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Web Letter

The greatest economic crisis ever witnessed by this planet is the exclusive or foremost focus of all the forums the world over. Every possible method and mechanism is being tried to overwhelm it as efficiently and as early as possible. But in a unique and most unnatural manner, as if it has been caused by some natural calamity utterly beyond human control.

Is the innocent and simple statement that those responsible did not maintain their books properly, creating and consuming trillions of dollars, a believable or sufficient explanation of the behavior of these global giants with decades of experience and state-of-the art-expertise in the IT era?

This rare, eerie silience desperately needs to be broken to take to task all those who masterminded the crisis, failed to apply the law or looked the other way to let it to happen or led it to happen. That will deter recurrence of such a planetary financial famine, and who knows how tremendously it might help towards a possible jump recovery.

Abdul Qayyum Khan

Islamabad, Pakistan

Mar 10 2009 - 5:11pm

Web Letter

Jobs can‘t come back until consumer spending comes back, and that won’t happen because, as we learned in Econ. 101, the very rich (who have all the money) have a low marginal propensity to consume. In other words, they can’t spend enough to keep the economy going. Returning to a reasonable tax level (say, a marginal rate of 45 percent) would, dare I say it, redistribute a small amount of the stagnant wealth that the super-rich can’t or won’t spend to keep the economy going.

Seeking to use the tax system to modestly redistribute wealth has nothing to do with Robin Hood but is all about simple economics. The super-rich now possess a huge stagnant pool of wealth, while 90 percent of the population don’t have the resources to keep the consumer economy going, nor to save enough to provide for their economic security.

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To see the data go to UCSC.

David Kee

Westmont, IL

Mar 6 2009 - 11:10pm

Web Letter

One point that is often ignored in looking at the images and anecdotes about Great Depression I is that the base level of poverty was much more severe than what we have now.

When you see pictures of ragged children and housing like chicken coops from 1932, conditions didn't start out like the 1960s or the 2000s and somehow deteriorate to that in two years' time. Farmers, in particular, were at depression levels economically through most of the 1920s.

On the other hand, the somewhat closer-to-the-land, closer-to-the-bone life that people lived also gave them more skills to deal with the conditions of the Depression. And the level of debt was much lower in the 1930s than it is today. Our "higher standard of living" has mostly been faked through borrowing.

So I picture us retrenching to living conditions of the 1960s and 70s, but not living conditions in the 1920s and '30s. We might lose all the wealth accumulated for a generation. But not two or three generations' worth. I hope!

Evelyn Uyemura

Torrance, CA

Mar 5 2009 - 10:18pm

Web Letter

I think the way to tell if we're in another Great Depression is if prices go down and continue going down. It was the deflationary spiral created by the collapse of the banking system that caused the depression of 1929-1941, and it was the deflation created by the gold standard that caused the depression of 1873-1893. If we get into another spiral of declining prices, we will be in another depression.

Robert Abbott

Gilbert, AZ

Mar 5 2009 - 8:02pm

Web Letter

"There must be some way out of here..."--Bob Dylan.

Indeed, we have a crisis here, and we can straighten it out. Four ideas: have an economy that is based on making things and not on flipping papers around, end the hypocrisy of the new American Century and its goal of leading the world to an age of democracy and bliss, cut the Pentagon budget by half and end the occupations of Iraq and Afghanistan.

Obama's war budget: another $600+ billion for the Pentagon and $140 billion extra for Afghanistan and Iraq. Count all the other goodies like homeland security, veteran's benefits etc., and you come up with a $1 trillion budget for the military. This out of a nearly $4 trillion budget.

We already spend more than the rest of the world combined on the military. We have 30,000 nuclear bombs and nearly 1,000 military bases all over the world. Who is our enemy and what is their force projection? Do we need twelve aircraft carrier squadrons to fight suicide bombers and IEDs? We have a nuclear submarine fleet armed with nukes with enough firepower to destroy the world. They are impervious to a first-strike attack! These subs alone can keep peace in the world or, alternatively, insure that the USA rules the world (which is more like it).

Cut the military budget to half its size and we would still dominate the world. The $130 billion to Afghanistan and Iraq is money down the drain. Our insane Mission Impossible, to right wrongs in the Middle East and grab the oil while we're doing it, proved... impossible.

Pentagon money down the drain! Better spend the money here for stuff we can grow an economy on. And please, no more bubble economies, no more globalized Information Age economies, where our best and brightest bankers take in junk mortgages and slice, dice and collaterize them with a few clicks of the computer. Then these elite-schooled, greedy, globalized bankers had the rating companies rate this junk as AAA securities , which were then leveraged 30 times and sold all over the world as gold! (Causing Iceland and other countries to collapse!) This is a crime scene, not an economy! Can we go back to making things ?

Obama's "State of the Union" speech the other day made a pitch for a new "American Century" (i.e., we must rule the world)! This does not bode well.

What? The American Century, Part II? Yes, Obama said it the other day, ("The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of healthcare; the schools that aren't preparing our children and the mountain of debt they stand to inherit.")

Here he was following up on Henry Luce's claim that the twentieth century was America's time to be the world's good Samaritan and spreader of democracy. Add to that Secretary of State Madeleine Albright's notion of America as "the indispensable nation." Then go back in time to the Puritan idea that we are the chosen people that will bring light unto the world and that we are a city upon a hill for all to see, a beacon of goodness. And don't forget the neocon Project for the New American Century, which promoted American global leadership. Fundamental to the PNAC were the view that "American leadership is both good for America and good for the world" and support for "a Reaganite policy of military strength and moral clarity.

Can this be? Is numero uno in our future?

No doubt, we were a can-do country during the twentieth century--climbing out of the depression, winning the war, helping our friends with the Marshall Plan and surpassing Great Britain as the major economic and military powerhouse. But we suffered during the Bush years, with the Iraq war debacle, Guantánamo, the Katrina debacle, the Wall Street meltdown.

Are there still customers for Brand America? Probably not, and God seems to be looking at us with a jaundiced eye, and so maybe now's the time to became a caring, peaceful country like Sweden or Norway. Mixed economies with great social services. And perhaps a new UN, minus the likes of John Bolton, can become the new city upon the hill.

Howard Kaplan

Belmont, MA

Mar 5 2009 - 2:18pm

Web Letter

Nicholas von Hoffman starts out with a great premise then degenerates into sophomoric discourse, as usual ...

Michael McKinlay

Hercules, CA

Mar 4 2009 - 4:20pm

Web Letter

I would vote for "Free Trade" Depression if a label is necessary. Western economic "experts and leaders" have outsourced industries, jobs, disposable income and markets overseas for cheap labor, so it is hardly surprising that we are in a depression. Since we have no jobs, we do not the ability to buy even cheap goods. The cheap labor overseas cannot come to the rescue, because they are not allowed to have disposable income to buy anything. They wouldn't be cheap labor if they had a disposable income. You can forget about 401(k)s, and you had better push for a survivable Social Security system to cover your basic retirement needs. It is past time for a single-payer government health plan, along with all the bells and whistles of a government social safety net. The basic question you need to ask yourselves is, "Has your life improved since NAFTA?" There will be no recovery without tariffs to protect and regrow the American market we have lost!

Pervis James Casey

Riverside, CA

Mar 4 2009 - 2:06pm

Web Letter

Obviously, we do not want to ramp up production of battleships, long-range bombers and tanks that fire on the run. We may be in a "long war," but not WWII. Indeed, most of that early ordnance for WWII was poorly designed and did not work well.

On the other hand, we did become the "Arsenal of Democracy." The Red Army had their own tanks superior to those of the Wehrmacht or, for that matter, the US or UK. But they also had an endless supply of US-built Studebaker trucks to defeat the German Army's horse-drawn logistics with.

For a big program, Obama's "It Begins With Energy" sounds right. The trick will be to spend money wisely on post-carbon infrastructure, not on air-brush drawings of "futuristic" equivalents of those 1920s Giant Magnetos and, oh, diesel-powered dirigible ocean-liners.

Serious military thinkers are concerned with something called "fourth-generation warfare" and have so far focused on "peace operations," "counterinsurgency," "resiliant society," "soft power" and other at least semi-thoughtful notions. Funding those might be not just stimulative but "change we can believe in"--for instance, not building more and more prisons or buying armored fighting vehicles and 20mm cannons for the local police. Even those custodians of our residual need for "hard power" have a change agenda; for example, Dilger and Sprey in America's Defense Meltdown.

It is well to search for new military-economic terminology. That is actually more advanced in military circles than in our corrupt, euphemistic civilian political circles, where "non-state actors" hide out in the Caribbean but are called "bankers," "large donors" or "sportsmen" instead of "pirates," "slavers" and "terrorists."

John Robert BEHRMAN

Houston, TX

Mar 4 2009 - 10:53am