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2/28/11

Economic, Social and Geopolitical

We're in for a long, hot summer...

The forgotten man is preparing to say and do something though.

Those of the boomer generation who complain of "political correctness" in the rewriting of textbooks and education curriculum ought to study history themselves. We were also sold in schools a whitewashed history that was written to suit the purposes of the mood of the country facilitated by government, educational institutions and the private sector.

One of the biggest lies goes something like this: There was a stock market crash one day in 1929 and President Hoover was oblivious to it and did little about the economic condition the country was in. There was an election in 1932 and Franklin Roosevelt won and saved the country from the Great Depression by instituting work programs, allowing unions to bargain fairly for a fair wage and created Social Security and things got better. Except that it is all a big distortion of truth.

In fact almost everything FDR did made the Depression worse and created the "Depression Within A Depression" that caused another stock market crash in 1937 and what actually ended the Great Depression was the US entering WWII in 1941. There had been a brief respite for some people due to WPA, CCC, RA, TVA and other projects but when the work was done, those people were out of a job and angry enough about it that they went on strike. In other words they went on strike against a temporary welfare program. (This should remind people of the "99ers" demanding unemployment extensions.) Not only that, since FDR had the Wagner Act passed liberalizing union organization, people began striking against employers, inside their very place of employment by having 'sit ins.' (This should remind people of public employees, school teachers in particular, ranting in New Jersey and rallying in Wisconsin that they should be immune to the economic crisis, occurring today.)

What Roosevelt's war against business caused companies, since they had no idea what Roosevelt, the Fed, the Treasury and Congress over-regulating and arguing over taxation and budget restraint would do next, they hoarded cash and did not reinvest in the economy to create new industry, new business and real jobs. They also had passed retroactive tax laws, with the Justice Department then pursuing people and companies for doing what was perfectly legal at the time they did them, with criminal charges for acts that had been made illegal after the fact.

Does any of this sound familiar to what has been happening in recent years? It should. The Political Class would have you distracted by the big bonuses (that is not a good thing) corporate executives are getting, frightening you the government is going to shut down (maybe not a bad thing) and anything that will keep the mainstream media busy.

In Muncie, Indiana a newspaper editorialized in 1936:

"Who is the forgotten man in Muncie? I know him as intimately as my own undershirt. He is the fellow that is trying to get along without public relief...In the meantime the taxpayers go on supporting many that would not work if they had jobs." (excerpt from Amity Schlaes "The Forgotten Man")

The contagion had already spread from Wall Street prior to the 1937 crash to Main Street, just as this current economic crisis has.

Much like the respite from 1934-1936 during the Depression that things were getting a slightly better, we have experienced a similar respite from 2009-2010. The stock market has reached ridiculously inflationary highs that have nowhere to go but down. Meanwhile Main Street is still experiencing high unemployment, highly leveraged consumers, a financial institution and mortgage/foreclosure crisis with attendant real estate deflation, alongside consumer product inflation, higher gas and food prices being the prime examples. Additionally national and international problems are entering into the picture, affecting the average person. The Middle East problems will not be resolved quickly or easily, affecting our oil supply, our national and state governments are technically insolvent and for all practical purposes most of the European Union countries are bankrupt. A currency crisis looms of epic proportions, so complex even the experts really don't have solutions to offer for it.

The stage is set for stagflation as bad as, if not worse than the 1970s. Obama can do a fake out to becoming a centrist, but for all his trying he's not fooling the average person who still recognizes him for what he is, a collectivist. His regulatory policies are harming business and not helping consumers. The Republicans can bellow all they want and the tea party coalition can rant but most people have figured out they are in collusion and their tune hasn't really changed. We're in for a long hot summer of an economic Double Dip quake of high magnitude on the Richter Scale. A real good shaker and the powers that think they are in control will have no idea what to do about it.

The average person, the modern day "forgotten man" isn't without backbone and not finished yet. He (and she) are quietly standing by, saying little at the moment, my bet though is that will not be the case by the end of the year. Much like Bill Wilson, founder of AA and Dale Carnegie, founder of self improvement courses, started the mutual and self help movements during the Great Depression, many Americans are already following similar paths. They recognize government intervention and dependence has had little results of value to them. They still have faith in individual effort, being achievement oriented and believe in the American ideal of a strong work ethic and people pulling themselves out of difficult situation. They've figured out that the whitewashed history that has been sold is just as much a lie as collectivist politically correct revisionism is. Government and politics can do little for them.

Look out for a revival of the real American hero who still believes in the American Dream by no later than early 2012. Decide what you want to be and go do it.