Michael Reagan's Monthly Monitor March 1998

The Roaring Twenties were a period of tremendous economic and technological growth. In March, 1998, the Monthly Monitor studied the similarities between our era and the times prior to, and during, the Great Depression. It is instructive to see the parallels between then and now; to understand the commonalities and the differences so that we can be informed citizens and investors.

TABLE OF CONTENTS: Welcome Mail Call What Can We Learn From The Great Depression Era of Good Feeling Shanghai's Empty Skyscrapers A World-Wide Stock Market Debacle RCA (1925-1929)-and MICROSOFT (1993-1997) Hoover Believed in Soundness of the Economy History of US Deficits IRS Sunset Publisher Welcome Didn't Bob Dole ask, "Where is the outrage?" He, like many of you, can not understand why, or rather, how, President Clinton continues to get away with his antics. Well, perhaps it was too much for Bob Dole to understand, at his advanced age, how much America has changed in his lifetime. Heck, sometimes I think I might be too old too. We always knew that Americans voted with the pocketbooks, but I guess we had no idea that a fat wallet (one filled with credit cards, a little cash and a couple of handy condoms) took precedence over everything else. At one point, not even that long ago, I think the news of a President having sex with a young intern would have repulsed the people ..not just from a moral perspective, but from a practical one as well. It cannot be good for a political or military leader to be putting himself at risk of being blackmailed over bimbos. Of course, maybe Bill Clinton knows us better than we know ourselves. After all how can he be blackmailed if he is not embarrassed about his behavior, nor fear how we the people might react. Maybe his behavior is not that reckless. If we do not care, and his wife does not seem to care, why should we think that he would care? Maybe we should not expect otherwise. In many ways the American people have become self indulgent and soft. In other ways, they have become immoral, or at least amoral. We all seem to think we are owed something, even if that something is just to be left alone in our immoral morass. Then, once we go over the edge, it certainly feels better knowing that there are others joining us in the sludge. Now we have the comfort of knowing that our leaders have joined us too. It seems as if that as long as we have enough money to satisfy our cravings for entertainment, we will not bother with the principals of our leaders or, for that matter, the principals of responsible citizenship. Remarkably, even the establishment press seems taken aback by our fellow citizens' tolerance of a completely immoral president. They too now know what we conservatives have predicted: If you feed the people enough garbage, pretty soon they learn to like garbage. As the chief purveyors of garbage in America, the media/press folks cannot seem to find a mix of garbage that can get a rise out of people anymore ...they almost seem disappointed. So, what is the bottom line? As long as the stock market is high, interest rates and unemployment low; that while Hollywood crank out blockbuster movies and Silicon Valley makes ever more titillating computer games; as long as we remain financially strong: we will gladly ride to Hell in our hand-basket together. Don't worry. Be Happy. Mike Reagan Mail Call Do you thing there should be a constitutional amendment protecting the American Flag? 64.19% Yes 35.71% No With all the pressing issues before us I DO NOT want congress wasting their time passing a constitutional amendment protecting the flag. It is only a symbol; the beliefs, philosophy, and ideas behind that symbol are what is important. Cops have better things to do than chase a few radicals burning a flag. Get a grip, people! Joe Hugh So long as the statute concerning the proper method for the disposal of a soiled flag, (i.e. incineration) is in force, there is no requirement for any action. Since the specific flags have been "soiled" both through their inclusion in the particular "protests and by contact, those disposing of "soiled" banners ARE IN FULL COMPLIANCE WITH THE EXISTING STATUTE although they may not know it.... Bob One of the first official acts of the Chinese Communists when they took over Hong Kong was to ban desecration of the Chinese or Hong Kong Flag. I'm patriotic but I question the validity of this issue. It seems to be more smoke designed to keep us from focusing on corruption and other real issues confronting our alleged republic. The American Farmer The true "flag" of this nation is its' constitution and it should be protected at all cost. The Stars and Stripes (that represent all I love and respect about this great country) is a symbol. It's my belief that placing our symbolic flag under the protection of our "real" flag weakens the fabric of both. Bill Ward For those who dishonor our American Flag, pick another, then move to that country! We can recycle your space. Rick in CA Do you think James McDougal's death will seriously hamper Kenneth Starr's case against Bill Clinton? 35.62% Yes 63.70% No What case? Isn't President Clinton, like, the greatest president ever?! That horrible 'Great Right Wing Conspiracy," lead by that dastardly evil Kenneth Starr, cannot win. With all the wonderful things Clinton did, he has to win. - P.S. Hitler wasn't so bad, we must not judge people. There really is no right and wrong. Who are we to judge? Doesn't every man behave like an animal in heat??? Family Man As a "convicted felon" McDougal, like Hale, is not credible as a witness. He did, however, provide Starr with much material, which had been hidden. That will be much more important to the case. Warhorse Besides losing a major witness, another death has occurred to a potential enemy of Bill. A loud unspoken message has just been sent to Monica, Johnie Chung, ex Arkansas governors, and other potential enemies of Bill. That message is that strange and deadly things often happen to people that could end up in a court against Bubba/Bill. Dave Anderson What Can We Learn From The Great Depression Popular wisdom today says that it is impossible for America to go through another debilitating "Great Depression" like that of the 1930s. That may be correct, but not for the reasons most people think. The American people today don't appear to be nearly as easily led, nearly so gullible as Americans in the 1930s. This is due more to the Information Age than it is to learning from history. Americans don't learn from history - probably because they don't know it. The radio was new and, effective by the 1932 election. For the first time voters could be accosted in their own homes via sound waves - and Democrat charges that Hoover was CAUSING the depression sank deep into their consciousness. The generation who were young parents in 1932 would NEVER recover from the firm belief that they must not spend money ever again as they did in the 1920s. That paradigm shift in people's feelings about money was an unintended consequence of the charges made by the Democrats. People developed a permanent fear of depression and a new dependence on the Federal Government. If the government was run by Democrats, popular wisdom held, there would never be another Depression. Unbalanced budgets and runaway federal spending to prevent economic recession were, therefore, moral and good. It took the passing of that generation and new generations arising before any changes could be made in the growing federal control and spending. Today's young people are more apt to believe in flying saucers than in the Federal Government being useful to them in their old age. The people who actually lost jobs in 1932 - and that was when the depression actually hit - believed that FDR saved them. Yet, twice since 1929 dramatic drops in the market have occurred - one in 1987 and the second in 1997 - and the results have not been the same. Because of federal protections in place? Hardly. If there were a real run on the banks like there was in the 1932, the federal government, with its $5.5 Trillion debt, would hardly be in a position to stop it. What does keep deflation in check is the mood of the people. As long as they believe a stock market slide won't continue, it probably won't. However, there could be some stormy weather ahead if the public does react like it did in 1932; the results may be the same - a depression. After all, there was no International Monetary Fund to save the world in 1932, and it is in place to save the World from the Asian Crisis of 1997-98, right? Probably not. At this writing the IMF has put $100 billion + into the Asian Bailout and it has not appeared to help much, if at all. The Indonesian currency, which was the worst hit of the Asian currencies in a major wave of lost value, has again suffered a sharp drop in value. There is good evidence, in retrospect, that Federal intervention worsened the 1930s depression. Copying that response for the current worldwide crisis could do on an international scale what Federal intervention in the US Economy did on a national scale in the Depression years. Sixty years of deficit spending has left America with a national debt equivalent to it's entire gross domestic product for 1991. In 1929 real per capita federal expenditures in 1990 dollars were $195.41. They increased to $367.84 by 1933, in Hoover's efforts to create jobs, an 82 percent increase. By 1937, five years into the Roosevelt administration, per capita federal expenditures were $545.23, a 48 percent increase, and they had gone up to $638.78 by 1940. Clearly, if government spending to create jobs was the answer to the depression question, Hoover's spending should have reversed the trend by 1932. What happens if loans made by the World Bank are not paid? What would happen would be a worldwide financial crisis comparable to the Savings and Loan Crisis in America - only on a global basis. America would be responsible for a third of the debt incurred, on top of its already $5.5 Trillion public debt. To make matters worse, with the currency devaluation that has taken place throughout the world for many years, but especially in the last four years, money America lent to the IMF to bail out nations would be paid back in currencies that have been dramatically reduced in value. Continue