1 Boring Old Man

Thinking about the auto industry’s failed bail-out set me to thinking about The Great Depression – those years between the Stock Market crash in 1929 and the outset of World War II. While the Market fell in October of 1929, the devastation of the economy didn’t immediately follow the crash. The Stock Market rallied somewhat for nearly a year, before it began a slow decline, finally bottoming out in late 1932 at 10% of its 1929 high. Unemployment followed a similar path, moving up from 3% in 1929 to 25% by F.D.R.’s Inauguration in 1933. The lines outside the Stock Exchange were replaced by lines outside of Banks – epidemic "runs" on Banks that ended up bankrupting them. By 1933, there were even more lines. This time they were outside of soup kitchens set up to feed the people out of work.

Those were the Hoover years. While often blamed for the Depression, Hoover had only been in office  for seven months when the initial "bubble burst." The entire rest of his term was spent watching the country deteriorate, unable to stem the downward slide. Hoover’s failing was relying on existing institutions. He believed in "volunteerism," encouraging Banks to get credit flowing again among other things. He was reticent to enact government legislation or government programs to try to stop the collapse of our economy. He imposed tarrifs to encourage buying U.S. products, but other countries did the same, destroying export markets. By the time he left office, hordes of displaced people were living in makeshift towns known as "Hoovervilles."

“This is the Democrats’ first opportunity to pay off organized labor after the election… a precursor to card check and other items,”… “Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.”

I can see why the Democrats were so wishful about a filibuster-proof majority in the Senate. I’m not sure that I would want that myself, in theory. Checks and balances are a good thing. But if the Republicans are going to act this way, voting with some kind of rigid ideological bloc-vote, then we may be in for another fruitless Hooverville period, because the kind of intervention needed to prevent it will make this Auto Bailout look like a trip to the Five and Dime. If I understand the economists and the historians correctly, what we need right now is bold action, not old politics [see Chris Bowers for another perspective on the auto vote: Ideologues Not To Blame For Auto Bailout Failure].