According to the mathematician, Albert Einstein, the policies of George Bush are likely to result in another Great Depression. To quote a recurring quip, 'I know George Bush, and let me tell you, George Bush is no Albert Einstein.'

During a recent press conference, a reporter asked Ari Fleischer if the President believed that ‘deficits did not matter', given the huge size of the tax cuts pushed through in this administration. The press Secretary replied that the President believed that his tax cut proposal was the best way to ‘create jobs'. At the present time the Republican Administration is pushing these tax cuts as an ‘economic stimulus package' as well as a measure to ‘create jobs'. Here we have an old policy being dressed up in new propaganda. The policy has not changed but the sales pitch certainly has.

A few years back it seemed that the American economy was booming and the Republicans were arguing that since huge surpluses were forecast for the next ten years, therefore it was only right that taxes be cut to provide tax relief, and since it was pointed out that about half of the cuts would go to the riches one percent of the population and the majority to the richest ten per cent, the Republicans argued that this was only fair, since they paid the most taxes and therefore should get the most ‘tax relief'. We now know that the economy was not rosy when the Republicans were making this particular pitch, but rather for years previous to this time, large corporations were cooking their books to hide the fact that they were not showing profits, and the economy was actually caught up in a huge stock market bubble. The tax cut package will reach around two trillion dollars if proposed additional cuts are included, and while the idea of tax cuts has not changed, the propaganda used to peddle the cuts has morphed and now rather than being a well deserved tax relief measure handed out during a time of ever expanding ‘surpluses' the tax cuts are being peddled as a ‘job creation measure.'

At the same time as the ‘don't tax and then spend' Republican party is handing out close to a trillion dollars to the richest one percent of the population, the country is running record breaking deficits, which do not yet include the cost of any war or the tens of billions of dollars of bribes being paid to countries such as Turkey, Egypt, and a handful of African nations as the price for their war support, as well as the reported twelve billion being paid to Israel to bribe them to keep out of the war. When the estimated (low ball figure) 95 billion dollar cost of the war is factored in and the close to 50 billion dollar cost of the bribery required to gain support for the war, the already record breaking deficit swells to about half a trillion dollars, which will have to be borrowed. So in effect, what is happening here is that George Bush is ignoring the state of the economy, and is borrowing heavily in the name of the American people so as to transfer a trillion dollars in borrowed wealth to the richest one per cent of the population.

This transfer of wealth is also known as ‘trickle down' economics (the doctrine of the Reagan White House). When massive wealth is accumulated at the top of the pecking order, it is argued, it will eventually ‘trickle down' to everyone at the bottom (or a rising tide raises all ships). I need not comment on the self serving nature of this particular piece of propaganda, since it should be self evident that trickle down theory is simply a means of justifying social inequality. During the Reagan years this policy of transferring trillions of dollars to the very wealthy resulted only in a monster debt so massive that no one seriously considers paying off the principal, and the huge interests payments have robbed America of its future. In the space of just the two Reagan administrations, America went from the largest creditor nation on earth to the world's largest debtor, and the impacts are being felt to this very day.

Now the White House press Secretary stated that the President believes that ‘trickle down' theory is the best way to ‘create jobs', this being the latest bait and switch propaganda technique being used to peddle the tax cuts (the Republicans changing propaganda used to peddle agendas the way others change shirts). However I am led to ask whether anyone would seriously think that George Bush is another Einstein.

Albert Einstein was one the greatest mathematicians of the previous century. This is a claim that could not be made by either Ronald Reagan or George W. Bush. His father, George Bush One, correctly called this trickle down economic theory ‘voodoo economics' when he was challenging Reagan for the nomination of his party, but became silent after being selected to be Vice- President. Perhaps it would be better to call it ‘voodoo propaganda' for that is all it is, for according to Einstein this ‘trickle down' theory is not a viable economic policy at all, nor is it the way to ‘create jobs.' It simply transfers wealth, with disastrous consequences, including in the end the loss of profitability that led to all the book cooking we have become so familiar with in recent times. Reaganomics, as it was called, takes about fifteen years to begin to destroy the economy, or so it would seem based on our present experiences.

Great Depressions were a regular occurrence in the American economy through the 1800s, recurring periodically throughout the century, bringing grief to the nation over and over again. The most famous Great Depression, the one people usually refer to when using the term, was the notorious Depression that lasted throughout the decade of the thirties. Since the analysis of economics involves mathematics and number crunching, Albert Einstein turned his talents to the analysis of the cause of these frequent Great Depressions. What he discovered is that Great Depressions were caused by what he referred to as ‘poorly paid workers who did not provide a profitable market' (leading to profit loss and book keeping in our day) as well as "the profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions." What he meant here was that so much money accumulates at the top as capitalists fiercely compete to see who can become the richest that eventually the bottom falls out of the bottom, the market can no longer be supported due to an imbalance in the distribution of wealth, which results in a glut of goods on the market that cannot be sold, which results in price deflation, which results in loss of profit, further job cuts, which then leads to a further deterioration in the market, and further deflation, which leads to further job cuts, as the economy spirals into disaster. Great Depressions are not caused when stock market bubbles burst, but rather the bursting of the bubble is merely a reaction to the collapse in the market (a symptom and and not a cause). Great Depressions are caused by the huge transfer of wealth to a tiny minority at the top of the pyramid, which as Einstein put it, causes ‘instability' in the ‘utilization of capital' which then results in ‘increasingly severe depressions' with the severity of the depression correlated directly with the degree of income inequality that has developed in a society.

So, therefore, while George Bush might ‘believe' that a huge transfer of wealth to a very tiny elite group is the way to ‘kick start' the economy, Albert Einstein, if he were alive, would argue otherwise. The policies being pursued by George Bush are, according to the Great Mathematician, the recipe for a severe Great Depression, and not a big time ‘job creator'. These would be the kind of policies that would capsize the economy, rather than priming the pump and bringing the country up to speed. The paltry 300 dollars that was the middle class share of the tax cut will in no stimulate growth or job creation, and the massive deficits that will result not only threaten to jack up interest rates but, given the threat of deflation, are actually extremely dangerous since deflation makes debt much worse. One thing you would not want is deficits and deflation at the same time, and you certainly do not want monster debt growing by the trillions of dollars at the same time as the economy is at the risk of suffering deflation.

The enormous transfer of wealth that was the result of the Reagan Years is partly responsible for the trouble the economy is experiencing now, as Albert Einstein would remind everyone, if he were alive today. He is not, and so I remind you on his behalf. The problem was compounded by the Free Slave Trade concept, pushed by Reagan. The so called ‘Reagan Miracle' which resulted in huge profits for a time, was the short term gains that resulted from exporting jobs to low wage maquiladoras, and importing cheaply produced goods which could then be sold for higher profits. While this Free Slave Trade strategy brought in short term gains, over the long run it eroded benefits and wages, driving down wage levels, as workers in different countries found themselves locked into a race to the bottom (who would work for less money, who would work more hours for less money and fewer benefits). As jobs were exported and wages eroded the short terms gains of the Free Slave Trade were lost, and at the end of it all, in pretty short order (about 15 years) even the world's largest corporations found themselves locked into that great race to the bottom. I call this the ‘trickle up theory of economic pain'. All that happened here was what Albert Einstein described in his analysis of the Great Depression. The problem was doubly compounded under Ronald Reagan in that both the huge transfer of wealth to a tiny elite took place at the same time as the Free Slave Trade concept was eroding jobs and wages at the bottom.

So now we find ourselves living in a world where Japan is fighting fiercely against deflation, trying to stave off the Great Depression, the German economy is stagnant, Asia still has not recovered from the collapse the occurred at the end of the 90s, and the American economy, despite having interest rates cut to almost zero, continues to suffer from millions of job cuts, while there is talk of a ‘jobless recovery'. It should be noted here that a Great Depression does not happen all at once. For example the depression of the thirties did not hit rock bottom until about the middle of the decade. They creep up slowly, grinding away, year after year.

Even now deflationary pressures are building in the U.S. economy, the largest in the world, and if the United States sinks into deflation and the spiral of further job cuts and further deflation continues, the rest of the planet is also at risk since the American economy is so large and so dominant. Now given the harm done to the economy by Ronald Reagan, his transfer of wealth which destabilized the economy, and his Free Slave Trade concept which only exacerbated the coming disaster, one must ask just what the Congress and the Senate are doing, behaving like blind sheep, and passing such reckless economic policies as those proposed by George Bush. Further destabilizing the economy by handing out trillion dollar wealth transfers to the top percentile is not going to heal the economy, but rather could be the final nail in the coffin that has already had enough nails pounded into it by Ronald Reagan. Further wealth transfer and further slave trading will only erode the base of the market even further, which as Einstein warned the nation, will in the end result in a Great Depression.

Now I know that George Bush is no Albert Einstein, and so the opinion of George Bush in regards to this transfer of wealth is of no interest to me (even going so far as to be forced to borrow the money to complete the wealth transfer) The fact that as Ari Fleischer put it, ‘the President believes that this is the way to create jobs' is of no concern to me, because I think it is more sensible to listen to Albert Einstein, and would only change my mind if it turned out to be the case that George Bush at the very least, worked through the whole theory of Relativity with a stack of papers and a pencil and then got an A plus as a grade, or even better, improved on the theory of Relativity, thus making him not only a mathematical genius but a great economist as well.

If Einstein were alive today I am sure he would be testifying on Capital Hill and bawling out Senators and Congressmen, who do, after all, have a long history of just following along in allowing and fostering all the Great Depressions that occurred in the past, and so no one should have any illusions that the Congress will not just go right ahead again this time and plunge the country into utter ruin, because they certainly will. If Einstein was alive today he would be talking to you people about these matters, but he is not, and I am, so I will do so myself on his behalf...

Below follow some quotes from Einstein on this subject, and below this a selection of quotes from a page on the same subject "The Causes of the Great Depression'....



Albert Einstein - Why socialism : a few quotes from Einstein's essay - "I shall call "workers" all those who do not share in the ownership of the means of production ... the worker produces new goods which become the property of the capitalist ... Private capital tends to become concentrated in few hands ... The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists ... an "army of unemployed" almost always exists. The worker is constantly in fear of losing his job ... unemployed and poorly paid workers do not provide a profitable market ... The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions ... This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career ... "



The Cause of the Great Depression

The depression began in late 1929 and lasted for about a decade. Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade. The maldistribution of wealth in the 1920's existed on many levels. Money was distributed disparately between the rich and the middle-class, between industry and agriculture within the United States, and between the U.S. and Europe. This imbalance of wealth created an unstable economy. The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the maldistribution of wealth, caused the American economy to capsize ... the rewards of the "Coolidge Prosperity" of the 1920's were not shared evenly among all Americans. According to a study done by the Brookings Institute, in 1929 the top 0.1% of Americans had a combined income equal to the bottom 42%. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all...In the 1923 case Adkins v. Children's Hospital, the Supreme Court ruled minimum-wage legislation unconstitutional ...

Essentially what happened in the 1920's was that there was an oversupply of goods. It was not that the surplus products of industrialized society were not wanted, but rather that those whose needs were not satiated could not afford more, whereas the wealthy were satiated by spending only a small portion of their income. A 1932 article in Current History articulates the problems of this maldistribution of wealth ... One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920's 60% of cars and 80% of radios were bought on installment credit. Between 1925 and 1929 the total amount of outstanding installment credit more than doubled from $1.38 billion to around $3 billion. Installment credit allowed one to "telescope the future into the present", as the President's Committee on Social Trends noted. This strategy created artificial demand for products which people could not ordinarily afford. It put off the day of reckoning, but it made the downfall worse when it came.

Mass speculation went on throughout the late 1920's. In 1929 alone, a record volume of 1,124,800,410 shares were traded on the New York Stock Exchange. From early 1928 to September 1929 the Dow Jones Industrial Average rose from 191 to 381. This sort of profit was irresistible to investors. Company earnings became of little interest; as long as stock prices continued to rise huge profits could be made.

Prices had been drifting downward since September 3, but generally people were optimistic. Speculators continued to flock to the market ... Once enough investors had decided the boom was over, it was over. Partial recovery was achieved on Friday and Saturday when a group of leading bankers stepped in to try to stop the crash. But then on Monday the 28th prices started dropping again. By the end of the day the market had fallen 13%. The next day, Black Tuesday an unprecedented 16.4 million shares changed hands. Stocks fell so much, that at many times during the day no buyers were available at any price.

More jobs were lost, more stores were closed, more banks went under, and more factories closed. Unemployment grew to five million in 1930, and up to thirteen million in 1932. The country spiraled quickly into catastrophe. The Great Depression had begun.

Fear of a spiral into Depression as job losses mount

Dismal sales at Christmas time were propped up by deflationary price cuts, and now the retail sector is among the hardest hit as one third of a million jobs are slashed in February. Not coincidentally, the same rise of the Extreme Right Wing is taking place as was seen during the depression of the 30s, with the same drive to seek relief in aggressive wars of conquest...

The United States economy shed another 308,000 jobs in the month of February, bringing the official jobless toll up to eight and half million. (The official jobless rate always underestimates the true unemployment numbers, since it does not count those out of work for a very long time, and those who have simply given up on looking for work). This took place after the millions of jobs shed in the last several years during a ‘recession' which began officially, in the spring of 2001. The measure of consumer confidence dropped to about 79 per cent, and the retailing sector has been heavily hit in the recent rounds of job cuts, and this after a dismal Christmas retailing season, where sales were generated through deflationary price cuts, generating lower profits for the retailing sector.

During the Ronald Reagan years an experiment was tried on the economy which was nicknamed ‘trickle down economics'. According to the theory the more wealth that was transferred to the extremely rich top percentile, the better everything would get for everyone down at the bottom, the workers and consumers who provide the base for the economy. Reagan instituted the ‘don't tax and then spend' policy of the Republican party, which was supposed to lead to a huge surge in the economy, by cutting taxes for the very rich, who would then ‘trickle down' this money to the base of the economy. (You will notice that it is not called ‘flood down theory' but rather ‘trickle down theory', this being in line with the saying ‘Greed is good' which one then began to hear around the same time, since it is said that human greed is the great engine that drives the American economy, and though people might want to just keep getting richer, they would have a strong motivation to rather trickle down money so as to get even richer over the long haul). Trickle down economics has been thoroughly discredited, in that all that statistics prove that all that happened during the Reagan years was that a massive transfer of wealth took place, and truly the rich just kept getting richer while the base of the economy kept getting poorer.

Reagan also forced through the ‘Free Slave Trade' concept, where jobs would be exported to low wage nations and then cheaply produced goods would be imported and sold for higher profits. It was this slave trade that was responsible for the temporary surge in profits combined with a resulting stock market bubble, that was then referred to as ‘the Reagan miracle'. The end result of the transfer of jobs and the resulting downward pressure on wages and benefits has been described as ‘the great race to the bottom'. Wage cuts, wage freezes, union busting and other accompanying tactics only further eroded the bottom of the market, creating what I call the ‘trickle up economic pain effect' which eventually led even large multinational corporations to do such things as cook the books and try all sorts of trickery to hide the fact that they were no longer showing profits as the hangover from the Reagan years began to severely impact the economy toward the end of the nineties.

According to the mathematical analysis performed by Albert Einstein of all the Great Depressions which hit the economy over the past couple of centuries, gross income inequality combined with the resulting erosion at the base of the market in a market based economy leads to increasingly severe Great Depressions, with the severity of the depression being in direct correlation to the how extreme the income inequality has become in a society. It is impossible for a market based economy to remain stable when jobs and wages are eroded and slashed at the base, with the money supply becoming top heavy and concentrated in the hands of tiny percentage of the population. Much like a ship with huge weights attached to the top of a tall mast, the economy becomes top heavy, destabilizes and then spirals into destruction with further job cuts further eroding the base of the market, leading to lower sales leading to further downward pressures on prices (‘deflation') leading to reduced profits, and further job cuts, and so on.

Currently Japan is fighting with deflation, the Germany economy has stalled, and the price slashing over the Christmas season in America is the first clear sign of deflationary pressures building in the American economy, with the recent job slashes in the retail sector a second strong indication. The recent huge job cuts is another signal that due to the Free Slave Trade and the trickle down economic theory, America is now on the verge of something far worse than an ordinary ‘recession' (a sort of pot hole in the road) but heading into a deep gulley. Time will tell.

It was this spiral that an economist was worried about in the story as it was reported on the CNN site, when he said of the third of a million job cuts in February, and the hard hits being taken by the retail sector in the recent times, " "What worries me the most is a slip backward becoming a spiral downward. Jobs are the linchpin of both consumer confidence and consumer spending. We can't sustain many more losses like this without that downward spiral getting started," said Bill Cheney, chief economist at John Hancock Financial Services."

Now this dangerous situation with the economy does also impact on any analysis of warfare and the current political climate in the United States of America as it slips and slides towards of a form of extreme right wing fascism and the establishment of a ‘fuhrer state'. During the last Great Depression in the thirties a tiny elite had gained massive wealth and had capsized the economy in the process, leading to the surge of the left onto the political scene. Right wing extremism surged around the world, leading to dictatorships and fascism and then to aggressive wars to exploit the resources in other countries as these right wing dictatorships looked for relief from their economic woes, without of course, doing goodness but rather by doing evil, so as to protect that status quo. The same imperialist impulses are rapidly developing in America as once again the economy is under dangerous threat due to the extreme social inequality that has developed in the country since the Reagan Revolution (as it was called) and also due to the great race to the bottom, the erosion of jobs and wages, which leads directly to the massive hangover after the temporary binge of Free Slave Trading. Greed is not good, and neither is any other kind of sinful wickedness, and sooner or later, when the grapes of wrath have ripened on the vines, any country of nation that practices sinful ways finds themselves working those wine vats of wrath, and bottling copious amounts of that deleterious and unwanted wine. Yes, the great wheel of history is a cruel and ruthless bitch in that way, to be sure, and so now, given how hard it is to fix the damage, and the great forces of reaction that will resist any real, meaningful change, it now appears that the United States is about to embark on a Nazi like era of aggressive wars, wars for cheap oil and other exploitable resources in just one more sinful attempt to make some greedy gain and put off the day of reckoning...

What this means, is that you can obey the draft, should that become required at some future time, as the situation escalates and American hubris and arrogance and extreme violence do not prove to be quite the grand and majestic things some delusional types like to desperately force themselves to believe that they are...Yes, you can send your kids off to die to protect the status quo, being sinful to save oneself from past sinful conduct, so adding sin onto sin, and while you are at it you can be overwhelmed by the most powerful delusions, convincing yourself that evil can triumph and sin can bring in a harvest of the grapes of blessings, if you are just evil and violent and sinful enough. Just one more sin should do it...

For those not interested in wickedness, mass murder of children, oppression, the crushing of civil rights, the rise of fascism and extremism, and every other sort of wicked reactionary sinfulness, there are good alternatives. Foremost, the cure must address the illness, and should the country slide into depression, the solution is not fascist imperialism, robbery, and warfare, nor is it appropriate for you to ‘die for you country' in some far off land, but rather redistribution of wealth is the solution. Furthermore an appropriate ‘economic stimulus plan' would once again not consist of sinful destruction and blowing things up and bombing (thus destroying even more of the base of the economy in the process) but rather in a novel concept, not being sinful or greedy but rather taking all your wickedness money, almost a trillion dollars a year spent on killing tools every year, and spending it all on a great Marshall Plan for the planet, doing something decent for the billion who go without even one square meal everyday. You cannot have social inequality without having social inequality, after all, and when you look at a country like Columbia, for example, a very tiny elite of feudal landlords are the ‘rightful owners' of three quarters of the land and wealth in the country and many millions live in utter squalor, while the country is convulsed by violence and rebellion, and soon enough, given that Washington pays for oppression in nations around the world, soon enough Americans don't feel very safe, even at home. If you want to be safe, you must stop sinning, and those who practice wickedness must drink the wine that is produced at harvest time.

Woe to the nation that turns justice into poison, and which thrusts righteousness and peace to the ground, who hate the one who brings charges against the sinful wrongdoers, and despise those who speak nothing but the truth. Woe to the nation that oppresses the poor, grinding them down, extorting from them and leaving them even more wretched and miserable than before. Therefore, although people have built mighty mansions built out of marble and hewn stone, they shall not live in them. Though they own massive vineyards, they shall not drink the wine from them, for monstrous and many are their sins, those bullies who attack and slaughter the innocent, hold entire nations hostage, who corrupt justice in the courts and push the poor and destitute out of the way. Hate evil and love good, and establish justice on the planet. Then it may be that good times and favor may yet be shown to this planet.

And yet people thrust aside all thought of the evil day, and thus they hasten the reign of violence and wickedness on earth, and they do not grieve over the ruin of the planet. And so, time and time again they are abandoned to their terrible fate, as violence reduces to the great houses to rubble and the small houses are shattered. ‘Have we not won power through our own great strength,' they boast. Listen then, to this, you who grind the faces of the poor, buying the weak for a piece of silver and the selling the poor for the price of a pair of cheap sandals. Will not the earth quake on account of this? Will not everyone who lives upon it be brought to grief and mourning? The whole earth will surge and seethe like the River Nile, and subside like the River of Egypt. The earth will be plunged into strife and darkness, and feasts will become times of mourning, and everyone will be dressed in mourners clothes, for it will be a very bitter day. The pillars are struck and the whole porch is shaken, and the roof comes crashing down on the heads of the people. Woe to the nation that practices godless sinfulness, the nation that can never practice simple decency, common justice, or righteousness, peace and truth. Woe to that wicked place when the time to harvest comes around, and the grapes of wrath hang heavily on the vines.