SCARY....Consumer prices plunge; production jumps

[oregonindy]

so I caught the story in the seattle times..
http://seattletimes.nwsource.com/APWires/headlines/D8EGPDN87.html


why is this scary with Capital letters? History my friends...history.

Take a read and see if you see any downright chilling similarities between today and the start of the great depression.

http://www.gusmorino.com/pag3/greatdepression/

The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. 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 "roaring twenties" was an era when our country prospered tremendously. The nation's total realized income rose from $74.3 billion in 1923 to $89 billion in 19291. However, 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%2. That same top 0.1% of Americans in 1929 controlled 34% of all savings, while 80% of Americans had no savings at all3. Automotive industry mogul Henry Ford provides a striking example of the unequal distribution of wealth between the rich and the middle-class. Henry Ford reported a personal income of $14 million4 in the same year that the average personal income was $7505. By present day standards, where the average yearly income in the U.S. is around $18,5006, Mr. Ford would be earning over $345 million a year! This maldistribution of income between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income7.

[melody]

1. That was George's job - to sink us into a Depression

And he's doing it admirably well.

[Warpy]

2. The rich always try to kill the goose that

laid all their golden eggs by stripmining wealth from the class that actually works to create it. That causes the consumer market to collapse as people can afford nothing but bare essentials (and usually not enough of them) and avoid any goods or services they can do without and survive.

As they gain more and more wealth, they find themselves victims of the law of diminishing returns, meaning that additional wealth becomes more and more meaningless except as a set of numbers, as the goods and services they could have bought with that wealth are disappearing, thanks to the collapse of the consumer market.

Only a system that siphons the extreme wealth off the very top and recirculates it at the bottom can remain a healthy, dynamic system. Allowing wealth to stratify is allowing it to stop moving, and wealth only works if it is kept in motion.

Remember, guys, the money pump works from the bottom up, not from the top down. No rich man ever gave anyone a job producing something that he didn't have a paying customer waiting for. Ignoring this fact will always lead to economic stagnation followed by depression. There have been no historical exceptions.