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Great Depression II (GD II)

As Krugman writes.

One difference, of course, is that GD I (the one that started in 1929) was more or less an accident. GD II was created, deliberately, by our ruling elites, first through the fraud and looting that brought down the financial system, and then through the "austerity" -- but not for the elite! -- that followed.

A second difference is that in GD I we had FDR. The lesson that the ruling elites seem to have taken from FDR is "never again." In GD II, they have Barack Obama, who has learned that lesson well.

Never again will the "small people" be permitted to do anything other than suffer and die and Obama, cheerfully enabled by both career "progressive" and Blue Dog factions of his party, is more than happy to let them do so. Yay!

NOTE Commenting on The Lightbringer's inaugural speech, CD got things exactly right. 01/20/2009 :

How dare Obama speak of "sacrifice," four times in under 5 minutes, at one point by my count, after directing Dems to hand over $350B in the initial TARP, no strings attached, and rushing to get the next round, and more, all while holding not a single Wall St. executive or Bush era regulatory agency actually responsible? It sickens me, because I understand, even if many don't, what it is that Obama means when he speaks of "sacrifice." He means for me and you, our SS dependent grandmothers and neighbors who rely on Medicaid and Medicare, veterans and the unemployed and students and the poor, to make his noble "sacrifice."

Of course, Obama wasn't speaking to the voters at all, but to his rentier owners. They weren't sickened at all.

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Submitted by gmanedit on

we should be paying attention to Michael Hudson.

In short: we must pay to bail out the banks. Good-bye, three centuries of the Enlightenment.

It's wonderful how clearly you can write when you don't have an invisible electric fence to keep you "respectable."

Yeah, CD was paying attention. Why, on this joyous occasion, were we repeatedly threatened with "sacrifice"?

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Submitted by CMike on

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression.

Wikipedia says:

The Long Depression was a worldwide economic crisis experienced in the latter half of the Victorian era...

It was most notable in Western Europe and North America, at least in part because reliable data from the period is most readily available in those parts of the world...While it was occurring, the view was prominent that the economy of the United Kingdom had been in continuous depression from 1873 to as late as 1896 and some texts refer to the period as the Great Depression of 1873–96.

In the United States, economists typically refer to the Long Depression as the Depression of 1873–79, which followed the Panic of 1873. The National Bureau of Economic Research dates the contraction following the panic as lasting from October 1873 to March 1879. At 65 months, it is the longest-lasting contraction identified by the NBER, eclipsing the Great Depression's 43 months of contraction. Following the end of the episode in 1879, the U.S. economy would remain unstable, experiencing recessions for 114 of the 253 months until January 1901.

For those of you who are willing to watch a total 12 minutes and 56 seconds worth of YouTube video, I recommend two segments of Alistair Cooke's discussion of the late nineteenth century United States farm industry and the Long Depression.

The script which leads into this first segment reads:

Down the years, Americans have tended to believe that any big change in technology is a good thing and is going to benefit everybody. But this sudden new transcontinental transport system which the first railroad men built as much for money as for use, transformed the colonial ideal of the small farmer as the almost sacred norm of American life. Jefferson called the farmer God's finest creation and he was thinking of a man who farmed a few acres with his own hands.

But not all the small farmers in the world could satisfy the giant maw of Chicago. And the farmer's livelihood it now appeared was rooted in a false eighteenth century assumption about the basic American farm. The Founding Fathers, remember, had never left the east and their idea of an expanding agriculture was Virginia or Massachusetts going on forever. Parcels of land, happily alternating pastures with woods and little rivers all assigned with a rational, neat eighteenth century plan in firm little rectangles exactly one quarter mile each.

But the prairie was not like that. One man's 160 acres might have the luck of a creek and a few shade trees but another man's 160,00 acres might be barren of all shade and water. A lot of families who had gone into the mid west with high hopes of self-sufficiency got badly bruised. Not the least were thousands of homesteaders whose quarter square mile was too arid or too tough to work or was bought out by a railroad for a song, [a railroad] financed by government subsidies. The government had given with one hand and taken away with both. As a bitter rhyme of the day had it, "In God we trusted...

Watch the part here from 0:00 to 4:56. At that point in the video, Cooke starts talking about Thomas Alva Edison, a discussion that carries over into a separate YouTube clip so you might not want to keep watching at that point.

But do watch the video here, which begins with anecdotes about the wealthy in serving as a backdrop for the subsequent discussion, to the 8:00 minute mark where the music comes in and the credits appear -- no need to watch the show's credits scroll on the screen.

There's a lot going on here: mythos, populism, technological revolution, political corruption, the crusade against the gold-backed strong dollar and for the free coinage of silver (i.e. the right to take silver ore to a U.S. mint and get the mint to stamp out silver coins of equal weight "good for all debts public and private." This would allow mortgages and other loans owed in gold backed dollars to be paid off in silver backed dollars at a specific gold/silver weight ratio and support the price of agricultural other commodities.)

[For anyone who is interested, here on autoplay are all five YouTube parts of "Money on the Land" chapter from Alistair Cooke's America series. He makes some interesting comments about the "Robber Barons."]

The thing about the Great Depression was that a financial collapse interrupted an industrial expansion that just needed to get put back on the tracks with some new rules in place to guarantee there would be broad based demand in the economy from workers and that those involved in productive industries and providing useful services would be reap the benefits of economic growth not those in the financial sector.

There were more fundamental problems underlying the Long Depression. Where the American economy was heading was not entirely clear back then. That's more like the situation we face today I think. And we should take note that the Progressives, with their 18th century European class roots, and the post- American Civil War populists who arose from several groups who were independent of one another (factory labor, miners, southern farmers, mid-western farmers) failed to find a way to join together in a single movement.

Submitted by lambert on

... only if you experienced a "recovery" after the crash of 2008. For those who did not experience a recovery, which includes most of us, including and especially the long term unemployed, there are two. Hence, GD II.

Interesting history on progressives vs. populists. Did the progressives of the 19th Century throw the populists under the bus, too? I'm guessing yes.

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Submitted by CMike on

whether the affluent do-gooder elite or the educated but not affluent do-gooder elite, were largely aligned with the Republican Party throughout the period --at least, until the TR/Taft split (e.g. Jane Addams and Harold Ickes). They concerned themselves with the plight of immigrant factory laborers but did not align themselves with the radical labor movement. Immigrant and factory labor workers in the industrial north-east and upper mid-west, groups with large Catholic constituencies, were repulsed by the nativism and the thundering Protestantism of the farm populists and worried by their anti-tariff positions.

Eventually, all those movements were to come together in the New Deal coalition.'s what Richard Grossman, a bona fide anti-corporatist, has to say about that:

[42:59] What do we have after the populists were crushed at the end of the [1800s]? We have the movement for the next fifteen years, or so, that's called the Progressive Era. And we learn more about that in school than we learn about the populists.

And I think it's very important, in rethinking how we got here, how we got into this mess, [how, after the triumph of the abolitionist movement and the free-labor movement destroyed the slavocracy by ratifying the 13th, 14th and 15th Amendments, the Supreme Court found a right of citizenship for corporations in the 14th Amendment], see the progressives [as] almost the opposite of the populists in that they basically conceded that the corporation would be the dominant institution of our time. And that the best that they could do would be to try to make it a little less bad; to try and find the best men to run [the corporate economy] and to try [to] control them around the edges.

And so when we got to the New Deal during the Great Depression it is important, I think, to understand it was the progressive agenda, and not the populist agenda, that was picked up. And so what I learned in school was that there was a Constitutional Revolution during the New Deal. And I think that's way over-stated. In fact, none of the issues we're talking about, that gave rise to the corporate state and allowed it to claim Constitutional rights and to wield those rights against us, against our communities...none of that was challenged. It wasn't even on the table.

[This is a poorly delivered 58 minute speech by Grossman but some may find it worth listening to beginning at the 20 minute mark.]