What image do you have of the Great Depression? In a lot of minds, the thought conjured up is people standing in bread lines, while others who invested heavily in the stock market and saw their fortunes wiped out in a day’s trading stepped off the nearest tall building.
So when Franklin D. Roosevelt became President, he eventually expanded a number of the measures put into place by President Herbert Hoover (a ‘progressive’ Republican) and created more governmental agencies and programs like Social Security, growing the government to new levels in an effort to bring relief. It was all designed so we’d never have to live in desperate economic straits again.
Well, guess what? We live in interesting times.
Since the housing boom began to go bust five years ago we have seen millions of jobs lost, entire neighborhoods become little more than a sea of foreclosed homes, local and state governments come under strain, and trillions of dollars in personal wealth vanish. Thousands of businesses – small and large – which thrived during good times closed up shop, their shuttered facades a grim reminder of the boom we no longer enjoy.
As Americans, we elected our current leader in reaction to the hopelessness and stagnation we felt under a recessionary economy being dragged down by a pair of wars in far-off, distant lands. His message of ‘hope and change’ was enough to convince the people to give him a try despite his being relatively untested and lacking executive experience.
Over the last thirty months, we’ve seen the results – more jobs lost, more foreclosures, and most certainly more government. TARP begat the Stimulus, which begat quantitative easing, which begat the recent debate over raising the debt ceiling. While the public doesn’t understand the ins and outs of the economic theory behind all these machinations, they completely understand the disappearance of their 401.k balances, the equity in their homes, and perhaps eventually their livelihoods.
Yes, we live in interesting times.
So where are we headed? Last year, Greeks rioted when their government had to enforce strict austerity measures at the direction of those who bailed them out. London erupted in its own strife over the weekend, perhaps due in part to bitterness among those down-and-out long-term jobless and others living on the dole – much of the destruction simply seems to be a cover for looting and theft.
The question to me isn’t IF this sort of situation will arise here on this side of the pond, but when and where?
While there’s at least one account of an “eviction riot” during the Great Depression, much of the unrest came in battles between workers and employers. Indeed, we have that same sort of tinderbox these days – just look at Wisconsin for a recent example. While labor demonstrations both there and closer to home were peaceful for the most part, what’s to say the next one may not spread from its original intent of showing Big Labor’s strength and turn violent? Of course, the TEA Party will get the blame, but in retrospect they as a community have been quite restrained considering they’ve borne the brunt of the economic damage caused so far.
I’m not an old man, as I’ll turn 47 next month. But it seems to me that I’ve seen a lot more trouble in the world over the last half-decade than I saw in any other time.
Bear in mind I came of age after the Vietnam War wound down, but I remember Watergate and the fall of a President. I recall the “malaise” we were in during the Carter years, and the arrival of “morning in America” with Ronald Reagan. We’ve had Grenada, Panama, the Persian Gulf War, Iraq, Afghanistan, and a number of terrorist attacks with the granddaddy of them all being 9-11.
After 9-11 we were frightened but we were ready to fight, even if we didn’t know just who the enemy was. Now we’re just plain scared and perhaps many are resigned to the fact that times will be hard for awhile to come.
Every year around graduation time, we reflect on what an 18-year-old American has and hasn’t seen in his or her life – for example, a person turning 18 in 2011 has no concept of the Persian Gulf War except in books. They’ve never known a world without the internet being commonly available, and their first memory of political scandal probably had to do with what the meaning of “is” is or whether the 2000 election was stolen or not.
But neither their lifespan nor mine is such that we’ve lived through an economic time like this – sure, things were tough in the early 1990s but “the worst economy of the last 50 years” had nothing on this. Unemployment was higher in the early 1980s but that recession was short-lived once Reagan’s tax cuts took hold and wealth trickled down. In this instance we seem to be attempting a new model of redistributing wealth which works for certain favored groups – others, not so much.
Undoubtedly, we as Americans will find our way out of our economic slump. But whether that day will arrive in time for many Americans on the verge of losing everything is the key question, and the answer may be in whether cooler heads will continue to prevail.
We live in interesting times, and it’s likely our children will too. But the curse could eventually turn to a blessing if we solve the problem properly.