Wednesday, April 02, 2008

Another Great Depression Looming?

Andrew Leonard writes in Salon that we are far from being in anything like the Great Depression that ravaged this nation in the last century. But he also warns that it could happen again if we continue along our current economic course. Here is his prescription for a "sequel" to the Great Depression:

1. Continue to ignore growing income inequality and govern the United States for the benefit of the rich at the expense of the many.
2. Continue to whittle away at the safety nets that exist to cushion Americans from economic ill winds.
3. Continue to weaken government oversight of Wall Street.

It seems to me that if we elect John McCain--that economically ignorant, by his own admission, bastion of "conservative values"--as our next president, this prescription will be followed right to the letter. If so, will another Great Depression be far behind? Stay tuned.

1 comment:

Tom said...

One big difference that I don't think Leonard deals with properly is that we have globalization now that we didn't have in 1929.

And by that I don't just mean NAFTA and other interlinking treaties; I mean instant communication worldwide, by phone, Internet and other media, and complete currency fluidity that makes everything different than 1929.

It would be much, much harder to use Franklin Roosevelt-style fixes for a downturn than in was in the early 30s, simply because the Rich will be able to flee to new havens for their wealth, and Wall Street isn't the only real big-player market in the world now that it was.

As for safety nets for the middle class, they are a huge part of the budget and to staunch more huge deficits, there are sure to need to be reductions.

Roosevelt used a lot of "make work" fixes -- huge murals, big park creation projects -- that, even if needed, wouldn't make sense now.

I think a huge assault on Global Warming would create jobs for the middle class: solar panels, wind farming, nuclear energy. This is something that Obama wants. Also, to preserve the safety net, efficiencies can be found for Medicare and by capping Social Security payments.