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In 1945 the United States emerged from a world war with the only intact industrial economy in the world.  The British, European, Soviet, and Japanese economies were in ruins.  China and the rest of Asia, Africa, and South America had undeveloped economies, later renamed third world economies.  Additionally, the US held most of the world’s gold reserves.  

Four years of war production gave the US a large, disciplined, and skilled work force, and war time consumer shortages provided enormous pent-up consumer demand to drive the postwar economy’s growth. Jobs were plentiful, and US real income rose strongly in the 1950s and into the 1960s.  

But then things started to go wrong.  President Johnson’s program of “guns and butter” (the Vietnam War and “Great Society” welfare spending) resulted in a proliferation of US dollars that eventually forced President Nixon to close the gold window and terminate the right of foreign central banks to redeem their holdings of US dollars for gold.  Additionally, Expansionary monetary policy pushed up consumer demand, but high tax rates curtailed supply response, culminating in the “stagflation” of President Carter’s administration.

President Reagan’s supply-side economic policy cured stagflation and the worsening “Phillips curve” trade-off between inflation and unemployment, and real economic growth resumed throughout the 1980s and into the Clinton years, an administration that piggy-backed on Reagan’s success.

But in the last decade of the 20th century things turned for the worse.  The success of Reagan’s economic policies created excessive confidence in unregulated free market economies.  Federal Reserve Chairman Alan Greenspan and the Clinton Treasury claimed that “markets are self-regulating.”  The repeal set in motion the 2008 financial crisis that launched the largest and longest money printing activity in the US in history.  The Federal Reserve’s balance sheet increased by $8.2 trillion as the Fed printed money with which to buy up the troubled investments of the large banks in order to keep the banks solvent.  The massive increase in the money supply went mainly into the prices of stocks, bonds, and real estate, thus dramatically worsening the income and wealth distribution in the US and creating the One Percent.  

This is a hopeless situation for the Western World today.  As awareness spreads slowly but gradually among the populations of the West that their governments are against them, the majorities will begin to realize that they are targeted for dispossession.  Once the population of a country realizes that the government does not represent them but represents their enemies, a revolutionary situation develops.  All that can possibly save Western Civilization is revolution across the entire front. Otherwise we face institutionalized tyranny and economies run for the benefit of the One Percent.

You have been forewarned...Mark my words.

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