I have since finished the book mentioned in my previous blog, "The Crash of 2016" by Thom Hartmann and the book lays blame on who he calls "The Royalists" for the previous stock market crashes and depressions. We know them as the "Robber Barrens", such as Cornelius Vanderbilt, John D. Rockefeller, and Andrew Carnegie who were considered ruthless monopolists during the late 1800's, the "Gilded Age", a period of extreme wealth and poverty, and most recently "The Trickle Down Theory" followers. The theory is, that the "haves" are able, through extreme wealth, to increase their share of wealth, basically taking it from the "have nots". This happened in 1776, 1860, 1929, and supposedly now, eventually causing such an imbalance that causes the "have nots" to say "enough is enough!" causing the excess "bubble" to burst. This seems to repeat itself by every two or three generations as people forget what it was like "the last time". Most recently, the blame seems to come from the Reagan era when he cut taxes to the rich. The top tax rate for the wealthy was cut from 80% to 23%! You can imagine what a decrease in tax income this created for the country. And another negative effect was that instead of investing in its workers instead of paying high taxes on money taken out, company stock holders took out the money and gave it to themselves, thus causing the current inequality of income! I was disappointed in the end of the book because he doesn't talk of how to PREVENT the crash of 2016, but what major changes that need to occur AFTER the crash. Interestingly, he cites exactly what took place after the previous stock market crashes, that is, a taking over by more humanitarian groups to put the economy and peoples' lives back on track. F.D. Roosevelt is a good example, establishing Social Security, and unemployment insurance.
In the meantime, I am hoping to explain what needs to be done while "The Crash of 2016" is occurring. We'll leave the big stuff to the politicians!
In the meantime, Joan and I went "camping" in NYC this past week! We brought our trailer to a park on Liberty Island, NJ and took the subway and ferry into the Big Apple. We saw many sights and got tickets to "Aladdin" and "The Phantom of the Opera" at "senior rates" of course! It amazed me how vibrant, busy and alive the city is! If there is a recession, practically no-one seemed to be concerned about it as they went about their busy day!
There are the obvious signs that all is not well with some. We saw a number of homeless people with grocery carts full of their belongings. Of course this is nothing new in NYC but I sure saw a lot of it.
What I also noted is that, as in other downturns in the economy, the "grubby" or "grunge" look is back!
Here's a number of examples of people I saw. Although these are models, they represent what I saw:
The "grubby look" in men appears to be au rigueur. I saw a large number
of men touting a 3 day old beard. These actors lead the trend:
On a more somber note, we were "at the right place at the right time". On the anniversary of 9/11, Joan took this picture:
A reminder of the recent past. These lights, symbolizing the two lost towers are lit for two nights each year.
On another note, just by watching TV we have seen the following behaviors that will continue to strengthen in this bear market:
fear of foreigners
tighter borders
less Free trade among countries
less immigration
protectionism
Increased internal conflict
De-globalization
Populist and authoritarian leaders
Distrust of:
Central banks
governmental institutions
law enforcement
the legal system
schools
science
This is occurring on a global scale. Let's look at other countries besides our own:
France: The National Front (French: Front national; FN) is a socially conservative, nationalist political party in France. Its major policies include economic protectionism, a zero tolerance approach to law and order issues, and opposition to immigration. A eurosceptic party, the FN has opposed the European Union since its creation in 1993.It continues to increase in strength in French politics.(Wikipedia)
Greece: The Independent Greeks (ANEL) is a conservative, national-conservative, and right-wing populist political party in Greece. Economically, the party calls for revoking loan agreements between Greece, the EU and the International Monetary Fund. Further, it considers the agreements illegal and calls for lifting immunity from and then investigating and prosecuting Greek ministers, parliamentarians, and officials who negotiated the agreements or who otherwise bear blame for Greece's economic crisis. Party leader Kammenos said Greece had become a "laboratory animal" in an austerity experiment conducted by the IMF and EU, who "used the public debt as a means of control." Kammenos has focused much of his fire on Germany, stating that "Germany is not treating Greece as a partner but as its master. … It tries to turn a Europe of independent states into a Europe dominated by Germany."
The party's official program states it will repudiate part of Greece's debt because it was created by speculators in a conspiracy to bring Greece to the edge of bankruptcy. It announced in December 2012 that it would start working to create a patriotic Democratic Front, whose aim is to save "Greece from the neo-liberal avalanche."(Wikipedia).
Great Britain:
Well we've all heard about Brexit. It was mainly brought on by the far right by scaring the British into thinking how negative an effect the immigrants were having and how the European Union was siphoning off their money to support the millionaires and poorer countries.
Now we come to our country the good old U.S.A.!
Let me make a list again of the attributes of a leader in a bear market:
Has a negative opinion of foreigners
wants tighter borders(and walls!) and less immigration
wants less Free trade among countries (against Trans-Pacific Partnership (TPP) Agreement)
protectionism (tighter tariffs) and de-globalization
Creates increased internal conflict
considers himself a populist
is labeled as an authoritarian leader
Now who am I describing?
Donald Trump of course!
I
believe that, despite his behavior as "un-presidential", his
authoritarian method of leadership keeps him just behind Hillary in the
polls. Remember, as I have previously mentioned, leaders are decided by
the less developed part of the brain that controls emotions. The brain
stem (basal ganglia) controls our
instinctive behavior. This includes "fight or flight", desire for
pleasure, territorialism, breeding, and the selection of leaders.
The only thing that is keeping Hillary Clinton in the race is the fact
that we are STILL in a bear market bounce. If the market was crashing,
we would be in a very different race! So I believe that, as long as
the market holds up before the election, Hillary will win by a whisker.
Interesting times.
In
my next blog, I will be doing a book report on the current book I'm reading
that is much more positive in nature than the book reviewed above!
Until then,
Stay safe
Best regards,
Ken Knight
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