members of BOTH parties will be trying to assess what has happened in recent times, and to then put in place new laws to govern banks and various investments.

During the Great Depression of the 1930s, banks failed by the thousands. In an effort to prevent, or to at least control, such things from happening again, the Glass-Steagall Act was passed and signed into law in 1933.*** First, it established the Federal Deposit Insurance Corporation (better known to most of us as the “FDIC”), which insured bank deposits (then up to a limit of $100,000, which was quite a sum for those times); that is, if you had $5000 in a bank and that bank collapsed, you still got your $5000 back. Why would this help? Okay, one of the reasons for bank failures was “a run on the banks;” that is, many people were fearful of losing their money, sometimes their life savings, from a failing bank, and they withdrew their money. Now, there’s no question that some banks were shaky for a variety of reasons, but when a few banks collapsed, it caused even “healthier” banks to fail, because depositors withdrew their money. In such situations, even rumors (whether true or false made no difference) could cause bank failures, because depositors were terrified of losing their money, and thus the fear of a bank collapsing brought about the reality of that bank collapsing. With deposits insured, and the public aware that they could get their money even if their bank failed, it was hoped that “panics,” with mass bank withdrawals, could be curtailed, or even stopped, thus preventing the collapse of “healthy“ banks.

The new law also gave more power to the Federal Reserve in regulating interest rates, but that’s another matter. Further, “Glass-Steagall” separated banks into commercial banks and investment banks, with rigid barriers against mixing the two. Part of the reason for the Depression was seen by many, but not all, as banks having gotten too involved in investments in the stock market (including “speculation“ in stocks), for one thing. In those pre-Depression times, many banks often had brokerage departments, which often issued various securities, including stocks and bonds for corporate clients, while the rest of the bank took care of the more traditional banking roles of deposits and lending. By assuming so much risk in the brokerage area, investments gone sour could pull down the whole bank, rather than just the brokerage part. So what does this mean? Well, let’s say that you have your life savings in bank XYZ. The bank also has a brokerage unit which takes a major hit during “The Crash.” The losses from the brokerage unit have to be covered by the whole bank, not just the brokerage part. Ahh...cough, cough....guess whose money is now at risk?

Further, collapsing banks, the resulting jobs losses and the financial losses to depositors fed into the “depression” mentality that kept the downward spiral going, and as mentioned above, often caused mass withdrawals from other banks, even though some of those banks might have been sound, causing these banks to either fail or teeter on the brink. So you see, there was kind of a chain reaction. When you hear, “Your money is safer under your mattress, than in a bank,” this is more or less what is meant.

I won’t get into too much more on this part of the subject, but there were additions to the Glass Steagall Act made later in the 1950s, prohibiting bank holding companies that owned two or more individual banks from buying banks in another state.+++ Further, these bank holding companies were restricted to more or less traditional banking practices and restricted banks from the insurance business .

Many bankers didn’t like the laws, and over time, there were attempts to get aspects of the laws changed or repealed, with more intense efforts beginning during the Reagan years. In 1987, the Federal Reserve Board voted to loosen restrictions on some banking activities, including the issuance of....“mortgage backed securities.” Then Fed Chairman, Paul Volcker, dissented, fearing that banks would lower the standards for loans, then market shady loans to the public, all to make money from these securities they would then sell. (See Part One, for the basic workings of the mortgage lending business) Also in 1986/1987, the Fed broke the precedent of Glass-Steagall by allowing banks to again engage in certain limited investment activity, but limited such activity to no more than 5% of their gross business. In 1989, the Fed, now under Alan Greenspan, a strong advocate of deregulation, increased the percentage to 10%, and in 1996, to 25%. Gradually the banking laws were being dismantled.

In 1999, Senator Phil Gramm (R-Texas), Rep. Jim Leach (R-Iowa) and Rep. Tom Bliley (R-Virginia) introduced a measure in Congress that would effectively repeal much of “Glass-Steagall.” It permitted banks to outright own investment firms and insurance companies. The basic bill, also known as “The Financial Services Modernization Act,” had the support of the Clinton White House and Treasury Secretary Robert Rubin.^^^ The first vote in the Senate was 54-44, with 53 Republicans and one Democrat voting for the bill, and 44 Democrats against. The House passed a somewhat different version by voice vote; that is, there was no roll call to indicate how individual members voted. The bill went to conference committee to get an agreement between the two versions and the final bill was then passed by the Senate 90-8 and by the House 362-57. Clinton signed the bill into law. The walls between various financial sectors were shattered.

To be continued...

(No "Word History" this time)

***This was actually Glass-Steagall #2, as a previous act was passed in early 1932 and was known by the same name.
+++One could certainly argue that this prevented any banks or bank holding companies from becoming “too big to fail.”
^^^Rubin was a former exec of Wall Street investment firm "Goldman-Sachs." Not long after Glass-Steagall was repealed, he went to work for one of the beneficaries of the new law, Wall Street financial conglomerate "Citigroup." Hmm, now you people don't think....there could have been some tie....oh come on!!! You folks are cynical!!! (But so am I!)

The Banking System

For "Word History" followers, I'm still working on "Part Two," and I'm getting close to finishing it, but it does take quite a bit of time to research each word through various sources; so I hope to have it posted soon; there is, however, a single word history at the end of this article.

As we all know, many of the banks, including many of those "too big to fail," are in trouble. Any regular readers here already are well aware that I'll NEVER be mistaken for a supporter of any wealthy big business venture, but first, we all need to ask ourselves two questions: "What kind of banking system do I want?" And, "What is in MY self interest?" As to the first, I guess I'd have to say that we only have a couple of "broad choices;" the basic system that has evolved during the history of the country, or some other very different system. The key to what I'm saying here is "broad." I am not for a total overthrow of the basic banking system, but I do believe that it needs to be regulated. Since the time of The Great Depression and the subsequent regulation imposed because of that fiasco, the bigwigs have stomped around huffing and puffing about how unfair government regulation is. I equate them with criminals who get shot or clobbered breaking into someone's home and then they, or their families, argue how unfair it is that they were injured, and that people shouldn't be able to hurt someone breaking into their home unless there is clearly "a threat to their safety;" as if someone breaking into your home ISN'T a clear threat to a person's safety. Criminals always seem to feel they are being treated unfairly, and of course, there's always that premise that comes to mind: "self interest." If criminals can make things safer for themselves, hey, they're going to do it; it is in their interest to do so. Such is the case with rich bankers and their "investors," frequently those of the "sit on their ass class." No regulation means they can do anything they want, including to you, and legally get away with it. Make no mistake about it folks, that's why all of the whining about regulation by bankers and their investors over the decades. Like those home robbers, they have NO concern for YOUR well being, only their own. As to the second point, I don't see it in non rich people's interest to have the whole banking/financial system come crashing down. I know you're mad, and YOU SHOULD BE!!! So am I, but sometimes we have to swallow hard and move on, hoping to avoid an even worse calamity. If greater banking regulation to avoid such nonsense is the result, we'll all be better off for it.

Okay, but the point is, if you favor the basic system, but re-regulated, and probably with even more enhanced regulation than that of the New Deal era, because times have changed so much since then, well we're going to have to have more money for bailouts, because they've gotten themselves (ad we're the "collateral damage;" get it? Banks....collateral!) into one hell of a mess, and that mess has helped to bring the country down with it. The conservative free market people who at least are consistent say no taxpayer money should be used to bail out bad banks and that we should just let them go under. In an ideal world, and this is NOT an ideal world, that would be true, and even since the New Deal era, banks have been taken over by government regulators due to insolvency, but these were generally a few banks here and there, and their demise didn't cause a potential depression, or even much of a ripple in the lives of most Americans. The situation now is much different. So many big banks are in trouble that their collapse would undoubtedly send shock waves around the WORLD, not just in America. The same argument can be made for American automakers. In an "ideal world," they could be left to go under, but not only would that give Americans a jolt to their pride, but certainly hundreds of thousands, if not millions, of Americans whose jobs are tied to the auto industry would go under too. Like we need a couple more million jobless Americans. Add the banking system jobs to the unemployed, if the banks go under, and you got probably a couple of more million. There's no doubt in my mind that the resulting catastrophe would surpass the Great Depression, which might happen even if we continue the bailouts. So, as I see it, we've got our backs to the wall. These last eight years, especially, have put us in what may well be a "no win situation" about the entire economy, not just the banking system.

Some conservatives are saying that with all of the spending being done by government, that in a few years, inflation could be a big problem. They "may" be right, but that can't be a reason for inaction, folks. If the doctors told you, "You have to have this surgery, or you are likely to die," would you say, "Let me think about this....hmm....This surgery is going to cost the insurance company a bundle, and they may raise my rate?"

Word History:
Bolster-This comes from Indo European "bhelgh," which meant "to swell." The Old Germanic offshoot was "bolkhstraz/bolkstraz," which gave English "bolster," which seems to have been spelled in Old English just as it is today, and also gave German "Polster." The original meaning in Old English was "long pillow stuffed with some material" (You can see the "to swell" meaning in this.) Later, in the 1500s, a further development came about from this "stuff something so that it puffs up" meaning, so that it took on the meaning of "support something." German "Polster" still means "pillow, or padding."