Most of us are of an age where our parents or grandparents grew up as children of the Great Depression, 90 years ago. They learned to be frugal and self-reliant. They hated debt and hardly ever had to deal with leftovers. They were good cooks, with good appetites. In turn, they tried to teach us the values of “waste not, want not,” the Golden Rule and to always vote.
The Great Depression started in 1929 as a mild recession with rising unemployment and drops in prices and purchases. It dove into a depression when too many people panicked, and Wall Street and thousands of banks crashed. Just like today, the general economy shut down. Unlike today, there was no virus or pandemic, no social distancing or fear of thousands of people dying. There was only widespread poverty when farm production dropped by 50% and almost half (5,000) of all banks failed. Unemployment jumped to 23%, and farm, rent and mortgage defaults led to hundreds of thousands of homeless people living in “shanty towns.” Families went hungry, especially in the big cities, and the beginning of an eight-year drought turned fertile farm and dairy lands in the mid-section of the country into a Dust Bowl. Thousands of people were forced off their land, scenes made famous by the John Steinbeck novel, “The Grapes of Wrath.”
When written, what will a future novel about the COVID-19 pandemic and this 2020 depression depict? That answer depends on what our government leaders do right now. The ill-guided and uncoordinated efforts by the Hoover Administration in 1930-32 did extra harm to the economy and are blamed for lengthening the Great Depression by almost a decade. Our leaders today have plenty of opportunities to make the same mistakes. Although the underlying structures of these two depressions are very different, many lessons could still be learned by studying history.
Franklin D. Roosevelt replaced Hoover as president in 1933 and immediately launched his New Deal. When it was fully implemented, the New Deal was comprised of 26 economic relief, reform and recovery programs. At its height, as many as 74% of all American households were “on the dole,” getting housing assistance, unemployment checks, Social Security benefits, federally-supported local government programs, bank deposit insurance and hundreds of thousands of public works jobs.
Today’s economic crisis is probably bigger by almost all measurements than the Great Depression of the 1930s. It should be painfully obvious that we need our own New Deal — one that is much bigger than Roosevelt’s.
The treasuries of our local, county and state governments are being depleted from the public health and economic recovery responses. Just in Sonoma County, hundreds of businesses and thousands of jobs may be lost forever. Our public health system weaknesses and failures are now exposed. Our modern consumer-based economy that our parents and grandparents warned us about has now let us down. Amazon, ZOOM, China, another bailout for Wall Street or a change of residency in The White House — alone or all together — will not save us.
The greatest days of America were built during the years after the Great Depression. Social Security for the aged, a minimum wage for all, child labor laws and the Federal Reserve System were created. The Public Works Administration (PWA) hired private contractors to build 35,000 projects. The Works Progress Administration (WPA) hired displaced workers to build 125,000 schools, hospitals and public buildings and the San Francisco — Oakland Bay Bridge and New York’s Lincoln Tunnel.
Portentously, we are at a moment when we can “make America great again.” (Red MAGA hats not required.) We need a Federal Housing Authority to build millions of houses. We need a Green New Deal to replace every rusty speck of our fossil fuel-based economy. We need a Digital Reform Deal to protect our privacy, civility and journalism. Finally, we need a Main Street Renewal Act, to recover and revitalize the small town commerce and local ownership that has kept America great for the last 90 years.