Words of Wisdom From The Great Depression

In a completely unstaged 1930s-era conversation between “Mr. Courage” and “Mr. Fear,” Hearst Metrotone tried to encourage consumers to stop saving money with a little thought experiment:

“Crackers and milk? Is that all you’re eating?”

“Well, yes. You know times are hard. I’ve got to economize.”

“Maybe you don’t know it, but you’re the type that’ll put this country on the bum if you keep it up.”

“Is that so?”

“You bet it’s so! Why, that kind of talk puts fear into people. Do you realize that if everybody spent one dollar per week, we’d have prosperity here again? If people quit buying, wages can’t be paid by merchants and manufacturers, can they?”

This argument seems vaguely familiar, somehow. More importantly, let us never forget that it was once possible in America to order crackers and milk for dinner at a restaurant with white tablecloths and tuxedoed waiters.

For a slightly different take on things, check out this newsreel chronicling daily life for men living in Hoovervilles. The narrator certainly doesn’t shy away from telling it like it is. Here he is on breadlines: “Around noon, we hit our favorite restaurant for lunch. It sure was a popular place. We liked it so much we’d stand on line for a couple of hours…no checks to pay, no waiters to bother you, all free. The only thing you gave in exchange was what they called ‘self-respect.’”

I can’t really think of any parallels between the economic situation and now, unfortunately; there really don’t seem to be any similarities I can think of, but perhaps you’ll enjoy these videos anyhow.

[Image via Flickr]

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    • Lastango

      “I can’t really think of any parallels between the economic situation (then) and now, unfortunately; there really don’t seem to be any similarities I can think of…”
      The only thing that has changed is our style. Nowadays, we do it with food stamps and other entitlement payouts. Were it not for these, we would have breadlines and soup kitchens. The median income in the US has retreated to 1994 levels (our real earnings are now dropping every year), and our median wealth has declined 40% in just a few years. Economic disaster is breaking out all around the world and has already arrived here.
      Consider an example of the new reality. A few years ago, the city of Ontario, California thought it would do a Good Thing and put tents, running water and toilets at a homeless encampment. Not long after, they found themselves sending in the police to tell everyone who wasn’t from the Ontario area to leave. Let’s keep in mind that this was years ago, as the recession was just getting started.
      Can’t happen where you live? The mayor of Costa Mesa, Calif. has a different view:
      Now, as we are spiraling deeper into outright depression, we will be hearing about that sort of thing more and more. The rot is reaching into sectors we never would have considered threatened. The collpase of the legal profession in the US gives a good example.
      (Tip: don’t believe those unemployment stats, or the rosey GDP estimates. It’s all bunk.)

      • MR

        You know what caused the Great Depression was the almost total collapse of US economy’s money supply – that is all aspects of money, including balances in savings accounts, in the economy. It almost happened again in 2008, but Bernanke didn’t allow it to happen, and since then (also learning from Japan’s massive price deflation throughout the ’90s) has done everything to juice the US economy’s money supply. That’s where the almost zero percent interest rates on current no risk investment savings and the less than 3 to 4% 30 yr mortgage rates come from. The man is viligant and is truly a savior. History will remember him.

      • Lastango

        The sooner we dismantle the Fed, the better. Bernanke has done exactly what ushered in two lost decades in Japan: prop up failed financial institutions. Like Japan, we are stagnant and debilitated, with no end in sight.
        All the stimulus spending during recent years has accomplished nothing except pile up unprecedented debt, and transfer money from ordinary Americans to Bernanke’s cronies at the Wall Street financial institutions — the same institutions that did so much to create the current financial crisis. It is no accident that Washington is packed full of Wall Streeters. The whole lot of them, Bernanke included, ought to be in prison.
        After we close down the Fed, we need to padlock the doors at the likes of Fannie, Freddie, and HUD. The only way to deal with that snakepit is to shut it down permanently and get the federal government out of the financial markets.

      • MR

        Lastango, we are not like Japan. It was their tight monetary policy (tighter money supply) the caused their price level to collapse in the ’90s. Stimulus spending is fiscal policy not monetary policy and granted only stablized US demand over the last four years. The financial shock was that great. You grow the Federal deficit by over $4 trillion and only stablize demand in the US economy? Yes, again the crisis was that severe. But the system withheld it. The last time the Fed was abolished (its earlier version) under Andrew Jackson, the US economy ended up with one of the worst Depressions in its history. What preceeded it was a period of runaway inflation that screwed creditors and rewarded debtors. Still political and economic winners and losers in your post Fed reality. I’ll stick with the current Democrat version: Woodrow Wilson’s modern Fed and FDR’s large, federal government presence in the enonomy. Hoover’s Fed chairman didn’t let the Fed work the first time it should have been called upon. Bernanke studied that period of economic history and made sure it didn’t happen again.

      • Lastango

        Unfortunately, that “period of economic history” is happening again. The decay is all around us, and we see it clearly in the explosive growth in the use of food stamps and in the swelling disability rolls (i.e. welfare by other means). The accelerating decline of Europe is happening for the same reasons; they can’t afford their governments. As for Japan, that nation collapsed due to the burden of using public debt to prop up failed institutions. That is how Japan’s debt-to-GDP ration reached 220%. It should be obvious that “tight money” does not increase government debt. Spending does.
        And thanks for confirming that you want to “stick with the current Democrat version”. That is exactly what I thought you were doing — posting with political intent. Are you doing this all over the web, or just here?

      • MR

        Lastango, when have I ever denied my political beliefs? I was volunteering all day today, as I have been doing since Saturday, here in Cleveland to re-elect Obama. It’s because I give a sh*t. And in response to your me “sticking with the current Democrat version”, yes it is the difference between a 33% unemployment rate at the bottom of the Great Depression and 7.9% now. I’m not saying that this system is perfect, but it does create security against another Great Depression. PS. I only blog here. But do you really want to know why?

      • Lastango

        No one believes the current rate is actually 7.9%. That rate is a polite fiction generated by a rigged labor pool participation rate. And has it occurred to you that the “bottom of the Great Depression” was actually caused by Washington’s interventions?

      • MR

        I promise to read your article more carefully. But with just a quick scan it doesn’t talk about the contractive monetary policty that caused the collapse of the US money supply, that caused the economic downturn to be so severe during the Great Depression. Yeah, FDR’s New Deal fiscal policy (government spending) wasn’t able to turn the economy completely around by itself (but as your article says a lot of it was declared unconstitutional and was therefore stopped even before it ever go up in running). Compare that to Bernanke’s aggressive Fed action (very expansive monetary policy) and the aggressive fiscal policy of Obama. It mitigated the economic downturn this time. Also the size of the federal government’s presence in the US economy now is much larger than when FDR was just beginning this presence back in the early to mid 1930s.

    • Cuthbert

      99 Tips for Dating A Younger Guy, Go Get Some You Cougar Puma, Rake your claws