In the previous piece, I mentioned that discount selling and bare bones discount stores began in the 1960’s, which they did. Target, K Mart and Wal Mart all got their start in 1962, although Sam Walton, had got started a couple of years earlier in Rogers Arkansas. Sam used to advertise that everything in his store was “Made in America,” and he was proud of that. For 30 years, Wal Marts, under Sam Walton, kept to his promises. When he died at age 74 in 1992, his kids became the wealthiest by inheritance offspring in the world. Wouldn’t that be nice? Wouldn’t it be nice to suddenly become a billionaire? Not happy with being super wealthy, the kids decided to get even richer. Wal Mart shopped in China for merchandise. China was still in terrible shape from WW II, plus being under the dictatorship of communists. Chairman Mao died in 1976, but his successors kept up the fight to squelch freedom, prosperity, and happiness. When America came to their door in 1978, the People’s Republic of China decided to change from a harsh system, to what Deng Xiaoping called a ’modified capitalistic socialism.’ In other words, Deng realized that his people were poor as dirt, and the capitalistic world was prospering. The opportunity presented itself, and Wal Mart was right there, to be joined later by just about every other chain business, which forced independent businesses to also join in the route from American manufacturing to Oriental made products.
Beginning in the late 1960’s, major department stores and clothing outlets began importing clothes from the Orient. Why? Because the ILGWU (International Ladies Garment Worker’s Union) had struck so many times, and succeeded in raising wages so high, that it was cheaper to have clothing made in Mexico or the Orient. It’s was the same old story, repeated over and over again. The first effort at remaining solvent was to move operations to the American South and non-union workers. The New England mills and their buildings mostly remain, but are empty. Eventually, the mills in the South became too expensive to run, even with non-union labor, and even towels and sheets became made in Mexico or the Orient. They still are, as is just about everything needed to live in America.
As the years passed from the 1950’s and into the 1960’s, the Korean War was not ended, but there was an ’armistice’ which still exists today, along with 37,000 US troops there, which gobble up the paper dollars by the bushels every hour. The French occupied Vietnam for their rubber plantations for many years, but the Vietnamese wanted independence. The French enlisted American help, and we sent 500 troops there as early as 1950. The French gave up in 1956, licked their wounds, and left. We stayed with our 500. When JFK was elected, he increased their numbers to 16,000, thought better of it and decided to bring them all home. He was assassinated before he could accomplish this, but his Vice President, Lyndon Baines Johnson, (LBJ) decided that Vietnam was his baby, and eventually over 700,000 American troops were in Vietnam and Cambodia. That war killed LBJ’s chances at being a hero, and he decided not to run again. More bombs were dropped on Vietnam than were dropped in WW II, and the cost in human lives was in the tens of millions, with 59,000 GI’s dead. We lost that war, and Nixon stopped it and got us out. The dollar printing was extraordinary for that war, and prices went through the roof before it was officially ended in April of 1975. The 59,000 dead don’t count the hundreds of thousands of American troops permanently injured either physically from Agent Orange, lost limbs, and other injuries, or mental illness from the terrible stress and anguish caused by that war. Vietnam is one of the darkest pages in American history.
As a result of the Vietnam disaster and the outrages of American youth about it, America’s youth changed from short hair and no drugs to long hair, and the drug scene came on big. “Hippies” became the common term for the great unwashed set who correctly didn’t like the war, and not much of anything else after the war in Vietnam was ended. “Free love” and drugs pervaded America, and we were outraged. At least I was. Civil rights came on big also, with riots in major cities, enormous fires, violence, and law breaking. America was not a nice place in the 1960’s. In 1965, doctors discovered that cigarettes caused lung cancer, and Americans began to try to stop smoking. They’re still trying. New car prices, plums, Venetian blinds, and 2 X 4’s continued to go up in price, and Americans still thought it was caused by greedy businessmen and corporations. In 1970, the average new home cost $26,000, the federal debt was $390 billion, and the average yearly wage for an American was $8700. Gas was 36 cents a gallon, and ’officially’ the inflation rate was 6.5%. Five years later, thanks to Vietnam’s printing press dollars paying for it, the average new home price had gone to $42,500, gas was 57 cents a gallon, and ’officially’ the inflation rate was 5.6%. If the official rate was correct, gas should have been 47 cents a gallon, not 57 cents, and a new home should have cost $34,000, not $42,500. Government has always lied.
Four years later, thanks to inflation, the average home price had jumped to $71,800, and gas 86 cents a gallon. Why? The war was over, but the cost of winding it down, bringing everyone home, and treating hundreds of thousands of wounded was not cheap. By 1979, the federal debt had gone to $890 billion. (Remember, now it is $9 trillion, and including promises for the future, it is $40 trillion). Government still lies about inflation, now claiming it is about 2%.
OPEC raised their oil prices, because at $2 per barrel, with inflation raging in America, thanks to printing press dollars, they had to, in order to make any profit. As this series continues, I wish you would realize that as each year and government caused debacles pass, the dollar has become worth less and less. Will these two words meld into one eventually? The dollar’s slow collapse has had other actions, which no one seems to understand. I want this to show that every action has a re-action. When the money loses value, lots of things happen, and none of them are good for an economy or the citizenship.. When the dollar was strong, it was cheap for Americans to travel overseas. Not any longer. When the dollar was strong and manufacturing stayed here, there were lots of jobs. When the dollar was strong, Mom and Pop both having to work to stay alive was unheard of, but now is not only common, but even with both working, it often is not enough. When the dollar was strong and stable, saving in them was a good thing to do, but now is it neither smart nor possible for most. When government stayed out of the subsidy area, the cities were whole. If Congress, the President, and government had followed the Constitution, we wouldn’t have gone into Korea, Vietnam, and now Iraq and Afghanistan. American politicians, following the example set by FDR, discovered that the key to winning elections was promising endless handouts from D.C. Not only handouts, but pseudo ’protection’ from old age, sickness, job losses, competition, and now ’terrorism.’ As each year has passed, more and more bureaucracies are formed.
Just as a classic example, in 1966, the Department of Transportation was formed. The department transports nothing, but has a budget of $58 billion, and has 58,000 employees, or in other words $100,000 for each employee. Did transportation exist before 1966? Did railroads, highways, airlines, and ships run and transport things before 1966? Also in 1966, the Federal Railroad Administration was formed, which has a budget of over a billion dollars. Did railroads exist before the FRA? I could go on and on, but I hope the point has been made. When I was growing up in D.C., bureaucracy was contained within the bounds of the city, but now has exuded and enlarged itself to encompass thousands of square miles just in the D.C. area alone, plus regional offices everywhere. No government is a profitable enterprise. Governments eat profits, and hinder development. Governments cost a lot of money at any level, but the federal government alone, is un-hampered by cost considerations, because it can print any amount of dollars it needs to pay for itself. It is self-perpetuating.
Not only is it self-perpetuating, but it has convinced almost everyone that it is necessary, beneficial, and responsible for prosperity; when the direct opposite is true. People believe, in 99% of the cases, that when the government gives a grant, foots a bill, or builds something, that there is no cost at all. Manna from DC rather than heaven! How wrong this is. Not only wrong, but government’s self-perpetuating situation is fed royally by politicians using it to win elections. As in all civilizations in history, nations have failed because of economic disaster. Economic disaster by making the money worthless, getting into expensive wars, or allowing government to grow to intolerable and un-sustainable levels. We’ve only gotten into the early 1970’s and it looks really bad, but this is only the beginning of American failure. More Wednesday, and remember I leave on Thursday for a couple of weeks to cruise up the Columbia River. You can buy now, but your checks may sit in the post office for a week or so.