I’m having a hard time sleeping lately. I keep waking up at 3 am or 4 am feeling compelled to investigate the root causes of the national and global financial crisis we are experiencing. I don’t have a lot of time, because I’m also running a startup company, but I have to carve out some time if I want to be part of the solution as we try to fix our government and our country, and get it back on track. I’ve got to become better informed.
I have several books now on derivatives trading, and I have come to believe they truly are “financial weapons of mass destruction” as Warren Buffett called them in 2003. I think unbridled use of OTC derivatives is the primary cause of the worldwide economic melt-down. The Wikipedia article on derivatives is a good starting point.
And I think the utter neglect of the tenth amendment, which was supposed to limit the Federal Government’s power, and reserve all powers not enumerated in the Constitution to the states and to the people, is the reason that we have a federal government that is so powerful that a few hundred leaders can basically sell the future of hundreds of millions of citizens for a mess of pottage. With millions of phone calls we can delay them for a few days, but basically if a few powerful people say the sky is falling our elected representatives will believe them and will turn over an unprecedented amount of power–in this case into the hands of unelected officials.
The world is topsy turvy. I am finding that I can trust what Chinese bankers are saying about the financial collapse than most of what is said in Washington or on Wall Street, or reported in the main stream media in this country. The business of the media is entertainment not journalism. So I turn to the Financial Times and Economist magazine from the UK to find informed and honest reporting. I have found a few excellent articles in US publications, that appear to understand the root causes, but they are primarily guest opinion pieces.
I’m also trying to learn more about the Great Depression: what caused it and how the country finally emerged from it. If there is a next depression, I wonder what historians will call it. Great Depression Two? I doubt it. I think someone will coin a phrase that will fit the situation and stick, like when Churchill used the phrase “Iron Curtain” and it stuck.
I’m very interested in the memoirs of Marriner S. Eccles, the successful Utah banker who was asked by FDR to serve as Chairman of the Federal Reserve Bank in 1934. He served in that powerful role for 14 years. The book is called “Beckoning Frontiers.” I purchased a used library copy on Amazon last week. It’s on Google Books, but only with a snippet view since it may still be under copyright.
His interpretation of what caused the Great Depression is radically different than anything I’ve heard before, and the solutions that he prescribed were radical at the time he first proposed them, but were soon woven into the fabric of the New Deal. After reading his description of the Senate Finance Hearings of February 1933, which took place one month before Pres. Roosevelt was inaugurated, and learning of his five-point plan for economic first-aid for the nation, it appears that Eccles was as much or more an architect of the New Deal than anyone else. I wonder who historians credit as being most influential in Roosevelt’s dramatic shift from being a states’ rights and balanced budget advocate during the election of 1932 (Eccles provides quotes from some of his speeches), to viewing the federal government as the key to leading the nation out of the depression, and providing economic security and employment as one of its key aims. Eccles must be one of the leading candidates.
His arguments sound very socialistic to me. The New Deal shifted huge responsibilities to new federal bureaucracies. Some of these federal programs are highly connected to the current financial crisis. I don’t believe socialism ever works, no matter how motivated by idealism it is in the beginning. Even Lenin’s biography, which I read years ago, makes you think he earnestly did care for the people, he lived very frugally and very ascetically, and that he believed Marxism was a better path for Russia than capitalism, with all the human suffering that comes with its excesses. But no one in this country claims to believe in socialism, so we practice what our friends in the UK call, “deceptive socialism.”
I’m trying not to judge Eccles too harshly, because he admits knowing virtually nothing about economics or the impact of finance and production on society, and he came up with what we thought were solutions to a devastating national crisis, when 5,505 banks closed in just 3 years and unemployment in Salt Lake City was more than thirty percent.
I want to be able to judge fairly whether he did more harm or good, and I haven’t read enough to do this yet. But I’m going to continue working at it.
Meanwhile, I’ve found some great online databases that Americans can freely use to do first-hand research into workings of each branch of our Federal Government. As citizens, we are empowered as never before with the ability to search online through millions of pages of government records. Here are some great resources for your 4 am time:
- The Entire United States Code
- Messages and Papers of the President, Radio Addresses, Fireside Chats, Executive Orders (1826-2008) and much more
- Supreme Court Rulings since 1893
- Public SEC Filings of All the Failed Companies, so you can see what they wrote just months before they collapsed
And while I’m posting this blog, I have to give a shout out to my 3rd grade class at Cascade Elementary, er, I mean to Consource.org, the free online library of the Founders’ constitutional documents, a great non-profit foundation with a wonderful mission.
These are all in my Google Chrome bookmarks bar, so I can click on them at any time. I recommend you make these a click away, and do as much searching in these as possible, so that you can become better informed as a citizen, and potentially better informed than your own elected officials, most of whom don’t have time to read the legislation they pass, let alone US history. Like kids today who use the internet to learn more than their teachers, it wouldn’t be hard to learn more than most of our elected officials. And then maybe we’ll be smart enough to upgrade our Congress next time we get a chance.
855 total views, 4 views today