Posts Tagged ‘FDR’
From the heart of the Manhattan Project October 10th, 2008
Oak Ridge, Tennessee
One of the questions that came up during Tuesday’s Presidential debate was whether America needed a Manhattan Project-type plan to deal with the energy crisis. One of the hubs of that project was the Oak Ridge National Laboratory: the place where Enrico Fermi and his colleagues developed the world’s first sustained nuclear reaction. Hiroshima and Nagasaki were to feel the immediate consequences of this work, done under aliases in this “secret city” that had come up almost overnight just outside Knoxville.
There was a clear national security consideration then–what else can there be when a country is at war? But this was tied to economic considerations: the effects of the were debilitating for the U.S. economy, the challenge was about ending the war and stop bleeding.
Both the Republicans and the Democrats see energy security as a key to national security. America consumes a quarter of the world’s oil, and higher prices means that more dollars go to countries who aren’t exactly friends (Russia and Venezuela and Iran are mentioned often). The question is, whether they have the will to do what President Roosevelt did.
The Manhattan project was a landmark for several reasons, not the least because a more concerted effort to meet a goal has hardly ever been seen in American history. It began with an August 1939 letter from Albert Einstein to Roosevelt that warned of the possibility of a German nuke.
Einstein was conservative about the power of the bomb: “A single bomb of this type, carried by boat and exploded in a port, might very well destroy the whole port together with some of the surrounding territory”, he wrote. He asked that experimental work be speeded up and funds be made available so that an American bomb could be built.
In today’s money, the Manhattan project would cost $24 billion. Proponents of a similar effort to survive the present crisis, like democratic senator Lamar Alexander of Tennessee, point to the $10 billion the U.S. spends in Iraq every month and argue that at least some of this money would be far better spent on energy security research.
In 1939, FDR took Einstein’s advice (even though the letter actually reached him two months later). A small project was launched right away. Oak Ridge was born in 1943. A town hidden from view by ridges on either side, with an abundant water supply from the Clinch river–critical for the lab’s uranium enrichment work–and easy access to cheap hydro power from the Tennessee Valley Authority.
The area’s former inhabitants were given as little as two weeks to vacate, and soon a 75,000-strong community was bused in. Everyone knew their job, but hardly anyone knew exactly why they were doing it. (Incidentally, President Truman, who pushed the button so to speak, knew very little about the Manhattan project when he was FDR’s deputy.).
But a whole city is a tough secret to keep. Over a billion dollars worth of building materials had to be shipped into surrounding towns. People were asking why Elza, Tennessee, population 151, needed 15,000 toilet fixtures. And it was tough to convince a mattress manufacturer that 15,000 mattresses were required in Clinton, population 4,820.
More than all the secrecy, what it took was the reallocation of resources, and this didn’t only mean money. At one time, for instance, the Oak Ridge facilities, that produced the Uranium 235 required for the bomb was using a full one sixth of the country’s power supply.
Whether any of this is conceivable today is another question, but what’s clear is that there’s a big push towards the nuclear sciences after a period when it languished under the burden of environmental and efficiency concerns.
You can tell this even anecdotally. Scientists (many of them Indian) who were out of jobs because their projects folded, and went into such diverse professions as running nutrition stores in malls, have been getting offers over the last year. Some of them are in their seventies–talk about renewable resources!
At Oak Ridge, they’re trying to solve the “big problems” as they put it. One of the items on the list is a “zero energy home”, which they hope to develop by 2012. That’s already about four years too late. This winter will be 2.7 per cent colder, says the department of energy, and Americans will pay 15 per cent more for their fuel.
Tags: Energy Crisis, FDR, Oak Ridge Tennessee, The Bomb, The Manhattan Project, Truman, US Elections 2008
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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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