The Great Depression

The Great Depression

The great depression was the United States longest recession with the highest unemployment rate in the history of our country. The aftermath of the recession brought many to question as to what caused it and what cured it? In my opinion it was the lending practices of the banks and intervention of the government that brought down the economic climate of that time. Initially the banks started to lend a ton of money (due to low interest rates from the Federal Reserve) to people to invest in the stock market and real estate. As the stock market went to an all-time high, it created a bubble that makes everyday companies seem larger than they were supposed to be. The reaction of the Federal Reserve was increase interest rates to slow down the economy. The effect of this made the stock market collapse and made banks lose money while offsetting the lending ratio 9:1 (lending/reserves) that they loaned at. The collapse of the banks destroyed business from growing due to the lack of lending from the banks. Not only did it destroy businesses but it causes many people to lose their money.

From the catastrophic event, the government enacted the least logical policies (FDR’s New Deal)  to enforce what they thought would promote economic security. Through their efforts, they raised taxes on business owners, promoted unions and made employers pay employees at what the government thought they should be paid. With these regulations and others, the business owners found it hard to make a go at sustaining a business and hiring employees. To add to this they enacted the Smoot Hawley tariff that raised tariff on imported goods making trade decrease and trade wars with countries increase. This resulted to unemployment rates of 20-25 percent and a prolonged depression. While all this was happening the Federal Reserve raised interest rates which resulted in a few dollars chasing goods. So to the average consumer the price of food increased to a point where it was hard to afford getting by.

The end of the Depression only ended during World War Two, when every enabled man was asked to serve in the military. By everyone joining the military the Unemployment rate decreased and the Federal Reserve lowered interest rates to lend to the government for war. This made it accessible for business to receive loans and grow their business. During this period in our history the countries G.D.P. increased and the standard of living increased.

In conclusion the government’s intervention both harmed our economy at the beginning and improved our economy at the end. Personally I believe a free market system will correct itself if the right rules by the government our set into place.

Key Traits To Economic Prosperity

Key Trait Economic Prosperity

In order to have a successful economy in the world there needs to be four traits. These four traits includes having protecting  property rights, having a republic government, having good financial markets while retaining free trade and having freedom of press.

The first trait of economic success is “property rights.” Through having property rights (ownership, patents, land,  etc…) people can reap the fruits of their labors. Unlike countries that limit how much money someone can make, countries with property rights protect the money that everyone makes. By having these property rights in place a country can have incentives for businesses to be created and opportunities to better one’s own economic situation.

The second trait of economic success is having a republic government. By having a republic government under a capitalist system that advocates for property rights, people have the power to influence freedoms that build a business driven society. Through having a business driven society that develops new technology without the government getting involved, new technology is built that creates new jobs and improves the standard of living for everyone.

The third trait of economic success is having good financial markets and free trade. With a free market system, competition clashes to make companies develop a better product at a cheaper price. In doing so, the consumer wins while the companies strive to develop and differentiate their product to turn a profit. With the help of good financial markets that use fractional banking to lend to the companies. The companies can leverage their way into becoming bigger and better at what they do. With the syndication of free trade and conservatively strong financial markets the expansion of an economy is infinite.

The fourth trait of economic success is having the freedom of the press. Without the freedom of the press a countries economy would be illiterate to creativeness and advertising. In a general sense no one would know what’s out there or what to buy. But with the freedom of the press the creation of new ideas and advertising prevails to deliver knowledge to the consumer and increase free trade. It only makes sense that if a country is to strive successfully they would need to have the freedom of the press.

In all if I were to drive people to come to my city/country, I would have to encompass these four traits to make my city/country economically successful.

James Madison

One of America’s greatest founding fathers was a man named James Madison. Madison was hailed as the father of the Constitution and the Bill of Rights. Through Madison’s efforts with the Constitution and the Bill of rights, he constructed the freedoms and rights that we know today.

But before he constructed the political documents that governed the authority of government and people’s rights, Madison was faced with a difficult question. The question that came to his mind was, “how can the government control the governed while controlling itself?” In his view he believed that there would be factions that would ultimately control the government. To separate these factions Madison devised a system called Federalism. Through federalism the people’s rights would be represented through both the states and the Federal government. In doing this, factions such as religious groups, political parties and other groups couldn’t completely take over the  government due to the divisions in power. Besides the divisions between state/federal governments, Madison composed a system to separate the powers of the federal government.  As Madison pointed out in the federalist papers (essays that promoted the ratification of the Constitution),

 “In order to lay a due foundation for that separate and distinct exercise of the different powers of government, which to a certain extent is admitted on all hands to be essential to the preservation of liberty, it is evident that each department should have a will of its own; . . .

It is equally evident, that the members of each department should be as little dependent as possible on those of the others, for the emoluments annexed to their offices. Were the executive magistrate, or the judges, not independent of the legislature in this particular, their independence in every other would be merely nominal. But the great security against a gradual concentration of the several powers in the same department consists in giving to those who administer each department the necessary constitutional means and personal motives to resist encroachments of the others. . . . Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place.” (James Madison, Federalist papers 51.)

Through the separations in the federal government, the checks and balances of power would be in place by three distinctly different bodies of government.  None of these bodies of government would rely on the other but would balance the power to uphold and protect the constitutional rights. With the rights of the citizens protected by the republican government, no faction could completely control the government. Similarly the government couldn’t govern its citizens without the checks and balances that are set in place to give minorities (small political groups) the rights to have a position in matters without being persecuted. With the rights of everyone being protected, the United States political system is highly favored by the people. And with a strong advocacy for our system of government, the people find favor in being governed by a system of popular sovereignty.

In conclusion the state and federal government control each other, while they control themselves. As Madison stated,

“In the compound republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allotted to each subdivided among distinct and separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.” (Federal papers 51.)

Insperation For the Constitution

 

The U.S. Constitution is a document that protected the rights and liberties of the American People. Through it, lawmakers and judges use it as a standard for which they base laws off of. The Constitution was created by the founding fathers that were influenced to write this document after suffering from the unlawful rule of the British Empire. After seeing the magna carta [a document that protected the civil liberties of the Englishman] being violated by the British, they realized that they needed a better standard of law that would have the power in place for no one to violate it. That is why the founding fathers ensured that the Constitution would have checks and balances so no power could over throw the other. Through the checks and balances system the constitution cannot be destroyed and the power of America’s government can rely on the American people like the preamble stated.

                Almost everything in the Constitution was inspired so the government would have checks and balances to make sure no tyrant could consume all the governmental power. The founding fathers wanted to do everything in their power to stop the ruling of another king. Through looking at different systems of government from the Anglo Saxons to the Israelites they incorporated a system of democracy that built a balance of power. It is this democratic power that influenced the making of the Virginia Plan and the New Jersey plan. The compromise of both of these plans brought to the table a new plan that called the Great Compromise that was based in the Constitution.

The Great Compromised gave powers to the three branches of government but to make sure the government didn’t infringe on the rights of its citizens, the founding fathers created the Bill of Rights. The Bill of Rights limited the government from doing things unlawful like taking possession of property or being punished without trial by jury. Indeed the constitution protected peoples’ rights including the freedom of religion. And for this reason the Constitution could have never been brought about without the help of the God.

                Furthermore, God played his hand in the construction of the Constitution with the intention of bringing Liberty. In D&C 134:2 it reads, “We believe that no government can exist in peace, except such laws are framed and held inviolate as will secure to each individual the free exercise of conscience, the right and control of property, and the protection of life.” In this verse God endorses the same motives of the founding fathers such as life, liberty and property. But God didn’t just endorse the founding fathers motives but raised and guided the founding fathers to establish the Constitution. In D&C 101:80 it says, “And for this purpose have I established the Constitution of this land, by the hands of wise men whom I raised up unto this very purpose, and redeemed the land by the shedding of blood.” So to God it was through him that our freedom and the constitution came about. And to summarize the Constitution in God’s perspective D&C 101:77 states, “According to the laws and constitution of the people, which I have suffered to be established, and should be maintained for the rights and protection of all flesh, according to just and holy principles.”

                The Constitution as a whole encompasses the essence liberty. It was liberty that inspired the founding fathers to establish this document. With the help of God and Wise Men [the founding fathers] the inspiration to break away from the British was laid out to ensure that the gospel could be established. With the rights of the people prevalent in such a document, the rest of the world mirrored the work with their own Constitutions that gave everyone the freedom of religion. And for this grand purpose was the Constitution inspired by God.

               

Justification for Independence

During July 4 1776, the American colonies sent a declaration to British King George the third, stating that America wanted independence from England. This declaration was called the “Declaration of Independence” in it where the reasons why America wanted to seceded from the nation of Great Britain. It stated, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their creator with unalienable rights that among them are life, liberty and the pursuit of happiness.” In this clause of the Declaration of Independence the writer Thomas Jefferson was talking about the rights that King George the third violated. Through king George torturous acts of killing people that opposed his view, he violated the right of life. And with his violation of the rule of law, he abused the right of liberty. Furthermore the king created the coercive acts that taxed everyone and got into everyone’s business by doing so he infringed on the right to pursue happiness. In doing these acts and declaring war on America he created many threats that made the colonist want Independence.

                In retrospect to the Declaration of Independence, the founding fathers didn’t want to be independent from England before 1773. At that point in time, they saw Britain as an alley that let them express their views and have a conservative amount of representation. Although England had superior control of the colonies, they were to some degree understanding toward the colonies views.  But the freedoms of the colonies where all minimized when a certain king came to power. Unlike king George the second, king George the Third wanted to rule with an iron fist. When he came to power he went to war with France creating the war known as the seven year war. In the aftermath of the war England won, but accumulated one hundred and forty million dollars in debt. To the king there was only on way to pay for the war and that was through taxes.

                During 1763 to 1765 the king laid out a collection of tax acts that went into effect. In 1764 the king presented the Sugar acts that taxed items such as limber, textiles, sugar and wine. The sugar act also made colonies only trade with England reducing trade with other nations and making certain goods more expensive than others. Through this act, the total economic output of the colonies and the average household income decreased making colonist resentful toward England. But this resentfulness wasn’t just applicable toward the sugar act but was also shown when the stamp act came into law. Before the stamp act came into law the colonist showed a great degree of resentment. In response to the act a group called the sons of liberty intimidated the stamp distributors to resign from their job making it impossible for the act to be enforced.  Overall the colonist thought that taxes without representation violated the rights of an Englishman.

The colonists were angered for they didn’t have any representation or say in most legislation. Through the British parliament and the king, the colonists were made to believe that they were completely reliant on England.  The Whig party that represented the colonies was dismantled from any power by the authority of King George the third. Under his reign he put his own judges and governors in power over the colonies. With these leaders in charge the king directed his authority and judgment over the court system and the legislative power over the states. And to even further constrict power he enacted the currency act (1775) to take over the monetary system. As an effect of the acts of the king the colonist rebelled and didn’t seem to follow the acts. After King George’s acts were not followed, he took matters into his own hands by sending the military to enforce the laws. In addition to this obscurity the king created a new act called the Quartering Act (1775) that allowed British soldiers to stay at any of  the colonists houses. In all of these acts the colonist were angered; they felt that their civil liberties were taken away from them and that they had minimal involvement in the legislative matters that were brought before them. This anger came to a climax in Boston when the Townshend Act taxed all the imported tea that came to the Americas. In response to the act the colonist disguised themselves as Indians to raid the East Indian Tea ships by dumping the cargo over the ship.

As one can imagine the king was not pleased with this action. In response he started the Coercive Acts which included the Boston Act, The Massachusetts Government Act and the Administration of Justice Act. The Boston Act destroyed Boston’s economy by blocked all of the Boston shipping ports. In addition to the Boston act, the king and parliament started the Massachusetts Government Act, which abolished Massachusetts from having a government. Then the Administration act went into effect against the rule of law. In the Administration of Justice Act the British officials over the colonies didn’t have to be tried in American courts but in British courts. George Washington commented on the Administration of Justice Act by stating by calling it the “murdering act.” Indeed it was a murdering act because British officials could get away with murder without being tried in court.

                The natural rights of the colonist were meaningless to the British. To the British the 13 colonies were only an aid to building and funding their empire.  To the colonist the British were only using them and minimizing the freedoms of the people. After all the British had the colonist minimally involved in the legislative affairs of government and proved biased judicial system by implanting Judges that favored the crown. By letting the British officials free from being tried in American courts, the English king violated the rule of law. In doing so the British officials could get away with murder. These acts and the taxes that the king poured upon the people went against the Magana Carta when it stated that taxes can’t be made without representation. Collectively the colonist had little freedom with many of their rights being violated and with this in mind the colonist justified the right to go to war against the British.