Tuesday, November 25, 2008
In Present Economic Crisis, Echoes Of 1932 - Daniel Schorr
All Things Considered, November 25, 2008 · For one old enough to have been around at the time, there's a certain feeling of 1932 in the air as an activist new president mounts an attack on a crushing economic crisis. Then, as now, the preceding years had been marked by regulatory laxity that contributed to a Wall Street crash followed by an economic downturn. Worse than today, unemployment neared 25 percent. President Franklin Roosevelt spoke of one-third of a nation ill-house, ill-clad, ill-nourished. A new phenomenon was technological unemployment attributed to automation. FDR came on the scene pledging a New Deal for the American people. The New Deal followed a Keynesian principle of deficit spending to prime the fiscal pump. A variety of new agencies, starting with the national recovery administration, including the WPA and the CCC worked at the renewal of America. The Works Progress Administration built the bridges and the post offices. The Civilian Conservation Corps worked at protecting the land. One of its monuments was an area in the Catoctin Mountains that FDR called Shangri-la, later to become Camp David. The NYA — the National Youth Administration — helped needy students. I got 50 cents an hour sorting library slips in college. The New Deal left many monuments ranging from the Tennessee Valley Authority to the Federal Theater Project. In two years, in 1934, the economy began to turn around. Unemployment began to fall. But the Depression didn't finally end until the 1939 military buildup. No alphabetical agencies this time as president-elect Barack Obama works to create 2.5 million jobs in two years, but once again a Keynesian dip into deficit spending.