Another Key Second Depression Marker
With the stroke of a pen and some words about the need for Americans to volunteer, the president Tuesday signed a $5.7 billion tripling of the AmeriCorps volunteer program. The White House blog (modern of em, huh?) makes this point in its April 21 pointing:
"A week from tomorrow marks the 100th day of my administration. In those next eight days, I ask every American to make an enduring commitment to serving your community and your country in whatever way you can. Visit WhiteHouse.gov to share your stories of service and success. And together, we will measure our progress not just in number of hours served or volunteers mobilized – but in the impact our efforts have on the life of this nation."
In all fairness, as the UK Independent online edition points out: "Obama: 100 days, 100 ways | From closing down Guantanamo and banishing lobbyists, to dressing down in the Oval Office and planting vegetables on the South Lawn, the Obama presidency is reshaping America. "
It hasn't been all progressive change, for as some of my republicorp contacts has expressed it "Obama has been the best salesman ever for guns and ammunition in America."
...
So as the president calls out to Americans to become more involved in volunteerism, I look up and reread the Wikipedia entry on the Civilian Conservation Corps which was a cornerstone of the Roosevelt New Deal:
"The Civilian Conservation Corps (CCC) was a public work relief program for unemployed men, focused on natural resource conservation from 1933 to 1942. As part of the New Deal legislation proposed by U.S. President Franklin D. Roosevelt (FDR), the CCC was designed firstly, to aid relief of high unemployment stemming from the Great Depression and secondly, carry out a broad natural resource conservation program on national, state and municipal lands. Legislation to create the program was introduced by FDR to the 73rd United States Congress on March 21, 1933, and the Emergency Conservation Work Act, as it was known, was signed into law on March 31, 1933.[1] The CCC became one of the most popular New Deal programs among the general public and operated in every U.S. state and territories of Hawaii, Alaska, Puerto Rico and the Virgin Islands.
---
Members lived in camps, wore uniforms, and lived under quasi-military discipline. At the time of entry, 70% of enrollees were malnourished and poorly clothed. Very few had more than a year of high school education; few had work experience beyond occasional odd jobs. The peace was maintained by the threat of "dishonorable discharge." There were no reported revolts or strikes. "This is a training station we're going to leave morally and physically fit to lick 'Old Man Depression,'" boasted the newsletter of a North Carolina camp. "
Depending on how things work out this fall (linguistically remember to circle your calendar this year for the last week of October and mark it "Crisis picks up steam here") we'll likely see a second major public employment push in winter 2009-2010 to perhaps summer 2010. People have to be kept busy, off the streets, or like in the 1930's, there will be calls for a major paradigm shift by upstart political organizations. Can't have those kinds of challenges to the PowersThatBe now, can we?
The second Wiki reading on point therefore becomes the Works Progress Administration which seems to me destined to be remanufactured, retooled, updated, and upgraded to fit the continuing economic cycle bottom in 2010-2011:
"Works Progress Administration (renamed in 1939 to the Work Projects Administration; WPA) was the largest New Deal agency, employing millions of people and affecting almost every locality in the United States of America, especially rural and western mountain populations. It was created by Franklin Delano Roosevelt's presidential order, and funded by Congress with passage of the Emergency Relief Appropriation Act of 1935 on April 8, 1934. (The legislation had passed in the House by a margin of 329 to 78, but got bogged down in the Senate.)[1]
It continued and extended relief programs similar to the Reconstruction Finance Corporation (RFC), started by Herbert Hoover and the U.S. Congress in 1932. Headed by Harry Hopkins, the WPA provided jobs and income to the unemployed during the Great Depression in the United States. Between 1935 and 1943, the WPA provided almost 8 million jobs.[2] The program built many public buildings, projects and roads and operated large arts, drama, media and literacy projects. It fed children and redistributed food, clothing and housing. Almost every community in America has a park, bridge or school constructed by the agency. Expenditures from 1936 to 1939 totaled nearly $7 billion.[1] "
What do Great Depressions have in common? For one thing, governments try to spend their way out of trouble. As a Wiki entry on the political consequences of the Great Depression notes:
"Between 1933 and 1939, federal expenditure tripled, and Roosevelt's critics charged that he was turning America into a socialist state.[69] The Great Depression was a main factor in the implementation of social democracy and planned economies in European countries after World War II. (see Marshall Plan). Although Austrian economists had challenged Keynesianism since the 1920s, it was not until the 1970s, with the influence of Milton Friedman that the Keynesian approach was politically questioned.["
At a time when policy might be directed along the lines of "Women and children to the lifeboats first..." current policy seems to have launched the bankers in the biggest and fastest of all the available lifeboats, and again in fairness to the Obama administration, the Bushco crew lined them up and set the biggest off with no regards for the folks under the overpass, which the mealy-mouthed, co-opted MainStreamMedia marginalized, even as it continues to fan the charade of right-left politics while the real politics are of the up/down type; the kind that concentrates wealth in never-before-seen extremes in the hands of the few at the expense of - quick...look surprised here -- the many.
What will be curious to watch will be how the arrival of a new paradigm will be spun on behalf of the existing holders of power - American and British, Western European financial interests. It was easy enough last time around to goad Japan into the World War II...a subject that it turns out was not as cut and dried as when it was presented to Baby Boomers in school in the 1950's. A broader perspective "What Really caused World War 2" offers this on events of October 16, 1941:
It was on this day that Henry Stimson, Roosevelt's Secretary of War, wrote the following in his diary: "... and so we face the delicate question of the diplomatic fencing to be done so as to be sure that Japan be put into the wrong and to make the first bad move—overt move."
Stimson was to repeat this concern that faced the Roosevelt administration when he testified before one of the Committees investigating Pearl Harbor. There he was quoted as saying: "The question was how we should maneuver them [the Japanese] into the position of firing the first shot without allowing too much danger to ourselves."
All of which is not to say Roosevelt was wrong, but the record suggests that Japan was cornered in some sense of it.
Recall that the Great Depression was not a single economic event; it was two. The first break in the Great Depression came as the high in the stock market in the fall of 1929 (Sept 3, if I recall right) and then dropped like a stone into the abyss of 1933-34. From there, we saw a period of recovery.
the modern analog was the drop as the tech bubble burst in the second half of 2000 and the economy was on the verge of hitting new lows in 2001 only to be saved by the Twin Towers attack which spun the country on a dime, rallied everyone around the flag so to speak, and launched the first of the Second Depressions great employment programs: The War on Terror.
Just as there was some recovery after the first major downturn, America had been in 'economic recovery mode' from early 2002 until October of 2007 when the Dow hit a nominal (but not inflation adjusted) new high just over 14,000. Then we began out descent into what I look at as the analog to the secondary depression of 1936-1939, which ended with America saddling up to ride into WW 2.
Things aren't going to work out as a perfect rhyme this time, but if we look for parallels, there are more than a few at hand, and an investor or simply a regular human would be a damn fool not to be well-read on the past events so that their follow-ons can be discerned with sufficient clarity to allow a well-reasoned alternative path to be forged.
So to me, probably the biggest story of the week is hoopla that goes with great public works. If you find yourself pinching your arm and muttering "Haven't I read about this someplace before?" Indeed you have. But like I said: Missouri loves company.
No comments:
Post a Comment