The Bucket Shop Laws :The Act That Opened The Pandora’s box

In 2000, congress passed the “bucket shop” laws, which restricted regulation of credit default swaps. It was passed under The Commodity Futures Modernization Act of 2000. The Act basically deregulated Over The Counter (OTC) derivatives, which from that point created a booming Credit Default Swap (CDS) market and other exotic derivatives such as SIV, CMO, etc. (another alphabet soup!). AIG alone sold over $500 billion in CDS’s, which ended in billions of losses and almost brought the whole financial system on the brink of collapse. CDS’s magnified the losses from sub-prime mortgages, and since the banks and other financial entities didn’t hold enough capital to cover losses from these swaps (in unregulated markets, companies doesn’t have to keep a minimum reserve, like banks do on deposits), it spread into a whirlwind panic in the credit market ending in trillions in paper losses.  Banning regulation of these Derivatives had to be one the most costly mistakes of the government in recent times.


The country was under a sever credit crisis starting in 2007 and the government stepped in and passed the Emergency Economic Stabilization Act of 2008 in October. The act allowed the government to spend $700 billion in cash injection for banks and co’s in liquidity risk, and to buy distressed assets (like CDS and other mortgage backed securities!) from public corporation’s, in order to stabilize the economy. This billions is bailout for the company showed how badly greed in wallsteet and lax regulation in Washington can lead to sever recessions and loss of millions of jobs in main street.



Globalization And Its effect On The Wealth of Nations

Foner commenced the chapter by describing the WTO meeting in 1999 and how it symbolized the growth of globalization and its mass acceptance since 135 countries were represented in the meeting. Foner mentions that Globalization is called “the concept of the 1990s” when the media proclaimed a coming of an age of borderless economy, where cultures would be submerged to create a “global civilization” and the interest of the state would be subordinate to the global interest. Such as labor shifting from one country to a cheaper country, these losing nations would allow such shift since it makes sense economically, and it would mean more profits for its citizens (capitalists/investors to be specific).

I think the effect of globalization is far reaching and deserves more attention. Millions of jobs were lost and gained by nations because of the access to global markets for businesses and reduced barriers to trading. Consumers also got the taste of products from all over the world at lower costs, most of the things we use and wear are made off shore. There are two sides to Globalization, one is the incontrovertible effect that globalization had on the lives of most denizens of this planet (whether economically or socially). And the other is the creation of  entities (multinational-corporations) that has accumulated huge power and influence on a global scale. These corporations, with billions in revenue and hundreds of thousands of employees, can practice political influence (special interest, campaign donation and the fact that it provides jobs to constituents) to tip the scale toward higher advantage for them, leaving small business with no chance to compete, and creating an oligarchical environment in which a few large corporations really run the show within a given industry, leading to higher income inequality (gap) where rich get really rich and the poor remains roughly the same, if not worse. The top 1 percent of the global population owns 40% of the wealth according to a study conducted in 2000. The image below renders the wealth distribution in the US.


Simple Song of Freedom

The Song by Bobby Darin “Simple Song of Freedom” was released in 1969 and rendered his views of freedom and the social events manifesting around him, especially the Vietnam war. He’s singing about the need to stop fighting bring integrity and love back to our society. One line that alluded to the war was his line “We, the people, don’t want a war” The modern song that’s also a protest song is “Cry” by Michael Jackson. It was released in 2001 and its themes are war, brotherhood, and truth. The video had a long line of people holding hands next to each other that spread across a long distance. The song emphasized the need to come together, stop the wars and change the world. Which is similar to the themes in the song “Simple Song of Freedom” by Bobby Darin, which had a more mellow tone, like a country song. While the song Cry was had a more sad tone. But I think the listener understood the message that’s rendered in both of these songs, even though the wording and music may be different.
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The Femine Mystique

Even though woman had the right to vote, it did little to increase political and economic freedom for women. According to Foner, Women were still treated as subordinates to men in the early 1960s, where their rights were second class compared to men and job opportunities limited to low wage clerical positions. Foner asserts that Betty Friedan’s book “The Feminine Mystique” published in 1963 revived the feminine consciousness and exposed the third class treatment women received. She even compared the Suburban home to a “comfortable concentration camp.”

I think the feminist movement of the 60’s had its root in the 1950’s since it was an Era when the Nation took a break from War and was able to concentrate on domestic issues. The economic prosperity of the 1950’s and technological innovation lended women more time to create woman’s groups and think about dealing with their rights. I have also posted pictures of Protests by 20,000 women on August 9, 1956 which eventually became known as National Women’s Day. Even though they were not protesting for women’s rights, it showed how organized women were and their willingness to fight for rights.







Now where in the history of America has consumerism became widespread as in the 1950s. Not only in its breadth but also in depth as the very notion of freedom(something that symbolizes America) became intertwined with it. The 50’s was an era called the Golden Age of Capitalism, a period of unprecedented economic growth that benefited both the capitalists and workers, as result of higher wages. Economic prosperity led to a growing middle class, which demanded appliances and products that would enable them enjoy more leisure time and spend less in the kitchen or cleaning up the house. Inventions such as the dishwasher, washing machine and vacuum cleaners became household items. Even a reporter for House Beautiful Magazine asserted that the most potent weapon in the Cold War was “the freedom offered by washing machines and dishwashers, vacuum cleaners, automobiles, and refrigerators.” The image above is an advertisement from the 1950’s and showed how unscrupulous the advertising was since Coke was advertised to kids, and also one of the selling points in the poster says “Boosts Personality!”


To Secure These Rights

Postwar America saw a rising consciousness over the issue of racial inequality and universal human rights. In October 1947, a commission on Civil Rights issued a 178 page report called “To Secure These Rights,”  which prompted the federal Government to step up their actions against racial segregation and to assume responsibility in abolishing racial inequality. If these steps were not taken to secure the rights of non-whites, then our lives would be drastically different. We would be attending different schools (one for white and other for non-whites), different buses and job-opportunities for non-whites would be severely limited. We might have even had different blogs to post our assignments!!  The existence of racial segregation would undermine the very meaning of Freedom in America.


Time to Stimulate the Economy

This image depicts Anti-New Deal sentiment. This cartoon accuses Roosevelt of spending beyond his means to deal with the Depression. The primary point of criticism of the New Deal is that it increased the deficit of the US government due to massive spending to bolster the economy. The Government ran large deficits (kind of like now after the Great Recession), which had to be financed by increased taxes and/or borrowing, leading to national debt reaching all-time highs. The government spending in 1916 was $697 million, while in 1935 the government spending was $9 billion. Which shows massive increase in Govt. expenditures.


The Crash That started the depression.

One of the major catalysts of the Great Depression was the stock market crash in October of 1929. The market lost $40 billion dollars in value in two months, which is at that time over 40% of the Gross Domestic Product of US in 1929. The crash led to widespread panic selling which fueled further declines in the market. Business conditions became bleak, leading to high unemployment rate. Black Tuesday was one the days when the market crashed and lost 12%, marking the beginning of the great depression. The market bottomed in 1932, after losing 89% of its value from its peak three years earlier.


“The World Must Be Made Safe For Democracy”

This quote was from the speech he gave to congress to declare War against Germany and bring peace to the world in March, 1917. Woodrow Wilson was neutral at the time when the Great War broke out in 1914, he even won the election in 1912 by promising not to send American Soldiers to Europe according to Foner. But as the situation in Europe worsened, the straw that broke America’s stance against joining the war was the sinking of Lusitania by German Submarines where 1,198 people were killed including 124 Americans, eliciting public outrage in America. Woodrow Wilson’s decision to join the Great War was a landmark decision since America was a military superpower and had the power to quickly end the war, which was already going on for 3 years and had claimed the lives of millions. I think Foner was pretty clear and succinct in discussion of this issue where he noted America’s earlier stance of neutrality and then the later shift to joining the war.


William Taft: The Man with Substance

William Howard Taft won the presidential election in 1908 quite easily with the backing from the preceding president Theodore Roosevelt. He practiced what he preached of his progressive view by going after monopolistic industries (using anti-trust act) and even got the Supreme court to declare Rockefeller’s Standard Oil Co. in violation of Sherman Anti-trust Act.  He exemplified the progressive era by ratifying the 16th amendment, which allowed the federal government to impose a marginal tax rate (higher tax rate for higher income individuals). Income taxation has been and continues to be a major political factor and has tremendous effects on the economic behavior of both the government and it’s citizens.


No Exemption without Inspection!

Doctor’s Examination at Ellis Island

Final Discharge from Ellis Island

The top picture depicts a doctor’s examination office in Ellis Island where a man is stopped from passing because he’s suspected of defective eyesight. He was detained for further examination to determine if the defect will prevent him from earning a living. This picture was published in 1902. Millions of immigrants passed through Ellis Island where they were examined for disease or other undesirable attributes.

The second picture shows the final discharge area from Ellis Island. This must have been a relief for most immigrants were probably anxious about passing the physical exams. After passing that aisle, they are in America, where they could start anew. This picture was also published in 1902.


The Statue Of Liberty

No symbol of freedom is more revered than the “Statue of Liberty.” Its a global icon and a celebrated symbol of Liberty that embodies America. The Statue of Liberty was built in 1886, during the Gilded Age when America passed through a time of unprecedented economic growth and prosperity. The idea of the statue was conceived by a French educator Laboulaye, he hoped it would represent the historic friendship between France and America, and also the glory of Union’s Victory in the Civil War. Which was in by itself a victory of emancipation, of liberty and equality for all men.

As noted in the book, even though the Statue of Liberty was a celebrated icon when it was built, it couldn’t hide the conflicting social division that manifested during the Gilded Age. There was an unequal distribution of wealth between the upper class and working class where the top 1 percent of  America’s population controlled 99% of wealth. The rich capitalists would live in their fancy multi-million dollar mansions and engaged in “conspicuous consumption” while most of the urban population lived in slums and at the edge of poverty. Labor strikes and protests were common as capitalists tried to take full advantage of the lower class. This period of America created a dialogue which encompasses the crucial question of the social conditions needed for the liberty of it’s citizens and the role of government in fulfilling that condition for en masse.


“Who controls the past, Controls the future” -George Orwell, 1984

What was so interesting about Eric Foner’s review was his remark about what goes in historical memory can have political motives. It eerily reminds me of the book “1984” by George Orwell and how history is manipulated by the party to keep check of what is being remembered. And we know from Neurology and psychology that what we remember plays a fundamental role in forming the basis of our reality.

Foner mentions the dichotomy between the views provided by the North and South about how the Civil War should be remembered. One was the “Emancipationist” view provided by the North which emphasized freedom and equality for all men. The south embraced the “Reconciliationist” view which accentuated the commonality between the two sides and the bravery of the individual soldiers. The Reconciliationist view downplayed the role of slavery as the cause of the Civil War and Foner also mentioned how the South still embodied the with supremacy view even after the Civil War. David Blight’s book does seem to render important facts about how we remember the Civil War, but I am not so sure if it would be an interesting read for me, I had rather read the condensed review! But maybe serious history students and historians might find the book useful. Another event in history I think is remembered differently is the War against Iraq in 2003. The two most prevalent views is that the war was caused by the threat of WMDs in Iraq, while the other view is that the prime concern was taking control of the huge oil reserves in Iraq. Both view might have political agenda and that the democrats may advance the latter view to portray the Republican party as composed of greedy capitalists.  



At this fast pace of twenty first century, with the technology boom and the ubiquity of the internet, unprecedented paths have and are being trodden to sweep modern society by its feet.  Technology have changed the world  in almost every category in the past decades, from the way we  communicate to the way we commute. Nothing is bared, not even the way history is made and recorded!

Now a days one doesn’t have to raise a flag in revolution to make history, but just post a tweet on it and you might have millions on your side to join your cause! Also with the news of Library Congress’s decision to record every tweet made, it will provide historians another outlet to data mine for significant events to record it in their books  for our posterity. One might also be concerned about the privacy issue that the social media sites like Twitter might have, but it reminds me of a saying “If you want to keep a secret, you have to keep it from yourself”, I think its something we’ll just have to adjust to and be mindful of what we do online.