This is a recovery?
Of what? 1938 redux?
Most people do not realize it, or had never learned, that the “Great Depression” was, at its beginning, no worse than the recession of the early 1920’s. There was a severe downturn then, but in either a greater wisdom, or by inaction, most of the effects of that recession were over by 1924, about the time Coolidge assumed office. Coolidge was renown for his efforts to STAY uninvolved in the “business of business”, and consequently, the country was going through an unprecedented boom, as the nation was rapidly put on wheels, industrial growth expanded exponentially, and there seemed to be a genuine prosperity at hand, if you weren’t getting rich this week, why, just put your money in the stock market, or into bank stock on a new start-up bank in your local town, and just watch the money come rolling in.
But inexorable and inflexible rules of finance reared up, and what had been a bubble expanding away to infinity - burst. Banks large and small found themselves undercapitalized and overextended. The stock market, always a barometer of confidence (or lack of it), nosedived, apparently taking a lot of capital out of existence.
In come the “fixers”. First an attempt to raise revenue by imposing new and punitive levels of tariffs on imported goods, the scheme backfired in a most resounding way, setting up a chain reaction all over international trade and foreign bourses, and one after another, the great banking houses retrenched, some folding up completely.
But why the demand for greater revenues? Something called “Keynesian economics” a theory that government action could step in and “rescue” the commercial and businesses from themselves, by injecting great amounts of money into the economy, took over, and suddenly the governments everywhere NEEDED much greater revenue, to pay for these schemes to get people collecting a stipend of some kind, so the wheels of commerce could begin to roll again.
So what was a bad situation in 1932, was temporarily relieved by 1936, just in time for FDR to be re-elected. But then a much WORSE economic stall came. 1938 should always be remembered as the very worst of the Depression years, a really blue funk this nation did not recover from until the factories were turned over to all-out war production, and the excess number of young unemployed men were sent off to fight and die on the other side of the world.
We are in Great Depression II, and nobody will face up and call it what it is.
But like the Unsinkable Molly Brown, we ain’t done yet.
We aint done yet!
Great Recession Mark II followed by World War Mark III. Everything old is new again.
The world is a tinderbox and our leader is a toddler playing with matches.