And of course, it wasn't just my parents—it was everyone they knew. For example. My grandfather grew increasingly angry at the life of working harder than a slave for literally less than nothing. Life was brutally difficult in central Minnesota on a farm without electricity. Summers in the 1930 saw temperatures over 100° F. Winters were as cold as -40°F and dark. Kerosine and candles were expensive. The work was constant. The food was dreary as in oatmeal for weeks at a time. Once, in 1934, my grandfather decided to sell a calf for a little money. By the time the railroads and dealers took their cuts, he was left with 10 CENTS. After my mother escaped to Minneapolis to work as a domestic and my grandmother died of homesickness and despair (compounded by insanely bad medical care) my grandfather's rage fell on my poor uncle. To escape the rage, he signs up for the local National Guard unit because it got him off the farm and he got $1 for every meeting he attended.
Uncle's unit was folded into a troop-starved army in late 1941 so he was in the Pacific by early 1942. He survives the war having been promoted to Captain but is discharged with a thousand mile stare and a nasty drinking problem. He never does re-integrate into society and dies in a Salvation Army facility a man broken in countless ways. This is a guy who taught himself calculus because his father couldn't afford to send him to high school. What a freaking waste!
And yet, regular readers of this blog probably guess that I am more interested in the "Long Depression" of the 1870s. Just type 1873 in the "search this blog" gadget in the upper left corner of every page and you will see what I mean. (For example: We need real banking—not casinos, or Fighting inflation.) But briefly, the economic crises out here in the Internal Empire triggered by the return to the gold standard was long and cruel, and destroyed people's lives for generations. It also gave us the Greenback and People's Parties—who gave us the most interesting discussions on the subject of money ever written (which is pretty much why I got interested in these movements.)
Anyway, when economic literates start debating whether current conditions are more like the Great Depression or the Long Depression, the fact that there were protests in 951 cities worldwide yesterday should not come as a surprise.
“The Prevailing Debate Among Economists and Historians is Whether the World Economy Faces the ‘Great’ Depression of the 1930s or the ‘Long’ Depression of the 1870s”
Posted on October 5, 2011 by WashingtonsBlog
Economists Agree: We’re In a Depression
You know it’s grim when the prevailing debate among economists and historians is whether the world economy faces the “Great” depression of the 1930s or the “Long” depression of the 1870s.
Harvard professor and economic historian Niall Ferguson, a fan of the British government’s austerity drive and skeptic of further stimulus, reckons the world is facing a “slight depression” and favors comparison with the late 19th century rather than 1930s.
Long-term market bear Albert Edwards at Societe Generale has talked more apocalyptically for years of an economic “Ice Age” dominated by household deleveraging, low growth and deflation.
But now “depression” is very much back in the mainstream lexicon as the small economic bounce from the deep global recession of 2008/09 fades rapidly after little more than two years and Europe’s bank and sovereign debt crisis intensifies.
Economist and doomsayer Nouriel Roubini now says there’s a “huge” risk of 1930s-style depression ….
HSBC chief economist Stephen King, who wrote earlier this year of a “new economic permafrost”, warned last week that the systemic financial threat of a euro zone collapse and breakup risked another “Great Depression”.
As I’ve noted for 3 years, we are in a depression, and – because the government has done all of the wrong things – we’re stuck in it.
It Could Be WORSE Than the Great Depression
Indeed, contrary to Reuters’ saying that economists are split on whether it’s a repeat of the Great Depression or a lesser depression, many economists say it could be worse than the Great Depression, including:
- Fed Chairman Ben Bernanke
- Former Fed Chairman Alan Greenspan (and see this and this)
- Former Fed Chairman Paul Volcker
- Economics scholar and former Federal Reserve Governor Frederic Mishkin
- The head of the Bank of England Mervyn King (and see this)
- Nobel prize winning economist Joseph Stiglitz
- Nobel prize winning economist Paul Krugman
- Former Goldman Sachs chairman John Whitehead
- Economics professors Barry Eichengreen and and Kevin H. O’Rourke (updated here)
- Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb
- Well-known PhD economist Marc Faber
- Morgan Stanley’s UK equity strategist Graham Secker
- Former chief credit officer at Fannie Mae Edward J. Pinto
- Billionaire investor George Soros
- Senior British minister Ed Balls
Bad Government Policy Has Us Stuck
We are stuck in a depression because the government has done all of the wrong things, and has failed to address the core problems.
An economics professor says we’ll have “a never-ending depression unless we repudiate the debt, which never should have been extended in the first place”
Fraud was one of the main causes of the Depression, but nothing has been done to rein in fraud today. Indeed, the only action the government is taking is to help cover up fraudOne of the reasons USA began recovering from the Hoover-era crash and Depression is that FDR had a particularly enlightened head of the Federal Reserve named Marriner Eccles. Compared to the demands of the monetary Progressives of his day, he was still very much the rich banker. But because he had come of age in the Internal Empire, he understood the arguments of the Progressives and so became the vest head of the Federal Reserve ever.
All leading independent economists have said that the economy cannot recover until the big, insolvent banks are broken up, but the government has just helped them to get bigger more
The following is a link to excerpt from his 1933 testimony. Yves Smith over at Naked Capitalism thinks the following bit is the most relevant to our times.
It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.
Where are people such as Marriner Eccles today?
Testimony of Marriner Eccles to the Committee on the Investigation of Economic Problems in 1933
Below are excerpts from the testimony of Marriner Eccles to the Senate Committee on the Investigation of Economic Problems in 1933. It is an historic document – laying out the future terms of the Federal Deposit Insurance Corporation, the management of money supply nationally through open market operations, the Bretton Woods Accord on currency stability, mortgage refinancing as monetary stimulus, and reforms of the Federal Reserve System to eradicate the excesses of untamed capitalism and financial dominance of Wall Street. He proposes higher income and inheritance taxes as essential to promote economic growth, curb inequality and forestall political instability. He encourages federal regulation of child labor, unemployment insurance, social security and other farsighted reforms. And he avows himself a capitalist throughout.
Although he was a titan of industry - with banks, railroads and corporations spanning the American west - Eccles was born the son of an illiterate, bigamist, Mormon, Scottish immigrant. He was about as far as you could get from the Eastern elite ranks that ran US banking on Wall Street. But he sure understood money, economics and trade, and had the personal drive and charisma to carry his point with the president and with Congress.
Following his testimony, the Utah banker was invited by Franklin Roosevelt to come to Washington to spearhead legislation to enact his proposed reforms. Within two years he had drafted and enacted the Securities Act of 1933 and the Banking Act of 1933(a.k.a., The Glass-Steagall Act, which separated investment and commercial banking and established the FDIC) and the Banking Act of 1935 (which created the modern Board of Governors of the Federal Reserve System and Federal Open Market Committee). He served as Chairman of the Board of Governors of the Federal Reserve System from 1934 until 1951. more