reply to post by Jazzyguy
To be honest the public is not blameless in this, not at all. The public is addicted to consumerism, cheap goods, cheap oil and cheap credits. The
real danger is also that the masses will deny that they're also guilty. Even if you have a good government, if they try to cut your addiction, you
will only remove them from power and find someone who's more "cooperative".
Funny though, the media does blame a lot of entities, but few or none ever also blame the public. Ignorance becomes a necessity, eh.
Exactly. The public will not act responsibly until we have passed the tipping point. Then of course it is too late to avert the on-coming natural
disaster. Since the 1960s Ford, GM and Chrysler have made a series of small cars, some of good engineering and quality of build, but the public
refused to buy them. Ford Falcon, Chevy Nova, Plymouth Valiant, etc.
Following another oil shortage in the 1980s Ford, GM and Chrysler downsized their cars substantially. Again the public said NO! As time progressed,
American automotive tastes changed so that the F150 and its GM and Chrysler counterparts became the vehicle of choice alongside the SUVs mounted on
the truck chassis, the Big 3 looked viable.
Then the unholy alliance of OPEC, ExxonMobil and unrestrained speculators laden with cash from 97 million workers weekly contributions into
unsupervised 401(k) plans, gasoline hit $4+ a gallon and a small revolt ensued. We blamed Ford, GM and Chrysler for not making more economical
vehicles. Well, you know all that as well as I do so I’ll stop here, but I have to add a post I meant to put elsewhere but I’m getting lazy (and
Oh, before I quit, in 1939-1940 Ford offered a downsized 2.5 liter V8 of 60 horsepower knock-off of its standard 3.6 liter 85 hp V8 in their full
sized cars. In 1941 Ford replaced that anemic engine with a much better performing flat head inline 6 of 3.5 liters. (The 2.5 was last seen in the top
of the line French Simca made in the late 1940s). Because of competition - top selling Chevy’s 6 was rated at 85 hp - Ford rated its new 6 also at
85 hp and bumped its traditional V8 first to 90 then to 100 hp, both numbers produced in the advertising department and not the engineering
department. The Ford 6 outperformed the V8 up to about 75 mph and gave higher mpg at any speed. End.
Here follows In an exclusive ATS MIX interview, Peter Schiff drops this bomb:
"Not only is our economy in trouble, but our individual liberties and private property rights are under attack. And the more power we cede to
the government, under the hope that the government will use that power benevolently to help us . . that's not what's going to happen. They're going
to use the power against us and not only are we going to loose our financial wealth, we're going to loose our freedoms. And if we don't have our
freedoms, we're never going to get our economy back."
Mr. Schiff (and his estimable mentor Dr. Ron Paul) make one pertinent mistake. Their solution is worse than the problem.
If you harken back to what our economy was in 1929, about 120 million people still feeding ourselves (and a lot of the world) with the produce of the
long since departed family farm, the US was just turning ANTI a lot of things including immigrants.
Then fast forward to 1933. Everything changed for the better. Allow me one example. Housing. A basic industry. Tagged with responsibility for the
current economic debacle. Good banking practices in the pre-1933 era required 50% down payment on a house. To stimulate the private housing industry
that was almost entirely small businesses, the New Deal created the FHA - Federal Housing Administration.
The major change brought on by the FHA was the reduction in the buyer's down payment to 10%. Great for borrowers. But what about the people with the
money, the lenders? The FHA said, ‘we will insure the mortgage.’ So who pays the insurance premium? FDR was no socialist, so he said, ‘let the
BORROWERS pay the premiums.’ The FHA insured home loans had a half percentage point added to the rate for mortgage insurance. From 1933 until the
1980s, no lender ever lost one penny on an FHA insured home mortgage. About a half century. Around the world, the American owner occupied home
mortgage became a safe investment good next to GOD.
The second and less noticed benefit from the FHA was uniform rules of construction for new housing. All 48 states. (Before Alaska and Hawaii). You
could move from Portland Maine to Portland Oregon and expect to find similar housing. The rules? Minimal room sizes were established. Inside bathrooms
with flushing toilets. Central heat. Utility closets for the water heater. Vented attics. Roof gutters. Waterproofed basements. A stoop or porch at
the front door. A window in every room. An electric outlet on every wall. Switches by the door. A closet in each bedroom and if there is an entry
hall, one there too. Water, gas and electric service piped in during construction. But the genius of FDR was that NO ONE builder was forced to do it
his way. But you could not get an FHA loan on a house that did not comply with the rules. So compliance was purely voluntary.
Americans tend to think housing standards are local. Some are, but the very first standards and the rules that made the American housing market the
largest and soundest in the world ever, were products of the New Deal and FHA. THAT was the way America got to be the country with the highest
percentage of owner occupied housing, with the enactment of the FHA in 1933.
Then along come those who don’t like rules and regulations. Too much interference. They convinced the Reagan Administration to begin taking down
those rules and regulations. Privatize the home loan market they urged. Let the market work its wonders said the Milton Friedman types. Fire the staff
at the regulatory agencies if you can’t repeal the laws outright.
I lied. Here is one more example of the genius of the New Deal. While we speak of bank failures in a cavalier fashion today it was not always that
way. In fact, many people today are experiencing what it was like BEFORE 1933. Can you imagine the gloom that would strike a frugal person who had
saved for his old age only to wake up to learn his bank had failed? Savings of a lifetime were wiped out overnight. That happened in Germany and gave
the world Adolph Hitler. Fortunately while it also happened in the United States, we got Franklin Delano Roosevelt. We were lucky, Germany and the
world was not.
The New Deal gave us the FDIC. (And its companion FSLIC). Federal Deposit Insurance Corporation and Federal Savings and Loan Insurance Corporation.
Staring at $2,500 in 1933 the FDIC insured deposits in any bank (or S&L) that would campy with sound banking practices as set forth by the FDIC. If
the bank would consent to that, then they could advertise by posting the FDIC logo at their front door. After the bank holiday imposed by fiat by FDR,
he did not re-open ALL banks but only SOUND banks. One easy way to be classified as a SOUND bank was to join the FDIC. Needless to say, most banks
VOLUNTARILY joined the FDIC.
So who pays the premiums for this potentially large loss? The banks! On the last banking day of each month, the bank reports its deposits. At the
beginning of the system the assessment was one-half of one percent of deposits. When the FDIC determined by accepted actuarial methods there was
suffice money on hand to insure the public, the assessments were suspended.
Although banks could not directly pass the assessment on to costumers no one is dumb enough to think this cost item did not go into the banks
calculations of fees to be charged for its services. Note: To offset the assessments, the FDIC allowed banks to use 25% of customers deposits as
collateral for overnight loans from the Fed.
The amount insured was gradually raised to $100,000 and in the recent bank panic was raised to $250,000 temporarily. I expect that will be made
permanent in the next Congress. No depositor has ever lost a cent (up to the insured amount) since 1933.
Then not surprising, as part of the privatizing and deregulating mania the notion of SOUND BANKING PRACTICES was given up begriming in the 1980s. We
mixed investment banks - speculators - with commercial banks. Privatize! Deregulate! That was the mantra. And here we are today, puzzled over what
happened to us, as if 1929 never happened.
Who was it who said “If you don’t know your history you are doomed to repeat it.”
[edit on 12/13/2008 by donwhite]