Posts Tagged ‘Great Depression’

bilde-113

The argument behind our course, A Tale of Two Depressions, was not that the depression of the 1930s and the one today are exactly the same but, instead, that we might learn a lot more about each depression by comparing it to the other.

David Cay Johnston offers a different perspective. In his view, the majority of Americans actually fared better in the midst of the First Great Depression than they’re doing today.

Indeed, coming out of the Great Depression eight decades ago, the vast majority fared vastly better than most people have coming out of the Great Recession, which officially ended on June 30 six years ago.

It may be jarring to hear that the vast majority of Americans, the 90 percent, enjoyed bigger income gains in the 1930s than in recent years, but that is what the data show.

The data also indicate tandem increases in both want and wealth, with the vast majority worse off in 2013 than in 2009, while those at the apex of the economy are enjoying a much larger — and growing — share of national income.

Read the rest of Johnston’s essay for his survey of the data on jobs, earnings, and inequality in comparing the two eras.

Men Waiting Outside Al Capone Soup Kitchen JNS.FoodGiveaway2

Our course, A Tale of Two Depressions, is now over (except, of course, for the final exam).

Here’s a link to the additional materials (songs, news stories, cultural responses, etc.) we made available to the students.

Here’s a link [pdf] to some of the charts we compiled to compare the first and second Great Depressions.

And, finally: maybe someday we’ll be able to offer this as a history course instead of current events.

American-Dream

The American Dream has been a prominent theme of our Tale of Two Depressions course this semester. We have had the opportunity to trace both the changing content and contours of that dream and the periods, as after 1929, when it quickly turned into a nightmare.

But, as we know, a new American Dream was invented in the postwar period, the so-called Golden Age of American capitalism, which—while unevenly distributed (for example, in the Jim Crow South and northern inner cities) and openly contested (for example, in the Port Huron Statement and the March on Washington for Jobs and Freedom)—held sway at least in some pockets. Such as Detroit:

Decades ago, car workers lived the quintessential American Dream: they pursued stable, well-paying, union-backed jobs, often straight out of high school. They were able to build a middle-class life and provide the promise of something better to their children.

Now, once again, as the BBC [ht: ja] explains, that dream has turned into a nightmare:

Times have changed.

Now jobs are scarce, and people feel shame in being unprepared for the current labour market.

“Unemployed auto workers, factory workers, they have a lot of regrets about the past,” he said.

“A lot of workers are internalising, ‘You succeed on your own merits and your own abilities, and if you fail, you’re to blame’,” [Victor Tan] Chen says.

He isn’t alone in seeing this pattern.

Experts tell the BBC that job seekers in the US are now, more than ever, blaming themselves for being out of work, due in part to misconceptions about what it takes to succeed in America.

What reinforces such an American Nightmare is a self-help industry that is the modern secular version of our grounding myth—which, as Helaine Olen explains, is “the idea that diligent efforts and thrift demonstrated both godliness and virtue — and would result in worldly success.” Belief in self-help easily becomes self-blame. And, of course, an attempt to blame the victims of the Second Great Depression for their own plight.

Viewed through this prism, you can think of the constant simmering anger in our culture as the road rage of self-help culture. Fearing the humiliation of failure, we aggressively lash out at others who prove the self-help nostrums a lie.

This could be the reason that many, including Republican members of Congress, blame the long-term jobless for their own plight, and cut off their unemployment checks. We say those who fell prey to predatory lending weren’t misled, but were greedy.

According to the tenets of self-help, the victims of the American economic collapse need not a helping hand, but a kick in the pants.

Bors-4-3-14

It just so happens, in the midst of the march to war over Ukraine, this week we’re teaching Berkeley in the Sixties and The Port Huron Statement in the Tale of Two Depressions course.

In 1962, the Students for a Democratic Society were concerned about the effects of “a half-century of accelerating destruction,” especially the policy of nuclear deterrence.

Deterrence advocates, all of them prepared at least to threaten mass extermination, advance arguments of several kinds. At one pole are the minority of open partisans of preventive war —who falsely assume the inevitability of violent conflict and assert the lunatic efficacy of striking the first blow, assuming that it will be easier to “recover” after thermonuclear war than to recover now from the grip of the Cold War. Somewhat more reluctant to advocate initiating a war, but perhaps more disturbing for their numbers within the Kennedy Administration, are the many advocates of the “counterforce” theory of aiming strategic nuclear weapons at military installations — though this might “save” more lives than a preventive war, it would require drastic, provocative and perhaps impossible social change to separate many cities from weapons sites, it would be impossible to ensure the immunity of cities after one or two counterforce nuclear “exchanges”, it would generate a perpetual arms race for less vulnerability and greater weapons power and mobility, it would make outer space a region subject to militarization, and accelerate the suspicions and arms build-ups which are incentives to precipitate nuclear action. Others would support fighting “limited wars” which use conventional (all but atomic) weapons, backed by deterrents so mighty that both sides would fear to use them — although underestimating the implications of numerous new atomic powers on the world stage, the extreme difficulty of anchoring international order with weapons of only transient invulnerability, the potential tendency for a “losing side” to push limited protracted fighting on the soil of underdeveloped countries. Still other deterrence artists propose limited, clearly defensive and retaliatory, nuclear capacity, always potent enough to deter an opponent’s aggressive designs — the best of deterrence stratagems, but inadequate when it rests on the equation of an arms “stalemate” with international stability.

As we know, history is repeating itself, as “the world alternatively drifts and plunges towards a terrible war when vision and change are required.”

Thus, we would do well to consider Stephen Cohen’s argument that the American media are misrepresenting Putin and Russia.

The degradation of mainstream American press coverage of Russia, a country still vital to US national security, has been under way for many years. If the recent tsunami of shamefully unprofessional and politically inflammatory articles in leading newspapers and magazines—particularly about the Sochi Olympics, Ukraine and, unfailingly, President Vladimir Putin—is an indication, this media malpractice is now pervasive and the new norm.

There are notable exceptions, but a general pattern has developed. Even in the venerable New York Times and Washington Post, news reports, editorials and commentaries no longer adhere rigorously to traditional journalistic standards, often failing to provide essential facts and context; to make a clear distinction between reporting and analysis; to require at least two different political or “expert” views on major developments; or to publish opposing opinions on their op-ed pages. As a result, American media on Russia today are less objective, less balanced, more conformist and scarcely less ideological than when they covered Soviet Russia during the Cold War.

And we should remember that Senator John McCain’s shameless denunciation of President Obama, as responsible for a “feckless foreign policy where nobody believes in America’s strength anymore,” was delivered in a speech the American Israel Public Affairs Committee (AIPAC), the most powerful foreign policy lobby in Washington. As John Hickman explains,

McCain fulminated about Russian annexation of Crimea and possibly of the Russian speaking eastern half of Ukraine. Yet he was speaking to an audience that had endorsed the annexation of the Golan Heights and East Jerusalem, and endorses the ongoing annexation of the West Bank. Hypocrisy more complete would be difficult to conceive.

American journalists allow politicians like McCain to get away with such nonsense because many fear reporting anything critical about either Israel or the Israeli lobby. They are also captives of the news frames constructed by official sources in Washington. For the Crimean Crisis the consensus news frame is that Russian behavior is a violation of a strong post Second World War international norm against territorial annexation. The historical reality is that the norm has been frequently and successfully violated: Poland annexed East Prussia, East Brandenburg, Lower Silesia, and Pomerania; Russia annexed Bessarabia and Bukovina; India annexed Goa, Daman and Diu, Dadra and Nagar Haveli; India and Pakistan partitioned Kashmir; Indonesia annexed West Irian; Ethiopia annexed Ogaden; Turkey annexed northern Cyprus; Morocco annexed Spanish Sahara, and Israel annexed the majority of Palestine. Yes, of course some sort of justification could be offered for each of these events. There are always justifications. What is important but ignored in the outrage currently being performed about Crimea is that “the world community” did not protest strongly or effectively.

The consensus news frame also excludes reference to the complexities of Russian and Soviet history. When reporters deploy the propagandistic phrased like “Ukraine’s Crimea” they ignore the fact that Russian sovereignty over the peninsula predates American possession of the Mississippi Valley and ignores the rather artificial transfer of sovereignty over the peninsula from Russia to Ukraine by Nikita Khrushchev, at a time when both Russia and Ukraine were part of the same country (the Soviet Union). Forget about sympathy for the difficulties faced by ethnic Russian minorities in the post-Soviet near abroad.

Between the irresponsible pandering of politicians and the cockeyed international news coverage it seems likely that many will be deceived by a simplistic narrative of Ukrainian nationalist good guys and Russian bad guys. What a pity that it always seems to take so long to realize we are being failed by our political and news media leaders.

In both cases, the march to war was prepared by simplistic narratives produced and disseminated by feckless media and politicians.

greed

Yesterday in our class on A Tale of Two Depressions, we discussed Robert McElvaine’s notion of “moral economy” (which he introduces in chapter 9 of his book, The Great Depression: America, 1929-1941). The idea is that, during the first Great Depression, Americans were engaged in an intense debate between different moral economies (which McElvaine characterizes as the difference between the “cooperative individualism” of workers and the “acquisitive individualism” of businesspeople).

As I explained to students, all economic theories—for example, neoclassical, Keynesian, and Marxian theories—represent moral economies. And they arrive at very different conclusions concerning the justice or fairness of capitalism. Thus, for example, neoclassical economists argue that everyone gets what they deserve and, through the workings of the invisible hand, the result will be full employment. In contrast, Keynesian economics is based on the proposition that, while everyone may get what they deserve (with the possible exception of coupon-clippers), it’s quite possible that will result in less-then-full-employment equilibrium, which then requires the visible hand of government intervention. Marxian economists propose a third possibility: even if everyone gets what they deserve in markets, in production things are different (because of exploitation)—and the consequence, whether there’s an invisible or visible hand, is inequality and instability. In other words, the three economic theories represent radically different moral economies.

One student then invoked the idea of moral economy and blamed greed for causing the current crisis. I responded by making the distinction between individual greed and economic institutions, which like the different notions of fairness among economic theories leads to quite different solutions: throw the greedy bankers in jail (which of course we haven’t done) or change the economic institutions (which we haven’t done either).

Chris Dillow makes a similar distinction between “greedy bankers” and “overly powerful bankers.” His view is that “the habit of over-emphasizing individuals’ traits and under-emphasizing situational forces” leads us to “to moralize inequality; the rich are rich because they are greedy whilst the poor are poor because they are lazy.”

What this effaces is the fact that inequalities in capitalism are instead the result of inequalities of power – a power which rests in part upon ideology. Moralizing inequality tends to blind us to this fact. It creates the illusion that capitalism would be acceptable if only those at the top were better people, when in fact the faults in capitalism are structural and not due to the flaws of passing individuals.

That’s pretty much the same distinction I was trying to make, although I still want to characterize the two explanations as different moral economies: one is a moral economy of flawed individuals, while the other is a moral economy of flawed institutions.*

 

*Although I’m willing to admit I’m sympathetic to Dillow’s view for another reason: because he invokes my favorite football club and blames Crystal Palace fans (who greeted Wayne Rooney with chants of “you fat greedy bastard”) for committing the error of “blaming Rooney’s salary upon his personal character rather than upon his situation.”

 

 

It’s just been announced that Bruce Springsteen’s “The Ghost of Tom Joad” will be released as a duet with the Nightwatchman Tom Morello on Springsteen’s new album.*

The timing couldn’t be better, as I work on the syllabus for my spring 2014 course, “A Tale of Two Depressions,” which I’ll coteach for the second time (here’s a link to the course last spring) with Ben Giamo.

 

*For younger readers, Tom Joad is a character in John Steinbeck’s novel The Grapes Of Wrath. Near the end of the story, Tom makes his famous “I’ll be there” speech, which is noted in Springsteen’s lyrics.

Tom Joad: I been thinking about us, too, about our people living like pigs and good rich land layin’ fallow. Or maybe one guy with a million acres and a hundred thousand farmers starvin’. And I been wonderin’ if all our folks got together and yelled…

Ma Joad: Oh, Tommy, they’d drag you out and cut you down just like they done to Casy.

Tom Joad: They’d drag me anyways. Sooner or later they’d get me for one thing if not for another. Until then…

Ma Joad: Tommy, you’re not aimin’ to kill nobody.

Tom Joad: No, Ma, not that. That ain’t it. It’s just, well as long as I’m an outlaw anyways… maybe I can do somethin’… maybe I can just find out somethin’, just scrounge around and maybe find out what it is that’s wrong and see if they ain’t somethin’ that can be done about it. I ain’t thought it out all clear, Ma. I can’t. I don’t know enough.

Ma Joad: How am I gonna know about ya, Tommy? Why they could kill ya and I’d never know. They could hurt ya. How am I gonna know?

Tom Joad: Well, maybe it’s like Casy says. A fellow ain’t got a soul of his own, just little piece of a big soul, the one big soul that belongs to everybody, then…

Ma Joad: Then what, Tom?

Tom Joad: Then it don’t matter. I’ll be all around in the dark – I’ll be everywhere. Wherever you can look – wherever there’s a fight, so hungry people can eat, I’ll be there. Wherever there’s a cop beatin’ up a guy, I’ll be there. I’ll be in the way guys yell when they’re mad. I’ll be in the way kids laugh when they’re hungry and they know supper’s ready, and when the people are eatin’ the stuff they raise and livin’ in the houses they build – I’ll be there, too.

Ma Joad: I don’t understand it, Tom.

Tom Joad: Me, neither, Ma, but – just somethin’ I been thinkin’ about.

_56346784_stagnation

It’s a sad commentary on contemporary economics that Larry Summers’s belated, poorly thought-out, population-driven “discovery” of the possibility of secular stagnation continues to receive such accolades. Paul Krugman gives him credit for “forcefully” offering such a “radical” idea at “at the most ultrarespectable of venues, the I.M.F.’s big annual research conference.” Jared Bernstein, for his part, finds it “compelling.” And then there’s Gavyn Davies, who considers Summers’s speech “a tour de force that demands to be watched.”

Oh, please!

Let’s give credit where credit is due, starting with Paul Sweezy, who offers an appropriate history lesson, explaining how and why the issue of secular stagnation was raised during the First Great Depression and then “so abruptly interrupted by the outbreak” of WWII. And while I’ve never been entirely convinced by Sweezy’s own explanation of the stagnationist tendencies of “monopoly capitalism,” he certainly offers much more food for thought than we’ll find in the present discussion. In fact, Sweezy’s observation about the state of the debate, offered in 1982, is even more accurate today:

I have the feeling that if you ask an economist how we got into the mess we are in, he or she, while not denying that it is indeed a mess, will reply by giving advice as to how to get out of it but will not have anything very enlightening to say about how we got into it.

For my part, I’m all in favor of resuming the long-interrupted debate over capitalism and stagnation, especially about how we got into the current mess. But, if we’re going to take the discussion seriously, let’s open up the terms of debate, in terms of both the history of economic thought and the range of ideas that exist today, which Summers and his colleagues have worked so long and hard to keep on the “radical fringe.”