History Repeating Itself?

So the 75th anniversary of the return of legal beer has been on my mind lately. (Obviously, given that I’ve actually gotten off my ass to blog about it….)

But of course that means that the Great Depression has also been on my mind. The beer bill signed by FDR in March 1933 was, after all, intended as an economic stimulus package: breweries would get back in business and hire more workers. The Treasury would tax beer at five dollars a barrel, and that money would help pay for other back-to-work projects.

But the beer bill was just one part of the plan to repair the economy. On March 12, 1933, for example, FDR asked all banks to close for a brief “holiday.” The goal was to stop the panic and the “bank runs” while Congress and the Federal Reserve shored up the nation’s money supply. (If you’ve seen the movie “It’s A Wonderful Life,” you know what a bank run is.)

Anyway — seventy-five years later, here we are approaching panic mode, with the Fed stepping in with moves and money designed to stop the panic and prevent full-blown economic disaster.

Will we end up where Americans were seventy-five years ago? Unemployment rates of one-third. Millions of foreclosures and bankruptcies? Homeless people on the road or camped out under bridges?
Back in 1933 and 1934, Congress created mechanisms to prevent a repeat of that disaster: federal home loan programs, the FDIC, Social Security (which originated as a way to keep paychecks flowing even when people couldn’t work).

In theory, those programs, most of which still exist, were designed to protect the economy. Whether they will or not is a question no one can yet answer.

But we don’t have one thing Americans had back then: leadership in the form of a strong, focused, inspiring president. In fact we’ve got a president who didn’t know, until someone told him, that gasoline was inching toward four dollars a gallon. a president who thinks the war in Afghanistan is “romantic.”

Right now, we all need to work together, avoid panic, and hang in there. But it’s hard to do that when there’s no one guiding the ship. So here we are all, seventy-five years after the worst economic depression in our history, once again afloat on a sea of uncertainty, fear, and near-panic. But there ain’t no captain guiding this ship.

Hang on to your hats and your loved ones. This could get ugly.

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