The period between the end of the Bush disaster and the beginning of the Obama ascendancy is a quiet time and a moment for reflection before we cheer more for the passing of the last year than the coming of the next. A Zogby Poll found, “Americans are overwhelmingly glad to say goodbye to 2008 but are somewhat unsure of the future. Americans are guardedly optimistic about 2009, but many feel that the coming year will be worse or the same as 2008.”
Many of us are looking for guidance from the past, perhaps even from the period when Herbert Hoover bid adieu and FDR waited for his turn at bat. The year was 1932: It was a year of famine in Russia, hunger marches in Britain, Nazis emerging in Germany, Gandhi striking for India’s independence, and 13 million Americans were out of work. A temporary halt to foreclosures had been ordered while working hours and wages were cut.
The worst was still to come.
Randall Parker, author of “Reflections on the Depression” sees parallels between 1932 and today. He wrote that: “In the 1920s, most everyone was saying that this was a new economy and all the old rules did not apply. We know from economic history — they said the same things in Japan in the 1980s and during the Internet bubble of the 1990s — that when you hear those words it is time to run like hell.”
Where are you gonna run? There is no sector of our economy untouched by the current maladies. Will our Great Recession turn into a Greater Depression? What should we expect since everyone knows that if the new president is to fix the economy — a formidable task for any president — it won’t happen over-night. It took FDR years, and even then, it is said that it was the war that ended the depression — not the New Deal.
Here are some predictions — long-since forgotten all these many years ago. Even then, not everyone was willing to admit what was coming.
“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.” – Harvard Economic Society (HES), November 10, 1929
“The end of the decline of the Stock Market will probably not be long, only a few more days at most.” – Irving Fisher, Professor of Economics at Yale University, November 14, 1929
“In most of the cities and towns of this country, this Wall Street panic will have no effect.” – Paul Block (President of the Block newspaper chain), editorial, November 15, 1929
“Financial storm definitely passed.”
– Bernard Baruch, cablegram to Winston Churchill, November 15, 1929
“I see nothing in the present situation that is either menacing or warrants pessimism… I have every confidence that there will be a revival of activity in the spring, and the country will make steady progress.” – Andrew W. Mellon, US Secretary of the Treasury, December 31, 1929
“We are now near the end of the declining phase of the depression.” – Harvard Economic Society, Nov 15, 1930
“Stabilization at [present] levels is clearly possible.” – HES, Oct 31, 1931
“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.” – President F.D. Roosevelt, 1933
Flash forward to today: Have we reached the bottom of this economic depression or is the worst still to come? Mike Schenk, an economist for Credit Union National Association, expressed his concerns, “This is scary stuff. We are teetering on the brink of a massive downward spiral. Deflation is a threat.”
Even the most dire warnings don’t seem to move people until their lives are directly impacted. We still haven’t reached the point where our media realize that much of this was a result of criminality.
Case in point: James Wood writing on the Seeking Alpha website:
“Bernie Madoff took dishonestly about $50 billion from investors through a Ponzi scheme. A 20 times greater amount, about a trillion dollars, has been taken from naïve investors (both bank and non bank) who invested in subprime loans in a way which is as dishonest as the Madoff Ponzi scheme, at least in a moral sense. The only big difference between the two scams is that the Madoff scam we can blame on Madoff, but Subprime is the fault of the system. While no one individual is responsible for the Subprime problem, the general greed for profits led all the bankers to deceive themselves and their investors. Government must be held responsible for not having fundamental regulation to protect its banks and investors from the stupidity of the banks that promoted subprime.”
Add to this the millions facing foreclosure because they were sold a bill of goods as part of President Bush’s ownership society and you have a human disaster as well as a financial one.
We may not be able to make a citizen’s arrest of a whole system, but we can do more than we seem to be doing collectively by speaking out against these outrages and pressing the new Administration and anyone who will listen that more has to be done, and done now.
Silence in the face of what’s coming is complicity. This is no longer about a political abstraction, but a very real threat to our economic survival.
Speak now or forever hold your piece of the American dream — before it becomes a memory or memorabilia.