History of U.S. Financial Bailouts and Economic Recovery

	New Normal # 4 History of U.S. Financial Bailouts and Economic Recovery Bailout History The $700 billion 2008 financial-sector rescue plan is the latest of many bailouts that go back to the Panic of 1792 when the federal government bailed out states over-burdened by their Revolutionary War Debt. Thereafter private banks and investment bankers took over financial bailouts until the Panic of 1907 when the economy was so big that even J.P. Morgan needed U.S. Treasury help. This led to the 1913 Federal Reserve System designed to be the lender of last resort. Recently the 1987 Savings and Loan Crisis bailout cost about $160 billion. Other recent government private sector bailouts have included: 1970 Penn Central 1971 Lockheed 1980 Chrysler 1984 Continental Illinois 1991 Executive Life Insurance Company by states assessing other insurers and the 1998 Long-Term Capital Management bailout by commercial and investment banks. See History of U.S. Government Bailouts. Think overcoming greed is difficult. U.S. does better than most! 12/28/15 Great Recession Cost Was High But Growth Cured Budget Problems Economic Cost of Great Recession Estimated at 12.8 Trillion. Some add home values loss but this is a reach since the housing bubble had inflated values. U.S. FED Profit of $100b in 2014 was up from $47b in 2009. The 2010-14 total was $ 420b. Source See Treasury Financial Analysis of Great Recession in Charts Hear Recession, Stagnation, and Monetary Policy EconTalk Podcast 1/9/17 Source

	New Normality #5 Poverty Rate Stuck at 15.5%. After "...correcting the 2013 poverty rate for noncash food and housing benefits, refundable tax credits, and the upward bias in the CPI-U ..."the rate drops from 14.5% to 4.8%. War on Poverty-Was It Lost Others believe it should be raised as it doesn't account for geographic and demographics differences. See Poverty Rates How Flawed Measure Drives Policy Other Data 1 Data 2 Think many use true but not necessarily appropriate data to foster their POLITICAL beliefs. Example: With our obesity problem how could anyone have believed that many went to bed hungry during the Great Recession. Calculation ignored food stamps and subsidized school lunches.
	New Normal # 6 Profit Beats Wages Twenty-first century war expenditures helped profit recover after a dot-com bubble recession, then crash with The Great Recession and then grow to new heights. US Companies have competed very well in a flat world using technology, outsourcing to Asia, Mexico...and by keeping wage increases low. Source Total compensation has done better although Obama Care gave companies an opportunity to again lower compensation. Source More Data 1 Data 2 Think Rust Belt then NAFTA and soon TPP? See How Democratic Failed Workers 11 min Short Term vs. Long Term Returns 52 min
	New Normality #7 Wellbeing Growth Continues 1. Society's continued stability has resulted in tremendous economic growth which is the key determinate of well-being. Public safety net, child safety, and adjusted poverty rate have all improved dramatically since the Gilded Age. Think economic continued economic distress in Russia, Europe, Japan and China. 2) Scientific achievements have continuously added to citizen well-being. Think cured diseases, smart phones, streaming audio-video, Gillette Stadium ... See Health Problems Solved.
	3) Personal Income increased continuously if not always rapidly because nature and nurture improved the personal characteristics needed to enhance wellbeing. Think Russia, China, and Europe's really slow recovery from the Great Recession. Source Is The Country In Trouble, Will Stagnate Income Hurt Our Children and Recent Decades Ranked By Problems. see Crisis of Capitalism 11:10 video is an interesting Marxian view i.e. Bernie Sanders Return to page 1 Source #1 Source #2

New Normal # 8 Asian Competition

Automation Will Continue, What Will Displaced Workers Do?

Should We Encourage Apple to Assemble Onshore? How?

#9 A New Western Normality in the Making?

I. Development of Illiberal Democracy   summarized from Francis Fukuyama: Democracy's Failure to Perform
    A. Causes
          1. Foreign Policy Failures of Developed Democracy enhanced by U.S. foreign policy failures i.e. Middle East wars
          2. Non-Liberal Democracy success, especially China
          3. Poor Liberal Democracy Performance i.e. economic slowness, immigration, wealth accumulation
     B. Definitions, nominal
         1. States are a monopoly on a legitimate use of physical force.from Max Weber States are about Power!
         2. Rule by Law: sovereignty sets the law i.e. China
         3. Rule of Law: sovereignty responsible to same laws as the governed. Laws limit power.
         4. Democratic Accountability requires free multiple political parties with guarantee substantive accounting and a
             government that serves the entire population, not just the elite.
    C. Modern Political System
         1. A modern miracle that generate tremendous power limited by the rule of law and is democratically accountable
         2. Patrimonial state: rulers own political system, resources and distribute gain production Who You Know
         3. Neo-Illiberal States: look like a democracy, limited representation, leaders follow the money
   D. U.S. Failures at State Building
         1. Focus: building a Liberal Democracy
         2. Required focus: moving from Patrimonial State to Modern Political System
             a. Iraq and Afghanistan: got the liberal democracy but did not move from a patriarchal to modern state
                 Both state moved to Oligarchy where a few wealthy people form a Plutocracy.
                 Neither can protect citizens and provide services to much of the population.
             b. Ukraine: got a liberal democracy from the Orange Revolution of 2004-5, but could not keep it as a
                 second revolution needed to avoid a strong connection to Russia.
             c. India: Very democratic but can't progress to modern state as it can't fix serious problems
                 Elected strong leader but he to is failing.
             d. Greece: got a democracy in 1974 but developed into a Clientelism where every election brings a
                 new set of party connected bureaucratic. Strong unions kept jobs for previous bureaucrats.
                 Eventually, she had seven times the bureaucrats per person as did England.
                 Problem: Greece does not want to change.

II. Three main forces are blowing up global politics

Source by Steve LeVine Oct 1

Summary from author/editor Walter Antoniotti antonw@ix.netcom.co

A Trio of independent disruptions
Opposition to immigrants, globalization, and establishment leaders/institutions created disruptions.
America's 1990 dissatisfaction recently spread to Europe causing two years of volatile pubic fury.
This spread compounds to an unpredictable degree the possible disruption to Europe and Western Culture.

Status and Social Cultural Apprehensions contributed to these disruptions.
This caused effected groups to lash out in a tribal like response.
An end to a post WWII US led moderation is seem by some to be causing
1. Great power conflict returning to early Cold War levels
2 Declining world wide economic prosperity, including the west

All three disruptions could last years Axion reported here, here and here.
Optimistic leaders thought and even hoped Trump, Brexit, or something else
would help moderate our disruptions.

Disruption modification related to Trump, and Brexit, power immigrants are difficult.
1. No opposing stability force seems forthcoming
2. An aging and shrinking developed world's population reinforces disruptive forces.
3. AI is increasing worker employment anxiety.
3. Climate change is increasing leader constitution.

Covid-19 adds to our currnet the deep doo-doo.

See

Mark Blyth Summarizes 30 years of Western Capitalism 6/20

Editor: True: Capitalism did what it was suppose to do and protected profit from foreign competition.
Union leaders protected their jobs with tow tire wage contrects.
Science and debt did much to improve wellbeing.
Politicians, median and economists avoided change to stay in office.

'America First ' has won, by Robert Kagan at NYT.

Saving liberal democracy from the extremes, by the FT's Martin Wolf

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