Tag Archive | "WPA"

Who’s Getting Hosed?

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An Open Letter to Bill O’Reilly (Fox News)


The burgeoning file of viewer responses to Bill O’Reilly’s recent “Who’s Getting Hosed” program, is about to gain another addition; namely, my considered opinion.  


In case you missed the program, Bill’s discussion with Ms. Sarah Palin touched upon entitlement reform.  As an 85-year-old survivor of the Great Depression and World War II — in other words, as someone who has seen “the best of times” and “the worst of times” — I believe that my perspective is both relevant and valid.


I remember when FDR (President Franklin Delano Roosevelt) mandated Social Security as part of the New Deal (National Recovery Act).  After the crash on Wall Street and the resultant demise of too many American banks, FDR also ushered in other safeguards to protect the American people from another financial disaster.  He based his actions upon the theory that the economy depended upon the purchasing power of its people.  It was a theory that seemed to make a lot of sense.


By implementing shovel ready jobs (the WPA) and restoring trust to financial institutions, our nation slowly moved forward.  FDR also encouraged the growth of the Labor Movement as a tool to compel industry to raise the wages of workers by 93%.  Whether the implementation of this plan would have accomplished recovery, we will never know, because WWII intervened.


The war, as it turned out, solved the unemployment problem; by 1942, the New Deal had been repealed, with one exception.  That exception was Social Security.  In the years that followed the war, our economy grew by leaps and bounds. Enterprising homebuilders, such as Levitt, launched a campaign to supply modest dwellings in suburbia.


The housing boom gave birth to increased sales of household goods and automobiles.  The advent of television and televised commercials elevated consumer demand for these products and thus, further heightened the employment rate.  Wall Street experienced phenomenal growth in the decade spanning 1950 to 1960.  The economy was humming along nicely.  Could it be that FDR was correct in his assumption about the spending power of our citizens?


The Cold War with Russia and the resultant Race to Space added to our economic growth.  Larger paychecks produced record sales.  Merchants invested in shopping malls and thus was coined the phrase, “Shop til you drop.”  It seemed as if, to paraphrase an old song, happy days were here again.


In the midst of this explosive growth, labor unions were riding high.  Collective bargaining agreements produced wage increases that did not translate in terms of dollars in the workers’ paychecks for their 40-hour workweek.   However, these increases paid for fringe benefits: time and a half or double time for working weekends and/or holidays, healthcare insurance, paid sick leave, paid vacations, and paid holidays as well as paid time off for a death in the family.  These benefits were agreed upon by both employer and unions.   Might you call this, “Sharing the wealth?”


Today, these fringe benefits have been removed from the bargaining table.  Unions find themselves giving back hard-won gains in order to keep their members employed.  Through automation and outsourcing, American industry has created the atmosphere ripe to kill the goose that laid the golden egg (Social Security).


Personally, I feel that President Roosevelt was on the right path to national recovery by increasing the purchasing power of our people.  But, his dream died as we decided to become involved in a global society; the same society that has outsourced manufacturing, IT, and so many other jobs overseas.   Social Security emerged from the need to address the American worker once he or she left the workforce.  Call it Socialism or Social Engineering, the bottom line now is, how, as a nation, do we address this problem?


In listening to some of the proposed plans, I have to wonder about the pitch coming from former Speaker of the House, Newt Gingrich.  He wants to have the credit card companies invent a foolproof Green Card for guest workers.  I have to wonder what planet he lives on, given the fact that consumers are in the throes of the greatest period of unemployment since the Great Depression.


As I listen to the rhetoric about reforming Social Security by grandfathering a portion of the recipients and offering bailouts to those that do not qualify, I cannot help but feel that this is a most callous approach proposed by our leaders.   To put this into perspective, how do you think the average person would feel if the insurance provider he endorsed welched on him?  Suppose that provider announced that it could no longer afford to pay out settlements genuinely due him?


Social Security funds have been used and abused by our government to balance budgets and wage wars.  The so-called “lock box” brought to light by the global warming expert, Al Gore, is filled with IOUs.


As our concerned leaders of this nation and representatives of media continue to expound upon the dire straits of our economy, I have not and probably will not hear that similar reforms be enacted upon the endowments/entitlements of our elected officials.  With their hefty pensions, terrific healthcare coverage, and campaign war chests, no wonder our governmental officials die in office.  It doesn’t pay, literally, to die anywhere else!


There is a message circulating on the Internet via Representative Ted Poe (Republican, Texas).  It concerns the squandering of American taxpayers’ money and how the squandering was authorized by the Congress of the United States.  A picture paints a thousand words.  So if you want to see your government in action, play the video below:



 


In answer to Mr. O’Reilly’s question, “Who is getting hosed?”, the answer is, “We the people!


He Had a Dream

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After World War I, America experienced a period of time when the country was riding high.  It was called the Roaring Twenties. Prohibition had been enacted, drying up the source of liquor to the general populace.  To the rescue came the bootleggers to fill the void.  Fast money and fast women were on the rise.  Even the stock market expanded its sales by allowing small investors to buy on margin and thus attempt to achieve financial wealth.  This period of plenty lasted more than a decade, until October 1928.  On that fateful October day, Wall Street experienced a financial disaster.


Investors woke up one morning to find that their financial gains had gone with the wind. This was the cataclysm that sent America into the Great Depression.  The President Elect, Herbert Hoover, tried to quell the panic by treating the crash as a market correction.  He did not intervene in the process, but as time passed, the situation worsened.


Ordinary Americans found themselves not able to meet the demands of everyday life.  They looked to government to supply the answers, causing general unrest in the population, which then selected Franklin D. Roosevelt to replace Hoover in the next Presidential election.


When FDR assumed Presidential power, he knew he had the tiger by the tail and could not let go.  A Wall street market correction was not the answer.  A change in governmental policy was imminent.  To address the nation’s problems on a systemic basis, FDR consulted with leading economists as to the cause of our financial collapse.  In addition, he and his advisors had to institute preventive measures to restore the trust of the populace in a system that aspired to restore order in the country.


In FDR’s first few years in office, the country had witnessed massive unemployment.  Industrial production had declined by 45%, homebuilding sank by 80%, and more than 1 million families lost their farms. On the corporate front, profits declined by 10%.  11,000 of the country’s 25,000 banks failed, wiping out 9 million savings accounts.  At the same time, approximately 2 million people were migrating throughout the country, desperately searching for work on the remaining farms.


In 1933, Roosevelt’s administration initiated The New Deal or NRA, bringing sweeping changes to the workforce as well as banking and financial institutions.  Wage and price controls and the FDIC restored the nation’s trust in banking.  That trust was bolstered by the installation of the SEC as the governmental watchdog of the banking industry.  These were the moves that we needed to re-establish the order and move forward.


The President was a firm believer in the principle that the economy was based upon the spending power of its people.  With that in mind, he instituted the WPA to bring “shovel-ready” jobs to the unemployed.  These jobs, in turn, supplied consumer money to encourage entrepreneurs and business to expand their horizons.


The NRA that ended in 1939 ushered in:


1.       The mandating of maximums on prices and wages, and competitive conditions in all industries

2.       Encouragement of unions to raise the wages of working class by 93%

3.       A decrease in farm production, thus escalating consumer demand and causing higher prices to make

          farming more profitable


In the later years of the Depression (1934 to 1936), the Second New Deal added Social Security.  This was a pension fund established by a Federal directive and paid for by the American workforce.


The economy slowly recovered until 1937, when it had a downturn caused by the Federal Reserve tightening the money supply.  The Administration’s response was to ignore balancing the budget and launch a $5 billion spending program to increase mass purchasing power in the spring of 1938.


This program came without the consent of the Republican conservatives. Meanwhile, under the direction of Adolph Hitler, Germany decided to expand its borders.  This decision on the part of that madman sparked World War II.  With the defeat and occupation of France, European Allies looked to America to supply the materials needed to wage war.  This need created a job market that spurred on our the suffering economy.


With the Japanese attack on Pearl Harbor, the United States entered World War II.  Able bodied men aged 18 to 45 were conscripted into the armed services, leaving women to step in and assume the jobs of the men sent off to war, ’til Johnny came marching home.  From 1941 through 1945, America had drafted 17 million men.


During the war years, government invested in cost-plus contracts with  employers, to stimulate development of on the job training of unskilled workers.  By 1942, the New Deal no longer existed.  With the exception of Social Security, which was saved by the conservative Southern Democrats, the NRA laws were repealed.


Today, historians still debate the pros and cons of Franklin Delano Roosevelt’s New Deal.  Despite the criticism of socialism, his legacy led America through the Great Depression and World War II, and endeared him to the hearts of most American workers.


During his four elected terms of office, he used the media to talk to the American people in what he called Fireside Chats.  His was the calming voice in the depths of the Great Depression.  His was the rallying voice when the Japanese attacked Pearl Harbor.  And his was the reverent voice when he called our nation to prayer on June 6th 1944 as our sons crossed the English Channel to establish a beachhead on France’s Normandy coast, leading to the liberation of France and the destruction of Hitler’s Europe.


On April 12th 1945, Franklin D. Roosevelt passed away, not knowing that victory was but a few short months off into the future.  However, his dream still lingers on, the dream of a vibrant society empowered by the spending power of its people to keep the engines of industry regenerating.


To many of the children that lived through the Great Depression and later fought and won World War II, that era still holds fond memories of peaceful days spent enjoying family and friends. It was a time when a penny purchased two pretzels with mustard from a street vendor.  To echo the words of former President George H. Bush, “Life was simpler and kinder then.” 

Brother, Can You Spare a Dime?

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The title of this story reflects a popular song that emerged during the Great Depression of the 1930s.  It was Tin Pan Alley’s way of advertising the plight of the American people during times of intense hardship.


In 1932, composer Jay Gorney and lyricist E.Y. Harburg combined their creative forces to deliver a song that struck at the heart of every man, woman, and child.  Brother, Can You Spare a Dime? became the heartbeat of the nation.  When the Stock Market crashed, many people lost their jobs, initiating a domino effect.  Without money, everything — like the old South — was gone with the wind.  Americans were devastated.  They lost faith in the government as well as the banks that had collapsed and taken depositors’ hard-earned money with them.  A lot of human suffering occurred with no safety net for the future, until President Franklin Delano Roosevelt was elected.


Succeeding President Herbert Hoover, FDR was burdened with the monumental task of restoring the country to solvency and resurrecting the nation’s faith in its lawmakers and banking institutions.  He began with by creating the NRA (National Recovery Act).  When that was declared unconstitutional, he replaced it with The New Deal.  Understanding that the economy hinged upon the spending power of the people, the President then organized the WPA (Works Projects Administration – originally named Works Progress Administration) to bring jobs back to the rapidly sinking economy. He also instituted the CCC (Civilian Conservation Corps), a paramilitary organization that took young men off the streets and employed them to restore public works.


To revive faith in the banking system, he introduced the FDIC (Federal Deposit Insurance Corporation), which insured depositor monies up to $100,000 dollars.  As a failsafe, he established the SEC (Securities and Exchange Commission) to monitor and regulate the financial markets and financial activity that had spawned the Great Depression.


In addition, FDR introduced the Social Security system, mandating the age of retirement as 65. By allowing younger people to fill the jobs of the retirees, the nation was assured of continuous source of employment.  Social Security would later become the model retirement system because it had the lowest administrative costs in the world.  After all his diligence, the Great Depression ended with the bombing of Pearl Harbor.


The fly in Social Security’s ointment, however, was this.  The monies collected for Social Security from the paychecks of future retirees, and intended to sustain people through their retirement, was placed into a general fund.  Into this fund, the government dipped its greedy hands again and again.  How many times have you heard present-day politicians say that there is no money in the fund, only IOUs.  Who do you think “borrowed” this money?  FDR must be turning over in his grave.


In retrospect, the differences between the Great Depression of the 1930s and the Great Recession begun in 2008 are that, in the ’30s:


1.  There was no government bailout of Wall Street.

2.  The Gold Standard regulated the amount of money that could be printed.

3.  Banks were more stringent in their lending policies.

4.  There was no credit card system to create escalating debt.

5.  Few people had health insurance.

6.  There was no charge for listening to the radio.

7.  Movie houses provided incentives, such as dishware, to increase patronage.

8.  There was no air conditioning in homes.

9.  Telephone service existed only through the local drugstore, at pay phones.


Overall, money was tight and life was simpler.  People used public transportation to travel.  Those of us who remember the Great Depression survived it and became stronger for it.


The old Depression songs, Brother, Can you spare a dime?,  Ain’t We Got Fun, and No More Money in the Bank still ring in my ears.  It was a time when chivalry, faith, hope, and charity still existed, and the pleasures of life were found not in fancy cars or expensive vacations, but in the company of family and friends.  No wonder we call them “the good old times.”


 

 

 

Shovel Ready

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Adopted by individual voters and political groups alike, the term “shovel ready” graphically illustrates our national chomping at the bit to get off the unemployment line and start earning decent wages again.  Widely used during our most recent primary elections, the phrase actually was coined during our previous Great Depression, under FDR’s administration. 


After the collapse of Wall Street, in 1932, President Franklin Delano Roosevelt created the National Rcovery Act to resurrect employment.  Considered un-Constitutional, one year later, the act was renamed The New Deal and included the CCC (Civilian Conservation Corp) and the WPA (Works Project Administration).  Established to produce jobs and put money back into taxpayer’ pockets, both entities were formed to repair the nation’s physical infrastructure: roads, bridges, parks, and highways.


The CCC was a para-military organization designed to take young men off the street and keep them out of trouble by employing them for projects such as Virginia’s Skyline Drive.  As in the Army, the workers lived in barracks and were fed three meals a day.  The WPA provided employment for older, married men via labor for governmental projects.  When the media inquired as to their exact duties, workers were quoted as saying, “I lean on a shovel.”  In other words, these jobs did little or nothing to resolve the unemployment crisis.  And if rampant unemployment wasn’t a big enough cross to bear, Mother Nature added to our national misery with droughts and dust storms.


Perceiving the Great Depression as Biblical peoples must have viewed the plagues, some Americans deemed our fate “the wrath of God.”  They’d assumed that we were reaping Divine retribution for the indulgences of the Roaring Twenty’s.


Nearly seventy years later, President Obama atempted to tear a page out of FDR’s book with his economic stimulus plan.   He also sent up a hue and cry for “shovel ready jobs.”  Our fearless leader was referring to jobs in which workers could be employed immediately, as opposed to being assigned to projects that are bogged down in planning, design, or legal red tape.


As well-intentioned as Mr. Obama may be, there remain some glaring differences between the Great Depression of the 1930’s and the Great Recession (Depression?) of 2008.   When Wall Street crumbled in 1929, the government did not — unlike Mr. Obama’s adminstration — bail out the financial institutions to the tune of $710 billion.  In fact, the governnment gave these institutions not one red cent.


In the 1930’s, there were also more shovel ready jobs — a lot more.  A road gang could easily have consisted of 300 or more workers, simply because technology was not as advanced as it is today.  Nowadays, it takes a virtual skeleton crew using state-of-the-art machinery to produce quality roadways more quickly and cheaply.  As automation continues to replace human labor, what are our children’s and grandchildren’s places in the American workforce?  Will our descendents compete with machines and slave labor in a global society?  We need answers to these questions before this or the next administration crafts another stimulus program.


Parents should seriously consider the best investments in their children’s education.  Should tuition money be paid to colleges and universities, or should it be paid to vocational schools?  Our current government seems willing to make our children common laborers by way of shovel ready jobs. I suppose this strategy is more expedient than creating jobs that require real skill and intelligence, jobs that can make them self-sufficient and in turn, restore America to a state of prosperity.


A common laborer does not require a college education.  All he or she needs is a strong back and some muscle.  In pondering this, let us not forget the wise motto of the United Negro College Fund, which can and should be applied to citizens of all races:  “A mind is a terrible thing to waste.” 

Solving Unemployment

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In September of 2008, the United States of America experienced a financial meltdown, resulting in massive, escalating unemployment.  Government stepped in to fill the gap, using $710 billion in taxpayer’s money in an attempt to resolve the situation.  The money was allocated to keep the “big boys” on Wall Street and in the insurance industry afloat, and ostensibly, to save jobs.  Lo and behold, the financial market has recovered to some degree, but the unemployment rate remains high.  Why?


Like most businesses, the financial and insurance industries are interested primarily in profits, and not what benefits the country-at-large.  The difference, however, between finance and insurance, and other industries, is that the first two are heavily regulated by the government, and for good reason.  The mandates exist largely to protect taxpayers from fraud and theft.  Knowing that their you-know-whats’ were hauled out of the fire by the taxpayer bailout, for the express purpose of maintaining and creating jobs, why have those industries not responded in this way?  President Franklin D. Roosevelt stated, “The economy of the country depends on the spending power of its people.”  How right he was!  FDR tried to jumpstart the economy during the Great Depression by creating jobs though government-run programs such as WPA and CCC.  Because these jobs did not originate from the private sector, he did not achieve this goal.


Our capitalistic system demands that employment must be profitable.  How, then, do we fulfill this demand in this terrifying economy?   The first step is to achieve a meeting of the minds between government and the private sector as to which will be the source of employment.  When the Japanese attacked Pearl Harbor and plunged us into World War II, meetings such as this took place, and were successfully concluded, to organize the nation into a smoothly running machine capable of winning the war.  Once faced with a common enemy, it did not take long for both parties to offer viable solutions, including changes in the products, machinery, and workforce complexion of manufacturing.


As a nation, we must take a page out of that book to resolve today’s economic and employment problems.  Both parties, government and industry, must realize that there has to be give and take, not a rape of the American public by taking advantage of a crisis situation.  Now bolstered with $710 billion, the private sector must begin to recall employees it had downsized in response to the 2008 stock market crash.


In turn, the government must make business more profitable by facilitating this period of transition and growth through a reduction in taxes and by supplying work to industry.  Simultaneously, entrepreneurs and small businesses should be allowed to invest in the job market by easing the restrictions that pose problems to the operation and, by association, profitability of their businesses.  The final goal should be to employ more than 95% of the nation’s workforce, thus reducing the current 10 percent rate of unemployment. With more workers contributing to social programs via automatic payroll deductions, those programs would become solvent and self-sustaining.


A renewed workforce equates to money in the pockets of consumers.  With disposable incomes, consumers will stimulate the economy on all levels: they will be able to patronize a broad range of providers of products and services.  The economy would blossom. Both government and business would profit, and Americans would not be losing their homes, going hungry, and forced to learn Chinese and Arabic in the hopes of landing jobs in foreign lands.


If all of this could be accomplished, the next step would be to transform government to run in a business-like manner.  Citizens should be viewed as clients; every business creates and maintains a client base, or the business does not exist.   This strategy would make government more fiscally accountable while providing needed services to its citizens.  By abolishing earmarks and lobbying, we’d dramatically reduce corruption of our elected officials and make government more responsive to the needs of its clients, us.


Next, let’s merge Social Security and a Federal pension plan into one viable program for every citizen.  Laws must mandate that elected officials have the same programs as regular citizens, not special concessions.  Money collected for social programs (Social Security, etc.) should not be placed into a general fund, but allocated for the purposes for which they were intended (i.e., solvency of senior citizens upon their retirement).  The U.S. Treasury Department should place the funds into separate, low-risk, interest bearing accounts to be managed by financial professionals.  These professionals must demonstrate ethics and business practices that will be held to the highest scrutiny, via meticulous, unannounced external audits.  All finances must be reconciled; no secret slush funds for those seeking to rip off “the little guy.”


This plan may not be the cure-all for our country’s woes, but it is a start in the right direction!  When you consider the cold reality, what is the shortest road to national success?  Is it healthcare?  Housing?  The financial market? Or jobs?  Which one of these choices relates to President Roosevelt’s declaration that the economy of the country depends on the spending power of the people?  The answer to that question, obviously, is “jobs.” Without consumer confidence and resultant spending, our nation would be reduced to “banana republic” third world status.  Yes, I said “third world” and not “emerging nation.”  Let’s call it what it is, shall we?  Know the truth, and the truth shall set you free.


The recipe for success will lie in the hands of the three parts of our Federal system.  Every citizen, therefore, should be extremely well informed and painstakingly selective when voting for our representatives in 2010 and the future.  And if this article has offended you in any manner, you may very well be a part of the problem and not the solution. 

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