Home Page Edit: November 5, 2008

Banks operating under Federal Reserve Bank authority (c.1913) during the Roaring Twenties after World War I caused the Great Depression of the 1930's. U.S. Congressional and Executive response to the Great Depression of the 1930's was the socialist response in the form of the New Deal, making the Federal Government the employer of last resort.

U.S. Congressional and Executive response to the Credit Crisis of September 2008, caused by Democrats making law effecting Federal government banking and finance, made the Federal Government the financier of last resort.

Given election of Obama to the Office of President on November 4, 2008, U.S. Congressional and Executive Branches of Federal Government shall function as both employer and financier of last resort.

A long view of the history of banking and finance in the United States since the Great Depression of the 1930s weighs against election of a socialist to the Office of President in the 2008 General Election.

The Great Depression was caused when bankers under Federal Reserve Banking authority (c.1913) stimulated purchase of capital stock with low down payments, with a balance to be paid for with borrowed money. Low down payments to purchase stock during the Roaring Twenties gave that decade its name. After low down payments inflated stock market prices and bank loans reached huge amounts, the banks called in the loans. That bank action forced foreclosures and bankruptcies nationwide, shutting down all industrial engineering and manufacturing in the U.S., forcing the Federal Government to act as the employer of last resort, introducing the socialist programs and institutions of the New Deal.

The un-anticipated occurrence of World War II (1939-1945) brought U.S. industrial engineering and manufacturing back to life. Enormous manufacturing capability ended the Great Depression and enabled the U.S. to fight and win the battles of that great war on two continents.

Enter the Bretton Woods Agreement Act of 1945. See 'Bretton Woods Agreement'. This Act by the U.S. Congress was put together in 1944 by finance ministers from forty four different nations. This Act established the World Bank and the International Monetary Fund, marking beginning of uncontrolled expansion of the U.S. Money Supply, creating inflation of the U.S. dollar. This Act forced U.S. citizens to pay for re-construction of Europe and Japan from devastion caused by the military actions of World War II.

See 'Money Supply Growth vs Population Growth'. The image under this link is a comparison of the rate of growth of the U.S. Money Supply (M) to the rate of growth of the U.S. Population (P) that occurred from 1900 thru 1997.

With inflation of the U.S. dollar, U.S. manufacturers could no longer afford the cost of labor in U.S. dollars. This inflation forced outsourcing of manufacturing to other nations (China, India, Indonesia, Malaysia, Mexico, etc), wherein lower currency exchange rates enabled profit from manufacture of goods and products. High inflation of the U.S. dollar destroyed manufacturing in the U.S., creating the rust belt across such States as Michigan, Ohio, Indiana, New York and Pennsylvania. Because of destruction of most, if not all, of its industrial manufacturing capability, the United States is now critically vulnerable to being destroyed by military attack by its enemies while it struggles to cope with unaffordable health care insurance protection and pensions that once were provided through the millions of manufacturing jobs that no longer exist.

Some explanation of cause of the current failure of financial markets is provided by Howard Husock, ( City Journal Writer 2000 ). The following excerpt reveals a similar pattern of Federal Government banking and finance abuse by socialist Democrat Party control behind the current 'credit crisis':

"The Clinton administration has turned the Community Reinvestment Act, a once- obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American citiesÑand, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation's banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left- wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.

The Act, which Jimmy Carter signed in 1977, grew out of the complaint that urban banks were "redlining" inner-city neighborhoods, refusing to lend to their residents while using their deposits to finance suburban expansion. CRA decreed that banks have "an affirmative obligation" to meet the credit needs of the communities in which they are chartered, and that federal banking regulators should assess how well they do that when considering their requests to merge or to open branches. Implicit in the bill's rationale was a belief that CRA was needed to counter racial discrimination in lending, an assumption that later seemed to gain support from a widely publicized 1990 Federal Reserve Bank of Boston finding that blacks and Hispanics suffered higher mortgage-denial rates than whites, even at similar income levels."

Under Democrat Party control, the U.S. has been reduced to a socialist welfare state and beggar nation - a socialist welfare state as defined by budget deficits at Federal, State and Local levels of government and at private company and individual levels of our existence - a beggar nation as defined by our trade deficit, because goods and products required to maintain high standards of living are no longer manufactured in the U.S.

Any misgivings about performance of Republicans in office at the Federal level of government during the last eight years are far outweighed by the destructive federal government banking and finance practices through Democrat Party control since the election of Franklin D. Roosevelt in 1932.

Now we shall see how an Obama Administration acts towards preservation or destruction of free market capitalism in the U.S. - the engine for our individual pursuits of life, liberty and happiness.

Because of the Great Depression of the 1930s, the Federal Government became the employer of last resort. Because of the Credit Crisis of 2008, the Federal Government became the financier of last resort.

A majority of the voters elected the socialists of the Democrat Party in November 2008, to control both the Executive and Legislative Branches of Federal Government, because they want "CHANGE" (?) - they will get CHANGE; that CHANGE will be life in the United States as it existed in Poland under the Soviet occupation, or as it currently exists in Cuba, or as it is currently degrading in Venezuela.