I am prepared under my constitutional duty to recommend the measures that a stricken nation in the midst of a stricken world may require. These measures, or such other measures as the Congress may build out of its experience and wisdom, I shall seek, within my constitutional authority, to bring to speedy adoption.
But in the event that the Congress shall fail to take one of these two courses, and in the event that the national emergency is still critical, I shall not evade the clear course of duty that will then confront me. I shall ask the Congress for the one remaining instrument to meet the crisis—broad Executive power to wage a war against the emergency, as great as the power that would be given to me if we were in fact invaded by a foreign foe.
Memory holes are nothing new. Many Americans are familiar with Franklin D. Roosevelt’s line that “the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.” Fewer remember that he uttered the blockquotted lines in his first inaugural. FDR remains the only US President to include an explicit threat to overthrow the government in his inaugural address.
This diary is not to call for the overthrow of the government. The violence that would be unleashed by such an event does not bare thinking about. Instead this diary is meant as a wakeup call to our current political leadership. Things MUST improve.
Today our public officials live in a memory hole. Even Speaker Boehner, is likely not so ideological that he would see the government dissolve instead of taking steps to advert the collapse. Unfortunately, most of those who have studied the last collapse have been exiled from public life. To quote Mike Konczal,
Someone noted that with Goolsbee leaving all of the big names surrounding economic policy are no longer economists but lawyers and people associated with Wall Street. And it is also telling that, with the Larry Summers editorial from the weekend, all of the economists you’d recognize who have left the administration are calling for more stimulus, while it is those there now calling for confidence.
Our politicians in Washington are living in a painted bubble. On the walls of the bubble are a idealized picture of America. I’m afraid this BLS map has lost a little being resized for the web, but if you look at the county level unemployment data over the last 12 months:
Leaders in Washington are getting advice from lawyers and investment bankers with only a cursory background in macroeconomics. When they look out the window at Washington they see a community in an artificial employment bubble. The media has been quite about unemployment until recently, where is surfaced as a presidential campaign issue. Not surprisingly Mitt Romney, talking about the economy, has vaporized the poll numbers of his republican rivals who want to talk about anything but.
The Great Depression lasted a decade, though for today its enough to understand the first four years.
1929: Market Crash.
1930: Austerity Sweeps through all levels of government.
1931: Depletion of Accumulated Capital
1932: Breakdown in Food Distribution.
Among the history that has gone down the memory hole, late 1930 and 1931 is the most critical. November saw austerity minded legislators elected in a number of states. In Texas the state tried to balance the budget only to find that each cut brought a greater loss of tax revenue. By 1932, teachers were being paid with vouchers and universities were on the chopping block. Put simply, the state could no longer maintain the routine functions of government.
Today we are seeing a similar situation sweep through Europe. Greece is about to explode. On June 1, the CIA noted the possibility of a military coupin the country. Ireland is seeing massive emigration out of the country in the wake of its economic collapse. After putting in place an austerity plan, economic growth has ground to a halt in Great Britain. All of these countries show a common trend, austerity programs have impeded the normal functioning of government.
How bad is it going to get? In 1932, Douglas McArthur took the U.S. Cavalry through Washington D.C. evicting the bonus marchers (veterans demanding that payment of a lump sum WWI retirement bonus be moved up). Here’s a picture of the Cavalry going in:
Speaking of memory holes, tanks rolling through Washington to put down the Khaki Shirts of the Bonus Expeditionary Force is one of them. That’s how close we got. What would have happened if FDR had carried on Hoover’s policies and American faced a choice between more of the same on the same and more of the same in 1936? For that matter would we have even made it to 1936?
We are seeing a common theme in the rioting in Greece, the rise of the Scottish Nationalist Party in the UK and the recent elections in Ireland. Austerity must end. Austerity, when it impacts the normal functioning of government, amounts to the suicide of a nation state. Once the effects of austerity fully set in, any extreme becomes possible.
We on the left, need to see that our leaders accept the stakes which they are playing for. Robert Reich recently had some quotes from sitting Democratic Senators on the possibility of more stimulus:
"Dead in the water. We'll be lucky if we get votes to raise the debt ceiling without major spending cuts this year and next."
"Are you kidding? It's all budget deficit, budget deficit, budget deficit. Nobody's thinking about anything else."
"Republicans beat us up so bad over the first stimulus there's no way we're gonna try for a second."
"We got them [Republicans] cornered on Medicare. Now they want to change the subject to jobs. Forget it."
"No need. We'll see job growth in the second half of the year."
"The President doesn't want to put anything on the table he can't get through Congress."
If the above quotes do not turn out to be an example of words likely to come back to haunt the speaker I don't know what is.
The U.S. economy right now is a pressure cooker on which all the safety valves are slowly being removed. Extended unemployment benefits expire at the end of the year, the current talk is of what safety net programs to cut. While we have avoided the mass pauperization of the elderly (for now), record numbers of Americas young are moving back in with their parents.
The New Dealers of the 1930s and 1940s created as many safety valves as they could, and meticulously documented what they did. A repeat of the depression proved so terrifying that every administration, Republican or Democrat, since has sought stimulus, up until today.
Let’s not repeat the mistakes of the past, we might not survive them this time.