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Sunday, September 29, 2013

Not so good

This is what the good old days looked like

The picture to the left is called “Christmas dinner in home of Earl Pauley near Smithfield, Iowa…” This is Christmas for a farm family in Iowa in 1936. This is the world that conservatives call the ‘good old days’.

This is the sort of country conservatives believe we should have. Again.*

This was the age before Social Security, before Medicare, before welfare, before government regulation. This is a farm family. They worked hard–so hard that you and I probably cannot begin to conceive of how hard they worked. I’ve done farmwork, but it was mechanized, and it was still damn hard. So this family worked hard. There was no unemployment insurance. 


These were not urban welfare queens. They had not made bad choices, unless trying to run a farm should be considered a bad choice. They were not coasting, using the safety net as a hammock, because there was no safety net.

I assume the family in the picture is living on its farm. A lot of families lost their homes in the period 1929-1936 because they couldn’t pay the mortgage. Farmers in particular lost their land because their crops died in the field–if they grew in the first place–because of a stretch of drought that lasted several years, and that led to the Dust Bowl. My grandmother lived through the Dust Bowl in Kansas. Her stories were horrific.

You need to look at this and remember that this is the world that conservative politicians want to bring back. They want to kill all the social programs that were created as a result of the Great Depression. Conservatives want people who lose their jobs, through no fault of their own, to be pushed down to the sort of life that you see in this picture. 

They want people without work to fall into the sort of poverty that you see here. They may not realize what would happen if we follow their policies and gut social programs and all assistance to anyone but the wealthy. They may not realize what the implications of their policies will be, but the picture gives you a graphic example of the world that conservatives want to re-create.

Oh no! they proclaim. Getting rid of all this government will release the job creators, and they will create jobs! For everyone!

Bull.

The job creators at the time of this photo were fully unleashed. They were barely regulated. They were lightly taxed. And yet the people in this picture were living the way you see. Dirt floor. Bare plank walls. Where was the magic of the market? It didn’t solve the problems then. It didn’t help the people you see here. Rather, the people you see got to the condition you see because of the lack of regulation, and the lack of government support, and the low tax burden on those at the top of the economic pyramid.

The unfettered might of the market did nothing to help the people you see here. In fact, those with money shrieked that these people had to be left on their own, to starve if necessary. Any attempt to interfere would destroy prosperity. In fact, any interference by the government was immoral. But even a casual glance at this picture will tell you that any prosperity this family had ever known had been destroyed some time ago, and all because of the magic of the market. The only thing immoral was the sanctimonious attitudes of the upper echelons who let families live like you see in the picture.

If you read Friedman’s Monetary History of the United States, you will see that he talks about a seemingly endless series of economic crises, starting in the 1870s and carrying through to the Great Depression. That’s a period of 50-60 years, and there were three acute recessions and at least one depression (depending on how you define the downturn that began in 1873), and the last depression was so bad we call it Great. This averages to almost one crisis every fourteen years; the ‘teens of the Twentieth Century were marked by the Great War, so it’s difficult to compare this to ordinary periods.

One crisis per generation.

This is what the magic of the market created. A downturn every 14 years on average. Just about every generation was hit by a very nasty downturn, all in a period when there was no one to help. 

Private charity? Private charity is only viable during a period of economic expansion; when unemployment is above 10%, there simply aren’t enough people with enough money to make private charity effective. That’s why you have a family going through an experience like the one in the picture. Because people of the time relied on private charity.

And these were crises without unemployment assistance, food stamps, housing subsidies, with no government assistance whatsoever. People caught without work for six months or a year or three years had nothing to rely on, but they still couldn’t get jobs. Talk to people who lived through the Depression, quickly, while they’re still alive. They will all tell you, there was no work to be had.

And, btw, Friedman’s thesis that the Great Depression could have been avoided has been shot full of holes by our current situation. Friedman claimed that the Fed could have solved the problem through looser monetary policy. Since 2008/9, the Fed has been doing just that, pumping huge amounts of money into the economy in any way possible. And the same conservatives who howled about FDR have been howling about Bernanke. Has the policy worked? 

Well, we didn’t have a depression, at least not one like our grandparents lived through, but ask a recent college grad how easy it is to find a job. Look at the unemployment rate. So Friedman was a quarter-right at best. Monetary policy alone cannot solve the economic problems we faced in the early 1930s, nor the problems that we are experiencing in the early 2010s

Nor can the magic of the market create prosperity for all, except for relatively short periods. If capitalism produced a crisis every 14 years, that means if you were fortunate enough to graduate into an economic expansion, you should expect a downturn by the time you hit 40. Then maybe you’ll benefit from the upturn by the time you hit 50. Of course, by then you will have lost five or ten of your prime wage-earning years. So how are you supposed to save for retirement?

So look really hard at this picture. Think of it the next time you hear someone claim that we need to unshackle the job creators. Think of it and remember that the Titans of Industry screwed it up in the 1920s, and the 1900s, and the 1890s, and the 1870s…that’s a lousy track record. The Titans of Industry created the world you see in the picture.

*This is an incredibly harsh statement. I do not ascribe malign motives to sincere conservatives. I am not saying conservatives are evil people who wish misery on others. However, ideas have consequences; we have a moral obligation to understand the ramifications of our policies and of what we advocate for society. In this, I believe, the conservatives fail. Perhaps this is because they do not understand history; but a point is reached where there must be willful ignorance of what they advocate. 

History is so very, very clear, if you realize that there was history before WWII, or even before 1970. I keep coming back to this, but it continues to be true: we tried it their way. It did not work. Most of human history has been a long, dreary experiment in laissez-faire markets. The outcomes were horrible; look at this picture.

And if free markets or government regulation or interference or high taxes didn’t cause the situation in this picture, what did? They have no real answer for that question.

So yes, I realize I am making a terribly provocative statement; but the point stands. If we follow their advice, this is where we will end up. Again.