1920’s to 1980’s a brief flirtation with Democracy

The extract, at the end of this piece, is from the  FullerMoney newsletter.

Basically it’s saying that the present financial crisis is more than a recession and implies that is on par with The Great Depression. If that’s the case then it will be decades until we recover.

Accepting the premise, I make two points.

First; the Great Depression (also caused by greedy money men) caused real, deep, suffering to the 99% , which can only be dimly seen in the Hollywood portrayals of it..

Second; the route out of The Great Depression was via The Second World War, when the 1% had to release money and create new industry to supply the armaments to fight the war.

Soldiers returning from that war, were more sophisticated than they were going in.

They came out of the War, expecting a better life than they had had, going in to it, and demanding such.

They had become aware of  how Russians had sloughed off the 1% and the 1% knew fear. Churchill’s speech about The Iron Curtain was a reflection of his own concerns about how the “threat” of Communism could affect the life-style of his Class.

He relied on the thought that the British Working Classes knew their place and would doff their caps, as before, and cheerfully and gratefully re-elect him.

Despite his fear of Socialism, he was still so far removed from the 99%, as to be surprised to see the British people  vote in a Socialist Government and set up the Welfare State.

The U.S., having two right wing parties, tried to resist the growth of Socialism with McCarthyism but had to settle for a bosse’s version of the Welfare State.

To my mind, the present Crisis/Depression sprang from Glasnost.

Communist Russia had lost its battle with Capitalism and the 1% slipped back into Victorian Capitalism mode.

In Britain, under Margaret Thatcher, (taking her lead from Ronald Reagan) Privatisation of Health and Education and the dismantling of the Welfare State began.

The Victorian Industries, which had been in a chaotic mess until they were nationalised were quickly put back in private hands but in a healthier state than when taken into public ownership and now effectively in a monopoly/cartel position.

Worse, she gave away our Cotton, Steel and Engineering industries to the Far East (part of Ronnie’s plan to avoid the spread of Communism from China) and turned to the financial sector to provide Britain’s income.

They were to be her entrepreneurs, and were to be given Carte Blanche to win our wealth.

She relaxed all the financial controls that had been put in place after The Wall Street Crash.

No doubt similar processes were unfolding in America and she took her lead from them.

We are now seeing people awakening to a realisation that the 1% are racing ahead with plans to Victorianise Society.

Plans to return the 99% to a state of subservience, where older “useless” workers were not only tossed on the scrapheap but were allowed to die off through sickness, poor diet and the lack of humanity, only hinted at by Dickens but amply portrayed by images of life in rural India and China.

One gets hints from the situation in our care homes, the Government’s  declared intentionto sieze your home to pay for your care in old-age and the deferment of pensionable age to a point, where applying for one’s pension will, for many, be pointless.

It’s not here yet and is still possibly a few decades off (beyond my life span) but hopefully Occupy  and similar popular movements will survive the new surveillance technique’s and give the 1% pause for thought.

Redefining Recovery

We have suggested that the concepts of recession and recovery need to take on new meaning. After a normal recession (which for the average post-World War II experience in the U.S. lasted less than a year), the economy quickly snaps back; within a year or two, it not only recovers lost ground but also returns to trend.

After systemic financial crises, however, economies of the postwar era have needed an average of four and half years just to reach the same per capita gross domestic product they had when the crisis started. We find that, on average, unemployment rates take a similar time frame to hit bottom and housing prices take even longer. With the Great Depression of the 1930s, economies on average needed more than a full decade to regain the initial per capita GDP.

“After the Fall,” a 2010 paper written by one of the authors of this article and Vincent Reinhart, a former Fed official who is now chief U.S. economist at Morgan Stanley, added evidence that in 10 of 15 severe post-WWII financial crises, unemployment didn’t return to pre-crisis levels even after a decade. It also showed that in seven of the 15 crises there were “double dips” in output.


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