Today, in 2011, we are hearing news that the economy of the USA is improving. The economic crash of 2008 has been largely forgotten as the stock markets improve and consumers increase their spending.
This is exactly what happened in the year 1937, when after unheard of stimulus by the U.S. Federal government in the form of public work projects, the economy had a slow rise in activity.
However, the Federal Reserve Bank in 1937, seeing a rise in activity, decided that inflation was imminent, and they severely tightened the money supply. As a consequence, the U.S. economy crashed again.
There was no reprieve from the Great Depression until the U.S. entered the Second World War and borrowed money at a rate that had never occurred in history. In addition, workers began to produce war materials, essentially worthless objects that could not be consumed, thereby creating a great demand for consumer goods in the U.S.
Essentially, what happened during the Second World War, was a major increase in wealth of the workers, along with a pent-up demand for consumer goods.
After the war, the economy of the U.S.A., and Europe, shot upwards as workers produced goods and buyers used their saved funds to buy them.
Also, people of the under-industrialized world bought the goods and agricultural products of the U.S.A. and Europe.
This brought great wealth to the West to the point that Western workers became lazy and inefficient. The result of this change in productivity produced the depression that we are now witnessing.
WHAT CAUSES ECONOMIC DEPRESSIONS?
The cause of the Great Depression of the 1930’s, the present depression of 2008, and all other depressions throughout history, has been known by astute economists for over a century.
In 1848, Karl Marx wrote the Communist Manifesto, and in 1867, he wrote Das Capital. These books essentially described the failure of western economy due to an unequal distribution of wealth.
It was quite obvious in Marx’s era that society was markedly divided between the aristocrats, the wealthy and the workers, who were extremely poor.
Marx’s solution for this inequality was Communism. Communism, as a political and economic form of government was tried by Russia and failed completely.
The reason that it failed in Russia is that it was used in name only, but, in reality, the inequality of wealth remained. The leaders of the Russian Communist party took on the roles of the Aristocrats and the workers remained as poor as they had been under the Czars.
In China, today, we may be seeing a more equitable distribution of wealth, as the Chinese government has decided to share wealth with
DISTRIBUTION OF WEALTH IN THE WEST
In the West, after the Second World War, wealth was initially distributed to the workers.
But, as the workers demanded more and more wealth, in the form of entitlements, such as health care, vacations, retirement and control of their factories, the owners sold their factories and farms to China and other Asian countries and recaptured their wealth.
Today, there is an enormous unequal distribution of wealth in the U.S.A. and Europe. This inequality of wealth must lead to economic depression.
WHY REPEAT THE PAST?
The repetition of economic disasters amongst humans is inevitable. The reason is the great disparity in intelligence and education of human beings.
Only a minute fraction of human beings have enough intelligence to understand the complexity of human society. Even this small minority cannot understand human society if they are not supplied with the tools of education; that is, the history of mankind and the mechanisms of society.
Everywhere we look, we see that those people in power make great efforts to ensure that the general population is unaware of the reality of their economy and their society. They achieve this goal by making education a form of indoctrination into a false value system.
The general population is brain washed into believing that their nation and their government are divine and that any problems with the distribution of wealth are caused by outside evil forces. If a herd of sheep were to feed on a pasture in such an unequal fashion, most of them would be emaciated or dead and a few would be overfed and fat.
This is exactly what we see in Western Society today.
History never repeats itself in exactly the same way.
Throughout time the Universe changes. However, the underlying forces are always the same. What we see in the repetition of events, are new events with new details, but a similar pattern as what we saw in the past.
A good analogy is cloud formation. Each cloud is different, yet similar to the clouds in that area of the sky. The forces that make clouds do not change, but their manifestations are always different.
This repetition of 1937 will have an ending dissimilar to 1941 when the U.S. entered a world war. But, only something dramatic will be able to change this new point in history.