United States History
19th Century Ended with Monarchs in control, liberal economic thought expands
1900-09 A severe recession brings the need for government take-over of central banking
1910-19 FED becomes Lender of Last Resort, few labor gains, war, first Red scare, slow
1920-29 Recession early,then economy/Wall Street dominate with loans to war-torn nations
1930-39 Great Depression dominates, Keynes Wins, communism affects Western politics
1940-49 U.S. dominates, Truman Doctrine and Marshal Plan hope to defeat communism
1950-59 U.S. vs. communists plus war expand economy despite labor
1960-69 Vietnam War buildup powers economy, starts inflation but enrages many
1970-79 Nixon toke U.S. off gold plus oil embargos increased inflation, China opens
1980-89 Federal Reserve induced a recession which solve inflation with pain,
RR cuts taxes, regulation and increased the deficit.
1990-99 Tax increase ended Bush reelection plans, free trade and capital markets expands
2000-09 Two tax cuts, three wars and one health care acts expand government debt
2010-04 Government creates money to end Great Recession and health care. 1/17/17
|The 19th Century ended with conservative Oligarchs from business, finance plus European Monarchies in control of the world political economy. Liberalism first inspired by the English Civil War of the 1640’s began to take a more economic slate. It would increase dramatically and during the mid-19th century with the philosophy of Friedrich Engels. His ideas concerning worker well-being morphed into Marxism and Leninism. Elsewhere, the worker caused Union movement would last well into the next century.
The 20th century brought 50 years of Japanese military oligarchs. England and other Western countries would control world trade through colonies with Germany and Japan wanting to join their exclusive club. Click to enlarge most pictures.
Great Southwest Railroad Strike of 1886 against Jay
Gould, one of the most ruthless industrialists of the day was a trade union strike
Century begins with
President Roosevelt going after J.P. Morgan and banking sponsored
trusts and in 1906 passing the
Meat Inspection Act and the
Pure Food and Drug Act. "Even his friends occasionally wondered whether
there wasn't any custom or practice too minor for him to try to regulate,
update or otherwise improve."
The Banker’s Panic of 1907, so named because it started on Wall Street, soon “spread throughout the nation when many state and local banks and businesses entered bankruptcy.” Banker J. P. Morgan led a group of Wall Street bankers to saved the day with a large shot of bank liquidity. The U.S. Treasury also helped. This was a change from conservative laissez-faire capitalism and many thought it was required as the economy had become too big for private banker Oligarchs to be the lender of last resort.
TR takes on big business.
Wall Street during the bank panic in October 1907. Click to enlarge
Federal Reserve Act solved the lender of last resort problem and its
formation continued the battle of
federal government involvement in society activities. Decades of union
strikes eventually resulted in Massachusetts and other states passing minimum wage laws.
Clayton Anti-Trust Act
was ineffective by our court system.
World War I began in 1914 because
territorial and economic conflicts among the European Monarchs fueled by
militarism, a complex web of alliances, imperialism, and nationalism got out
of control. Even England’s democratic
constitutional monarchy was not immune, as her vast colonial empire needed
protection. "The US with immigrants and citizens from many fighting nations
was isolationist but people ”…”…
increasingly came to see the German Empire as the villain after news of
atrocities in Belgium in 1914, and the sinking of the passenger liner RMS
Lusitania in 1915 in defiance of international law." President Wilson kept
the economy on a peacetime basis, while allowing US bankers large-scale
loans to Britain and France. Because England controlled the sea, she
and her allies could use loans from US banks to buy
US goods. US business made a substantial profit though most
were not paid back and
remain in “limbo."
The 1918 flu pandemic killed more people than WWI. See Basic Facts Wrong
|An Act to provide for the establishment of Federal reserve banks,to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States and for other purposes.
Russian forest trench at the
Soldiers spent months in trenches with rats, lice, feces, mayhem and death all around them. Russia did not suffer as much helping us in WW 1 as in WW 2 when 23,000,000 died. Source
A white gang looking for African Americans during the Chicago Race Riot of 1919
The 1920’s brought post war
prosperity but not before the
Monetary Policy was used for the first time as the FED tightened to stop
post war caused inflation. A sharp short recession ensued. Before the
coming boom there were troublesome times as
the banker supported League of Nations.
At home the 1919 strikes, riots created a
growing fear of radicals and
terrorists who wanted labor reform.
It was part of a worldwide questioning of WWI causing authoritarian central
Representatives attending the 1921 Conference on Unemployment held in Washington, D.C. Click to enlarge some pictures.
Harding easily won with an isolationist policy of the Republican Party conservative wing. A decade long battle with the liberal banker wing resulted, Bankers wanted U.S. dominance of International Trade Interestingly they easily accepted the pro business administration's insistence they approve foreign loans as it came with military support when countries defaulted of their bank loans.
Morgan banker Thomas W. Lamont was the leading international banker of his day. He provided Benito Mussolini with a PR campaign to soften world opinion of his fascist strong-arm activities and got Washington to take Italy off the no loan list. A $100,000,000 Morgan loan to Italy followed and soon led to bankers making loans to Italian manufacturers.
According to Benito Mussolini fascism politicizes everything spiritual and human: "Everything within the state, nothing outside the state, nothing against the state."
Morgan directed attempts to solve the German reparation problems that had bedeviled international politics after World War I and the Treaty of Versailles. Germany felt the 1924 Dawes Plan acceptable and another adjustment was made with the 1929 Young Plan but it also failed as fascists were taking over Germany.
Both the Federal Reserve and Wall Street bankers supported England's return to the Gold Standard at a pre- war parity of $4.66 per dollar. FED chair Strong went against J. P. Morgan and supported the Sterling with both low US interest rates as the Bank of England kept rates high. Morgan did not want low U.S. rates. A run was expected and credits lines from the FED and Morgan totaled $300,000,000. Potential borrows paid one percent.
As economist Keynes predict Chancellor of the Exchequer W. Churchill later acknowledged this his greatest mistake. Politicians would soon learn that it's the economy, stupid. Later the low U.S. rate combined with a 10% margin requirement would help cause a bull market that some feel was brought down by an August of 1929 FED rate increase. d the over- valued pound could not compete internationally in textiles and steel resulting in English worker real wage decreases. Both a Coal and a general strike resulted.
Bankers did not want politicians to control the value of money fearing inflation as a cure for debt. By 1970, their fears came true and the age of inflation resulted.
Subsidized English Mine owner Poor Beggar! from the Trade Union Unity Magazine (1925)
Eventually boom times returned and the stock market finally got back to 1907 levels. Prohibition fostered by conservative religious oligarchs began its 13-year reign in 1920 brought. Liberal activities by unions, suffragettes and socialism brought government action, some good like 19th Amendment and some not so good as “…intense government persecution of radical political dissidents in response to the postwar Red Scare…” that was sweeping the nation liberal oligarchs set up a Totalitarian state. Conservatives around the world feared the redistribution wealth effects of Communism and its antireligious component. Monarchies with the inherited wealth and the power that goes with being part of the nobility were particularly unhappy. Many, including England and the United States financed and fought in the failed in Russia’s anticommunist counter- revolution. Prosperity again brought banker excesses and the Wall Street Crash of 1929 brought down the much of the banking system and with it much of the US economy causing the Great Depression.
As predicted by many, politicians have not controlled the printing press. Keynesians worry about employment and Monetarist lead by the Austrian School wanted stable money supply and resulting stable prices.
The inflation of the 1970's hurt many retired people on fixed income. To help a 1975 SS added a cost of living increase. This would require a 1983 tax increase. As usually, there was an eight-year delay in paying for the new program.
MY PARENTS AND EVENTUALLY THEIR CHILDREN BENEFITED. An adjustment
for Bush 2's Medicare D benefit is due though Obama Care will probably cause
confusion and higher taxes. Income tax brackets were indexed to inflation
so after 1985 there would be no
Early in the
used German hatred caused by excessive WW I reparations the
long economic depression following the war with uncontrollable inflation to create a strong nationalist government modeled after
Mussolini's Fascisms. Using terror to take control of a weak
unpopular government, Hitler using loans from bankers world-wide and
confiscated wealth and began a many year military build-up. Russia uses
propaganda to spread its form of socialism called Communism. It required
revolution rather than evolution. The
Japanese invasion of Manchuria
signaled the beginning of a new colonial building period based on
nationalism. Western Europe had used capitalism and religion to colonize
all the best areas.
U.S. Banks wanting to
Japanese troops marching into Mukden on September 18, 1931
"At the Versailles Peace Conference in 1919, Japanese diplomats had pushed for international recognition of the principle of racial equality (p. 165). This proposal was famously blocked by the British Empire delegation and by President Woodrow Wilson. Japan was also offended by the Immigration Act passed by the United States in 1924, which was even more racist than earlier US immigration laws. [Morgan's] Lamont patiently explained to officials in Washington that this law was likely to alienate Japan from the United States (p. 168). Despite the deterioration in relations between the two countries,
Lamont continued to work with the Japanese government and banks to fund projects in Japan’s colonial empire such as the South Manchurian Railway. The invasion of China proper by Japan in 1937 led to the end of relations between Japan and J. P. Morgan." source
Tensions increased when the Senate refused to agree with the House
which had and
The Share the Wealth movement founded by Huey Long who would later be assassinated was one of many liberal social activists throughout the U.S. and Western Europe. These activities would be countered by conservative banker and business leader oligarchs who backed Herbert Hoover’s use of laissez fair Classical economic policy.
The first policy mistake was by Hoover. He followed the Republican party against his own and beliefs of those of many economists and signed the Smoot-Hawley Tariff Act. Many countries soon followed and the resulting decrease in world trade hurt everyone. The Federal Reserve tried to maintain the Gold Standard with two discount rates increase of 1 point each. Then there was the Revenue Act of 1932 which dramatically increased federal taxes. Both were right out of the Classical Economics toolbox. So was the $200,000,000 U.S. bank loans to keep Britain on the Gold Standard. Al efforts failed.
Brittan went off first followed by the U.S. in 1933. The economy hit bottom in 1933 and spending printing money was the only way out of deflation which made existing loans more expensive to maintain and also made business less apt to borrow.
An impoverished American family living in a shanty, 1936 click to enlarge
Hover lost the 1932 election. as FDR promised to use liberal Keynesian economic policy of government action to solve the continuing economic recession.
His New Deal employment programs would be the first time U.S. government would use massive debt to solve a major non-military problem. Like the war debt from WWI and following wars, the debt would not be paid back. As debt was retired the funds came from new debt. Inflation and economic growth would ease the interest payment pain. Major legislation included the Social Security Act which covered Old-Age, Survivors, & Disability Insurance, the Fair Labor Standards Act/1938 which set maximum work hours and minimum wages, the Agricultural Adjustment Act/1938 which provided fair price for farmers, and the Prohibition Discriminatory Employment related to federal employment .The Wagner Act along with other pro labor reforms were also passed. Conservative fought back using a conservative Supreme Court which declared some New Deal legislation illegal.
The battle over Keynesian vs. Classical Economics continues today. Many conservatives do not mind government action and debt for military but disagree with Liberals who want to use debt to solve economic problems. Both oligarchies to date have not believed cost effectiveness applies to their perceived governmental responsibilities. Politicians from both political parties act unhappy despite benefiting from an electorate that lives much better because of massive federal annual deficits plus the economic benefits of an annual balance of payments deficit amounting to $1,700 per person. The later represents cheap goods from abroad where dollars accumulate to eventually spent with little benefit to U.S. citizen. Voters let politicians buy their vote with these debts disliking all members of Congress but their own! After Germany invaded Poland starting World War II President Roosevelt asks the Congress for a defense budget hike and the United States declares its neutrality. Many wanted the US to stay out of the war and just as many profited as US loans to Europe were spent with US companies that supplied war arms and food to belligerents. Citizens had begun to prosper after a decade of recession. Shacks that members of the Bonus Army erected on the Anacostia Flats burning after the confrontation with the military.
the U.S. Congress approving the first peacetime
which was justified by Japan's December 7, 1941
attack on Hawaii's
Pearl Harbor. n 1944 the United States Supreme Court rules the
wartime internment of Japanese Americans on the West Coast was valid during
a time of war. This type of subjugation of human rights began in the John
Adams administration with the
Alien and Sedition Acts which limited citizen rights because of
American paranoia over revolutionary ravaged Europe. It continues today with
Federal surveillance areas needed to fight the War on Terror.
USS Arizona (BB-39)
End of war layoffs caused four hundred thousand
mine workers to strike
with other industries following their lead. The 1947
pledged to contain Communism. It began with $400 million of loans to help Greece and Turkey.
It was used to buy US
military materials needed to fight Communism.
Not only were there no was reparation payments for the losers, but the U.S. Marshall Plan loaned 12 billion dollars which would be used to rebuild Europe. Loans were mostly spent in the U.S. for military, economic and political needs. Congress over-rode President Truman's veto of the Taft-Hartley bill thus Congress rolled back many of the advantages labor had gained with the 1935 Wagner Act. Many Democrats joined with Republican lawmakers to curb the power of unions.
1950 began with an enhanced battle between capitalism and communists. The Chinese backed North Koreans began the Korean War and contributed to Senator Joe McCarthy's communist witch hunts initiated a Second Red Scare.
Hundreds of thousands of South Koreans fled south in early 1950 after the North Korean army invaded South Korea. Click on most.
|President Truman's relief of General Douglas WW 2 hero MacArthur who wanted to be President used tries to use a red scare that gripped the nation to try and convince voters to invade China and possibly us the bomb
|1955 USSR sponsored Warsaw Pact countered U.S. sponsored Western Europe NATO with an Eastern Europe eight communist nation mutual defense treaty.
|Soviet Premier Nikita Khrushchev and United States Vice President Richard Nixon debate the merits of communism versus capitalism in a model American kitchen debate at the American National Exhibition in Moscow (July 1959) - photo by Thomas J. O'Halloran, Library of Congress collection.
By decade's end the cold war would heats-up
Castro became a dictator with close ties to Communist Russia. Click
Congress passed the 1959 Landrum-Griffin Act regulated labor unions' internal affairs and their officials' relationships with employers. Labor was to the left and Communism was to the left so labor was in trouble.
Iranian Coup of 9 August 1953 orchestrated by the
United Kingdom (under the name 'Operation Boot') and the
Iranian coup kept the
capitalist colonialists mostly Christian West in control of mostly Muslim Iranian Oil.
Suez 1957 Crisis pits US
against Britain and France.
President Eisenhower also ended
the Korean War quickly
Interesting how some Presidents are better at negotiating than others.
In a blow to conservative southern Oligarchs the Supreme Courts rules
segregation illegal. Public acceptance would take many years
Little Rock Nine help Ike with desegregation. Click.
Anarchist" attempts to destroy the
Statue of Liberty as Communism tries to
gains a foothold and the US counters with
the Marshal Plan and NATO.
1961 had the U.S. failed
Bay of Pigs Invasion of Cuba authorized by President Eisenhower
planned by the CIA with Richard Nixon as the outgoing
administration's liaison. It would contribute to a fifty plus year
and finally approved by new administrating. Kennedy brothers would
never again trust the CIA.
U.S. Trade Embargo on Cuba.
President Kennedy set goals that President Johnson tried to fulfill with the government sponsored Great Society which blacks think is too little to late
President Eisenhower's 1961 Military Industrial Complex speech warned of the dangers of a dominate military the collateral damage form the Vietnam War would lead to a revolt by draft age young people from the Baby Boomer Generation.
formed in 1960 but years passed before these Oligarchs would show their
mussel and raise oil prices creating gas shortages. Expensive oil
energy would begin a multi-decade
WW II created competitive advantage decline that had been enjoyed by
Oligopoly manufacturers and unions.
Americans wanted small automobiles that limited pollution and this required a catalytic converter. Upstart Japan was much better at building these cars. Manufacturing and union oligarchs made decisions to maintain their own economic well-being as they delayed expensive employment and salary reductions. Companies did their best to maintain profits and American Rust Belt workers suffered as a result. A many decade- long slide in worker economic well-being began and it continues today. Education oligarchs push increased education as the answer but data and some leaders have taken a different view and feel education needs to be completely restructured.
From 1970 to 2006, Cleveland, Detroit, Buffalo, and Pittsburgh lost about 45% of their population and median household incomes fell: in Cleveland and Detroit by about 30 percent, in Buffalo by 20 percent, and Pittsburgh by 10 percent
The Iran hostage crisis was collateral damage from GB and U.S. efforts to control oil supply and profits.
Students for a Democratic Society (SDS) formed to wrestle control
of power from white Oligarchs. The
24th Amendment prohibited both Congress and the states from
limiting the right to vote in federal elections with the payment of
poll taxes and other limiting devices. This was the beginning of the
latest round of liberal attempts to share societies benefits among all
citizens. This included gays as the 1969 NYC
Stonewall riots marked the beginning of a forty-five year U.S.
gay rights movement.
The decade ended with the White Lake NY Woodstock Festival, It was an enormously successful musical and cultural gathering which would become a milestone signifying how the young liberal baby-boom generation would move American ideals to the right.
The 1930's depression caused a drop in the birth rate reversed
Woodstock Began a
Baby Boomer Inspired
The New York Daily News photo on Sunday, June 29, 1969, showing the "street kids" who were the first to fight with the police over Gay Rights.
A 1971 Nixon Shock ended the United States partial Gold Standard as Vietnam War deficits caused inflation and the dollar's loss in value caused foreign governments to withdraw gold. The 1970 Economic Stabilization Act froze many items including wages and salaries. It also put a 10% tax on imports to slow inflation.
Nixon Shock Ended Breton Wood's Agreement
Nixon visit to China "opened the door to Sino-
Richard Nixon meets with Mao Zedong in BeijingFebruary 21, 1972.
Binge buying a toping off a an almost full take resulted in long gas lines
'The 1972 Watergate Brake-In began the fall of President Nixon who was a weak president because of disagreements over the Vietnam War and the 1973–1974 Arab Oil Embargo which lowered supply and caused energy prices to skyrocket. Age of bank deregulation began when the Supreme Court ruled in Minneapolis vs. First of Omaha that states can't regulate interest rates of National Banks. The U.S. embassy Iran hostage crisis late of the decades was a politically catastrophe for President. Carter. It was the beginning of collateral damage from Western efforts to control Middle East oil. Gasoline prices tripled to over $1 per gallon.
Chrysler's Bailout Gravy Train
The decade ends with Chrysler receiving government loan guarantees to avoid bankruptcy
The 1981 troubled economy greets President Reagan took on was suffering from a new phenomenon known as stagflation. Increased unemployment and increased inflation had never simultaneous occurred in the U.S. It would be measured by the misery index. It went through the roof and President Reagan let FED Chairman Volker continue to tighten money to slow the economy and lower inflation. His efforts worked but caused two recessions.
RR's attitude against government regulation was not swayed by the need for the FED and FDIC to rescue Continental Illinois and begin the too big to fail banking policy of banking regulators.
The new president's had pledged to use Supply-Side Economics as the solution to slow economic growth.
Unless Your a Big Bank like Continental Illinois
Two Recessions, Stagflation and
Iran Hostages Freedom
Volker Cured Inflation Shown Here But
Poor Record on Deficit Reduction
The lower taxes and less government red-tape campaign promises were fulfilled with the Tax Reform Act of 1986.
First up was the Kemp-Roth Tax Cut. It lowered taxes and significantly simplified the tax code but the campaign pledge of lower taxes went by the boards as first year federal tax revenues increased by $54.9 billion.
The budget and trade twin deficits had everyone paranoid and Gramm Rudman Hollings Balanced Budget Act attempted to halt the recent massive increased federal deficit but it and measures to follow failed though to dates GDP has outgrown the federal deficit. from The Economist Magazine
The decade ended with the fall of the Berlin Wall and signifying the end of the Cold War.
The 1992 election went to Clinton because of a
slow economy and Bush1's broken 1988 pledge of
Lips: No New Taxes. Some felt actions of the
this and other elections.
Republican sponsored lower taxes and less government "Contract
with America" resulted in a 1994 Republican controlled congress.
Clinton's 1996 reelection was helped by a strong economy and a Republican sponsored 1995-96 Government Shutdown.
The 1999 Republican sponsored Gramm–Leach–Bliley Act repealed the depression caused Wall Street excesses outlawed by Glass Steagall Act Financial derivatives were exempted from regulation. Derivative excesses were given by many as a major cause the 2007 Great Recession. Signed by outgoing President Clinton it continued the deregulation started thirty years earlier by President Reagan.
Brooksley Born the 1996 to 1999 chairperson of the Commodity Futures Trading Commission which had oversight futures and commodity options markets lobbied Congress and the President to give the CFTC oversight of derivatives. CFTC regulation was strenuously opposed by FED chairman Alan Greenspan, and by T. Secretaries Robert Rubin and Lawrence Summers.
|Editor's Note: Is it me or do Democratic Presidents sponsor free trade and then lose fights with republicans to raise the minimum wage. Also the Great Society started just before the peak of stagnate wages. Did the cost of these programs postpone wage increases? Now Obama Care must fight for funds with an increase in the minimum wage which is at a 60 year low!
Tax Cuts of 2001 and
2003 when combined with fighting Wars on Terror around the world but
especially in Iraq and Afghanistan fueled large debt increases. Proving he
is not an exact copy of RR, Bush 2 signed the
Medicare Act of 2003 which increased benefits and cash outflow by $400
billion over 10 years again proving voters can b bought.
The Global Financial Crisis of September 2008 began as the stock market crashes. In response, U.S. President George W. Bush signed the revised Emergency Economic Stabilization Act which created a 700 billion dollar Treasury fund to purchase failing bank assets.
The decade ended with a series of Tea Party Protests conducted across the United States focused on smaller government, increased fiscal responsibility, increased individual freedoms and what conservative have historical viewed as part of the Constitution. President Barack Obama obtained Congressional approval for a $787 billion stimulus package which was the largest since President Dwight D. Eisenhower.
Bush 2 Fulfill His Dad's No New Taxes Pledge
2010 brought the controversial
Patient Protection and Affordable Care Act insuring an exciting political decade. The
Dodd-Frank Wall Street Reform and Consumer Protection Act attempted to
reregulate the financial markets and protect consumer from market excesses and
replace protections lost almost twenty years earlier. The
2013 government shutdown over appropriate spending was again led by
Republicans but this time the economy was slow so the Republicans won
Editor's Note: Unlike Europe where the Southern Poor Want Help from the Wealthy North, Rural America Votes Against Government Interference With Their Lives Concerning Healthcare, Education, Gun Violence ...Click to enlarge.
My limited knowledge of
history begins when Jesus and his disciples formed a liberal Oligarchies to
direct Western Civilization in their interpretation of the appropriate
direction. Some Jews joined but most avoided change and stayed with their
conservative Oligarchs. Eventually Christianity became mature and morphed
into a conservative oligarchy. The Protestant Reformation started as liberal group
of oligarchies but then morphed into conservatism oligarchies.
All groups have done much good and in their attempt to guide society in their chosen direction. But this liberal to conservative oligarchies dialectic extends beyond religion to politics and most of human life. It is called human natures. As all human characteristics follow a normal distribution and when the extremes of any human characteristic are in control, outliners occur and a “Black Swan” rules the roost until removed from power by another swan.Reading The Presidential Election Cycle Theory and the Fed