Those who cannot remember the past are condemned to repeat it.
George Santayana
Spanish Philosopher
1863-1952
Lecture of 9/12/07 Outline
If we do not learn from past mistakes, we repeat them. This is true of individuals, families, groups, nations, and species.
Examples: Alexander the Great, the British, Soviet Union, and Americans have all tried in the past to control Afghanistan. All unsuccessful.
The story of the three pigs leaving their mother, made houses. One of straw, one of sticks, and one of brick. Big Bad Wolf, Huff and Puff.
Reflect on how the wise pig knew because he studied his world history and paid attention.
Napoleon & later Hitler try unsuccessfully to invade Russia leading to disaster for both armies.
Relate to modern day occurrence: Hurricane Katrina and how the commission knew way ahead of time that the levies should be reinforced and a category five storm would create the worst catastrophe in US history, not 9/11.
Our time is sacred because students of this class will be better, better leaders, and create a bright and promising future.
Examples of the truth of Santayana’s quote as it pertains to Afghanistan:
(Attempts of empires to occupy and control a distant land)
Alexander the Great attempts control of Afghanistan
(4th Century BCE) Results:
Consequences and results: huge expense, loss of soldiers and resources, failure, humiliation
The Mongols under Genghis Khan invade Afghanistan (1219-21). But, in the long run, the Mongols are unable to stamp out Afghan resistance.
Britain tries to control Afghanistan (1870’s-1919)
huge expense, tens of thousand dead Britains and Afghanis, failure, humiliation.
Soviet Union tries to control Afghanistan Afghan-Soviet War 1979-1989 After 10 years of bitter fighting, the Soviets finally withdrew Consequences and results: huge expense, loss of soldiers and resources, failure, humiliation, Soviet Union collapses.
The United States struck back against the Taliban which had harborded Osama bin Laden and Al Qaida (November 2001). We have now been at war for eight years and we still do not have Osama bin Laden. American opposition to the war is growing and there are major questions about whether we can really afford this war.
Those who cannot remember the past ...
>Archive - PWW Print Edition Archive - 2004 Editions - Jun 19, 2004
Author: Wright Salisbury
People's Weekly World Newspaper, 06/17/04 12:57
Those who cannot remember the past are condemned to repeat it. So said philosopher George Santayana in 1905 in his treatise, “The Life of Reason.” Today we are at war in Iraq, on a fool’s mission to thwart Al Qaeda, which Iraq under Saddam Hussein would not tolerate. We allowed ourselves, or our senators and congressmen allowed themselves, to be lied to and led into a war based on entirely false information. This is a matter of public record and does not even merit discussion (though President Bush is still looking for, i.e., hopes to find, such weapons somewhere in Iraq).
Bush is not intellectually the brightest star in the firmament, as even his most ardent supporters will agree, but if he had taken the time to read a little history, perhaps he would have been less eager to make war in the Middle East. Indeed, if he had simply learned the lessons of Vietnam, he would have hesitated to attack Iraq. But assuming that he, or someone in his administration, remembered the disaster of Vietnam, he could have argued that Iraq “would be different.”
But consider the past. “The past is prelude to the present,” some wise man said (I can’t remember who, but no matter). In 1920, according to “The Last Iraqi Insurgency,” an article by Niall Ferguson that appeared in the op-ed section of the April 18 issue of The New York Times, the British attempted to drive the Ottoman Turks out of Iraq. The parallel to our 2003 invasion of Iraq is eerily familiar. Gen. Frederick Stanley Maude declared at the time, “Our armies to do not come to your cities and lands as conquerors or enemies, but as liberators.”
They ran into a hornet’s nest of opposition and suffered more than 2,000 dead and wounded. They finally quelled the inevitable revolt, but only by the use of indiscriminate bombing that repelled the British public.
And their “exit strategy”? I don’t know if they planned one, but troops remained there until 1955, 35 years later.
Never have wars of aggression or conquest been successful. Every empire, from the Roman, the Spanish, to the British, has ended with the “empire” shrunk eventually to the land of the aggressors or the empire-builders. Recent attempts, from 1800 on (the Napoleonic wars, World Wars I and II, and the Vietnam War) have lasted no more than 10 years.
Will we never learn? Doesn’t anyone read history? People don’t like to be invaded and dominated by foreigners and will kick them out at the earliest opportunity. But Iraq is different, isn’t it?
No. It’s the same as the past. And those who cannot remember the past are condemned to repeat it.
Wright Salisbury is a member of September 11th Families for Peaceful Tomorrows and founder of the Alliance for Jewish-Christian-Muslim Understanding. He can be reached at .
Britain tries to control colonies in America (1775-1783): Consequences and results: huge expense, loss of soldiers and recourses, failure, humiliation
France tries to hold control of Viet Nam: First Indochina War (1946-1954). Consequences and results: huge expense, loss of soldiers and recourses, failure, humiliation
United States blocks democratic elections in Viet Name and tries to control the country. Vietnam War 1959-1975
Consequences and results: huge expense, loss of soldiers and resources, failure, humiliation
More Examples of the truth of the quote:
Those who cannot remember the past are condemned to repeat it.
George Santayana
Spanish Philosopher
1863-1952
Economic Bubbles (Bull Runs) and Crashes: in Holland, between 1634 and 1637, there was a speculative frenzy that sucked people into “tulipomania!”
The first tulips came to Europe from Constantinople in 1554. Certain “breaks”—flowers of particularly unusual beauty and patterns came to be highly valued. Trading in tulips was increased.
It’s hard to date with precision exactly when the bubble in Holland formed, but the autumn of 1635 marked a turning point. That’s when the trade in actual bulbs gave way to the trade in promissory notes: slips of paper listing details of the flowers in question, the dates they would be delivered, and their price.
Before then, the tulip market followed the rhythm of the season: bulbs could change hands only between the months of June, when they were lifted from the ground, and October, when they had to be planted again. Frenzied as it was, the market before 1635 was still rooted in reality: cash money for actual flowers. Now began the windhandel—the wind trade.
History of U.S. Stock Market Crashes
The Crash of 2000
From 1992-2000, the markets and the economy experienced a period of record expansion. On September 1, 2000, the NASDAQ traded at 4234.33. From September 2000 to January 2, 2001, the NASDAQ dropped 45.9%. In October 2002, the NASDAQ dropped to as low as 1,108.49 - a 78.4% decline from its all-time high of 5,132.52, the level it had established in March 2000.
Causes of the Crash:
1. Corporate Corruption. Many companies fraudulently inflated their profits and used accounting loopholes to hide debt. Corporate officers enjoyed outrageous stock options that diluted company stock;
2. Overvalued Stocks. There were numerous examples of companies making significant operating losses with no hope of turning a profit for years to come, yet sporting a market capitalization of over a billion dollars;
3. Daytraders and Momentum Investors. The advent of the Internet enabled online trading –a new, quick, and inexpensive way to trade the markets. This revolution led to millions of new investors and traders entering the markets with little or no experience;
4. Conflict of Interest between Research Firm Analysts and Investment Bankers. It was common practice for the research arms of investment banks to issue favorable ratings on stocks for which their client companies sought to raise capital. In some cases, companies received highly favorable ratings, even though they were actually in serious financial trouble.
A total of 8 trillion dollars of wealth was lost in the crash of 2000.
Following the Crash:
1. New Rules for Daytraders. Under the new rules that were introduced, investors need at least $25,000 in their account to actively trade the markets. In addition, new restrictions were also placed on the marketing methods daytrading firms are allowed to use;
2. CEO and CFO Accountability. Under the new regulations, CEOs and CFOs are required to sign-off on their statements (balance sheets). In addition, fraud prosecution was stepped up, resulting in significantly higher penalties;
3. Accounting Reforms. Reforms include better disclosure of corporate balance sheet information. Items such as stock options and offshore investments are to be disclosed so that investors may better judge if a company is actually profitable;4. Separation between Investment Banking and Brokerage Research. A major reform was introduced to avoid conflicts of interest in the financial services industry. A clear split between the research and investment banking arms of brokerage houses was mandated.
The Crash of 1987
The markets hit a new high on August 25, 1987 when the Dow hit a record 2722.44 points. Then, the Dow started to head down. On October 19, 1987, the stock market crashed. The Dow dropped 508 points or 22.6% in a single trading day. This was a drop of 36.7% from its high on August 25, 1987.
Causes of the Crash:
1. No Liquidity. During the crash, the markets were not able to handle the imbalance of sell orders;
2. Overvalued Stocks;
3. Program Trading and the Use of Derivative Securities Software. Large institutional investment companies used computers to execute large stock trades automatically when certain market conditions prevailed. Some analysts claim that the program trading of index futures and derivatives securities was also to blame.
During this crash, 1/2 trillion dollars of wealth were erased.
Following the Crash:
1. Uniform Margin Requirements. New margin requirements were introduced to reduce the volatility for stocks, index futures, and stock options;
2. New Computer Systems. Stock exchanges changed to new computer systems that increase data management effectiveness, accuracy, efficiency, and productivity;
3. Circuit Breakers. The New York Stock Exchange and the Chicago Mercantile Exchange instituted a circuit breaker mechanism, which halts trading on both exchanges for one hour should the Dow fall more than 250 points in a day, and for two hours, should it fall more than 400 points.
The Crash of 1929
On September 4, 1929, the stock market hit an all-time high. Banks were heavily invested in stocks, and individual investors borrowed on margin to invest in stocks. On October 29, 1929, the stock market dropped 11.5%, bringing the Dow 39.6% off its high.
After the crash, the stock market mounted a slow comeback. By the summer of 1930, the market was up 30% from the crash low. But by July 1932, the stock market hit a low that made the 1929 crash. By the summer of 1932, the Dow had lost almost 89% of its value and traded more than 50% below the low it had reached on October 29, 1929.
Causes of the Crash:
1. Overvalued Stocks. Some analysts also maintain stocks were heavily overbought;
2. Low Margin Requirements. At the time of the crash, you needed to put down only 10% cash in order to buy stocks. If you wanted to invest $10,000 in stocks, only $1,000 in cash was required;
3. Interest Rate Hikes. The Fed aggressively raised interest rates on broker loans;
4. Poor Banking Structures. There were few federal restrictions on start-up capital requirements for new banks. As a result, many banks were highly insolvent. When these banks started to invest heavily in the stock market, the results proved to be devastating, once the market started to crash. By 1932, 40% of all banks in the U.S. had gone out of business.
In total, 14 billion dollars of wealth were lost during the market crash.
Following the Crash:
1. The Securities and Exchange Commission (SEC) was established;.
2. The Glass-Stegall Act was passed. It separated commercial and investment banking activities. Over the past decade though, the Fed and banking regulators have softened some of the provisions of the Glass-Stegall Act;
3. In 1933, the Federal Deposit Insurance Corporation (FDIC) was established to insure individual bank accounts for up to $100,000.
Population Explosions—War and Poverty
In early 1946 British and KMT troops entered Vietnam to disarm the Viet Minh and prepare the way for the French, who were ferried to Saigon (now Ho Chi Minh City) in U.S. naval vessels. Outgunned, the Viet Minh were forced to accept an agreement that permitted French troops to disembark, with the condition that Vietnam would become an autonomous state in the French Union (to be modeled on the British Commonwealth), and that French troops would leave in 1952. Once ashore, however, the French quickly chose to violate this agreement, and to move against the Viet Minh. On November 22, 1946, in an action that was widely condemned, the French navy bombarded the port city of Haiphong, killing 6000 civilians and wounding 25,000. The First Indochina War had begun.
Viet Minh armed forces had numbered only 2000 when independence was declared, but once they issued the order for national resistance in December 1946 their numbers jumped to 60,000. The United States advised the French to develop a government that would be loyal to France and counteract the Viet Minh, so France named Bao Dai—the former Vietnamese emperor—to be the figurehead ruler of Vietnam. Bao Dai had collaborated with both the French and the Japanese, and he had abdicated during the August Revolution. By 1949, however, the CIA (which had replaced the OSS) reported that the Viet Minh enjoyed the support of the vast majority of Vietnamese, including the country’s normally anti-Communist Catholic minority.
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Afghanistan, officially Transitional Islamic State of Afghanistan, republic in southwestern Asia, bounded on the north by Turkmenistan, Uzbekistan, and Tajikistan; on the east by China and the part of the disputed territory of Jammu and Kashmīr controlled by Pakistan; on the south by Pakistan; and on the west by Iran. Afghanistan lies across ancient trade and invasion routes from Central Asia into India. This position has been the greatest influence on its history because the invaders often settled there. Today the population includes many different ethnic groups. Most of the present borders of the country were drawn up in the 19th century, when Afghanistan became a buffer state, or neutral zone, between Russia and British India. Kābul is the capital and largest city.