US occupations - 1900

Exports Unimportant in US growth 1929-1970

How often I've read some "economist" say something like this:

Our 40's and 50's economic hay-day was never going to last, the whole of the industrialized world was leveled EXCEPT America and we were the only place the rest of the world had to go both for the products they needed and the capital goods to rebuild their own industries. Definitely a good position to be in, but not one likely to be replicated or even maintained unless we want to start a new world war and level all the productive capacity Germany, Eastern Europe, India, S.E. Asia, Mexico, etc. (I don't think that would work out so well for us) We had a remarkable run of good luck...

The problem is - this is completely wrong. If you look at the historical statistics, you'll see that US Exports to the rest of the world (excluding Canada) were a minor factor in our economic growth. Here are the numbers:

1929:
US GNP -$100 billion
Merchandise Exports** - $4 Billion
Exports To Canada - $1 billion
US Budget - $4 Billion

1940
GNP - $100 Billion
Merchandise Exports ** - $4 Billion
Exports To Canada - $700 Million
US Budget - $10 Billion

1950
GNP - $285 Billion
Merchandise Exports ** - $7 Billion
Exports To Canada - $2 Billion
US Defense Budget - $24 Billion

1960
GNP - $564 Billion
Merchandise Exports** - $15 Billion
Exports To Canada - $4 Billion
US Defense Budget - $53 Billion

1970
GNP - $1,000 Billion
Merchandise Exports** - $35 Billion
Exports To Canada - $9 Billion

US Defense Budget - $95 Billion

** = excludes crude raw materials and food.

As shown above, from 1929 to 1970 our GNP increased from by almost $900 Billion dollars from approximately $100 Billion to $1,000 Billion. Our Merchandise exports increased from $4 billion to $35 Billion. Our Merchandise exports to the rest of the world (excluding Canada) increased from $3 Billion to $24 Billion.

So to recap. from 1929 to 1970 - US GNP increases $900 Billion, US Manufacturing exports (less Canada) increase by $21 Billion. That's 2 Percent of the increase. Even in 1970 our Merchandise Exports amounts to only $200 per person. Meanwhile, we were spending almost $1,000 a person just on the US Defense Budget.

California State Budget Expedtures since 1996

i

for . . . Calfiornia State Budget Expenditures . Fiscal Year (millions) Increase Over 96 . Total Special Fund Bond Fund . 1996 $59,870 $12,541 $1,937 - . 1999 $75,260 25.7% . 2001 $96,382 61.0% . 2003 $106,779 $18,892 $11,015 78.3% . 2005 $107,591 79.7% . 2007 $129,968 117.1% . 2009 $136,168 $26,441 $15,638 127.4% . .

From the Quiet Coup - How we got into this mess

Taken from the except in the The Atlantic:


From this confluence of campaign finance, personal connections, and ideology there flowed, in just the past decade, a river of deregulatory policies that is, in hindsight, astonishing:

• insistence on free movement of capital across borders;

• the repeal of Depression-era regulations separating commercial and investment banking;

• a congressional ban on the regulation of credit-default swaps;

• major increases in the amount of leverage allowed to investment banks;

• a light (dare I say invisible?) hand at the Securities and Exchange Commission in its regulatory enforcement;

• an international agreement to allow banks to measure their own riskiness;

• and an intentional failure to update regulations so as to keep up with the tremendous pace of financial innovation.

The mood that accompanied these measures in Washington seemed to swing between nonchalance and outright celebration: finance unleashed, it was thought, would continue to propel the economy to greater heights.

The 12 Steps to Financial Catastrophe

Everything a direct Quote from Wall street Watch

Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:

1. 1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

Financial Sector Political Money and 3000 Lobbyists Dictated Washington Policy

During the period 1998-2008:

* Commercial banks spent more than $154 million on campaign contributions, while investing $363 million in officially registered lobbying:
* Accounting firms spent $68 million on campaign contributions and $115 million on lobbying;
* Insurance companies donated more than $218 million and spent more than $1.1 billion on lobbying;
* Securities firms invested more than $504 million in campaign contributions, and an additional $576 million in lobbying. Included in this total: private equity firms contributed $56 million to federal candidates and spent $33 million on lobbying; and hedge funds spent $32 million on campaign contributions (about half in the 2008 election cycle).

The betrayal was bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the financial sector's 2008 election cycle contributions.

Smoot-Hawley the Burden on the American Consumer

The following is the cost per person for Tariff duties from 1900-1947:

1901 - $2.99

1911 - $3.28

1923 - $5.00

1931 - $2.94 (Smoot-Hawley)

1946 - $2.68

Hoover and Taxes

McCain mentioned Hoover raising taxes during the Great Depression. And yes he did sign a rate increase in 1932. However, the Great Depression started in October 1929 and had been going on for 2 1/2 years before Hoover raised them. Further, the Tax Burden in 1932 was so small that the increase in income taxes made little difference. Total GNP in 1932 was $58 billion, total internal revenue receipts $1.5 billion. Federal Internal Revenue taxes therefore were less than 3% of GNP. And there was no social security payroll tax.

By comparison during the Boom year of 1950 internal revenue receipts were $40 billion out of GNP of $284 billion - almost 15 percent.