An Unknown Road
As a lad in the early 1930's I was aware that grownups were having a great deal of difficulty making ends meet, and my grandfather's nightly attention to the radio news didn't escape my notice. Any children who happened to be in the living room while he was absorbed in the evening news and commentary had to be silent under threat of being banished to their bedrooms.
I can still picture that console radio with its antenna running to a flat strip under the window sash and thence to a long length of copper wire fastened, with ceramic insulators, from the house to a tree some seventy-five feet away.
Many years later I learned that Franklin Roosevelt was in his first term and the nation was counting on him to solve its financial dilemma. A full-blown economic depression took root after the stock market crash of 1929 and Roosevelt's dramatic plans to solve the problems were falling short of expectations.
What was wrong? For the first time in the history of the country the federal government took it upon itself to manage the economy. In the past, when economic panics occurred, the government stood to one side and let the market forces clean up the mess. This time the government would make the repairs.
On February 13th, 1933, journalist Garet Garrett wrote:
"This is what is new in this depression, and wherein it departs from history. In previous depressions, a bank that was book solvent and unable to pay its depositors had no alternative. It was obliged to go into bankruptcy and liquidate. A railroad that could not pay its creditors simply went into receivership and was liquidated. And so on. Such a thing as Government going into debt itself in order to assume and underwrite the debts of private enterprise was hitherto unimaginable."
Today the average American can't imagine the government NOT assuming responsibility for bankrupt institutions. Even citizens who have done a poor job of managing their own financial affairs are begging for rescue from the federal government. (Read - taxpayer.) Thanks to the pioneering of Roosevelt and his band of academic experts the American habit of self-sufficiency and personal responsibility has been washed away. We are now, for the most part, a nation of subsidized dependents crying to have our bills paid by someone else. Even if we get into a financial mess of our own making we don't want to pay the penalty. We want a bailout.
But this is not 1933. We have traveled this road for 75 years. During the journey we mistook debt for prosperity and took on more obligations than we can ever pay back. Billions of dollars of debt are being snuffed out every day while billions more dollars are being created to keep the bubbles from collapsing completely. The federal government is taking unprecedented steps, just as it did in 1933, to deal with crisis. In '33 the Great Depression was already underway. The government interventions kept it going all the way up to World War II.
This time the objective is to keep a deflationary depression from crashing in on us. The jury is still out on whether the correction can be prevented a while longer.
So, once again old men - as they did 75 years ago - bend their heads toward their radios (or televisions) to hear the daily digest of economic news, worrying about how trends will affect them and their family. It's a reminder of the persistence of economic cycles - and of Milton Friedman's admonition, "There is no such thing as a free lunch." (Despite what the federal government is trying to demonstrate to the contrary.)
April 1st, 2008
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Unmanageable Religious Violence