1971: The Year That Changed Everything (But Probably Not For The Reason You Think)

NOTE:  It's almost certainly NOT what you think!

On August 15, 1971, President Richard M. Nixon (who was actually to the left of both Bill/Hillary Clinton and Obama on most issues) ended the Gold Standard for all practical purposes.  First temporarily, then permanently by 1973, and all remaining tenuous links between the dollar and gold were severed completely by 1975.  Some pundits point to this as the main reason why America has gone downhill ever since, and as they say, the rest is history.

But that's not really accurate, though.  You see, the so-called "Gold Standard" hasn't been true gold since 1933, when FDR first suspended it.  And for very good reason:  all of the objective evidence showed that the Gold Standard created artificial scarcity of money, and thus made the Great Depression worse.  Only after it was suspended was the economy able to heal.  And when it was reinstated after WWII with the Bretton Woods System, it contained a massive loophole that basically allowed central banks like the FERAL Reserve to do as they pleased regardless, provided that the system of fixed currency exchange rates remained intact.  And not every country toed the line, inflation happened anyway with the very expensive Vietnam War followed by the exogenous 1973 oil crisis, and eventually by the early 1970s the system had collapsed, so Nixon essentially had to put it down like a rabid dog.

The world indeed changed in 1971, and could have changed for the better.  Without the old Gold Standard to tie its hands, the federal government now had full Monetary Sovereignty as the sole issuer of its own currency, and but for the arcane and archaic rules left over from the Gold Standard, would have been able to fund a better than Nordic style social welfare state with less than Florida or Alaska taxes, simply by creating the money on an ad-hoc basis.  There indeed was increasing appetite among We the People for that which reads like Bernie Sanders' wish list.  Things like Universal Basic Income (UBI), Job Guarantee, single-payer Medicare For All, paid family leave, free or subsidized childcare, free college, and stuff like that were all being considered back then.  And the futurists' almost unanimous predictions of a radically shorter workweek by now could have been realized as well.  

So what happened?  Why aren't we living in a free, post-capitalist utopia (or at least protopia) by now?

Enter the infamous Powell Manifesto in 1971.  From FDR's New Deal up until then, the oligarchs were kept on a very tight leash with things like high taxes on the very rich, regulation of Wall Street and big business in general, social welfare programs, and a strong organized labor (union) movement.  But that Powell Manifesto, and what it advocated, was the beginning of the end for that, which ultimately paved the way for the "Reagan Revolution" of neoliberalism, inspired by Milton Friedman and the Chicago School:  deregulation of Wall Street and big business, tax cuts for the rich, gutting the social safety net, union-busting, offshoring/outsourcing, and stuff like that.  That agenda was ultimately continued by every administration since then to one degree or another.  Inequality exploded and poverty began to worsen again after plummeting for decades, and all manner of social ills related to those increased as well.

Productivity has increased dramatically since 1971, and yet wages have failed to keep up.  Why?  Because the oligarchs took nearly all of the gains since then, that's why.  And their sycophantic lackeys in government have enabled them.

America, and the world, ultimately learned the hard way why the Powell Manifesto was dead wrong, and that letting the oligarchs off of their leash completely was NOT such a good idea after all.  That is, only to repeatedly and thick-headedly forget such a lesson over and over again since then.  The parable of Chesterton's Fence comes to mind.  

Some argue that power doesn't really corrupt, it reveals.  Regardless, though, it is still just as dangerous to concentrate so much wealth and power in the hands of so few people.  A bad person on a leash is still a bad person, of course, but truly they are far more dangerous without the leash.

Also, let's not forget to thank the social conservatives, traditionalists, and reactionaries of both duopoly parties as well.  From the arguably misguided Daniel Patrick Moynihan all the way to Phyllis Schlafly and her demonic ilk, they railed hard against any programs or policies that in their eyes threatened "the family" (code for patriarchy, of course), and they successfully rallied their increasingly disaffected base.  Kinda like the reactionaries today, in fact.  But the fact remains that, both then and now, the reactionaries would not have gotten far had the Democrats not all but abandoned their economic progressivism first.

And as they say, the rest is history.  History may not always repeat itself, but it sure as hell does rhyme!

P.S.  For those who claim that increasing the number of women in the workforce was the cause of this problem of wages lagging behind not only productivity but also the cost of living, keep in mind that nearly doubling the workforce should have resulted in shortening the workweek across the board, as "many hands make light work".  Passing a Dutch-style law that gives workers the right to the same hourly wage rate regardless of number of hours, and the right to choose one's hours, would have largely done the trick without violating the iron laws of supply and demand, as would lowering the the legal threshold for overtime pay from 40 hours/week to 32 or less (it almost was set at 30 in 1938, by the way).  Closing the "exempt" loophole for salaried employees would also be wise.  But the oligarchs had other plans, and as they say, the rest is history....

The Real Reason Why The Broligarchs Want Higher Birthrates So Much (And Desperately Fear Low Birthrates Like The Plague)

The Broligarchs (Musk, Trump, Vance, and their entourage), and the oligarchs in general, seem to be panicking now about birthrates being too low for their liking.  Trump himself may not be harping on it so much, but the others are.  And they, along with the rest of the GOP are apparently more than willing to revoke women's hard-won reproductive rights in their zeal to raise the numbers.

But what about the supposedly legitimate economic fears of an aging (and eventually shrinking) population?  Well, a recent study came out that found that such fears are essentially overblown.  In fact, moderately low fertility (i.e. between 1.5-2.0 children per woman) and a shrinking population would actually maximize living standards for the general population.  Another recent study found that there is essentially no robust correlation between population aging and economic growth, contrary to what many people seem to believe.  Not to say that an aging population will not pose some challenges, but on balance the benefits would outweigh such drawbacks.  And our Monetarily Sovereign federal government can easily absorb the fiscal costs of aging such as pensions and healthcare, since the issuer of its own currency by definition has infinite money.

Oh, and by the way, there is that elephant in the room--make that the "elephant in the Volkswagen"--OVERPOPULATION.  Left unchecked, it will destroy the very planet that gives us life.  While technology (and Monetary Sovereignty) can largely solve the foreseeable economic challenges of aging and declining populations, the same cannot really be said of the intractable ecological problems of overpopulation.  And the only ethical way to do this is to voluntarily have fewer children, i.e. well below the "replacement rate" of 2.1 or so.  And the TFR is now below that in the USA, around 1.6 to 1.7.  The recent drop in birthrates is thus actually GOOD news on balance.

But wait, isn't the conspiracy narrative that the oligarchs in general want depopulation?  Well, that may have been true in the past, but now that seems to be more of a "Scooby Doo" narrative (that is, the one that they want us all to "discover").  And in any case, Musk has long called for "more babies", and the Rethuglicans (both MAGA and otherwise) have long been on a self-righteous crusade of sorts to trample and revoke women's reproductive rights.  There seem to be multiple agendas here, but in 2025, they all seem to be coalescing into one overarching agenda:  to prop up the current Ponzi scheme and pyramid scheme that is neoliberal late capitalist patriarchy, by any means necessary.

Enter the iron laws of supply and demand, particularly how they apply to labor.  Low birthrates now, by definition, portend labor shortages in the future, all else being equal.  And we know what happened in the decades following the Black Death:  the period from 1350-1500 was known as the "Golden Age of the European Proletariat" per Sylvia Federici.  Why?  Because after the population plummeted following the plague, there was a massive labor shortage, and the working class had a LOT of bargaining power.  Wages went way up, working hours went down, and working conditions improved as well.  And it sounded the death knell for feudalism.  Of course, the ruling class then did two things in response:  1) the Burning Times (witch trials), which killed off many revolutionaries, as Federici notes in her book Caliban and the Witch, and 2) the enclosures of the commons, thoroughly dispossessing and immiserating the working class.  Both of which combined to pave the way for capitalism, and then imperialism, colonialism, and all that jazz, and as they say, the rest is history.  Jason Hickel discusses the latter in depth in his book, Less Is More: How Degrowth Will Save the World.

Cue the predictable cries of "nobody wants to work anymore!" from the chattering classes.  Sound familiar?  It's really more like, no one wants to be exploited anymore.  And the oligarchs fear that like, well, the plague.  Kings need peasants, after all.

Long story short, the ruling class fears a labor shortage, because that would upend their power, faster than they can automate the "problem" away.  So why are they engaging in mass deportations now, which would cause a labor shortage in the short to medium term?  Well, racism and white nationalism, for starters.  And it also serves as a form of "chaos manufacture", that is, deliberately creating unnecessary chaos in a "shock and awe" campaign to mess with everyone's heads so as to seize more power.

In other words, it's all about power and control to these psychopaths, sociopaths, and malignant narcissists.  The kinds of people that are not even bound by logical consistency, let alone ethics and morals.

All the more reason NOT to give the Broligarchs, and the oligarchs in general, what they want.  Fie upon them!

UPDATE:  Antonio Melonio notably wrote a great article called "The Childfree Are Ungovernable", noting how the capitalist oligarchs have another, related major reason why they want the common people to have as many kids as possible ASAP:  to make us all easier to control as good little serfs.  And that dovetails well with another good article of his:  "Declining Birth Rates Are A Good Thing, Actually".

P.S.  Notice also how they want people, especially women, to start having kids as early in life as possible, particularly before beginning any form of higher education.  Thus, when they start early, then it becomes the path of least resistance to keep having one baby after another, kneecapping women's careers and getting women stuck in a quagmire.  That's a feature, not a bug, of their plan to keep women tied down and tethered to men.  And of course, the Broligarchs/oligarchs are also no friend to the vast majority of men either, as clearly working-class men will be financially on the hook for it all if the oligarchs get their way and then gut all social welfare programs.  Much like Adam's punishment in Genesis, "You will work for every crumb", fellas!  If women are to be brood mares, then men will thus have to be...WORK HORSES.  Patriarchy has a rather nasty habit of backfiring on men as well.

Again, all the more reason NOT to give them what they want.  Run, it's a trap!

(Mic drop)

"Too Big To Fail" = Too Big To EXIST

Once again, the issue of "too big to fail" is in the foreground, as we have obviously learned NOTHING from the last financial crisis.  If there is ANY lesson that we must NEVER forget, it is this: "too big to fail (or jail)" is really too big to EXIST, period.  And here is what we absolutely MUST do going forward:  give all banks and corporations large enough to have "systemic risk" (that is, where them failing would literally bring the whole economy down) a choice between the following menu of options:

1. Pay a prohibitive 90% marginal tax rate on all profits beyond the first billion, or,
2. Break up into smaller, unaffiliated banks or companies, similar to what anti-trust laws require for monopolies, or,
3. Full nationalization by the federal government, and (if already failed or failing) replacing the entire board of directors.

That's it.  That's the ONLY real solution. 

Of course, we also need to bring back the Glass-Steagall Act and pass a financial transactions tax and repeal the safe harbor provision of bankruptcy law and regulate derivatives better and stuff like that.

So what are we waiting for?

What Will Really Cause The Next Big Crash?

There is a recent article by Matt Taibbi in both Rolling Stone and Common Dreams that predicts a looming economic disaster due to three colliding problems.  And those three problems are as follows:  1) FERAL Reserve monetary tightening, both in terms of raising interest rates as well as the more subtle but significant Quantitative Tightening  (QT), 2) Trump's tax cuts depending on unrealistically high economic growth to "pay for themselves", and 3) Trump's tariffs and the resulting trade war.  And the collision of all three together will not end well, according to Taibbi, and he is probably right for the most part.

But even these are mere sideshows compared to the very biggest underlying root cause of the next looming crash, even if one or more of these problems are in fact the proverbial spark that sets off the financial powder keg.   So what is this underlying powder keg, exactly?  Well, it is the mother of all stock market bubbles, artificially inflated by corporations buying back their own stock to manipulate share prices.  And famous economist Ted Bauman predicts that when it finally bursts, any day now in fact, the market will quickly plummet by 70% or more, causing a crisis that makes 2008 and perhaps even 1929 look like a walk in the park by comparison.

So how did we get here in the first place?  The story begins in the 1920s, when corporate stock buybacks were all the rage, and in fact caused the 1929 Wall Street crash.  The Great Depression soon followed.  In 1934, this highly manipulative practice was rightly outlawed, and the ban remained in effect for nearly half a century until the Reagan administration lifted this ban in 1982 as part of Reagan's deregulation platform.  And since 2010, stock buybacks have accelerated dramatically, artificially inflating the stock market numbers and lulling hapless investors into a false sense of security.  And the recent Republican tax cuts have only accelerated this trend even further (since corporations now have even more money with which to buy back their stocks).

And what goes up, must come down, and the bigger they are, the harder they fall.

Don't say you weren't warned.  On the bright side though, if the crash occurs before the November 6 election, it will essentially guarantee that the predicted Blue Wave will be a Blue Tsunami, washing away the current vile Red Tide of Trump and his sycophantic Republican lackeys, no matter how much GOP cheating occurs (and surely there will be plenty).

America's Going Out of Business Sale Has Begun

Well, it's official now.  The Republican Tax Scam has now been signed into law on December 22, 2017.   The TL;DR version:  It is basically reverse Robin Hood economics--rob from the poor, give to the rich, and torpedo what's left of the middle class.  In other words, it's Reaganomics on steroids.

The lion's share of the tax cuts will go to the rich and mega-corporations, while the bottom 99% will get little or nothing, or even a tax hike depending on the exact vicissitudes of where one falls in the tax code.  Small businesses, or at least many of them, will likely get a swift kick in the margins, while large corporations make out like bandits.  And the price tag?  Over $1 TRILLION added to the national debt over the next ten years.   So much for the GOP being the party of fiscal responsibility, right?  Which will trigger automatic spending cuts to Medicare among other programs, unless Congress chooses to waive such cuts.  And it will also provide the perfect cover for Paul Ryan and his buddies pushing further cuts to the programs that they have had in their sights since forever, most notably Social Security, Medicare, and Medicaid, among several others as well.

If that wasn't bad enough, the Tax Scam also contains a bit of chaos manufacture in regards to Obamacare.  It effectively repeals the individual mandate for Obamacare, without replacing it with anything or doing anything whatsoever to stabilize the markets. Granted, the TSAP has long advocated (until we get single-payer healthcare) replacing the mandate with more positive incentives (such as increased subsidies), more stringent rules for special enrollment, and perhaps a surcharge as well for those try to game the system by dropping coverage and getting back in later.  Even the greedy insurance industry would be fine with such a replacement mechanism to prevent adverse selection.  But this bill contains no such mechanism, so unless something else is done soon, the result will indeed be chaos.

Oh, and to top it off, the bill also opens up the Arctic National Wildlife Refuge for "Drill, baby, drill!"  Because we really, really need to rape and plunder one of the very few remaining pristine areas of the Earth, because GROOOOWWWWTH!  Or something.

So overall, this is a very bad deal, and is essentially America's going out of business sale.  But hey, at least we will all get cheaper booze from this, right?

One Weird Trick to Rescue Economy, Defeat Oligarchy, and Pre-empt Fascism--Banksters HATE This!

As the classic clickbait-y title implies,what if there was a way to accomplish such a thing at little to no cost, and would also result in lower taxes for the masses as well? What if that option has always existed, but knowledge of it has been suppressed by the elites for decades out of fear of losing their power?

Well, it's actually true, believe it or not.  It's so simple that people tend to overlook it, and it's called public banking.  To wit, the government would print/create its own money interest-free, independently of the banks.  And thus the FERAL Reserve (which is about as "federal" as Federal Express, given how it is privately owned by the big banks) would become truly federal for once, with banks serving We the People, not the other way around.  National debt would become a non-problem overnight.  (This idea can also be implemented at the state and local levels as well.)  Of course, the banksters would absolutely HATE that.  For example, both JFK and Lincoln tried to do such a thing in fact, and we all know what eventually happened to them.  But the fact remains that We the People, through our elected representatives in Congress, nonetheless have to power to do exactly that.  We essentially gave the banksters their power, and we can also take it away--were it not for their venal and cowardly puppets in Congress today, that is.

Ellen Brown, author of Web of Debt (2007) and The Public Bank Solution (2013), has a lot to say about such an idea.   She brilliantly illustrates just how important the democratization of money is to a free society, and the history of just how much the bankster oligarchy has been ripping us all off for centuries.  For example, did you know that nearly HALF of the taxes we pay essentially go towards servicing the massive government debt to the banksters?  Did you know that nearly HALF of the price of practically everything we buy is a result of cumulative compound interest and/or hidden taxes embedded within such prices?  Did you know that infrastructure costs can also be cut in HALF simply by financing them with public banking?  And did you know that private banks actually create money out of thin air via a perfectly legal and centuries-old racket known as "fractional reserve banking"?  And that interest charged, not the expansion of the money supply, is the real cause of nearly all of the "inflation" that we see?  And for decades now, wages have not only lagged behind productivity gains, but haven't even kept up with such inflation?  Meanwhile the top 1%, and especially top 0.01%, have made out like bandits at the expense of the bottom 99%, with resulting inequality (which hurts the economy) soaring to levels not seen since the 1920s or even the Gilded Age.  If that doesn't make you feel RIPPED OFF, check your pulse 'cause you might be dead!

So what does all of this have to do with fascism?  Well, it appears that a certain little painter from Austria decided to exploit a rather similar situation in 1930s Germany after taking over.  In fact, rescuing the ailing economy, especially reducing or abolishing unemployment, was one of Hitler's biggest campaign promises.  And he did in fact succeed in doing so, and did so better than FDR despite Germany starting out in much worse shape than the United States was in 1933.  So how did the Nazis manage to pull it off?  By thinking outside the box and having their government essentially create their own money independently of the banks. Their country was literally bankrupt from the aftermath of losing WWI as well as being hit particularly hard by the Great Depression, but by creating their own money and spending it to "prime the pump", they were able to transcend their economic woes, and were thus able to restore full employment within a few short years.  In fact, their unemployment rate dropped by HALF within a year!  Contrast this with Austria, whose unemployment rate remained stubbornly high and barely even budged from 1932-1937, only dropping significantly in 1938 after Hitler annexed their country as part of the Third Reich.  Prior to that, the Austro-fascist regime was essentially following the outdated Austrian School austerity policies that Ludwig von Mises himself would have likely approved of.  The point of this discussion is NOT to praise Hitler or the Nazis in any way, but rather to show what opportunists they were and how to prevent such an evil authoritarian regime from ever rising again--if only the (erstwhile) free world had the foresight to get their economic policies right in the first place.  Because then, there would be essentially no legitimate grievances large enough for such a regime to exploit.

Of course, we would be remiss if we didn't also note that Hitler's "economic miracle" came with a serious dark side as well, even before the Holocaust began in earnest.  At least part of the drop in unemployment was the result of 1) removing Jews from the workforce after revoking their citizenship, replacing them with ethnic Germans, 2) removing women from the workforce (i.e. by firing many of them and also paying mothers to stay home), replacing them with men, and no longer counting women in the statistics, 3) bringing back the draft, and 4) spending ludicrous amounts of money on the military, financed by debt.  But since none of these things occurred until 1935 or even later, one could safely conclude that at least the first two years of the "economic miracle" can be easily traced to the pump-priming that resulted from their independent money creation.  The point is, there is no logical reason why that policy cannot be replicated minus the dark side, as fascism/racism/sexism/militarism is NOT a prerequisite for sound fiscal and monetary policy, any more so than it is for making the trains run on time like Mussolini did.

And just in case you thought that this "one weird trick" was peculiar to fascism, keep in mind that Hitler in fact got the idea from--wait for it--ABRAHAM LINCOLN.  Yes, really. Meanwhile, fascist Austria did the opposite under Dolfuss and Schuschnigg, and they messed the economy up so badly that the Austrian people actually eagerly welcomed the Nazis when they eventually took over in 1938.

Bottom line:  we know now what economic policies really work in practice, as opposed to half-baked voodoo economic theories and crank science.  As the saying goes, "it's the economy, stupid!"  So how long till we finally get it right?