Posts Tagged ‘Depression’
Wear a smilette, happy days are ahead… but when? October 8th, 2008
Roanoke, Texas
There’s an uncanny similarity between the great depression and the present crisis, not just in the events but in Washington’s response. The republican president at the time, Herbert Hoover woke up late, as did the American people. They bought his line of ‘a chicken in every pot and a car in every garage’ (now they’re talking cycles!), electing him in 1928 only to quickly turn him into a universal hate figure (like Dubya, in the current polls).
But republicans carried on gamely at that time, trying to spread a message of hope and exhorting people to take responsibility. Much the way Sarah Palin did in the vice-presidential debate–even though she seems to know as much about the economy as she does about Alaska-Russia relations.
One of the better ripostes to this ‘hope; spend within your means’ line, appeared in a 1930s cartoon which said that prosperity was around the corner and if you cannot afford a smile, if you should wear a ’smilette’. This is precisely what kitchen table republicans are now advocating, though we are short of a good cartoon in response.
I met someone who lost his job last month. He would have been okay about wearing a ’smilette’. I suspect the disincentive is that if you wore it too long, you’d end up looking like a stewardess on a micro-light aircraft.
The ‘new direction’ that Washington is talking about has a word in common with FDR’s 1932 ‘new deal’ in the literal sense, but really, the steps being proposed are very much like the ones in the 30s. At a fundamental level will take taxpayers’ money. This is difficult to sell, politically, which is why the first attempt at getting the bill passed in the Congress failed.
FDR’s plans kicked in when unemployment was breaking America’s back and included things like soup kitchens, and (generally non-productive) government employment schemes. But he also set up the Home Owners Loan Corporation which lent money to about a million possible defaulters. This is very much on the table now, because apart from the from all the foreclosures, there are between 6 and 10 million people who have an incentive to walk away from their mortgage payments.
The most important response common to that time and now, however, is more regulation. The Securities Exchange Commission was set up in 1934 to prevent a repeat of 1929. One of the main changes it made was to stop margin buying. If you wanted a stock, you had to show about half the money.
In the present scenario, the financial markets will have to say goodbye to many of its unsupervised activities. The first in line will probably be the clandestine, and catastrophic, credit swaps (I lend you money, and then insure myself against a default with a third person, because i know you cannot repay; if, as i expect, you don’t pay me, he has to. this was the baby AIG was left holding.)
Regulation has been a bad word in America for the longest time, and the changes in the offing are likely to be profound: there’s a realisation that America has been a little too free and much too brave for its own good. Republican or democrat, this translates to ‘we always sort of knew that the market couldn’t take care of all our problems, but now we’re willing to admit it and do something about it’.
Deeper down, the crisis doesn’t just affect main street, or John McCain road. During the Great Depression, it entered people’s homes. in 1940, 14 years after the realty bubble burst in Florida and and pinged America into a downward spiral, a survey found that 1.5 million jobless, depressed, American men had abandoned their families.
The first reports of marriages breaking up over who’ll pay the mortgage bill are already coming in this year.
Tags: Barack Obama, Depression, FDR, Financial Crisis, John McCain, Main Street, Marraiges breaking up, Regulation, Roanoke Texas, Sarah Palin, Sub prime crisis, US Elections 2008
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Michael Jackson’s hometown just made Indiana a swing state October 6th, 2008
The last time Indiana voted for a democratic president was in 1964. But over the last week it just became a ‘battleground’ state. Losing ground rapidly, the McCain campaign did something republicans have rarely done in the past: they began an advertisement surge. They would have been thinking of Gary when they did this. Or what’s left of it apart from 100,000 people.
Every shop on the West side of Broadway is shut. Has been shut for the last quarter of a century. At the Palace theatre, it says the Jackson Five is playing tonight, but that is a lie. The Jackson Five lived here (Michael was the youngest of them), but they beat it a long time ago.
Nobody can play at the Palace theatre. It exists only as a fabrication. They put up the display about Gary’s most famous sons about eight years ago. It was part of Gary’s effort to appear prettier–now we know where the roots of roots Michael Jackson’s cosmetic aspirations lie–because it came into some money.
The ‘loosest slots in the mid-west’, that float on riverboat casinos on lake Michigan (the gambling business, gives the state close to $ 50 million a year) had made it possible for Gary to spend on this bizarre face-painting. If you are fond of the theatre of the absurd, then Broadway, Gary, is where you want to be.
On boarded up windows, there is artwork by people who were no doubt the dregs of the poster-painting business: men and women looking onto the street with curious perspective. Frozen people walk into theatres–there are even painted salesmen in stores that will never be.
Who were they trying to fool?
And now, even that coat of paint is peeling, the coloured people in them ageing poorly.
Did I say every shop was closed? Apologies. Payday loans is open. Doing great business: get advances for a small price; about a dollar on the hundred that you may not earn. There’s a queue at this place. Cars lined up outside. As Wall Street says ‘May Day’, Gary says Payday.
You get angry when you get to Gary. But a town so bereft of soul, robbed of its last 21 grams, is difficult to find. That, and the theatre of the absurd, makes the trip worth it–even if you are not running for president.
In this election, Gary is the one town, say analysts (in a reasoned manner) and Mayor Rudy Clay, (as if it were gospel) that will swing Indiana the black man’s way.
Mayor Rudy Clay, Gary, Indiana
At 85%, Gary has the highest percentage of African Americans in cities that have 100,000 or more people.
“When all the votes are counted up and iss aaalll even, and then you add Gary, where Obama gets 95% (this is a fair estimate) that’s when you win the state”, says Mr Clay from his rather nice office in City Hall a few buildings down from all the boarded establishments, and just across the street from a perforated ghost: the old Sheraton, the hotel that stayed on because it was too big to move.
Gary kept everyone waiting on primary night a few months ago. It was the last town to report its results (by several hours) and there was some suggestion of rigging. But eventually, Obama lost Indiana to Hilary Clinton despite Gary’s overwhelming support.
The mayor’s explanation is that it took his town that long because 11,000 early voters had cast their votes and these had to the counted ‘the ol’ fashioned way, by hand’, according to Clay.
The same thing is about to happen in November. ‘But we’ll get more hands’, says Clay.
He likes to dress, does Mr Clay. His cuffs have his name embroidered and there’s an adventurous (but smart) tie. He’s been on the job two years now and he’s worked out quite an elegant formulation for Gary’s plight: “Let’s just say, that Gary’s best times are still to come.”
Hallelujah.
Tags: Barack Obama, Depression, Economy, Gary Indiana, Indiana, John McCain, Mayor Rudy Clay, Michael Jackson, Politics, Recession, The Jackson Five, US Elections 2008
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