A 20th Century Economic Theory

From the Great Depression through now. 2 separate Economic Transitions. (A Brain Fart started in 2009.)

Prequel:

• 1870-90 Gilded Age
• 1890-1929 Progressive Era
• 1913: Federal Reserve created.

The Great Depression may have been triggered by monetary/economic BigGov policies, but it was probably caused by the loss of farm and manufacturing jobs (Economic Transition, Technological Revolutions And Financial Capital).

The Great Depression was not "solved" by the New Deal. In fact, the New Deal may have lengthened the depression (Great Duration). (On the other hand, it probably did reduce the number of people starving to death in the meantime.)

It was fixed by the combination of post-WorldWarII re-investment (creating demand/growth) combined with the peak in effectiveness of the Industrial Age and BigWorld scale.

• to state that a little differently, in 1946 the US was the only industrial power in a position to sell to the rest of the world (because all the factories in Europe and Japan were bombed to pieces). So Globalization worked for us for awhile, as we traded finished goods for raw materials.
• Carlota Perez thinks it was more the subsidization of Home Ownership which triggered consumerism-driven demand for goods. (2019-10-16) Azhar Perez Bubbles GoldenAges And TechRevolutions

This growth was sufficient that the overhead of New Deal redistribution was "affordable". This led to growth of the Middle Class. (Golden Age)

When economic growth slowed, as post-war rebuilding and resulting momentum had dissipated, and as Globalization spread, the cost of New Deal became more significant.

• Charles Hugh Smith believes we really started importing from other countries as part of Cold War bribery. (Trade Deficit)
• Then the whole game was papered over with debt (National Debt, Consumer Debt).
• And as the Trade Deficit and Federal Deficit got huge, it forced us away from the Gold Standard (we killed Bretton Woods in 1971). (Hmm, "huge"?)
• Was it really about the end of domestic Cheap Oil? (US Peak Oil was hit 1970. First OPEC Oil Crisis was 1973.)
• Wages flattened since the early 1970s. (GDI - benefits like health insurance aren't included in wages, and grew a lot since then)
• What Happened in the 1970s

Also note

• 1964 Civil Rights Act, 1965 Voting Rights Act -> Southern Strategy -> 1969 Richard Nixon
• 1973 founding of Heritage Foundation
• 1976 Rupert Murdoch buys the New York Post
• 1977 founding of Cato Institute and Mercatus Center
• 1980 Ronald Reagan president (David Koch was Libertarian Party VP candidate)
• 1982 drop in progressive taxation
• 1987 end of the Fairness Doctrine
• 1996 launch of Fox News

Any lessons for handling Credit Crisis 2008? Any hope to "save" the Middle Class, or are we doomed to Collapse?

• Even if a bunch of Wall St guys deserve to go to jail, they were just the trigger, while the real cause is another Economic Transition due to IT.
• So narrow attempts at "fixing finance" may not have any effect (though un-breaking it may reduce a barrier to adjustment). But big changes to the financial Game Rule-s might trigger the Turning Point.
• A Network Economy of SmallWorld. The problem isn't too many capitalists, it's too few.
• Dismantle the Corporate Welfare that's making it harder for SmallCo to survive (relative to BigCo and BigGov)
  • Farm Bill Subsidy: mostly goes to Big-Ag
  • 2010-07-23-CarsonMakeRealFreeEnterprise
• Aim for Resilience and Anti-Fragility. Stop living off credit (incl mortgage). Stop your Consumerism. LocalWorld, Slow World.

Since then

• 2009: Citizens United
• 2013: gutting of Voting Rights Act (Shelby County v Holder)
• 2016: Mitch McConnell blocks the appointment of Merrick Garland to the Supreme Court
• 2016: Donald Trump becomes US President