Where Are You In The Food Chain?

The retreat to the time of winner take all capitalism in America means just that, winner take all. The purists on the right, and the more anti business elements on the far left, have formed something of an alliance, although only by conviction, not by their respect for each other. The purists on the right say, "No bailouts, businesses either sink or swim, but if you swim, you deserve to shoot for domination," although they can't or won't tell people what that really means.* The "sink" part is clear, if the auto industry is on the verge of failure like a few years ago, "The hell with 'em. Business decisions have consequences, and we all have to tough it out. If you're an investor who will lose your investment, oh well; if you're a worker who will lose your job, oh well; if you run a business that will fail because of dependence on the auto industry, oh well. If unemployment goes up by hundreds of thousands or even millions, oh well, and we aren't too crazy about giving you unemployment benefits either, you bunch of lazy losers, so if we have our way, benefits will be severely limited, or eliminated. And don't tell us how unemployment benefits stimulate the economy, because we don't believe in stimulating the economy, even though people say our conservative god, Ronald Reagan, stimulated the economy with tax cuts, military spending and huge budget deficits, that's all just a big lie, and don't try showing us the numbers either, they've just been cooked up by the liberal media. You can't have freedom if you bail out the companies, and you may not realize it, but if you lose your job or your business, that's freedom, worship it, and don't look for the taxpayer cavalry to come riding to the rescue. If other nations come to dominate the auto industry, that's the price you pay for a free society and free markets, even if those other nations do provide government assistance to business; we pity them for such a practice." 

What is the ultimate effect of "winner take all?" Well let's put it this way, we're all pretty much on the menu, because the economic food chain will have the better off devouring those less well off, but those at the top will have one hell of a feast, because they will dominate EVERYTHING, a position they are not far from achieving, so if this absolute economic nonsense continues, you might as well decide if you want to be served with an apple in your mouth, or maybe with just a little parsley, when you are presented on a platter for the winner take all philosophy and the consequent idea that there's really no American nation, but only a bunch of individuals who deserve to be dominated by the successful. Of course, if outside enemies threaten the success of those magnificent successes, YOU will then be expected to defend the nation "of the wealthy, by the wealthy, and for the wealthy," or you will be dubbed "unpatriotic."

* Opponents of bailouts on the left just feel it is wrong to give money to business, while they too seem to be oblivious to the economic consequences, although some on the far left hope that such calamity will radicalize the American middle class.

Capitalism & Long Term, Broad-based Prosperity, Part Two

In 1970 the Vietnam War was raging and U.S. military forces were deployed around the world, with more than 250,000 being stationed just in Europe. The U.S. military in 1970 totaled more than 3 million (active) men and women. By 1975 that number had dropped by almost a million. In 1995 the total was just above 1.5 million, and since 1996 the total number has been "around" 1.4 million; that is, less than half the total in 1970.

In 1970, the unemployment rate in January was 3.9%, but it had climbed to 6.1% by the end of the year. In 1975 unemployment was 8.1% in January and 8.2% at the end of the year. When Ronald Reagan took office for his second term in January 1985, the unemployment rate was 7.3% and was 7.0% by the end of the year, and 5.4% when he left office. When Bill Clinton took the oath for his second term, unemployment was 5.6% and was the exact same rate at the end of the year, and 4.2% when he left office. When George W. Bush took office for his second term in January 2005, unemployment was 5.3% and 4.9% at the end of the year, and was 7.8% when he left office.*  

Critics of capitalism over time have contended that the economic system heavily benefits those lucky enough to get to the top, or those already there by birth, and that capitalism can't provide long term, broad-based prosperity without large scale war to bolster the economy. Nothing I publish here, now or in the future, will resolve that debate, but hopefully you will come away with an understanding of the debate, although the idea that those born into wealthy families having a DECIDED advantage over others is hardly in dispute, except for perhaps some on the right, who seem to view this as an "entitlement."** The direction of the economy can be influenced  by a number of factors, not just wars, but as can be seen in the numbers above, the American military has been relatively stable in numbers for quite a long period. Any war where you risk your life is a major war, but in terms of numbers, the wars and military actions since Vietnam have not involved as large a number of troops as that war, which itself didn't compare to the huge military commitment of World War Two, when more than 16 million Americans served in the military. In 1944, when U.S. forces and the American economy were both fully engaged in World war Two, unemployment was about 1%.***

So, as the American military scaled back, unemployment has bounced around, and unemployment has even dropped to fairly low levels at times, but only temporarily, and income disparity has increased. After 9/11, President George W. Bush ordered an invasion of Afghanistan, followed not long thereafter by an invasion of Iraq. Any effect on unemployment seems to have been little, if any, but there was not an increase in the overall number of Americans in the military, nor did the country require a huge build up in military goods and equipment. If we, or any other country, concentrate on building loads of military goods, even, or especially, in times of relative peace, when do we begin to look like Nazi Germany? When Hitler took power, he used a number of things, like public works projects, to help the German economy rebound from the Great Depression. Later he shifted much of the effort into both the expansion of the German military in manpower and weaponry.****

Purist capitalism has lots of rough edges, and, in my opinion, they have to be filed down in order to have reasonable periods of prosperity for many and not just the few. Business people resist hiring, by nature; after all, if you own or have owned a business, do (did) you just go out and hire people without the business to sustain such employment? The notion by some that there is (or has been) some sort of conspiracy by business people to keep unemployment high just doesn't wash with me. With some nutcase right wing business people? Maybe, but the desire to make money is too strong for most people, and that includes us further down the income scale.

When Ronald Reagan was in office, unemployment dropped from nearly 11% about midway in Reagan's first term to 5.4% when he left office in January 1989, BUT there were huge deficits run every year of his presidency. Now, I'm not against Keynesian economic policies in their proper place, but Reagan "claimed" to be a conservative. Ever since, conservatives have tried to give Reagan credit for the drop in unemployment, but place the blame for the huge deficits on Democrats. This is an attempt to have it both ways, or actually, multiple ways. Conservatives argued that the New Deal spent money foolishly and that it did not end the Great Depression. They then turned right around (no pun intended) and said that the huge spending and deficits of World War Two ended the economic downturn. Either increased government spending helps or it doesn't. Pick one, please! With Reagan, huge government deficits helped reduce unemployment, but then conservatives blamed the deficits on Democrats, claiming Reagan's tax cuts saved the economy (conveniently leaving out the number of times taxes were raised under Reagan) and that tax cuts "pay for themselves;" thus not increasing the deficit. With such huge deficit spending an issue, the Reagan administration then argued "the deficits don't matter." Conservatives continued to blame Democrats for the deficits, always saying "Democrats blocked Reagan on budget cuts." Nonsense! Reagan had "working majorities" in Congress much of the time; after all, that's how he got a number of things passed. The fact is, he NEVER proposed a balanced budget, nor did he indicate how a balanced budget should be achieved. My overall point here is, you can't claim purist "capitalism" brought unemployment down, rather huge government outlays and Reagan's military build-up (which took much of the added spending) did so, or at least had much to do with lowering the unemployment rate. If you worked in an industry that benefited from military production, you too benefited, but the 1980s saw an overall decline in the middle class, as unions lost favor,***** indeed hastened by Reagan's anti-union policy, which began to give American business a grip on the country which has only increased incredibly since then. 

So my answer is, no, purist capitalism cannot produce long term, broad-based prosperity. Purist capitalism may well need help from wars, although the kinds of wars that produce mass employment seem to be a thing of the past. Capitalism needs help in reducing income disparity and in keeping it from self destruction, and that means it then is not "purist" capitalism, although today's Republicans seem bound and determined to take the country down the road to purity. That is a dangerous path for us, and for capitalists.

* Statistics are from the Department of Labor/Bureau of Labor Statistics.

** "If" concerted efforts by Republicans to repeal inheritance taxes on the wealthiest Americans succeed, this will indeed become even more of an "entitlement" than it is now. Even some very wealthy Americans fear this will establish a true "aristocracy" in America in place of a "meritocracy;" that is, a system where a person is rewarded by their merits (achievements). An "aristocracy" is a system where people of wealth and high social standing rule by inheritance, regardless of any achievement, or perhaps, even in spite of any achievement.

*** It would be interesting to know who made up this 1% (we know who makes up the 1% in today's jargon; the wealthiest Americans), as labor was in such short supply during the World War Two, that many women who were previously out of the labor force took jobs, some of which had been seen as "man's work," in  factories that produced military goods. "Rosie the Riveter" became a popular song and poster figure representing American women working for the war effort.

**** Some would undoubtedly argue that Hitler even used the public works projects to plan for military actions, and I would agree, BUT better highways, railways, ports, and waterways do not HAVE to be used solely for military purposes. As a kid I recall some people talking about America's then developing interstate highway system as being for war (it was the Cold War era). Defense planning was undoubtedly taken into consideration as part of the program, but not exclusively, and it would have been irresponsible not to consider such measures, but by the time of interstates, the idea of some mass invasion of America by conventional forces was lessening, as long-range missiles had become the concern. Hitler, on the other hand, was able to mask his aggressive military plans in eastern Europe, to some degree, with Germany's Autobahn system being seen as a measure to bring Germany more into the automotive age, which was undoubtedly part of the plan, too. The Autobahns were then coupled with plans to build an affordable car for Germans, the Volkswagen. The mass production of the Volkswagen, however, was interrupted by the war and did not take place until the postwar period. Militarily Hitler faced a problem not historically unique to German leaders; potentially hostile forces on both Germany's eastern (Poland, Czechoslovakia, Soviet Union) and western (France and probably Britain) borders. Improved transportation between Germany's border areas would allow him to shuttle troops to either border much more quickly, something that indeed happened during World War Two. Hitler's pact with Mussolini secured Germany's southern border, which by 1938 included Austria, thus making the southern border directly up against Italy.

***** Not every decline in unions or in the middle class can be pinned on Reagan, as some things were "in motion" when he took office, but his policies certainly seemed to make a bad situation worse.    

WORD HISTORY:
Broad-The origins of this fairly common word are unknown; in fact, its forms are only found in the Germanic languages. Old Germanic had "braidaz," which meant "spacious, wide." This gave Old English (Anglo-Saxon)  "brad," with a long 'a' sound, and with the same general meaning. This then became "brode," before the modern version. The expression that something is "as broad as it is wide" is certainly true, because "broad" and "wide" really mean the same thing. The noun slang form for "a woman" started in the early 20th Century in America, but the exact reason is uncertain, although some attribute it to "broad hips." Common in the other Germanic languages: German has "breit," Low German Saxon has "breet," West Frisian and Dutch have "breed," East Frisian, Swedish, Norwegian and Danish all have "bred," and Icelandic has breithur. Like their English relative, these all mean "broad, wide."

Addition To The Great Depression

I should have added this during my original articles, but better late than never. In order to add some balance, it should be noted that not everyone suffered terrible job loss or financial hardship during the Depression. We do need to remember, that while unemployment was far above what would have been considered normal, more people had jobs than were unemployed. Further, the ranks of the unemployed tended to be "revolving," just to use a term; that is, many who lost jobs at some given point, found other jobs eventually, although perhaps at lower wages, but while they were finding new work, others were losing their jobs. The situation at various points during the Depression was, however, that more folks were losing jobs, than finding jobs, thus the unemployment rate kept increasing for quite some time. Of course, the reciprocal of that was also true, as there were times when more people found jobs than lost jobs.

If a person or household had savings, or if a person was able to maintain a decent job during those times, they actually could have lived a pretty decent lifestyle, since prices fell faster, in most cases, than did wages; that is, some people actually GAINED purchasing power. As noted in one of the articles, I doubt many people wanted the Depression to continue in order for some to experience this benefit.

WORD HISTORY:
Save-This goes back to Indo European "sol(h)," which had the notion of "whole, keep together, keep well, keep sound." This gave Latin "salvus," which meant "safe, healthy, sound." This then gave Latin the verb "salvare," with the meaning "to make (something) safe from harm, to save." Old French, a Latin-based language, inherited the word as "sauver." English borrowed the word from French in the late 1100s as "saven," but initially with the religious sense "save a person's soul from sin." The meaning gradually broadened to "save, rescue."

The Great Depression, Part Seven

As the economy slipped and unemployment climbed, President Hoover tried to instill some confidence with the hope that consumers would spend, businesses would borrow and expand, and that this would lead to lower unemployment, and thus, to a reversal of the downturn. One of Hoover’s problems, however, was that when he made optimistic statements, and then the economy either didn’t improve, or slipped even further, his credibility, like the stock market, crashed. Certainly in any economic panic, and subsequent downturn, confidence is important, but there were serious structural problems in the American economy, and in fact, in the world economy, as I’ve already noted in the earlier parts.

In the midterm elections of 1930, Republicans retained control of both Houses initially, but by only one seat in the Senate and by two seats in the House. Several special elections were held prior to the House convening, and Democrats took control by four seats, and John Nance Garner became Speaker. To show how politically naïve Hoover could be, he considered asking Republican senatorial leaders to allow Democrats to organize the committees of the Senate, too, and thus the two parties would have a shared responsibility for bringing the economy back to health. Of course, this was all very absurd, as Republican committee chairmen and senior committee members would never have agreed to give up their powerful positions, nor would Democrats have been willing to take responsibility, and any blame, for the mounting economic mess that was occurring on the Republicans’ watch.

As I noted much earlier, Hoover, years before he was president, had been considering ways to lessen the effects of economic downturns in the business cycle. Hoover, and some others of that time period, considered deficit spending by government as a possible way of achieving some counterbalance to recessions/depressions, not necessarily feeling that such spending would actually or promptly end downturns, but that much economic hardship could be avoided, and that downturns could be minimized, and then the economy would recover and the upward march would continue. You have to remember, Hoover was something of a mixture of conservative and progressive. He supported Teddy Roosevelt’s (Progressive) Bull Moose Party earlier in the century, and he served in Democrat Woodrow Wilson’s administration. There’s no question that during the 1920s, while serving as Commerce Secretary for the Harding/Coolidge era, he got awfully close to business, and even to big business, as that was certainly a part of his job in that capacity, but he also made some less than favorable comments about the stock market and the speculative frenzy that seized Wall Street and the country in the latter part of the decade. A number of “Wall Streeters” made it clear that they preferred Coolidge to serve again, but when he bowed out, they had little choice, but to support Hoover. Hoover is also “somewhat known” for a statement about capitalism; and to paraphrase that statement, he said that there was a problem with capitalism, and that was capitalists, because they’re “too damned greedy!”

Deficit spending by the federal government cut against the grain of economic dogma of the time, and Hoover, misjudging the Depression as more a crisis of confidence, chose instead to try to provide confidence by balancing the federal budget, which, given the severe downturn, was by that time out of whack. So, Hoover the progressive now became Hoover the conservative, and it was this image that remained with him for the rest of his life, which was considerable, as he lived to be 90 years old, dying in late 1964.

The ranks of the unemployed grew so much that there were calls for federal aid to help individuals and families through the tough times. (It should also be remembered that many people who did have jobs had hours cut, even to the point where a good number were only part time employees.) Hoover, maintaining the federal system of separate national and state authority, saw “relief,” as it was called back then, as being a state responsibility, and in his defense, it had been just that. The system had worked before, but then again, we had never experienced such a dramatic economic collapse in the past. States, required to keep budgets in balance, were suffering from lost tax revenues and soaring aid expenses. Governors, politicians that they were, didn’t want to seem weak and ask for federal aid, so they seem to have assured Hoover that they had relief efforts well in hand. In fact, as time passed and unemployment grew to staggering heights, the states were overwhelmed, whether governors wanted to admit to it or not. Hoover promised federal aid, if requested by the states, and he assured the country that he didn’t want any citizen to go hungry, but for a man who had such a great reputation for feeding starving people, he seemed very out of touch with the situation. When the Mississippi River caused extensive and devastating flooding while Hoover was Secretary of Commerce, he went right to the problem areas and was given tremendous accolades for his involvement in helping people through the turmoil. During the Depression, Hoover could have gained further esteem by making appearances at food centers, and thus showing his concern for average people, and he would have seen, first hand, the situation that was developing. Then he could have made a decision about federal aid. We’ll never know, but such a demonstration “might” have bought him some political time and support. Again, he seemed not to understand the “big picture” of his image and what people wanted from a president in time of extreme crisis.

Hoover's opponents jumped on him for being against federal aid to help people weather the storm. Later in his term, he signed legislation putting the federal government into the relief business, but by then he received no credit, as he was seen as having opposed going down this road for so long. The federal budget continued to bleed red ink in an ever increasing amount.

WORD HISTORY:
Large-The ultimate origins of this word are unknown, but Latin had "largus," which meant "plentiful, abundant." This gave Old French, a Latin-based language, "large," with the same basic meaning, but with the secondary meanings "wide" (presumably from the notion of "abundant area") and "generous" (presumably from the notion of so much abundance, a person could afford to be generous). English borrowed the word from French in the late 1100s still with those meanings, but it wasn't long before the word came more and more to mean "big." With this meaning, "large" began to overtake "great" as the word to express "big," just as "great" had overtaken the native word "mickle/micel" which had this meaning (it still exists in dialect in England and Scotland). The expression "at large" apparently comes from the notion of being "free in the wide-open spaces."

A Diversionary Crisis, Part Two

I remember Joe Scarborough of MSNBC's "Morning Joe," a former Republican congressman, saying that during George W. Bush's term in office, Republicans "spent money like drunken sailors." I'm sure he took some heat for that comment from both Republicans and drunken sailors. I like Joe Scarborough, and while I don't always agree with him, I respect him. Unlike some Republicans, he doesn't suffer from the "George W. who?" question, as some GOP members do, in an effort to distance themselves from the Bush presidency, and from the responsibility for some, not all, of the problems we are now facing. Democrats also have their fingers in part of the run up to the collapse in 2008, just not quite as much.

Shortly after Barack Obama took office, Republican members of Congress, much diminished in numbers by the results of the previous two elections, were able, with the help of President Obama, to turn one of their negatives, "debt," into one of their selling points. The President's push for health care, while admirable, but also inadequate in several ways, gave Republicans a chance for a comeback,** and they took the ball and ran with it. The President's poll numbers tumbled; likewise for Democrats in Congress. The GOP began to emphasize "debt," and while the Congressional Budget Office* said the new health care law would not add debt, but even possibly reduce government debt, the public remained skeptical. After being pilloried for "spending like drunken sailors," Republicans decided to regain the issue of fighting government debt. The "Tea Party" movement, largely centered in the GOP, held rallies around the country with supporters waving tea bags and carrying signs denouncing Obama and Democrats as spendthrifts, as well as some...ah... other names. The Republicans made headway in turning the debt issue back in their favor, and some Americans seemed to suffer from collective amnesia about the "Republicans spending like drunken sailors." Incredibly the Republicans were able to sort of hit the "reset" button, and the tremendous government debt was laid at the feet of President Obama, in spite of the previous eight years of Republican rule, with two wars unpaid for, homeland security unpaid for, tax cuts (largely favoring the very rich) unpaid for, and a Medicare prescription drug benefit unpaid for. Lost in all of this, both Obama's health care reform and the GOP's debt targeting, was the economy and JOBS! I don't know of a reputable economist who doesn't essentially say, "You can't cut the debt big time, until people have jobs and the economy is back on firmer footing." With unemployment hovering around 9% for quite some time, jobless people collect benefits, and they are not paying taxes. It's a double whammy!

* Interestingly, one of the things Republicans "claimed" they didn't like in the Democrats' health care reform, the insurance exchange, they now champion in Paul Ryan's Medicare proposal. On the other hand, Democrats liked the idea when they proposed it, but now scoff at Ryan's use of it. You don't think.....nah....politics has something to do with this, do you? Nah, couldn't be.

** The Congressional Budget Office, also known by its initials "CBO," is a non-partisan office that crunches and analyses numbers for Congress.

WORD HISTORY:
Control-This is another compound word, so I will deal each part separately. "Cont" traces back to Indo European "kom/ghem," which had the idea of "beside, near, together." This then gave Indo European "kom-tr(a)," with the notion of "together" being expanded to mean, "opposite;" that is, if you and I are standing together, we are opposite of one another. This gave Latin "contra," but now more with the meaning "opposite one another, as in opponents; against, a counter to something else," as in, "The defense "countered" the other team's quarterback by rushing him." The "rol" part traces back to Indo European "ret(h)," which meant "run, roll." A variant form, "rot-a," with a long "o" sound, gave Latin "rota," with the meaning "wheel." This then gave Latin "rotula" and then "rotulus," meaning "small wheel." "Contra" and "rotulus" were then combined into "contrarotulus," which was a small wheel used to check one account against another in times long ago, as it had duplicate account information on it to "counter, check, verify" the other set of information by simply rotating the wheel (yes, "rotate" is from "rota"), rather than having to look back and forth over other methods of record keeping, like parchment. Old French inherited a form of the word from Latin as "contrerole." The Norman dialect of French took the term as "contreroller" to England where it was borrowed into English in the late 1200s or early 1300s as "conterolle," and a verb form "controllen," meaning "to validate, to verify, to check for authenticity, to regulate." The development of the further meaning "have power over" is easy to understand. German too borrowed the word, as "kontrollieren," with essentially the same meaning, but perhaps with more emphasis on the "to check, to evaluate," meaning. German also has a form of "rota," which is "Rad," which means "wheel," and some sources say it came from a Germanic source tracing back to Indo European, others say it was borrowed form Latin, and still others leave the ultimate origin as unknown. I'm inclined to believe German got the word from Latin, as it is not common in the other Germanic languages, including English, even more especially, Old English, a time when the vocabularies of the various Germanic dialects were much closer.

Where Things Stand & A Catch 22

Back in January of this year, I sort of took a look at where the country was, economically speaking. Now we're at the midpoint for 2010, so it's time to take another look. The Obama Administration likes to tout the fact that, during their first year in office, the economy "didn't fall off the cliff." Okay, I'll give them that, and I'll remind regular readers that I said prior to the 2008 election, that whoever won the presidency would probably end up being the loser, as the economic plunge and its aftermath would make life difficult for them, politically (not to count millions of Americans suffering the direct consequences).

So where's the economy now, going into the July Fourth weekend? The economy has gained more than a half million jobs so far this year, but that has to be put into the perspective that the "plunge" caused the loss of about 8 MILLION jobs! Now the unemployment rate sits at 9.5%, although counting people who are underemployed, it is in the upper teens.* The recent U.S. Census brought about "temporary" hiring, but many of those jobs are now over. The bad news is, private business hiring is slow, with only 83,000 hirings in June. The good news is, the "under employement" rate did take a good drop. The reason this "could" be good news is, employers will increase hours for current workers first, before they hire new workers. Let's hope! In fairness to the Obama Administration, the President and others in the administration have been saying from the first, that unemployment would be slow to fall. Some private economists have said it will take four or five YEARS to recover from the mess, and that estimate probably does not assume a major slowdown or even another period of negative growth in that time period. Now, my crystal ball is a bit cloudy today, but all is not well, and none of us should need a crystal ball to tell us that. The "oil spill" in the Gulf of Mexico has got to have an impact on employment in that area of the country, although I suppose some people have been hired in the clean-up effort. Even "if" they stop the leak this evening, the consequences will linger for some time, possibly years.

In other parts of the world, all is not "moonlight and roses," either. Europe has been in a separate (at least at this point) financial crisis of its own lately. Overspending by governments, presently most prominently by Greece, including "locked in" payments for a variety of benefits, have caused major financial problems, which in turn, have brought about attempts to rein in spending, which in turn has brought about civil unrest. All of this has been complicated by the economic down turn in the last couple of years, and from what I understand, from the purchase by some countries of securities marketed by American bankers. Yep! As Ronald Reagan would say, "There they go again!" This isn't gospel, but from what I understand at this time, that magnificent edifice of wealth, Goldman-Sachs, sold Greece (and other European countries) securities, often backed by ah.....American mortgages, including ....ah....subprime mortgages. "Supposedly," Goldman-Sachs told these governments what a great deal these securities were, but at the same time they were telling wealthy American clients to get out of these securities before they imploded. "Supposedly," Goldman-Sachs owned a large number of these securities, and its leaders were in the process of "dumping" as many of these securities as possible before the collapse came. C'mon now! American bankers do such a thing? Ah....all I can say is...."There they go again!"*** How much any of this will affect America's economy is unknown, although Fed Chairman Bernanke just recently said it wouldn't hurt us. Forget not, a few years ago it was said that the mortgage crisis wouldn't hurt the economy. Yeah, right!

Basic finance isn't rocket science. Look at it this way: You're employed and making decent money. You develop a lifestyle. You buy a house, so you have a mortgage. You buy a new car, and this adds another payment. You take a vacation, and you put all or a portion of the cost on your credit card, or cards; more payments. Then the economy gives away. Even if you keep your job, maybe you have your pay cut significantly.** You have these fixed payments. They haven't gone away. Something has to give. Even if you "save for a rainy day," if you actually lose your job, in an economy like now, that amount may not be enough.

Now, back to our economy. State and local government budgets, including for education, are in deep trouble. When the stimulus bill was passed about a year and a half ago, there was a certain amount of money that went to help state and local governments in an attempt to prevent layoffs from these entities. I guess, at least to some extent, it did help on that front, but now the "medicine" has been cut or stopped, and whether the patients can now get by on their own is very doubtful in my mind. California's budget has been a mess for years, and now they are really under the gun. Governor Schwarzenegger just issued an order reducing California employees' pay to minimum wage, because they are in a budget crisis. All over the country state and local governments are trying to bring revenues and expenditures into balance, but at great cost to many people, and to the overall economy. This whole situation could prove to be more than just a thorn in the side of the economy, but it may even cause a "double dip" recession. For the "free marketers," they'll say, "It will weed out unnecessary and inefficient programs," and there is a certain amount of truth to that.**** Of course, some also have argued that Uncle Sam should have just stood by and let nature take its course with the overall economy. Remember folks, those at the top don't worry about their next meal, or their child's next pair of shoes, or their kids' schooling. It is easy for them to make these "do nothing" arguments, and I understand that. What troubles me is that some middle class/working class folks seem to be on that same page.

If nothing had been done by Uncle Sam, and it certainly was NOT perfect, including the Federal Reserve, my guess is, many of these same folks would be wondering about those hardships I just mentioned above, because they would now either be unemployed or underemployed. I know many Americans, including this one, are concerned about the terrible budget deficit, and with good reason. That's one of the reasons the "winner" in 2008, may end up being the "loser." The Bush Era left the country in terrible debt,^ unable to properly finance an "anti depression/recession" package. So, the private credit bubble that so helped ravage the economy is now being combated by a trade off to public debt.^^ Not good, but something had to be done. The current administration is between a rock and a hard place, with trillions of dollars having been lost by the economy during the downturn.^^^ "Public" money has been borrowed to try to help make up for some of that lost money, but whether America is on the precipice of another downturn remains to be seen. The other day I heard on television that it is estimated 40% of our current budget deficit is due to the recession. So that means, if we don't get the economy growing more, that deficit can't be easily cut. On the other hand, the money needed to stimulate the economy is borrowed. What a "Catch 22!" (A Word History is below the notes)

* Underemployment essentially means that some workers still have jobs, so they aren't counted as unemployed, but they have had hours cut, or even gone to part time status.

** This might include no overtime, or you might not get bonuses, or you might even be put on part time.

*** In fairness, to my knowledge, all the facts have yet to be determined.

**** My guess is, most Americans don't want police and firefighters cut (and probably teachers), but in some cases it may be necessary.

^ The budget surpluses inherited by George W. Bush evaporated, and replaced by trillions in debt over his eight years in office. Neither the Iraq War nor the Afghan War was paid for, nor was the prescription drug benefit added to Medicare (thus further weakening that program, financially), on top of those things, tax cuts were given, with the bulk of those cuts going to upper income people, including many of those who got us into the current mess. As I've noted before, Bush was terribly worried about the "plight of billionaires and multi-millionaires."

^^ What I mean is, for instance, banks' bad (private) debts were taken over by the government in many cases, but the money given to the banks was not in the U.S. Treasury, but rather had to be borrowed (public debt). To be fair, some of those government loans have been paid back, with interest. Things aren't just limited to banks or car companies, but to all the other measures taken to try to stop the "plunge" that occurred. All of that money was borrowed by Uncle Sam.

WORD HISTORY: 

Three-This goes back to Indo European "trejes," which gave Old Germanic "thrijiz." This then was passed down to its Germanic descendants as: Old English "thri/thrie/threo," prior to our modern spelling, standard German has "drei," Low German dialect has "dree" and "drie," Dutch also has "drie," Swedish, Norwegian and Danish all have "tre," and Icelandic has "þrír," which is essentially the equivalent of "thrir."

The Economic Fallout Continues

The Obama Administration likes to tout the fact that, during their first year in office, the economy "didn't fall off the cliff." Okay, I'll give them that, and I'll remind regular readers that I said prior to the 2008 election, that whoever won the presidency would probably end up being the loser, as the economic plunge and its aftermath would make life difficult for them, politically (not to count millions of Americans suffering the direct consequences). So, as we begin 2010, where are we, economically speaking?

Well, the economy has stopped plunging downward, and it even has seen some minimal growth, but the emphasis has to be on "minimal." A year ago the nation was losing in excess of a half million jobs every month. Now the unemployment rate sits at 10% (although counting people who have gone to part time work, it may well be in the mid to upper teens), and the number of job losses has slowed considerably, to "only" 85,000 in December 2009. We always have to remember that if YOU are one of those 85,000, "only" is not an important word to you. So, while things certainly are not great, economically speaking, there has been some improvement. So what troubles me?

I'm a chronic worrier, and one of the things that has me worried (notice I said "one of the things") is the dire situation in many states and local communities. State and local government budgets, including for education, are in deep trouble. When the stimulus bill was passed early last year, there was a certain amount of money that went to help state and local governments in an attempt to prevent layoffs from these entities. I guess, at least to some extent, it did help on that front, but now the "medicine" has been cut or stopped, and whether the patients can now get by on their own is very doubtful in my mind. California's budget has been a mess for years, and now they are really under the gun. All over the country state and local governments are trying to bring revenues and expenditures into balance, but at great cost to many people, and to the overall economy. This whole situation could prove to be more than just a thorn in the side of the economy, but it may even help cause a "double dip" recession.

For the "free marketers," they'll say, "It will weed out unnecessary and inefficient programs," and there is a certain amount of truth to that. Of course, some also have argued that Uncle Sam should have just stood by and let nature take its course with the overall economy. To me, that's a bunch of nonsense. Remember folks, those at the top don't worry about their next meal, or their child's next pair of shoes, or their kids' schooling. It is easy for them to make these "do nothing" arguments, and I understand that. What troubles me is that some middle class/working class folks seem to be on that same page. If nothing had been done by Uncle Sam, including the Federal Reserve, my guess is, many of these same folks would be wondering about those things I just mentioned above, because they would now either be unemployed or underemployed.

I know many Americans, including this one, are concerned about the terrible budget deficit, and with good reason. That's one of the reasons the "winner" in 2008, may end up being the "loser." The Bush Era left the country in terrible debt,* unable to properly finance an "anti depression/recession" package. So, the private credit bubble that so helped ravage the economy is now being combated by a trade off to public credit. Not good, but something had to be done. The overall outcome is still to be determined, but in the meantime, watch those state and local situations, and keep your fingers crossed.

* The Afghanistan and Iraq wars were never paid for, nor was the Medicare prescription drug plan. Of course that didn't stop Bush from cutting taxes, and the wealthy benefited tremendously from Bush's tax cuts and his administration's lax regulatory philosophy. Income inequity grew ever wider, with many middle class folks actually losing ground.

WORD HISTORY:
Nimble-The roots of this word go back to Indo European "nem," which had the notion of "dividing, dealing out." The Old Germanic offshoot was "neman(an)," but rather than the notion of "dividing," the meaning veered to the result of something being divided or dealt out; that is, "take, accept." (See note below) This gave Old English "naemel," with the notion of "take" still very much present, as it meant "quick on the uptake/take in knowledge quickly." By the 1300s, this "quickness to learn" began to fade, as the meaning broadened to "quick afoot," and then also, "agile," and the spelling changed to "nemel." Later still (1400s or 1500s) the spelling changed again and the "b" was added, presumably because it made pronunciation easier, although some believe it was copied from the spelling of "limb."

Note: In Old English the verb "niman" meant "to take," but this was later replaced by "take." Modern German has "nehmen," which still means "to take."

The New Deal Era & Now, End

When Franklin Roosevelt took office, the American economy was in a shambles. Between 1929 and 1933, the economy suffered some staggering blows. Business investment plummeted by more than 95% from the 1929 level, international trade declined by about 50%, Gross National Product (GNP), used to measure the sum of all goods and services produced by the economy, dropped by nearly 30%, construction spending fell by 78%, the Consumer Price Index (CPI) showed an overall drop in prices by 18%. This huge price drop is called "deflation." Now, we all LOVE when the price of goods or services fall, but trust me, we don't want this to happen. When prices fall because of better producer efficiency or because they were way over priced, that's one thing, but when prices fall because businesses are trying desperately to bring in customers who are either hoarding funds or don't have many funds to hoard, this is a serious situation. A "mentality" sets in, with buyers waiting for prices to fall further before buying, which leads to prices falling further. If your employer is making less money, because of lower prices, guess who might not have a job soon?

After taking office, Roosevelt embarked on a course to try to stabilize, and then to reinvigorate, the economy. His proposals to Congress are known collectively as "The New Deal." Did his plans work? Well, the next election would seem to indicate that a great many Americans believed they did, or at least that many wanted to give FDR's policies more time, as Roosevelt swamped his Republican opponent, Alfred Landon, by a huge margin in both the electoral vote and in the popular vote.*** Roosevelt went on to win again in 1940, but while the popularity of the New Deal certainly continued with voters, war had broken out in Europe and in Asia, Japan was at war with China. There's no question that these events also influenced the outcome of the election. In 1944, Roosevelt won again, but by that time, America was in the midst of the war, now called "World War Two," and voters certainly weren't interested in changing administrations with the country at war. But elections aren't the only way to judge Roosevelt's two terms in office; we have statistics, and they can be little "buggers" for those desperately trying to throw history into reverse. Here, from "Historical Statistics US (1976) series D-86," are the unemployment rates, by year, during Roosevelt's first two terms.

Roosevelt took office on March 4, 1933, as presidents assumed office on that date in those days.
1933
24.9 (Further, and this is significant, a substantial part of the workforce had been reduced to part time from full time work.)

1934
21.7 (3.2% drop)

1935 (1.6% drop)
20.1

1936
16.9 (3.2% drop)

1937
14.3 (2.6% drop)

1938
19.0 (4.7% increase. Roosevelt cut back on New Deal programs to try to balance the budget, an idea he abandoned, as the country registered a big downturn, quickly dubbed "The Roosevelt Depression," by conservatives. Those trying to discredit the New Deal use the unemployment number from this year as their point of comparison with 1933, not the intervening years, to claim that the New Deal was a failure.)

1939
17.2 (1.8% drop)

1940
14.6 (2.6% drop)

1941
9.9 (4.7% drop. In fairness, America was producing goods, including war goods, to help the Allies, and in an effort to build up our own military, in case of war, which of course came in December. I only included this number to show how government spending brought down unemployment.)

As you can see, unemployment dropped significantly between 1933 and 1937; 10.6%. Further, many more people were on full time rather than part time. Now, did the New Deal end the Great Depression? No, but it helped. Would we have rather had those 10.6%, and perhaps more, still out of work? Just as today, the "purists" can't accept that their system collapsed. It DIDN'T and it DOESN'T always work flawlessly. The interesting thing is, I've often heard from some how the New Deal spending didn't help, but then these same people cite World War Two spending for ending the Great Depression. You can't have it both ways!!! Then Hitler, that SOB, can also be cited for combating the Great Depression. There were something like 6.5 million unemployed Germans in 1933 when Hitler took power (January 30th), and many more had only part time work. Germany's situation is analogous to America's, at that time. Hitler started lots of public works, building roads, bridges, and such in an effort to sop up unemployment. After a year or so, he began a dramatic military build up. German unemployment dropped precipitously up until the start of World War Two. Ronald Reagan became president when the country was in a downturn, which worsened considerably in his first two years in office. Reagan proceeded to run big government deficits and initiated a huge military build up. Okay, I'm NOT saying Reagan was Hitler. I'm only comparing the similar economic policies they used to fight economic downturns.

Now, will the Obama Administration's policies on spending work? We'll have to see, but the severe downturn has slowed. I didn't agree with how it was handled,^^^ but let's hope they get this right. Will it end the downturn? Probably not, just as the New Deal needed more "OOOMMMPPPPFFFF," this "stimulus" needs to get out the door faster, and "may" need a boost. (A word history follows the notes)

***Roosevelt received 60.8% of the popular vote and 523 electoral votes from 46 states to Landon's 36.5% of the popular vote and just 8 electoral votes from 2 states. For those unaware, in 1936, the Unites States had only 48 states.

^^^See: http://pontificating-randy.blogspot.com/2009/02/what-about-stimulus-bill.html

Word History:
Prince-This word came into English during the 1200s from Old French "prince." It came to Old French from Latin "princeps," itself formed form Latin "primus;"^ that is "first," and supposedly a form of "capere," which meant "to take."^^ Thus we have "to take first place (in leadership)." During the 1300s, English acquired the feminine form, also from French, which was "princesse" in French and gave us PRINCESS.

^ Latin "primus" goes back to Indo European "per," with the notion of "in front (of), before, forward, foremost, first;" thus also indicating, "chief, leader."

^^ Latin "capere" goes back to Indo European "kap(h)," meaning "grasp," thus, "take, seize, capture, take in mentally;" thus also "understand, comprehend."  

Economy Still Losing Jobs

Before I continue with "The New Deal and Now," (this relates to that topic, however) the government released unemployment numbers on Thursday, July 2. The report showed the unemployment rate went to 9.5%, and that 467,000 Americans lost their jobs during June. The only good news, if you can call it that, is that this is better than the 700,000 jobs being lost earlier in the year. This is going to be a real tough time for many, many folks, and it isn't going to end for quite some time, I'm afraid. I heard one Stephen Moore, a conservative economist and frequent guest on CNBC (a business cable channel, owned by NBC) Thursday. Unfortunately, I just tuned in when he had already been talking, but I did hear him say that if the government (he's been critical of Bush and Obama) hadn't intervened in the economy, unemployment wouldn't have gone over 6%. This guy must think he's talking to an audience full of Rush Limbaughs. Do you really believe this nonsense folks? "Economy....heal Thyself!" He's entitled to his opinion, but so am I, and I say that without much of the intervention that taken place (distasteful as it has been), we would have unemployment closer to 26% than to 6%. No one can convince me that if all the big banks had gone down, and many smaller banks, and the three major American auto companies had gone down, and AIG, the insurance giant, had gone down, that we'd only have 6% unemployment. C'mon now, Mr. Moore!

There are some "green shoots," as they've been called; that is, some bits of good news, like some upticks in certain indicators and sectors of the economy, but things are fragile, at best. There are still problems looming over the economy, as many states are nearly bankrupt, to put it bluntly. The same can be said for many local governments, including school systems. This only seems to say that there will be more layoffs feeding the downturn. Further, home prices continue to plummet, and commercial real estate, like office buildings and shopping malls/shopping centers are still in deep trouble, which then goes back to lenders who financed these deals. Further still, so many people have been damaged, even destroyed financially, by what has gone on for the past several years. They have seen their savings diminished or wiped out, including for many, even their 401 K plans. A sad, sad situation, as many people, especially those in their 50s and 60s, will NEVER recover from what has happened to them. I just hope that those who are younger can recover. The situation is still VERY ugly. For regular readers, you may recall that I said last year, that whoever wins the election (for president), may well be destroyed by what is taking place. At this moment, I have no reason to retreat from that. (Ahh, keep in mind, I DID say, "may." I know how to use "weasel words.")

Word History:
Scatter/Shatter-The overall history of these words is not certain, but it seems that "scatter" is actually a variant of "shatter," which was spelled "schateren/shateren" in English many centuries ago. The hard "c" sound "seems" to have come from Norse influence during the 1100s, as it traces back to the northern part of England, where Norse influence was greatest. Of course, when you look at the concept of the two words, they are similar: if a window "shatters," the glass "scatters." One source says the words come from Old Germanic "skath," (with no meaning given), but myself, I lean more to them coming from Old Germanic "skaith," which itself was the Germanic offshoot of the Indo European root "skei," both having the meaning of "divide, split, part." German has "scheid(en)," which means "to divide, separate," and the Low German dialect of the north had (I don't know if it still has in modern times) "schateren." (Notice the close spelling to the old spelling in English above) The shorter form of the "scatter" is "scat," as in to chase off a cat or other animal; that is, to "separate" the animal from yourself.

The New Deal Era & Now, Part Three

In mid January of this year, just days before Obama was sworn in as President, the Senate gave the authority for the release of the second installment of bailout money; that is, the remaining 350 billion dollars. In researching this just a bit, it seems that only one house had to authorize the release of the funds, and while both houses debated the issue, only the Senate voted. Also, the measure was not voted upon straight up, for or against, but the measure was put forth in "negative wording;" that is, opposing the release of the funds, and if a senator was against the money being authorized, he/she voted "FOR" the measure, and of course, "AGAINST" meant he/she was in favor of releasing the money. Anyway, the vote was 42 FOR and 52 AGAINST, and thus the money was released to the Treasury Department. The vote was: 33 Republicans, 8 Democrats, and 1 Independent (who caucuses with the Dems) "FOR" (but actually meaning against releasing the money), and 6 Republicans joined 45 Democrats and 1 Independent (who caucuses with the Dems) in voting "AGAINST" (but meaning for releasing the money).

After taking office, the new President was faced with the collapse of the American auto industry. Having had overwhelming support from autoworkers, he could have tried to give them everything they wanted, meaning more billions with no strings, but he didn't! Billions were given to tide over two of the companies, General Motors and Chrysler, but they were also given a time table to achieve a plan on how they were going to survive and potentially prosper (let alone stop losing billions). Remember folks, these companies were losing MILLIONS of dollars A DAY!!! Since that time, both companies presented plans and both were "eased" into bankruptcy with the help of "Uncle Sam," who took part ownership.* Current reports indicate that both companies may be out of bankruptcy far sooner than expected. Now, whether all of this will work....I have no idea. General Motors, especially, will be much streamlined, with far fewer brands and far fewer dealers. Chrysler has streamlined too, and will be combined with Italian automaker FIAT.

Will these, what I'll call, "Bush/Obama policies" work? Opinions vary, and to be honest, no one really knows for sure. Will these "remedies" prove to be as bad as the "disease?" Who really knows? Time will tell, but one thing is unmistakable, we have gotten ourselves into one grand mess. I suppose none of us is completely innocent, but some are outright guilty. Thirty years of free markets, with the removal of business regulations, or lax enforcement of what regulation existed, coupled with "trickle down" economics has taken a huge toll on America. We've had to learn all over again, what we should have learned from history; that is, substantial laizzez faire and trickle down DOES NOT WORK!

The handwringers of American society have worked themselves into a lather over government involvement in all of these things I've gone over in these articles. My question is, "Is our system so fragile and are Americans so insecure, that government can't intervene to try to halt a potential train wreck?" Let me tell you what this is about... MONEY and EGOS!!! With so many of these folks, it is always MONEY and EGO!!! They dream in dollars. Virtually every ounce of life is devoted to making more money in an attempt to soothe their insatiable egos. The rest of society can't keep up with them or their shenanigans, because WE DON'T THINK LIKE THEM! Many wealthy people and their money managers are terrified of government, because these folks don't have to answer to anyone.....except on occasion, to GOVERNMENT! (At whatever level: federal, state, local.) And they DON'T like it one bit! I wish there were a way of finding out what these egomaniacs were saying about the various current bailouts and those going back to the Bush Administration, and what their money was saying by how they invested it. If all of these companies had crashed last summer and fall, these folks (and many of the rest of us...maybe ALL of us) would be in even worse straits than we are today. Don't forget, these are many of the same people who wanted to get their hands on your Social Security money to ....ahh....invest it in the stock market!!! Remember that one? After seeing how THEIR whole system is just a mess, do you feel like turning over ANY money to these folks? If they want to be gamblers, they should go into business in Las Vegas.
Next...the final installment.... (A word history follows)

*The Canadian government also loaned them a smaller amount of money, and took a smaller ownership stake.

Word History:
King-This word "seems" to go back to Indo European "gen/gn," which had the notion of "production, offspring." The Old Germanic "offspring" (I couldn't resist that) of this was "kunjam," which seems to have meant "people, group of related people," from which Germanic developed "kuninggaz," seemingly "a leader of the people, offspring of the people." In Old English it was "cyning," and it was used for the name of Anlgo Saxon tribal chiefs, and later for the leaders of the individual Old English states, or provinces, if you will. Later still, when the English coalesced around a more "national" leader, that was the name given to him, and the name was then dropped for the regional leaders, and thus the title has carried forth until modern times. Germanic passed the term along to other non-Germanic languages like Russian and Finnish, for example, which use their own forms of the word. It prevails in all of the Germanic languages, as modern German has "könig", Dutch has "koning," Danish has "konge," Swedish "konung," Norwegian "konge". In English during the 1600s, the term also took on the additional meaning "big/large," as in "King Crab."

The New Deal Era & Now, Part Two

U.S. automakers have been struggling for the past number of years to remain profitable, but the economic downturn has put them flat on their backs.*** The automakers were literally losing millions of dollars each day!!! In September, 2008; that is, under the previous Congress and the Bush Administration, 25 billion dollars were authorized as loans to the three main American automakers; Ford, Chrysler and General Motors, for retooling to produce more energy efficient vehicles. This money was included as part of a major bill of more than 600 billion dollars, funding many aspects of government operations, and, therefore, there was not a separate vote on the auto loans.
Then in the middle of December 2008, Bush Secretary of the Treasury Henry Paulson loaned several billion dollars to both General Motors and Chrysler, to prevent them from going bankrupt. In all, General Motors, along with its finance arm, GMAC, has received over 63 billion dollars. Chrysler, along with its finance arm, Chrysler Finance Service, has received more than 16 billion dollars. (These figures from "Propublica.org") These funds came from the 700 billion amount voted on for banks previously, so again, there was no separate vote on this money. While Ford hasn't received any of the money (only the "retooling loan" money), they, too, have been losing billions, but in the last few months, they have been losing at a lower rate than GM and Chrysler. Recently, Wall Street cheered when analysts predicted that Ford would report a 10 billion dollar loss, and they actually "only" lost 9 billion. Don't pop the champagne corks yet! And I'll come back to the auto companies again shortly.
Enter the Obama Administration, January 20, 2009 (The new 111th Congress took office earlier in January, with both houses controlled by Democrats.):
Congress passes what most Americans know as the "economic stimulus bill." It provides 787 billion dollars (that's "billion," with a "B") for a wide variety of projects over a two year period. Some economists say it was not enough, while others say it was too much. There were two separate bills passed, one by the House and a slightly different version by the Senate (not an unusual situation). Then a conference committee, with members from both the House and the Senate and members from both parties, presented a new "compromise" bill for a final vote in both houses. The bill passed and was signed by President Obama in February. The final vote totals were:
House-246 FOR (all Democrats)-183 AGAINST (7 Democrats and 176 Republicans)
Senate-60 FOR (56 Democrats-2 Republicans-2 Independents)-38 AGAINST (All Republicans)
To be continued... (A word history is below the note)

***It should be noted that "foreign owned" automakers in the U.S. market have also experienced significant drops in sales during this downturn. Initially, the American companies took the major hits, prompting some commentators on CNBC (a cable business channel, owned by NBC) to proclaim that this problem in the auto industry was an American problem, and that the American companies should be allowed to file bankruptcy or liquidate. When other commentators asked if America wanted to still have American auto companies, the answer from the previous groups was, "We'll still have American auto companies; they're called 'Toyota' and 'Honda.' " The above is not a true word for word exchange, but rather a summary of things that were said.

Word History:
Switch-verb form-This was derived from the noun. See Part One of the above article for the noun's history at this link: http://pontificating-randy.blogspot.com/2009/06/new-deal-era-now-part-one.html

During the 1600s, the verb meant "to beat with a switch;" that is, beat with a riding whip or thin flexible twig. You don't hear this meaning used much anymore, but when I was a kid, it was not uncommon to hear another kid say, "I got switched last night!" Let me tell you, they didn't mean they got switched at the hospital either, but rather....YEOW!!! Further, the noun meanings transferred to the verb. I guess you could say they were "switched." Okay, back to the word. The noun also gave the meaning "to switch something on or off," or "to divert a train from one track to another." The notion of "swapping" didn't come about until the latter part of the 1800s.

The New Deal Era & Now, Part One

With America mired in arguably the worst economic downturn since the Great Depression, there have been lots of discussions about what we should do (or have done) about it. There are those who have said that there should have been no bailouts of any kind; that if you can't survive, oh well. Then there are those who have pretty much advocated federal bailout of just about anything; although I think their numbers are relatively small. During and after the Great Depression, strong emotions were stirred about Roosevelt's New Deal, and with the crisis now upon us, these arguments have been renewed. There are those who have said that both Hoover and Roosevelt intervened in the economy, and that, left alone, things would have corrected themselves. Some, not all, of these folks have even argued that it was government intervention that made things worse. On the other hand, others have argued that certainly Hoover did not do enough, but that even Roosevelt's policies were lacking in sufficient "punch" to reinvigorate the distressed economy.

First, let's recap just what's been going on. "Officially," the recession began in December 2007:

In early 2008, with the many people fearful of what was then a slowing economy, President Bush proposed a program of "rebates" to Americans, and that program began in late spring and early summer of last year. Now, maybe my memory fails me on this, but while I'm sure there were some protests about the program, I don't recall any "tea parties" or calls for the rebates to be paid for by cutting other government expenses (there may have been, but they certainly weren't very loud). Nor do I recall hearing that the President was a "socialist," or that he had a secret plan to make the United States a "socialist nation!" (I do have a bright red shirt, just in case I ever need to blend in.) This was at a time when the federal deficit, having grown by trillions during the previous seven years, was growing even more. The vote for the rebates was:

House of Representatives-385 FOR and 35 AGAINST (25 Republicans-10 Democrats)

Senate-81 FOR and 16 AGAINST (all 16 being Republicans) (Source for vote totals in both houses from GOVTRACK.US)

Then we had many banks teetering on the brink of collapse, several of which were declared by the administration and the Federal Reserve to be "too big to fail." I'm not going to go into each step that took place, but suffice it to say that I guess the "powers that be" decided that "Lehman Brothers," a large investment bank, was NOT too big to fail, and down it went. With this one bank failure, the whole system shook, and I'm sure all of you remember the plunges in the stock markets at various times during 2008, both in America and internationally.*** Remember, this was just ONE bank failure. Essentially up to this point, we had been told by the Federal Reserve, and to a lesser extent, Treasury Secretary Henry Paulson, that inflation was the potential problem for the United States. Suddenly, one morning I put on the television and there were reports that Fed Chairman Ben Bernanke and Secretary Paulson had called President Bush and top congressional people from both parties to a meeting, where they were told that 700-750 billion dollars (that's billion, with a "B") were needed to buy bad assets from banks, or the country and indeed, the World, was facing "The Great Depression, Part Two." I can't say that these same folks said this, but I know it was said by someone, that "Part Two would be WORSE than the 'original.' " President Bush endorsed the plan. In Congress, a great many Republicans opposed the plan, and it was about a week or more before the bill authorizing the money passed the House and Senate.^^^ It was then signed into law by President Bush. The vote was:

House of Representatives-268 FOR-148 AGAINST (3 Democrats-145 Republicans)

Senate-74 FOR- 25 AGAINST (9 Democrats-15 Republicans-1 Independent) (Source for vote totals in both houses from GOVTRACK.US)

Not long after becoming law, I believe it was Secretary Paulson, with the support of Chairman Bernanke, who announced that there had been a change in plans, and that the money would NOT be used to buy bad assets from banks, but rather it would be directly injected into troubled banks to provide capital. To keep this simple, to the media and to the public, the whole measure became known as "a bailout for banks." There's no question that the decision to change policy AFTER Congress appropriated the money, made an already skeptical public even more hostile. Regardless, hundreds of billions of dollars were funneled into banks, and even into AIG, an insurance company deemed "too big to fail." The government took a financial interest in a number of banks, and in AIG. I believe usually about a third stake in most banks, or at least those "too big to fail," and an astounding 80% in AIG.### The "new" Congress (the 111th) that took office this past January, voted to release the second installment of the "bailout measure."

To be continued.... (A word history is below the notes)

***While I don't remember every person who advocated such, there were a number of people, both politicians and economic "commentators," who took the view that "if you can't make it in the capitalist system, bye bye!" These folks would certainly correspond to those who argued against the New Deal, during and after the Great Depression.
^^^Congress decided to allot the $700 billion in two installments of $350 billion each, with the second part needing another favorable vote before the funds could be released.

### Whether you agree, disagree, or are indifferent to the decisions that were made, essentially by Bernanke and Paulson, in the last couple of months, I've heard comments from some conservatives who act as if the "bailouts" and and "government ownership stakes in companies" all started with the Obama Administration. I just wanted to remind them, in case their memories have failed. There are antidotes to such amnesia; they're called FACTS! And that's not to say that the current administration hasn't followed a similar path as the Bush Administration, it HAS.

Word History:
Switch-Noun-It "seems" that English first acquired the noun form of this word. Apparently it goes back to the Indo Europoean root "swei," which had the notion of "bend." Old Germanic continued with a root word "swih." Old High German developed "zwec," which meant a "wooden peg" which then was used for a target. In modern German, "Zweck" has come to mean "aim, goal, reason for something," and you can still see the association with "target." Low German developed "zwukse," which meant "a long, thin, flexible stick, or twig." (That takes it back to the "bend" notion) All sources mention the Low German dialect spoken around Hannover as being a direct link with the English word, as Hannoverian has "swutsche/schwutsche." Both Flemish and Dutch had, in times past (I could not find modern forms in either language), similar words (Some linguists say Flemish is a separate Germanic language spoken in Belgium. Some linguists classify it as simply a dialect of Dutch.) Anyway, it was picked up in English in the 1500s, and it seems to have been spelled "switz" and "swits," and meant "a flexible twig, but also a thin riding whip." It also seems that English picked up from another cousin, standard German, the "peg" sense of the word. This gave English "switchboard" in the latter 1800s, where in times past an operator plugged telephone lines (like "pegs") into openings. Further, during the 1930s, "switchblade" came from the notion of pushing the switch ("peg") to open the knife blade. Interestingly, a light "switch" might have elements of both meanings, as it certainly is something of a "peg," but the "flexible twig" notion could also apply, as we flip the "switch" back and forth. From what I have seen, American English used the notion of a "switch" to redirect a train from one track onto another.

The verb form will be covered next time.

Some Very Ugly Economic Stats

Here is the link to an article that really spells out, in statistics, many of the economic problems facing America.

http://www.msnbc.msn.com/id/29412777/

Housing Crisis Deepens

Below is the link to an article on how the housing crisis is deepening, not stabilizing, in spite of the Fed's and the Bush Administration's attempts to shove money into the hands of bankers. This top down approach will not work, in my opinion, and the numbers seem to indicate such. With unemployment soaring (more than a half million Americans lost their jobs in November alone), the housing situation can only worsen. There needs to be money injected into the system far downstream of the Wall Streeters and big money bankers. If YOU lose your job, how would YOU cope with the situation? Could you pay your current mortgage, or current rent? Assuming you have some kind of employer sponsored health care coverage, would you be able to afford coverage on your own if you lost your job?

http://www.msnbc.msn.com/id/28069420/

Economic Decline Accelerates

The economic situation in America has deteriorated further and at a much faster pace. General Motors just lost 2.5 billion and Ford lost 129 million. Ford has announced that it will cut more than 2200 white collar jobs in an effort to stay alive. GM has now issued a statement saying that it could run out of money in 2009. So what does any of this mean? Well, if our auto industry goes down for the count, this threatens not only the jobs of the people employed directly by the companies, but also the companies and jobs that are tied into the automakers; that is, companies that supply everything from metal to paper towels. Then there are the businesses around the various auto plants and offices that depend on customers from the auto companies; restaurants/diners, for example. I've heard estimates that more than two million people could be added to the unemployment rolls if Ford and GM go down.***

Like the banks and real estate markets, the automakers made some very bad choices. The free market philosophy says that companies or individuals make choices in business, and that they then either get to profit immensely, if they are a big success, or they fail and go out of business. That all sounds real nice on paper, and as an idealism, but in reality, people suffer the consequences, and in the case of the automakers, hundreds of thousands, if not a couple of million or more could suffer. Add to that those caught up in the real estate mess, including the banks, and the carnage is just incredible, AND it isn't over yet. In fact, no one seems to know if we are closer to the beginning of the overall downturn, in the middle, or nearing an end; although I don't hear many votes for it being near the end.

My point is, the Bush Administration let things go with little or no regulation. The "you're on your own" philosophy was their mantra. They did little to encourage automakers to make more fuel efficient vehicles, even though gasoline costs were escalating at an alarming rate over virtually the entire Bush presidency. Folks, this is pre 1930s; that is, pre-Depression philosophy. They didn't learn ANYTHING from history.

The public was asked to bailout private companies in the finance industry or, we were told, we faced The Great Depression, Part Two, as "they were too big to fail." (So much for the "fail" part of the free market system!) The government actually took a stake in several companies, and then the McCain campaign and "Joe the Plumber" had the nerve to call Obama a socialist!!! Folks, government ownership is like THE classic definition of socialism. Bush and his people have tried to put asterisks next to this socialism, saying like the government is only taking a thirty percent interest in the companies, and that it may only last for a few years, etc. etc. What it comes down to is, they're saying, "We're just a little bit pregnant." (Or maybe "We"re just a little bit socialist.") Now the automakers are essentially in the same predicament, and so is the public. Do we try to keep them afloat with tax money (actually borrowed money), or do we let them go down, and bring misery perhaps to millions, and even bring the whole economy into a state of collapse?

Further, in more bad news, unemployment surged to 6.5% in October, with another 240,000 people losing their jobs.

*** Mentioned a couple of times on CNBC, a cable business channel. (Word history follow)

Word History:
Seethe-This goes back to Indo European "seut," which meant "to boil." This was passed down to Germanic as "seuthanan/seuth," and the various Germanic dialects continued with a form of the word, including Old English "seothan," which also meant "to boil." This word remained the English word for "cook a liquid at high temperature" until French import "boil" began, ever so slowly, to replace it as the word for "to cook a liquid," but this was during the Middle Ages. In the 16th Century, it took on more of the meaning "to be very angry, agitated," and that's what we still use today. Interestingly, also at some point, it took on a secondary meaning of "soak," which still survives in the "seethe's" past participle "sodden," (German has [ge]sotten) although it is not commonly used in America. Germanic relatives of the English word include German "sied(en)," to boil, or be very angry," and Dutch "zied(en)." By the way, it seems that "seethe" also gave us "suds," that is, "foam that arises from a boiling liquid."

Jobless Benefits

Here's the link to an article about the surge in jobless benefits.

http://www.msnbc.msn.com/id/27572250/