|
19 May 2010 By Keith Johnson What this country
is coming to As the Great
Depression of the 1930’s was getting underway,
President Herbert Hoover refused to acknowledge
it. In the weeks following the events of
Black Tuesday, Hoover called the economy
"fundamentally sound.” Months later, he still
insisted that the strength of the American economy was
“unimpaired.” However, by 1931 he could no longer
hide the truth. With the economy in shambles, Hoover
was forced to declare that America was indeed in a
‘depression’. He chose the word ‘depression’ because
he believed it to somewhat innocuous and far less
provocative than terms like ‘panics’ or ‘crises’ that
had previously been used to refer to significant
economic
downturns. That same semantic
game is being played on us today. What we now call a
‘recession’ is what was known as a ‘depression’ back
in the 1930’s. As economist John Williams explains: “The
Great Depression was one that was so severe
that in the post-World War II era, those looking at
economic cycles tried to come up with a euphemism for
"depression." They didn't want to create the image of
or remind people of the 1930s. Basically, they called
economic downturns recessions, and most people think
of a depression now as a severe recession.”(1) The lies propagated by
our government and their paid shills are perhaps their
greatest crime. Deceiving the people concerning the
scope and magnitude of our financial crisis denies
them the opportunity to prepare for the tough days
ahead. Even the word depression does not fully
impress upon the people the serious predicament we now
face. Perhaps its time we do remind people of the
1930’s and draw parallels between those tragic times
and our current situation. Today’s
unemployment rate is fast approaching the worst
levels seen since the Great Depression. The official
unemployment rate (U3) released by the
Bureau
of Labor Statistics is currently at 9.9%. This
is the number often reported by the mainstream media
for public consumption but is far removed from
reality. To get closer to the
real number we must consult the (U6) figure that is
often touted as ‘true unemployment’. This figure adds
into the equation those who fall under the
contemporary definition of ‘discouraged worker’ and
those who can only find ‘part-time’ work. That
number puts the ‘true unemployment’ rate at 17.2%.
But wait, there’s more! Today’s definition of
a discouraged worker is one who has not found work
within the last year. Prior to 1994, a discouraged
worker was defined as one who had not found work
within the last month. That’s a big discrepancy. If
we add those lost souls back into the equation, we
come up with a more realistic unemployment rate of
right around 22%. That’s just three clicks shy of the
25% often cited for the worst levels of the Great
Depression in 1933. That 25% unemployment figure was
reflective of all workers both on and off the farm. Many economists,
intent on disproving any comparison of today’s
unemployment with that of the ‘Great Depression’, will
often site the non-farm unemployment figure of 34%.
But it should be pointed out that during that time,
27% of America’s employed worked on the farm. Today
that number is only 2%. Unlike today, The
Great Depression of the 1930’s was deflationary. The
Consumer Price Index was at 17.3% when it began
in 1929. By 1933 it was down to 12.6%. In other
words, as the depression progressed, the cost of
things dropped; what cost $1.00 in 1929 only cost 73
Cents in 1933.(2) Not so with the
depression of today. Ours is an inflationary
depression that is fast becoming hyperinflationary.
Hyperinflation comes when the increase in the
money
supply causes prices to rise so rapidly that
the highest denominated bank note becomes less
valuable than toilet paper. This is being facilitated
by industry bailouts, unnecessary wars, foreign aid to
Israel
and
entitlement programs that were not factors in
1933. Since 1933, inflation
has increased 1,627.23%. To calculate its decimal
equivalent you need to move the decimal point two
places to the left. So 1,627.23%=16.2723 in
decimals. This means that what cost $1.00 in 1933
costs approximately $16.27 today.(3) The average American’s
annual income in 1933 was $1,550.00. Today, that
would be the equivalent of $25,218.00. According to
the last Bureau of Labor Statistics report for
2009(4), the average American’s annual income was
$28,592.00 (mid range between highest and lowest by
State for 1 person). This may seem like we’re ahead
of the game compared to the Great Depression.
However, when you consider that the lowest bracket of
income tax was levied at 4% in 1933 compared to 15% in
2010, you can see that we are almost on par. But you
also must consider the plethora of other taxes and
deductions that have since been siphoned out of the
average American’s paycheck. Contemporary sales taxes
and compulsory enrollments like mandatory insurance
(both auto and health) must also be added into the
equation to get a better gauge as to where we are now
compared to days gone by.(5) Prices of things, on
average, were much more affordable back during the
Great Depression than they are now. Here are some
basic items for comparison: Cost of a new house
1933: $5,750.00 (equivalent to $93,565.72 in 2010) Cost to rent a house
in 1933: $18.00 per month (equivalent to $292.00 in
2010) Brand New Plymouth in
1933: $445.00 (equivalent to $7241.17 in 2010) Gallon of gas in
1933: 10 Cents (equivalent to $1.62 in 2010) Loaf of Bread in
1933: 7 Cents (equivalent of $1.13 in 2010) 1 Lb. Of Hamburger
Meat in 1933: 11 Cents (equivalent to $1.79 in 2010) Can of Campbell’s
Vegetable Soup in 1933: 10 Cents (equivalent to $1.62
in 2010) Dozen Eggs in 1933: 5
Cents (equivalent to 81 Cents today) Take the equivalent
monetary values listed above for 2010 and do your own
research. Can you buy the same items today for that
little cash? According to the 2009 census, the cost
to rent a house is approximately $775.00 per month, on
average. The cost of even the cheapest automobile is
in the tens of thousands and I don’t need to tell you
about everyday household goods. Consider these the
good times. When hyperinflation sets in, these prices
will soar. We don’t live today like they did back in
the 1930’s when people were, at most, one generation
removed from the farm. As was pointed out previously,
27% of American workers made their livings on the farm
and were able to provide many of their own basic needs
from that culture. Today, that number is only 2%. Despite this data,
deniers will refuse to believe that they are living
through a depression. Some need tangible, salient
evidence. They need to feel the depression,
or at least have a cognitive reference point that
coincides with the black and white images they have
come to associate with a depression. Where are the
soup lines? Where are the shantytowns? Where are the
armies of disheveled hobos playing harmonica as they
roast a can of beans over a roadside campfire? The complexion of
today’s depression is certainly different from the
hard luck images of the 1930’s. But these are just
cosmetic differences. When you strip away the veneer,
you find that we are afflicted with the same problems
as they were back then. Today’s soup lines come in
the form of food stamps.
Public
housing and tent cities are today’s
shantytowns. Hobos are now called ‘the homeless’, and
many of them are disappearing from the streets and
ending up in a burgeoning penal system that swallows
them up on petty drug charges. There are other
factors that keep this depression suppressed in the
minds of the American public. The most significant of
these is
unemployment benefits. This did not exist
during the Great Depression. When you were out of
work, you were out of money. This hit people
immediately and many had no way to obtain even the
most basic subsistence to feed their families. The
welfare system is another contemporary mechanism that
was not in place during that time. Right now, these
are perhaps the only two things that distance the
human suffering from our true economic reality. But
they weren’t built to last, and the only reason they
have lasted this long is because the government has a
vested interest in keeping these entitlement programs
going. Providing basic subsistence keeps the people
dependent and apathetic to their plight. As long as
people have a roof over their head and enough to eat
they will allow those who provide those things to take
everything else they have. The Federal infusions
of funds into the unemployment and welfare systems
will continue only for as long as it takes the bankers
to fully rob the
American people of everything they own. In the
meantime, unemployment will continue to rise and the
depression will deepen to levels unimaginable as the
unsuspecting unemployment recipient spends his jobless
days as if he were on a paid vacation. He’ll waste
his checks on beer and porn and stretch out on the
couch until the final week. Then he’ll get serious,
only to find that things are not as rosy as the liars
on CNBC promised they’d be. Unlike 1933, our
depression comes at a time when there is increased
foreign war spending and many of our potentially
unemployed youths are serving overseas. Imagine what
would happen to the unemployment rate if these wars
came to an end. Then imagine what would happen if
unemployment benefits and
welfare
entitlement programs ceased to exist. When you
do, you can understand why all of these things
continue to be funded. This is a robbery, and
the hostages are being held in the back of the store
learning to love their captors. Most Americans are
under a spell best described as the ‘Stockholm
Syndrome’. In psychology, Stockholm syndrome
is a term used to describe a paradoxical psychological
phenomenon wherein hostages express adulation and have
positive feelings towards their captors that appear
irrational in light of the danger or risk endured by
the victims. The syndrome is named after the
Normrmalmstorg robbery of
Kreditbanken at Norrmalmstorg in Stockholm, in
which the bank robbers held bank employees hostage
from August 23 to August 28, 1973. In this case, the
victims became emotionally attached to their captors,
and even defended them after they were freed from
their six-day ordeal.(6) Until the American
people snap out of their trance, they will refuse to
believe that they are in a depression, recession,
panic or crisis. To them, it will be a loving embrace
by a charismatic savior. Only until they feel the
peircing bite of cold air on their necks and the pains
of an empty stomach will they finally come around to
the realization that the panic is not coming—but that
the panic is on! (1) http://www.theaureport.com/pub/na/6199 |
Add Comments