Anyone who thinks our economy and the rest of America is in a familiar cycle, with perhaps different music and new electronic gadgets, hasn't been paying attention. Unfortunately this includes much of the media and the economic experts they choose to quote. It's like 1981-82. Well, no, even though in severity that event was the worst up to that point since the 1930s. Jobs were shed in this recession at a faster and deeper rate than since statistics began to be kept in the late 1940s, and by this time after the start of the 1981 downturn we had regained virtually all the lost jobs. Now we have nearly 26 million unemployed or underemployed (temps who want full-time work) Americans. Thanks to Republicans in Congress, 2 million have lost their unemployment insurance. In any event, that was a Fed-caused recession to defeat inflation, and the underlying American economy was strong and diverse, with the middle class at its zenith and Wall Street a dowdy joint tasked with raising capital for real productive, job-creating enterprises. None of that is true in this disaster.
It's like the Great Depression. That was an economic collapse fueled by financial speculation and fraud, high leverage, laissez-faire, and extreme income inequality, too. Unfortunately, there the parallels end. America was the world's largest creditor nation, manufacturing exporter and oil producer/exporter, with state-of-the-art factories and a skilled workforce just waiting for an upturn. Government was much smaller at the start of the Depression, allowing FDR plenty of room to experiment; he was not weighed down in the 1930s by two endless colonial conflicts and defense spending greater than all other nations combined. The bad was worse: Unemployment was estimated at 25 percent; poverty was much more widespread; the country was still heavily rural and small-town. And, importantly, the "old order" that brought on the crash was discredited and, for the next several decades, shut out of political power.
It's just a normal business cycle being made worse by government. When people say this, they don't mean that the government has made inadequate and poorly targeted stimulus or helped prop up the Wall Street casino prepping us for another panic. They mean Obama is a "socialist/fascist/communist" and America needs to let the "free market" rule, while slashing "wasteful" government spending. This would be dark comedy if it were not fervently believed by so many voters. It is most definitely not any kind of business cycle we've seen. But this dangerous minority may well get their way come November — they're already getting much of it, with painful consequences.
Every moment is different, of course, including the dullest evenings you ever spent at a laundromat. But this moment in history is different. We're not copping a national attitude. The contrasts between our nation's situation today and every time in its history are stark and arresting:
Our government and politics are broken. The U.S. Congress has had similar assemblages of jerks, mountebanks, demagogues and tools. The 1890s come to mind. But never have the stakes been higher. Republicans lost the election, but they have been able to block or emasculate virtually every reform the majority of voters wanted. In the Senate, one member can stop a critical appointment. A minority can leave millions without unemployment checks. The filibuster, rarely used in the past, is now threatened to stop almost everything. Meaningful health-care coverage, climate change legislation, financial reform...dead on arrival. Sen. Jefferson Beauregard Sessions of Alabama can slime the memory of Thurgood Marshall for "activism" and get away with it (does the distinguished gentleman from the South support Plessy v Ferguson?). And all this for the theater that will confirm a relatively conservative Supreme Court justice. That some Democrats are party to these crimes makes the situation worse because the Republican Party is no longer a traditional mass party with liberals, moderates and conservatives.
President Obama has been content to largely go with the flow of what he inherited. This means more than war, Gitmo and torture — it means three decades of making government ineffective, whether from the appointment of "free market" political hacks, regulatory capture by industry or tax cuts that gutted programs. The same is true on the state level. Thirty years of tax cuts and government subsidies to the well connected are causing our system to collapse. Most living Americans have no memory of when government was a competent, active agent of good (even though they are dependent on it still). Exhibit A is the Salazar Interior Department that let the Deepwater Horizon happen. Obama lacks the Brains Trust and Cabinet that prodded and inspired FDR. He lacks FDR's audacity or sense of urgency. (Oliver Wendell Holmes supposedly said Roosevelt had a "second-class intellect" but a "first-rate temperment." Mr. Obama is the reverse). Thus serious measures that would get control of Wall Street, rebuild the economy and prepare the nation for the future are not even considered. The continued drain of two wars and huge defense spending are not questioned.
Our economy is broken. When Apple employs 25,000 people here and its products are made by 250,000 workers in China, you get the idea of one piece of our self-made calamity. It's not just Rust Belt industries that have been hollowed out, but most of the productive economy. The old link of "What's good for America is good for General Motors and vice versa," as Charlie Wilson said (and was widely misinterpreted) has been shattered. Now transnational corporations want the cheapest worker in a world of surplus, skilled labor. Our trade deals are not working for most Americans, but now we're on the wrong end of the gun called being deeply in debt to China. And what did our debt get us? Not a world-class rail system or anything that would more than repay the debt (as in the Tennessee Valley Authority or Hoover Dam of the 1930s). It got us foreclosed sprawl and crap at Wal-Mart, the most influential force in driving down wages, eliminating benefits and destroying local economies.
It is, however, big business for the deregulated world financial elite that makes its money by trading, not by raising capital to create jobs. These barons caused the recession, remained intact thanks to the elected officials and Fed they own, and now are making threats about government deficits. Our corporate elite — beneficiaries of the greatest income inequality since the Gilded Age — demands that the status quo continue. Despite the "conservative" talking point, most pay no taxes. And they own the government. Their plan now includes offshoring of jobs at an even more aggressive rate. Thus, a huge cohort of Americans face a jobless future, and millions more will see their living standards continue to fall. This has been happening slowly for 30 years as America became more financialized, unions were destroyed, industries consolidated and wages stagnated and fell. Such an economy will have a very difficult time healing itself.
All this spells a crisis of legitimacy not seen since the Civil War, plus a crisis of means — where the will and interests of a large corporate elite clash with the good of the nation — never seen before. In the Depression, both were reversed. The banksters were brought down, prosecuted and regulated, preventing a recurrence of the calamity until after the Depression-era laws were repealed. But all this probably adds up to something greater that is broken: American society. How else can we explain the willingness of at least a substantial minority to vote for the very policies that brought on the Great Recession? Or the moronic blabber that passes for political discourse. E.g., "socialism" vs. "economic freedom." All this never mentioning we're a mixed economy, a nation where the red states are deeply dependent on federal spending, where the taxpayers prop up the banks, the defense contractors, the auto/oil/housing complex and the big agribusinesses. Or the commons and safety net that make a civilization — the legacy of which we still thoughtlessly enjoy. The social contract has dissolved and an angry nation thrashes about in its ignorance.
This time is different for another reason: Never before have our challenges been more complex and daunting. Theocratic "conservatism" can't address them, won't even recognize them. Liberalism is marginalized, not least thanks to the huge spending power of the right and their corporate masters. Education has been replaced by job training. The great majority of informed Americans is a memory. Can this experiment in self-government survive so many breaks?