Kansas Farmers at Auction Sale, circa 1938
This country is heading in the direction of big change right now, it’s in the air and the environment is just right. Like the industrial revolution or the technology boom, it’s a change that will definitely reflect the dynamic of this country and maybe the world. The decisions we, as a country, make at this time will decide whether that change is good or bad. Our current economic crisis could very well influence that change and may actually provide the catalyst needed to expedite a new “revolution”.
Right now we, Americans, are faced with economic turmoil and it seems near impossible to see an end to our troubles. Many are drawing a correlation between our crisis and that of our grandparents…of course, statistically, it truly doesn’t compare with what we saw during the “Great Depression”, not even close. If you are interested in the statistical data, I will tell you to look at employment rates and homeless numbers to help you get an idea of the differences. I say “statistical” because when making comparison, that is where you will see the major differences, otherwise, there are similarities that could lead a person to believe that we should focus on this as a solution to our current crisis and, in a sense, we’ve already started to do just that. We ousted the Republicans, just as we did in the 1930’s, we’ve imposed regulation, and our government has increased spending to “stimulate” the economy. Problem is that this is not enough, not nearly. Even though the cause of this mess is very similar to the onset of the “Great Depression”, that in no way means that the solution is the same – and the solution being arguable at best.
Due to their policy of “no intervention” and insisting that local governments and private charities provide relief to the unemployed and homeless, one can ask if Hoover and other Republicans were to blame for not curtailing the “Great Depression”. Republicans then, like now, hyped “laissez-faire” economic policy, even in the face of a ballooning credit bubble, over production, a trodden banking system and a “top heavy” social economic structure (over 40% of the wealth was controlled by 1% of the population). Should they have known this was coming? Who’s to say?
The same cannot be said for our current situation, no one acted, yet all the signs we’re there. So who’s to blame? Well, if I were to look at the hands of both parties, I’d have to say, “Not a clean one do I see…” Republicans, who historically have been the friend to the “free market”, were all for deregulating the credit and banking industry, which allowed us to see an “instant replay” of the 1920s, leading up to the “Great Depression”. Of course, in true Democrat fashion, we saw no opposition against this deregulation – why – because the Democrats wanted everyone to experience the “American Dream”…and what better time than when the economy is booming and people are willing to take a risk? Not only did they not oppose it, they, in some cases, openly supported deregulation.
See, as I mentioned before, the top 1% of the US population was experiencing the great economic prosperity the 1920s had to offer, whereas, the other 99% – also known as the middle and lower classes – really experienced very little growth in wealth from the “Roaring ‘20s”, the bubble burst before they got their piece of the “American Pie”. I guess this time around the Democrats felt that the middle class and the poor would have a better shot at getting their piece of the Pie, so they once again allowed the financial industry to “open doors” that should have remained closed. They gave the financial institutes “carte blanche”, forgetting the past and the repercussions of greed – of which, I can only believe, was the motivation for their “oversight” in the first place. And true to the rules of economics, the bubble burst, and the only pie the average American saw was in the face.
However, there is a lesson to be learned in every crisis, and here’s where we can benefit from the crisis of the past. What we know is this:
1. Social programs provided some support to tax payers.
2. Regulation was/is needed to protect against abuse.
3. Government spending does stimulate the economy.
There are more, but this will do for the purpose of my writing. Currently, from the “Right”, we hear a lot about lowering the deficit by cutting back on government programs – they say “spending”, but truly they mean cutting necessary social programs and the removal of jobs. The problem is most of the programs that they want to cut back on are in place as a support system for those who are most affected by our current economic crisis. Programs such as; Social Security, Medicare/aid, public education, unemployment, and other public services are always the first to get the axe, with little regard to why they are there in the first place – rewind to 1933. Removing jobs in the public service industry (i.e.: Teachers, policemen, firemen, etc…), didn’t work then and it won’t work now. Removing programs that support those affected most by financial burden only contributes to the hardships…yet there are those in our government who advocate this method.
The thought of less regulation or even deregulation is, in my opinion, even more asinine, knowing that we are in this situation partially as a result of unregulated “Capitalism”. If we are to believe that large financial and industrial institutes are “too big to fail”, which we are, then we should also be led to believe that government can and should have a key role in their regulation. However, we hear more and more talk about how the government “interference” in these institutes is nothing more than “Socialism” and a “government takeover”. They assert that our government should allow these institutes to work freely without intervention, and/or fail regardless of the circumstance. Is this the best thing to do? Obviously my opinion is “no”, but I will contend that I don’t know for sure, but I do know that this was the attitude Herbert Hoover had in the early part of the 1930s, even declaring, less than 6 months after “Black Tuesday”, that “the U.S. had “passed the worst” and stated that “the economy would sort itself out”. There are still those who would argue that, given time, it would have, but all indicators were contrary.
As for the third lesson we can learn from our past; government spending, during a time of economic crisis, is proven to stimulate the economy. It held a key role in the early 1940s when our nation started the true path to recovery – I say “true path” because we double dipped in the mid 1930’s, before large government spending – when the US entered WWII and saw an increase in defense spending, civil service jobs, and service enlistment (or drafts), which gave our economy a much needed boost – and then eventually stabilization. Though, there is a question as to whether the only reason we were able to stabilize so quickly is because the US was one of the only great nations that was not structurally affected by the brutality of the war. Regardless, the spending breathed life into a dying economy; even if it would have been short term, it provided much needed opportunities.
The difference we see now is cosmetic to say the least. Though it was defense spending as a result of war that energized this country during the “Great Depression”, we won’t see the same results from the wars in the Middle East. The reason being that we have never really stopped the Defense spending from WWII. It’s kind of hard to increase spending and create jobs where they both already exist. So now we’ve decided on “bailouts” that are suppose to stimulate spending or secure debt. We offer dealerships money to sell a car, and tax incentives to people for buying a new “fuel efficient” vehicle, or provide security to mortgage lenders when a family forecloses or defaults on a loan…instead of stepping in and “stimulating” the actual household.
This brings me to my thought, as late as it may be. What could we have done with all that money from the stimulus bill? Where could all that TARP money have gone, and still have provided all the same support to the car industry, financial institutes and tax payers alike, without actually giving it directly to the corporations that got us all in this mess in the first place? I think the answer is easy, “Green Energy”…I know I’m on the “Band Wagon”. Best I can say is hear me out.
During the “Great Depression” the US coined a phrase – ”The Dust Bowl” – a result of a long drought and over produced farms, the Midwest created a mess that blew across this country – literally and figuratively – and changed the way our government handles agriculture in this country. Farming, at the scale it was, has never returned, yet all that land is still there, practically, and our government is providing subsidies to people to [not] work them. So here are some options for that money – in list form, because I’m getting long winded again:
1. Provide money to government subsidized farmers to build “wind farms” to provide us with clean cheap energy.
2. Buy government subsidized farms for the same purpose and employ government workers to operate and maintain these “farms”.
3. Use money to build solar panel fields in places that are hot and desolate in the West and Mid West to provide the US with clean and cheap energy.
4. Invest in research and development of water current energy.
5. Build off-shore wind turbines for Pacific, Atlantic and Gulf Coast regions.
6. Offer tax incentives to use clean energy (we already do this, but it’s not as affordable and accessible).
I could probably go on, and maybe I’ve said things that have already been debated throughout this country for years, but I see no harm in repeating a view that I support. I’ve not heard talk supporting these exact issues, and I think the benefits could outweigh the benefits of our current government stimulus. Each of these options creates jobs through production, operation, maintenance, and facility management, etc…
We have the ability to stimulate the economy by providing this country with exactly what it needs; industry, necessity, production, and jobs. If this is done right, it could create jobs in more than just the government and/or energy industries. It could create jobs in Information Technology, Research and Development, Education and Training, Security, Engineering, and many other fields. If we get the jump on this, it will mean the difference between playing catch-up and leading the industry. Yet we have so much opposition to the idea of “Green Energy”, it seems there are forces working against the idea of prosperity for our generation and a solution to this economic crisis. If you don’t understand why this opposition exists or who is behind it, I implore you to ask someone on the Gulf Coast, and if they don’t have the answer, they should.
That, my friends, is my “New Deal” and like the one that came before it, I think this one could change the face of this great country by providing our generation, and the next, the means to leave our current crisis behind us and move towards a whole new “revolution”. I guess you can say that instead of looking to the past to solve our present problems, we could, ideally, learn from the past, while looking to the future for the answers we so desperately seek. As I said before, the dynamic of this country and maybe the world rest in the decisions we make today…the choice is ours to make, we just have to step up and do, rather than say.