Unsilent Generation

Entries categorized as ‘Great Depression’

Roszak’s “Making of an Elder Culture”

May 21, 2010 · Leave a Comment

Few may remember it, but before the advent of Social Security in the 1930s and Medicare in the 1960s, the old were widely viewed as a spent force. Nobody talked about happy retirement, in part because, these were people who remembered only too well the Depression. Few looked forward to leisure worlds because the poor house was too recent in so many people’s minds. Before old age entitlements, tending to the old was viewed as the job of the family. If you didn’t have a family, then it was charity–you joined the begging class. And even if you did have a family, you lived knowing that the young and middle aged couldn’t wait to get rid of you.

The same is more or less true today. Some days it seems the entire city of Washington, D.C., the nation’s capital, is on a mission against the old. Of course, nobody would ever say that. But there is a war against the old going on here in the form of a vigorous, largely uncontested attack on entitlements—a fighting word for conservatives and conservative Democrats who simply can’t stand Roosevelt’s New Deal, Johnson’s Great Society, and everything the stood for.

In his book The Making of an Elder Culture, recently published by New Society, Theodore Roszak, the cultural historian who more than three decades ago wrote The Making of a Counter Culture, sets out some of the grim history of old people in American society, and in doing so places elders within our current political world.

The old were in fact the worst victims of industrialism, primarily because they were not deemed worth saving. They belonged to that class of unwelcome dependents called the impotent poor—those who could not provide for themselves…as comfortable as many middle-class elders may be today, they share with all older people a long sad history of bleak mistreatment they would do well to remember. For generations the old have suffered wrongs inflicted on them by harsh public policy and often by their nearest and dearest….in the modern western world where the old have been seen as the claim of the dreary past upon the bustling forces of progress.

In the early days of the industrial revolution, Roszak writes, “aged workers became poor. The workhouse and county home were little better than the concentration camp. They were fed gruel, bedded down on straw or bare wood…they had no place to turn  save for their children…They were pictured as withered, toothless, bent, lean.’’

You must remember that as recently as 40 or 50 years ago, there was no senior lobby. The political pros never talked about a senior vote. Today all that has changed–yet Roszak sees in today’s entitlement wars a serious threat to the well-being of elders.

In the same way that organized labor was once regarded as a potentially tyrannical force able to achieve its own selfish ends, entitlement critics began characterizing seniors as a threat to the democratic process…

Nobody of any political stripe wants to risk the charge of granny-bashing,but the facts are clear. In the United States, gaining even  modest degrees of security in retirement has been a struggle against business leaders, political conservatives, and free market economists for whom money is the measure of all things.

Always remember, Roszak says, “the well-to-do are the first to tell us that there is not enough to go around.”

In his book, Roszak envisions a society in which rather tan cutting social programs for the old, we will extend them to younger people. Noone would resent Medicare, for example, if we had universal health care for Americans of all ages. He sees a future where the old and the young join to create a new world devoted to common humane goals: ending poverty at all ages, assuring education–laying the planks of a new society on the New Deal and LBJ’s social welfare project. Such ideas face an uphill battle in today’s political culture–but are no less inspiring for that fact.

I’ll be writing more about Roszak’s work in future posts.

Categories: Great Depression · Social Security · age discrimination · corporations · economy · elder books / arts · generations / intergenerational issues · health care · older workers · pensions / retirement funds · poverty · radical geezers
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GOP to the Unemployed: Drop Dead (You Bums)

February 27, 2010 · 10 Comments

Tomorrow, unemployment benefits will officially end for hundreds of thousands of Americans, thanks to maneuverings by Senate Republicans to prevent a vote that would have extended those benefits. Unless the extension is passed soon, some 1.1 million of the nation’s unemployed will see their unemployment expire in the coming month, and 5 million will lose benefits by June. 

The House finally voted to extend benefits on Thursday, after several days of stalling and posturing. But in the Senate, the measure was blocked by Kentucky’s Jim Bunning. Politico reported that late into Thursday night, Bunning held out against repeated Democratic attempts to pass the extension by unanimous consent. In response to entreaties from colleagues across the aisle, other Republican senators rose to defend Bunning’s right to obstruct the vote, and Bunning himself was heard to utter, “Tough shit.”  

Bunning said he wanted to see the cost of the benefits offset by other savings, to keep from adding to the deficit. But earlier in the week, Nevada Republican Congressman Dean Heller offered another objection to extending unemployment benefits: He believes it might create a nation of bums.

Think Progress relayed Heller’s remarks, which were made at a Republican Party function in Elko, Nevada, and reported in the local paper:

Heller said the current economic downturn and policies may bring back the hobos of the Great Depression, people who wandered the country taking odd jobs. He said a study found that people who are out of work longer than two years have only a 50 percent chance of getting back into the workforce.

“I believe there should be a federal safety net,” Heller said, but he questioned the wisdom of extending unemployment benefits yet again to a total of 24 months, which Congress is doing. “Is the government now creating hobos?” he asked.

Heller doesn’t seem bothered by the fact that he hails from a state with one of the nation’s highest unemployment rates–now more than 13 percent–as well as its highest foreclosure rate. In his speech, he managed to blame everything on the Democrats. “Six percent of Americans believe the stimulus package created jobs. More Americans believe Elvis is still alive,” he said. Never mind that the extended unemployment benefits Heller derided are in fact among the most effective components the stimulus package, according to the Congressional Budget Office, producing  $1.90 in growth for every $1 spent. 

What makes Heller’s statement really stupid, of course, is that people could become hobos if Congress doesn’t extend unemployment benefits, rather than if they do. Modest as they are, these weekly benefits are what’s keeping thousands–and perhaps millions–of families out of  poverty. The benefits that expire first are for people who have been out of work the longest, and are most likely to be living close to the edge already. 

The same is true for the other social safety net programs that Republicans tend to despise. For example, without Social Security, according to the Alliance for Retired Americans, ”55% of severely disabled workers and their families would live in poverty; 47% of elderly households would live in poverty; another 1.3 million children would fall into poverty; and 2.4 million grandparent-headed households caring for 4.5 million grandchildren would be deprived of [their] most important source of income.” Yet Social Security, too, has long been under attack by conservatives–a position that’s lately gained bipartisan ground, as reflected in Obama’s bipartisan “debt commission,” which is aimed at reducing entitlements.

The heydey of hobos was during the Great Depression, before the New Deal began to weave the social safety net. If Nelson and his fellow Republicans want to see Americans riding the rails, living in tent cities, and lining up at soup kitchens (even more than they already are), all they have to do is keep tearing that safety net apart.

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Categories: Congressional Democrats · Congressional Republicans · Great Depression · Obama Administration · Social Security · budget / tax policy · economy · financial crisis / recession · jobs / employment / unemployment · poverty · right wing
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Obama’s Disappointing State of the Union

January 27, 2010 · 4 Comments

Obama’s State of the Union message offered little that was new, bold, or inspiring. He spoke about the need for jobs, but avoided any specific proposals for creating them. While the unemployment rate runs 10 percent overall, and over 15 percent for blacks in some states, Obama is focused on tax credits for the middle class. Just how an unemployed worker can benefit from such tax breaks is a mystery.

The president’s economic plans eschew dramatic government action in favor of the market and the private sector. The administration is proposing the Heritage Foundation’s automatic IRAs to encourage savings by workers. To make this idea more appealing, the administration has suggested that the government might put $500 into each individual account to jump-start the program. As I wrote earlier, this scheme promises to be another boon to Wall Street. If the Democrats were willing to to ignore Republican attacks on big government, they might choose to put the $500 into Social Security instead.

Continuing the government-cutting theme, Obama proposed a freeze on spending, starting next year. The freeze wouldn’t include Medicare or Medicaid. But in another proposal, Obama said he would create by executive order a commission that would propose cuts in entitlements. That’s how, in Washington, you can support one program by undercutting it at the same time.

As for health care reform, it looks like what’s in store is a further weakening of an already weak bill, perhaps reducing it to a ban on some of the worst abuses by insurance companies, such as denying benefits to people with pre-existing conditions. There is likely to be no meaningful reining in of the insurance or pharmaceutical industries, and no control over costs. All in all, a lackluster, disappointing speech.

What would I like to have heard the president say tonight? Earlier this week, I wrote about FDR, and the ambitious initiatives he undertook in his first year. I thought about his insistence–which today sounds almost quaint–that the government exists to help its people, and when they need more help, the government should do more, not less. I thought about this particular historical moment, when the ruthlessness of Wall Street and the folly of conservative economic policymaking have been laid bare. It was a moment that might have been siezed for the purpose of real change. But tonight’s speech tells us, once and for all, that the moment has come and gone.

The historian and humanitarian Howard Zinn, who died suddenly today at age 87, said this in a speech made a few days after the 2008 election, and broadcast by Amy Goodman earlier this year: 

Why is all the political rhetoric limited? Why is the set of solutions given to social and economic issues so cramped and so short of what is needed, so short of what the Universal Declaration of Human Rights demands? And, yes, Obama, who obviously is more attuned to the needs of people than his opponent, you know, Obama, who is more far-sighted, more thoughtful, more imaginative, why has he been limited in what he is saying? Why hasn’t he come out for what is called a single-payer system in healthcare?…

I was really gratified when Obama called for “Let’s tax the rich more, and let’s tax the poor and middle class less.” And they said, “That’s socialism.” And I thought, “Whoa! I’m happy to hear that. Finally, socialism is getting a good name.”…But still, you know, he wouldn’t come out for a single-payer health system, that is, for what I would call health security, to go along with Social Security, you see, wouldn’t come out for that; wouldn’t come out for the government creating jobs for millions of people, because that’s what really is needed now. You see, when people are—the newspapers this morning report highest unemployment in decades, right? The government needs to create jobs. Private enterprise is not going to create jobs. Private enterprise fails, the so-called free market system fails, fails again and again. When the Depression hit in the 1930s, Roosevelt and the New Deal created jobs for millions of people. And, oh, there were people on the—you know, out there on the fringe who yelled “Socialism!” Didn’t matter. People needed it. If people need something badly, and somebody does something for them, you can throw all the names you want at them, it won’t matter, you see? But that was needed in this campaign….

You know, I like him. I’m for him. I want him to do well. I’m happy he won….But when I saw Obama and McCain sort of both together supporting the $700 billion bailout, I thought, “Uh-oh. No, no. Please don’t do that. Please, Obama, step aside from that….I’m sure something in your instincts must tell you that there’s something wrong with giving $700 billion to the same financial institutions which ruined us, which got us into this mess, something wrong with that, you see.” And it’s not even politically viable. That is, you can’t even say, “Oh, I’m doing it because people will then vote for me.” No. It was very obvious when the $700 billion bailout was announced that the majority of people in the country were opposed to it. Instinctively, they said, “Something is wrong with this. Why give it to them? We need it.”…

Obama should have been saying, “No, let’s take that $700 billion, let’s give it to people who can’t pay their mortgages. Let’s create jobs, you know.” You know, instead of pouring $700 billion into the top and hoping that it will trickle down to the bottom, no, go right to the bottom, where people need it and get—so, yes, that was a disappointment. So, yeah, I’m trying to indicate what we’ll have to do now and to fulfill what Obama himself has promised: change, real change. You can’t have—you can say “change,” but if you keep doing the old policies, it’s not change, right?

Categories: Great Depression · Medicare · Obama Administration · Social Security · Wall Street / financial industry · budget / tax policy · drug industry · economy · financial crisis / recession · health care · health insurance industry · jobs / employment / unemployment · pensions / retirement funds
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A Lesson for Obama from FDR: What America Needs Is Jobs–and Leadership

January 27, 2010 · 1 Comment

I published this piece yesterday on a site called Reader Supported News. It might provide some food for (wishful) thought as we prepare to listen to Obama’s State of the Union speech.

With the unemployment rate still hovering above 10 percent, the bailed-out financial sector is rewarding itself with bonuses instead of making the kinds of solid investments that might produce jobs. The time clearly is at hand for the Obama administration to push the banks aside, and plunge in to shape the economic recovery on its own terms. That means using federal monies to employ out of work people in rebuilding infrastructure and launching new projects –public employment in the public interest.

The model is Franklin Delano Roosevelt’s Civilian Conservation Corp. FDR’s idea – hardly a revolutionary one–was to replace relief with work, employing destitute young people in useful, low-skilled labor that would serve the public good. What makes the program seem even more relevant to the present day is its focus on environmental conservation: planting trees, preventing soil erosion, reducing flood and fire risk, and building infrastructure in National Parks. “I call your attention to the fact that this type of work is of definite practical value,” Roosevelt said in announcing the plan in March of 1933, “not only through the prevention of great present financial loss but also a means of creation future national wealth.”

The CCC idea was accompanied by proposals for a Public Works Administration to employ older people in large-scale projects involving a lot of planning and skilled labor. These latter projects would take many months or years, while the Civilian Conservation Corp could be implemented right away. The story of the CCC, writes Jonathan Alter in “The Defining Moment,” an account of FDR’s first 100 days, is “a tale of mobilization so rapid and so competent it almost defies belief for later generations.”

This, despite the fact that the proposal for a Civilian Conservation Corps immediately met with considerable resistance from all sides. The labor unions said Roosevelt’s proposed low wages would turn the nation into a forced labor camp, and amounted to fascism, Hitlerism and Sovietism, all rolled into one. It was attacked from the left by Huey Long, who called it a “sapsucker’s bill,” and from the right by conservative members of Congress who said that the economy would sort itself out in the long run without so much government spending. To one such remark, FDR’s aide Harry Hopkins replied: “People don’t eat in the ‘long run’ Senator They eat every day.”

The Roosevelt administration got the bill creating the CCC through Congress less than a month after his inauguration on March 4, 1933. Members of his own cabinet protested the idea was impossibly ambitious, but the president accepted no excuses–he wanted a quarter of a million young men put to work by summer. He then proceeded to manage the plan himself, delving into bureaucracy that ran the public lands–which then, as now, made a third of the nation–pulling in members of Congress, debating wage levels, making charts, writing up plans. When the mobilization still seemed too slow, he ordered in the army to help. “By April 7,” Alter writes, “only 34 days into the administration, the first corps members were enlisted. By July 1, less than four months after Roosevelt made his outlandish demand, he exceeded the quarter million goal. Nearly 275,000 young men were enrolled in 1,300 camps across the country, supporting their families and undertaking much-needed projects.”

The benefits of the CCC went beyond their impact on the economy or the environment. A friend whose father served in the Corps told me he recalled it, to his dying day, as one of the happiest times of his life. A kid from an immigrant ghetto in upper Manhattan, his idea of wilderness was no doubt limited to Fort Tryon Park–but the CCC sent him to work in Washington state’s glorious Mount Ranier National Park. And instead of the hopelessness that came with unemployment and desperate poverty, he had a place to live, three meals a day, and the pride of sending money home to help his single mother and younger siblings.

In its time, Alter writes, the mobilization of the Civilian Conservation Corps exceeded all prior efforts in the nation’s history–”and it has not been matched since.” Over nine years, more than 3 million men were provided meaningful work. The CCC would inspire numerous other programs–the Job Corps, Peace Corps, Vista, and AmeriCorps. It succeeded in the same spirit of solidarity and national service that would soon help win Second World War.

Roosevelt’s bold experiment in federal job-creation demonstrated that government can work–and more than that. It showed that there are times when leadership must come not from the states or localities or the slow-moving Congress, but directly from the White House. It provides a stark lesson for the Obama government, which remains mired in a swampland of political bickering while it pursues the illusion of bipartisanship, triangulates corporate special interests, and naively supports big banks in some revamped version of trickle-down economics.

The current word on the political street is that the Obama administration is bent on “going populist” in the wake of recent political defeats. And since his opponents long ago branded him a socialist (if not the anti-Christ), it seems he has little to lose. A good beginning would be to tax the $45 billion in bank bonuses at the utmost possible level, using the return to jump-start a federal government sponsored, government-run program like the CCC to employ men–and this time, women as well. Through a federally funded jobs program, they can be put to work to rebuild the nation’s rotting infrastructure; to spark public enterprise in the new energy industries, from autos to solar and wind powered electric utilities; to lay railways that criss-cross the nation and build the engines, coaches, and freight cars that will travel over them; and to construct and the staff community health centers that might fill in for a failed health care reform effort.

Some version of this plan has been proposed many times during the current financial crisis, and always ignored or shoved aside because of opposition from powerful industries and their supporters, who argue that such dramatic federal action would disrupt the free market or override local initiative. Well, the market, such as it is–never really free, and usually greased to serve corporate interests–has not done the job for the millions of Americans who remain unemployed. It’s time for the president to step in and do his.

I encourage you to check out the rest of Reader Supported News, an up-and-coming progressive news site.

Categories: 2010 elections · Congress · Great Depression · Obama Administration · Wall Street / financial industry · World War II · budget / tax policy · corporations · economy · financial crisis / recession · generations / intergenerational issues · health care · jobs / employment / unemployment · poverty
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Banker to Public: Inequality Leads to Prosperity

October 22, 2009 · Leave a Comment

Lord Griffiths of Fforestfach (and Goldman Sachs). Photo: Princeton University.

Lord Griffiths of Fforestfach (and Goldman Sachs). Photo: Princeton University.

In a now-famous talk at St Paul’s Cathedral in London, Lord Griffiths, the vice chairman of Goldman Sachs International and a former advisor to Margaret Thatcher when she was prime minister, gave the audience a pep talk, urging them to buck up, take the long view, and soldier on. There is nothing to be ashamed of here, he said. The hard-working bankers ought rightfully claim their big bonuses. As for the British public, they should get real and “tolerate the inequality as a way to achieve greater prosperity for all.”

Lord Griffiths of Fforestfach (his full title) said he knew what he was talking about, having been brought up in poverty a miners’ family in Wales. Presumably, what this taught him about inequality was not to be on the wrong end of it.

His Lorship urged people to think of  bonuses as part of the long-term investment in Britain’s economy.

I believe that we should be thinking about the medium-term common good, not the short-term common good … We should not, therefore, be ashamed of offering compensation in an internationally competitive market which ensures the bank businesses here and employs British people.

The British public, he said, should pull themselves together and realize that if the bankers did not get their bonuses at the same rate as last year—before they were bailed out by the taxpayers—then they might well toddle off to some other more favorable spot.

If we said we’re not going to have as big bonuses or the same bonuses as last year, I think then you’d find that lots of City firms could easily hive off their operations to Switzerland or the far east.

What’s gotten less play are the worries His Lordship expressed over the notion that the government might actually want to own the banks in return for bailing out their sorry arses. Or that they might institute restrictions exactly like those imposed by the Glass-Steagall Act. This, of course, was the Depression era law separating commercial banking from investment banking, whose repeal in the waning days of the Clinton Administration paved the way for the current recession.

There is a move in the UK now to nationalize all the banks, and if not that, then separating them into two parts. Each existing bank could be broken in two, one section functioning as the banking utility, and the other an investment firm.

Another interesting tidbit about Lord Griffiths is his membership on the advisory board of something called the Faith and Work Initiative at Princeton University, which seems to be aimed at bringing religious morality and ethics into the workplace.

The purpose of the Initiative is to equip students and leaders to integrate the resources of their faith with their work to transform their organizations and serve the greater good. This is in line with Princeton University’s unofficial motto, “in the nation’s service and the service of all nations.” For many, faith is what shapes and informs their value system, ethics, character, leadership, and attitude toward work. For many, faith is the key to find meaning, purpose, and even joy in their work, transforming it from being “just a job” to being a calling.

Apparently, the spirit moves Lord Griffiths in mysterious ways.

Categories: Great Depression · Wall Street / financial industry · economy · financial crisis / recession · international · poverty
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Old Guys in the Job Market Dropping Like Flies

August 3, 2009 · Leave a Comment

The recession is hitting older working men especially hard, in part because their jobs tend to be in sectors like finance and construction, and are fast disappearing. That means families dependent on one man’s earnings face especially hard times. Their plans for retirement are out the window as 401ks  crash; mortgages and credit card bills go unpaid; and health insurance get dropped before they are eligible for Medicare.

White men over 55 still experience unemployment at lower rates than their minority counterparts, but the change in their unemployment rate is greater–which means there are a lot of old white guys out there who’ve recently lost their jobs.

  In a new survey USA Today reports:

Jobless rates for men and women older than 55 are at their highest level since the Great Depression, government data show. White men over 55 had a record 6.5% unemployment rate in the second quarter, far above the previous post-Depression high of 5.4% in 1983. The jobless rate for older black men was higher — 10.5% — but more than a percentage point below its 1983 peak.The most remarkable change is in the unemployment rate for black women: 12.2%, far below the historic peak of 20% in 1983. Hispanic unemployment is about 6 percentage points below historic highs, too. 

In other words, this recession has shrunk the racial gap in unemployment, largely because white men are doing so much worse than usual.

Since older white man are also the demographic most likely to have voted for George W. Bush, I guess you could say there’s some poetic justice to all this. But being a member of the group myself, I know that we don’t all deserve this. In fact, no one deserves the kind of hopelessness that must come with being 60, jobless, pensionless, and uninsured, with no prospect for recovery any time in the near future.

Categories: Bush Administration · Great Depression · Medicare · Obama Administration · age discrimination · financial crisis / recession · health care · health insurance industry · jobs / employment / unemployment · older workers · pensions / retirement funds · poverty
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American Dreams

July 4, 2009 · Leave a Comment

POETRY AND POLITICS SERIES

Jean Casella, my longtime editor, who has published, edited, and written about books for twenty years, has agreed to bring some culture to Unsilent Generation by posting a literary excerpt every now and then, along with reviews of books, movies, and music.

For July the 4th, she sent me these two poems, one from the 1930s (and especially relevant to our current economic conditions), and one from the 1950s (which reminds me what things were like in this country when I was young). In both, the poets confront their nation about its failure to live up to its own promise, and its own mythmaking. Both, I think, are examples of what Howard Zinn meant when he said that dissent is the highest form of patriotism.

I can’t post these in their entirety for copyright reasons, but urge you to follow the links and read them through.

 

Let American Be America Again
by Langston Hughes

Let America be America again.
Let it be the dream it used to be.
Let it be the pioneer on the plain
Seeking a home where he himself is free.

(America never was America to me.)

Let America be the dream the dreamers dreamed–
Let it be that great strong land of love
Where never kings connive nor tyrants scheme
That any man be crushed by one above.

(It never was America to me.)

O, let my land be a land where Liberty
Is crowned with no false patriotic wreath,
But opportunity is real, and life is free,
Equality is in the air we breathe.

(There’s never been equality for me,
Nor freedom in this “homeland of the free.”)…

Read the complete poem here.

 

America
by Allen Ginsberg

America I’ve given you all and now I’m nothing.
America two dollars and twenty-seven cents January 17, 1956.
I can’t stand my own mind.
America when will we end the human war?
Go fuck yourself with your atom bomb
I don’t feel good don’t bother me.
I won’t write my poem till I’m in my right mind.
America when will you be angelic?
When will you take off your clothes?
When will you look at yourself through the grave?
When will you be worthy of your million Trotskyites?
America why are your libraries full of tears?
America when will you send your eggs to India?
I’m sick of your insane demands.
When can I go into the supermarket and buy what I need with my good looks?
America after all it is you and I who are perfect not the next world.
Your machinery is too much for me.
You made me want to be a saint.
There must be some other way to settle this argument….

Read the complete poem here.

Categories: Great Depression · Poetry and Politics · Silent Generation · radical geezers
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Lessons from the 1930s: “Big Business Must Be Controlled If Our Democracy Is to Survive”

May 22, 2009 · Leave a Comment

The Progressive, which is currently celebrating its 100th year, is running on its web site “a series of excerpts from The Progressive magazine in the 1930s that are especially relevant today.” I think these documents from the Depression era are especially resonant for us members of the Silent Generation, because they speak the language of our childhood. But these days, of course, they also speak the language of the present moment.  

All of the selctions are worth reading, but one of them stands out for the downright eeriness with which it captures our current predicament. It recalls the government bailout of banks and corporations that took place in the early years of the New Deal, and the swiftness with which those corporations and Wall Street executives bit the hand that had fed them.

In 1937, the economy went through a renewed downturn that FDR’s critics have referred to as “the Roosevelt Recession.” Conservatives blamed the slump on the administration’s hostility to big business and its Keynesian economic policies, and argued for rollbacks of government spending and regulation. Some spending cuts were made, to no good effect, and Roosevelt became convinced that the banking industry and other corporate interests were determined to scuttle the New Deal. 

Secretary of the Interior Harold Ickes led the counterattack. The following piece by Ickes was published on January 8, 1938. Because the excerpt is so long I am not setting it off as a block quote (no one want to read that much italics), but it’s better still to follow this link and read the whole thing, since for reasons of space I had to leave out some choice insults. 

Economic power in this country does not rest in the mass of the people as it must if a democracy is to endure. Wealth is not equitably distributed nor do its owners in the main even manage and control it. On the contrary, wealth has become so great and so concentrated that as a matter of fact, it controls those who possess it.

About one-half of the wealth of this country is in corporate form, and over one-half of it is under the domination of 200 corporations, which in turn are controlled by what [has been] referred to as “America’s 60 Families.”

[Up until the 1929 crash], America’s 60 families had held in their hands…complete dominion over the economic and political life of the country. They had lulled the American people into the conviction that if the people would grant conditions in which these 60 families…[could] do as they pleased, the 60 families would put capital to work; enterprise would boom, wages would rise, stocks would soar and there would be two cars in every garage.

The people gave the 60 families this confidence; gave the 60 families this trust in their benevolent despotism—in short, gave the 60 families then what they ask for today, and what happened? Out of their divinely claimed genius as managers of private enterprise the 60 families promptly led the American people into the worst peacetime catastrophe ever known.

Then the disillusioned people changed the government [electing Roosevelt in 1932].

The new government bailed the 60 families out of the consequences of their own mesmeric miscalculations and their unintelligent leadership of the system of private enterprise of which they had pretended to be master managers. It preserved the corporate structures in which their capital was invested from going through the wringer of bankruptcy and reorganization and stock assessment.

As an inevitable by-product of preserving the capital structure…[it also] preserved the management structure from going through the wringer to squeeze out incompetence and big salaries. Then government sought to modify the way in which the business of the nation was done so that business confidence would be based upon the well-being and purchasing power of 120 million people at the bottom standing on their own feet rather than upon the license of the 60 families at the top and upon their premises, in return for that license, to permit the gravy of their benevolence to trickle down upon the exploited millions at the bottom.

Government did get the economic system back on its feet; did succeed in doing a job where the 60 families had failed.

Government had the system back on its feet so well at the time of the elections of 1936 that, as the president said…the patients—over their panic and raising their salaries—felt strong enough to throw their crutches at the doctor.

And last spring government had the business of the country turning over so well that it thought it could safely heed the pleas of private enterprise to government and abandon the economic initiative.

Pursuant to these pleas government cut down public expenditures…in order to meet the insistence of private enterprise that business confidence would be greater if government would take steps to balance the budget—assuaged the fears of the head of the biggest bank in the United States about runaway inflation—and turned over to the managers of private enterprise the responsibility they had said that they were eager and willing to assume.

And what happened?

Two things. First, the 60 families that were masterminding private enterprise proved to have learned nothing nor forgotten nothing since 1929 about the management of business under modern conditions. They made the same mistakes they had made before 1929. They ran the stock market up and helped it get started down. They did little or nothing to increase the purchasing power of labor to make up for the government withdrawals and then ran prices to the sky so that the consumer refused to spend what they graciously let him earn.

Second, the 60 families, unwilling to learn to do business upon the democratic terms of 1937, began to make demands and threats.

To Franklin D. Roosevelt…[they have made] a threat that they will refuse to do business at all unless the President and the Congress and the people will repeal all that we have gained in the last five years and regrant them the suicidal license they had enjoyed in 1929….

To the 120 million people of the United States they have made the threat that, unless they are free to speculate free of regulations to protect the people’s money; unless they are free to accumulate through legal tricks by means of corporations without paying their share of taxes; unless they are free to dominate the rest of us without restrictions on their financial or economic power; unless they are once more free to do all these things, then the United States is to have its first general sit-down strike—not of labor—not of the American people—but of the 60 families and of the capital created by the whole American people of which the 60 families have obtained control.

If the American people call this bluff, then the America that is to be will be a democratic America, a free America.

If the American people yield to this bluff, then the America that is to be will be a big-business Fascist America—an enslaved America….

Big business must be controlled if our democracy is to survive….The new America must be a land of free business, not of ruthless business—a land of free men, not of economic slaves.

Categories: Great Depression · Silent Generation · budget / tax policy · economy · financial crisis / recession
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Happy Days Are Here Again–Not

April 10, 2009 · Leave a Comment

After waiting about a year too long to admit that the country was actually in a recession, financial analysts are now rushing to declare it over—with the politicians and the press not far behind. In another example of the upbeat rhetoric I wrote about earlier this week, the Washington Post this morning suggested that some “tentative signs of strength” in the banking sector, along with small gains in the Dow, could offer ”at least some hope that the darkest days of the recession could be ending.”

To be fair, the Post also acknowledges that unemployment rates are still rising, and could pass 10 percent this year. But they give the final word to a Standard & Poors analyst who declares, in a triumph of Orwellian Newspeak, “Less weakness is the new strength.” (Many of these same “analysts,” of course, were the folks who told us that the bubble would never burst.)

As Obama huddles with his top economic advisors today, the administration is also promoting a sense of what Agence France Presse describes as ”shy optimism” about the economy. At an Economics Club luncheon yesterday, Lawrence Summers acknowledged that there were “still substantial downdrafts” in the economy–which is how he describes more than half a million Americans losing their jobs every month. “But you also have to see that there has been a substantial anecdotal flow in the last six to eight weeks of things that felt a little bit better,” he added.

There are plenty of others, however, who refuse to add their voices to this “anecdotal flow.” 

I wrote earlier about former top regulator William K. Black, who thinks banks are in even worse shape than we know, and believes the upbeat prognostications are part of a “cover-up” designed to stir pubic confidence, prevent panic, and keep the lousy, fraudulent banks afloat.

Then there’s George Soros, who on Monday declared that “the banking system, as a whole, is basically insolvent.”  According to a Reuters report:

Soros, speaking to Reuters Financial Television, also warned that rescuing U.S. banks could turn them into “zombies” that draw the lifeblood of the economy, prolonging the economic slowdown.

“I don’t expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown,” Soros said, adding that in 2010 there might be “something” in terms of U.S. growth.

Even if the banks are, unsurprisingly, feeling a bit less peckish after feasting on government cash, that’s a false marker by which to measure recovery—which can’t possibly take place while the American people are still losing jobs by the millions. 

After hearing last week’s unemployment figures, Robert Reich wrote in his blog that we have passed recession and are into a depression–maybe not as bad as the Great Depression, but plenty bad enough. “Every lost job has a multiplier effect throughout the economy,” he points out. And it’s unemployment, not the prospect of bank failures, that creates the “broader anxiety” that keeps people from spending money, which in turn leads to more job losses. Reich believes the government should stop fooling around with Wall Street, and instead put all its resources into Main Street jobs.

On Monday, the New York Times asked an assortment of economists whether they believed in the increasingly optimistic forecasts. James Galbraith insisted that “the most important current economic fact remains the loss of 600,000 jobs every month,” and there can be no talk of recovery without job growth. As for the upbeat rhetoric, he said:

Compulsive optimism, otherwise known as grasping at straws, is habitual for some economists, especially if they are selling public policy or common stock. But it is also dangerous, destroying credibility and discouraging action. Repress it.

Categories: Great Depression · Obama Administration · Wall Street / financial industry · financial crisis / recession · jobs / employment / unemployment · media
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Why Bank Rage Is Not Populism

March 23, 2009 · Leave a Comment

The cover of Newsweek on the stands today reads “The Thinking Man’s Guide to Populist Rage.” These covers, of course, tend to go for eye-catching hyperbole (six weeks ago, Newsweek’s cover line was “We Are All Socialists Now”). But the issue is filled with serious essays on the subject, by Michael Kazin, Eliot Spitzer, and others. And in this morning’s New York Times, John Harwood makes similar claims, painting people’s anger at Wall Street as part of a populist resurgence. Harwood’s most prominent source is, of all people, Ed Rollins, the Republican strategist whose credentials on the subject consist of working on the campaign of faux-populist Ross Perot.

One person not quoted in these pieces is the original, and still unequaled, historian of populism, Lawrence Goodwyn. He identified the first populist movement—-the agrarian revolt of the 1890s—as the greatest mass movement in American history, and as a largely unfulfilled dream. Goodwyn’s 1978 book The Populist Moment is still in print and well worth reading, both for its stirring history and its insights into what is going on today—-and what isn’t going on.

Goodwyn traces the Populist Movement to its origins in the rural depression after the Civil War, when farmers formed clubs that fought the monopolistic railroad rates set by the big Eastern railroads, to the detriment of Southern and Western farmers. By the 1870s these clubs had grown in number and size, forming themselves into Farmers Alliances, which engaged in all sorts of cooperative action, from catching horse thieves to buying supplies. By the 1890s, the alliances had a combined membership of more than one million people and were in the thick of politics, fighting railroad rates, fighting the big cattle operators, demanding taxes on speculative landholdings, defending local merchants, and demanding paper money to replace the gold standard.

Most significantly, in relation to today’s economic crisis, the alliances believed they needed to wrest control of credit, and of the money supply in general, from the hands of bankers and other blood-sucking plutocrats, and place it in the hands of the farmers and laborers who were the real producers of wealth. Georgia populist leader Tom Watson accused the Democrats of sacrificing “the liberty and prosperity of the country…to Plutocratic greed,” and the Republicans of serving the interests of “monopolists, gamblers, gigantic corporations, bondholders, [and] bankers.” He said that big business didn’t care about ordinary Americans “except as raw material served up for the twin gods of production and profit.”

As an alternative, the populists proposed what they called the “sub-treasury plan,” under which a new monetary system would be created and operated “in the name of the whole people,” and credit would be freely extended to farmers, small producers, and other ordinary citizens. The plan represented a genuine challenge to the commercial banking industry, and to big corporations in general.

In the election of 1890 the movement emerged with substantial blocs—

Kingfisher Reformer (Oklahoma), November 29, 1894

Kingfisher Reformer (Oklahoma), November 29, 1894

52 congressmen, seven state legislatures, a handful of senators and governors–and by 1892, the alliance leaders had created the foundations of a new People’s Party. They got more than one million votes in the elections that year. Cleveland won, and in 1893, rural America fell into deep depression. The populists gained favor, and in 1896, the Democratic Party’s nomination of William Jennings Bryan (who also opposed the gold standard) represented an effort to pull in the People’s Party. 

But the revolt collapsed, for a myriad of reasons: It failed in its efforts to build alliances with industrial labor unions and with black farmers in the South. And it was deprived of its driving force when economic conditions improved. Some rebellious farmers went home to the Republican Party; others splintered off into generally futile local movements. Certain populist ideas were gradually worked into the overall economy-—railroad regulation, some banking reform, direct election of senators, postal savings banks, initiatives and referendums, and an expanded concept of currency.

But in fact, the movement’s co-optation into the mainstream politics of the Progressive Era was what cemented its demise. Goodwyn sees these reforms as “skin-deep parodies of the original ideals.” As he puts it, what happened was “a consolidation of our current political culture, framed by the narrow aspirations of ‘reform,’—-falling within the labels of ‘progressive’ or `liberal.’ No one would ever again challenge the basic structures of the political economy.” As for the farmers, “the noose tightened, with smallholders being swallowed by big enterprises.” It marked the beginning of the movement toward agribusiness, as well as an affirmation of the power of the industrialists, the insurance companies, and above all the banks. The public would push back at that power structure in bad financial times such as the Great Depression, but would never again pose it any serious threat.

What’s going on today bears little resemblance to the great surge of political organizing that began in and spread through the South and West in the 1890s. To begin with, it isn’t now, nor is it likely to become, part of any larger mass movement. It’s directed at the worst excesses of the system, not at the system itself. And it doesn’t offer an alternative vision, beyond a few more progressive “reforms.”

Some of these mild reforms are being earnestly pursued by the Obama Administration, which at the same time clearly has no intention of taking them any deeper. (Contrary to what Rush Limbaugh and Newsweek may say, we are not all socialists now.) They may well succeed in reining in the worst abuses of a system. But the system will survive largely intact and the society it dominates will remain wildly unequal, a far cry from the dreams of those farmers who gathered in barns and grange halls when the nation was much younger than it is today.

Anthony Weekly Bulletin (Kansa), May 4, 1894. Cartoons from web site on Populism created by Worth Robert Miller, Department of History, Missouri State University

Anthony Weekly Bulletin (Kansa), May 4, 1894. Cartoons from web site on Populism created by Worth Robert Miller, Department of History, Missouri State University: http://history.missouristate.edu/wrmiller/default.htm.

Categories: Great Depression · Wall Street / financial industry · budget / tax policy · financial crisis / recession · poverty
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