Thomas Jefferson and Banks

Thomas Jefferson was one of the greatest Presidents of the United States. He helped shape the ideal of a citizen’s democracy for America.  He was a visionary and evidently a futurist.  Here is what he said in 1802 about banking institutions:

“I believe that banking institutions are more dangerous to our liberties than standing armies.  If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered”

What  would he  think and say about the Occupy Wall Street phenomenon?

As a futurist, part of what I do is to present the future to audiences and readers around the world.  Presenting a vision of the future, making predictions and developing forecasts is what a futurist does.

Regular readers of this column know that since last September I have presented you with a number of economic forecasts and predictions.  There has been a constant flood of economic information and revised predictions in the media.  Economic forecasters seem to be rushing to revise their forecasts of just a few months ago to try to stay ahead of the tsunami of bad economic news.  In this environment I thought I should take a look back to see how accurate my forecasts to you have been.

I take great pride in my ability to make correct forecasts and predictions for you my readers, to the audiences I address and to the clients I advise.  In this case the correctness of my predictions are, unfortunately, extremely accurate.

Last fall, in a column titled “The Collapse of …

The Great Recession of 2008-2010/11 is going to be a very tough time economically.  As I wrote in my Forecast for 2009, this economic collapse brings four words to mind.

The first word is contraction, which is the standard way to view a recession.  Economic activity contracts and we are in a recession, economic expansion represents the end to the contraction.  The contraction was severe in the fourth quarter and will be so in the first quarter and second quarter. Output and consumption are in a deep fall right now and will remain so.

The second word is cleansing which in this context means that old ways of doing business, of looking at only the upside, of embracing debt and extreme leverage must and will be cleansed from both the economy and the way that people think. The casino capitalism of the past 20 years will soon be viewed as an unsustainable exercise in individual and corporate greed.

The third word is reorganization.  To quote from the linked column …

The current media and advertising recession will be more severe and more transformative than any one of the last 80 years.  This will be a time when it won’t be just about how far down ad spending goes, but also about what media entities and even business sectors will survive.

Historically, advertising recessions have been 1-2 years in length and have been about a contraction in ad spending on measured media.  Everyone hunkered down, altered pricing strategies, leaned on relationships and waited until the inevitable spending upsurge occurred.  The advertising recession of 2008 – 2010 will be different. This time, entire structures on both the buy and sell side will collapse.  The institutions that were developed and rigidified in the 20^th century are clearly not mirroring the dynamic changes of the media marketplace in this new century.  The advertising agency constructed in the second half of the last century no longer reflects the media reality of today.  The same can be said of the hierarchical distribution channel specific media sales organizations.  There are agencies and media properties that exist today …

It is interesting that central to the U.S. view of the global economy is the inauguration of President Obama and the passage of a historic stimulus package by Congress.  Given that the world is awash in economic fear the potential for hope and a sense of direction has been hard to find.  Since the current economic meltdown is something we want to change, and since that word has been synonymous with Obama, there is a lot of hope for a good start to his Presidency, and in his stated desire for a $1 trillion dollar stimulus package over the next two years.

As all prognosticators look ahead to this new year, it is clear that the place to look for our financial future for the next couple of years is Washington, not New York .

Politicians of both parties and most U.S. citizens are so scared or nervous about the economy melting down even further that there seems to be wide support for the Federal Government to spend whatever is necessary to get us out of this mess before it becomes even more catastrophic.  I find it interesting that economists of all stripes have come together is a loose consensus that the way out of this dangerous economic situation is massive spending by the government.  I certainly don’t disagree, but I have significant reservations about what Congress will pass and President Obama will ultimately sign.

The position here is that if the U.S., and therefore to a great degree the global economy is …