Sunday, May 01, 2011
Refusing to Learn
Several things were tried in 1929 to 1939. At first the federal government did nothing. President Hoover took the advice of his Treasury Secretary to let all the poison in the stock market burn itself out. That is, let the last buyers of inflated stock shares eat their losses. Doing nothing didn't work. The big losers simply shared their losses with everyone else and millions of workers were without jobs and without income. The next President took the advice of an economist and spent government money to create jobs. Enough of the unemployed workers found temporary work and were able to buy things so that the economy began to recover. The government had to go into debt to raise the money to provide the jobs. After a while the economy recovered and there was enough revenue to begin paying down the debt.
We are again in a recession or depression caused by the ability of the Wall Street gamblers to make us all share their losses. You would think that, having gone through the Great Depression of 1929-1939 our leaders and our more responsible politicians would draw on the experience of those years to frame policies for the present. For some reason nearly all of them choose to ignore or to forget the failures and successes of that time seventy-five years ago. Instead of using borrowed money to create temporary jobs, our leaders talk about reducing the deficit. We seem doomed to follow the path of Herbert Hoover rather than that of Franklin Roosevelt.