Posts Tagged ‘Great Depression’

Is the Money Going to the Wrong Place?

October 18, 2008

  This is not 1932, you might say when we compare today’s financial disaster with the Great Depression. No, it’s not.  But, there are similarities. You know, things like the stock market crashing and banks failing.

  This time is also different in that the government is pumping money into the banking system to keep it viable. However, there are those who say that’s the wrong way to go.

Franklin D. Roosevlet Library)

Pres. Franklin D. Roosevelt, 1932, Whistlestop Campaign, New Albany, IN (Courtesy: Franklin D. Roosevelt (Library)

  They are not opposed to the government intervening in the crisis, but they think the intervention needs to give relief to the average American, not just the banks. They point out that this is a good time to rebuild the nation’s infrastructure. That harkens back to President Franklin D. Roosevelt’s public works programs.

   “There is no way a modern economy can function without good roads, telecommunication, rail transport and an educated labour force,” Allan Mendelowitz told , a member and former chairman of the Federal Housing Finance Board, told  Adrianne Appel of Inter Press Service.

  Using money for those things provides jobs, which means that people will have money to spend, and since our economy depends heavily on consumer spending, it makes sense to target working Americans when deciding on where to prop up the economy.

  Appel’s article reports that critics of the Bush administration say he waited until he could wait no longer to do something to stop the economic bleeding. They don’t believe he really wanted to do it because it flies in the face of the ideology he has been espousing. But, he really has no choice if he wants to prevent another Great Depression.  But, the way he is doing it follows his philosophy of giving to the wealthy and hoping it will trickle down to the rest of us.

  “Just think if we used those billions directly on jobs,” said Lewis Pitts, a public interest attorney in North Carolina.

  “In the developed world we have the worst income distribution of any country. A smaller and smaller portion of our population has a larger claim on wealth. This manifests in that the working poor have less and less income and have a harder time making ends meet,” Mendelowitz said.

  So, in that sense, we are back to 1932.

  Congressional Democrats plan to start working on help for the average American, planning to allot $150 billion for roads and other infrastructure programs.  But, Senate Republicans would probably filibuster any attempt to do that, or, if they didn’t, President Bush would probably veto the bill. That would mean a delay, but he’ll be gone in January and, if Sen. Obama is president, it will probably become law. McCain? It’s hard to tell. He did buy into the Bush economic program, but he is not, as he says, Bush, and he does have a habit of changing his mind.


Child of the Great Depression

October 9, 2008

  The Great Depression food line on the cover of this week’s Time magazine brought back memories of my childhood. I was a “child of the Great Depression.”  I wrote about it in my memoir The Newsman, and an excerpt about that will follow.

Library of Congress)

Pres. Herbert Hoover was blamed for the Great Depression (Photo: Library of Congress)

    First, though, I’ll comment briefly on the Time article that tells us how history can help us avoid it happening again.

  Fortunately, our Fed Chairman Ben Bernanke studied the Great Depression of the 1930’s intensively. Most economists agree that the federal government did just the opposite of what it should have done when credit seized up during the Great Depression.  It “made a bad situation worse by reducing credit to the banking system,”  writes Niall Ferguson in his Time article “The End of Prosperity?” He has pumped more than $1 trillion into the financial system over the past 13 months.

  And Treasury Secretary Hank Paulson is doing the same thing with his $700 billion bailout of financial institutions, on top of what he has already spent on Freddie Mac and Fannie Mae, AIG, etc.

  It appears this is a case of some key people in government paying attention to the lessons of history. Will it work? Maybe, but things are expected to get worse before they get better.

  Now, here is that excerpt from The Newsman that I promised.

Excerpt from The Newsman

 Our house was not only small, it was crowded with me, my mother, father, sister, and brother, and, from time to time, out-of-work relatives. After all, we were in the grips of the Great Depression, which everyone in my family said was caused by Republican President Herbert Hoover. Later, I learned more about Hoover and that he really was a good, compassionate man, and that Coolidge and a lot of other people like him, Republicans and Democrats, had more to do with causing the Depression than Hoover. Back then about the only thing worse for whites in the South than a Damn Yankee was a Damn Yankee Republican. Now, as you know, the situation has reversed. Race was and is a potent political issue.


  My father, like everyone else in the South, except for a few “post office Republicans,” was a Democrat. A “post office Republican” was a person in Dixie who admitted to being a Republican in order to be appointed a postmaster when a Republican president was elected. That didn’t happen for the first twenty-two years of my life.


 The only president I had known for my first fifteen years was Franklin D. Roosevelt, special in our area because he made Warm Springs his second home. He was a good Democrat, according to my mother, and Republicans were bad rich people who cared only about their wealth. I picked up all of that valuable information about Republicans from my mother. My father wasn’t as vocal about national politics, concentrating mainly on state races. He was a Talmadge man to the core. My mama was vocal about politics, national and local, and didn’t hesitate to let all within earshot know her views right then and there. Usually, she would do it in such a way that she would have even those who disagreed with her laughing.


  Daddy was one of the few men in our extended family who had a job for a number of years in the early thirties. When relatives came to visit with suitcases in hand, they stayed for a while. Since there was no welfare, families had to look out for their own.


  One Christmas, after my mother and father had stretched their budget thin by seeing that all of the visiting kids got something from Santa Claus, they discovered they had forgotten guess who. On Christmas Eve they left me in the care of my brother and sister, and, along with other last minute chores, started looking for something for four-year-old-me.


  The Stores had already closed, but they found a barber shop open that had a cardboard toy circus for sale. They were late punching out colorful flat sheet of cardboard and folding them into a circus bandwagon, lion cages, elephants and other circus paraphernalia. When I wandered sleepily into the living room on Christmas morning, I was greeted by a huge circus that was spread out all over the floor. It took my breath away. I had never seen such magnificence before. It was probably the most exciting Christmas morning I ever experienced. It might not have cost much, but what does a four-year-old know or care about costs?  

(The Newsman can be purchased at Barnes and Noble in Columbus and online at