How is the working-class Depression of 2020 similar to the other 47 financial downturns in US history?
Downturns are frequently precipitated by poor economic and cultural practices and preceded by lots of signals: over-speculation, overuse of resources, oversupplies of goods, and exploitation of labor. What I see are many poor practices brought on by corruption--with overconsumption, climate change, growing inequality, and moral degeneration at the root.
The "disrupters" (21st century robber barons) have enabled an alienating and anomic system that is highly dysfunctional for most of the planet, using "algorithms of oppression." And this cannot be solved with data alchemy, marketing, and other forms of sophistry.
Put down your iPhone for a minute and ponder these rhetorical questions:
- How did people not know that another economic crisis was around the corner?
- Doesn't anyone have a sense of US economic history?
- Doesn't anybody read? Even a little?
- Wasn't it only a dozen years ago that we faced a similar crisis?
Warm Koolaid (2016) signified corporate America's use of myths and distractions to sedate the masses.
Who will hear the warnings and do something constructive for our future? Or is this Covid crisis another opportunity for the rich to cash in on the tragedy?
The answer lies, in part, to an ignorance of history and science, and oversupply of low-grade information, poor critical thinking skills, and lots of distractions. That's in addition to the massive greed and ill will by the rich and powerful.
US downturns are baked into this oppressive system. And crises are used to further exploit working families. With climate change and a half century of increasing inequality, these situations are likely to worsen.
"An economy based on mass deception, exploitation, degradation and oppression, violence, war, and massive environmental destruction...is unsustainable."
Workers will resist and fight oppression; they always do, but will they have a voice as the US faces another self-induced crisis, as trillions are doled out to those who already have trillions?
Here are the dates of the largest economic downturns.
1797-1800
1807–1814
1819–1824
1857–1860
1873–1879 (The Long Depression)
1893–1896 (The Long Depression)
1907–1908
1918–1921 (World War I, Spanish Flu, Panic of 1920-21)
1929–1933 (Stock Market Crash, Great Depression)
1937–1938 (Great Depression)
Feb-Oct 1945
Nov 1948–Oct 1949
July 1953–May 1954
Aug 1957–April 1958
April 1960–Feb 1961
Dec 1969–Nov 1970
Nov. 1973– March 1975
Jan-July 1980
July 1981–Nov 1982
July 1990–March 1991
Mar-Nov 2001
December 2007 – June 2009 (The Great Recession)
March 2020-
We live in an economic system that is unsustainable, unjust, and exploitative. While many of us in academia and the thought industry have known this for decades, those with greater wisdom have known for centuries. Techies and disrupters think it can all be solved with technology, not with profound wisdom. The ultimate in hubris and reductionism. We have to change the system politically, socially, and culturally. We have to be wiser.
How do we do that, radically change society, when our economic system has driven us in the wrong direction for so long? Some of these lessons can be learned from working class history, but they have to be applied with wisdom.
Of what changes do you mean?
ReplyDeleteA movement toward Quality of Life (QOL) rather than overconsumption.
Delete1918-1921 has WWI and Spanish flu, but it fails to mention the Panic of 1920. How come?
ReplyDeleteBlack Monday in 1987 is missing
ReplyDeleteThe rebound was quick?
DeleteI agree, greed is an evil creature and there's so much of it happening in our country and it's destroying us. We need to make big changes if "we the people" are to survive.
ReplyDeleteThere will be no education for human fulfilment as long as the system is mired in profit. With fascists due to take over the levers of power, education must now be redefined as it was decades ago before it vanished: "We go to school to learn to live not to learn to make a living."
ReplyDeleteWhere we are now feels an awful like 1987 to me. And I agree--that date should be on your list. By 1987, our society had whipped itself up into a massive casino capitalism frame of mind. Everyone had thrown their chips into real estate speculation, prices on goods soared, and I remembered people having really bizarre philosophies about their relationships with money. It was a good thing if you lived your life in a way that showed that money didn't control you, that you weren't going to worry about the fact that you couldn't pay off your credit card card debt. You deserved to have whatever you wanted. And if you acted in this way, the karmic universe would reward you. I remember watching it go down wondering if I was wrong to still believe that I shouldn't be paying more than 25% of my monthly take home pay on rent or paying more than 2.5 times my yearly gross take home pay on a house. I was a wedding photographer at the time, working for a high end photography business, and putting myself through a bachelor's degree program. I had the privilege of being a silent witness to countless conversations amongst the indebted working class who believed they were rich as they sipped champagne next to elaborate carved ice sculptures. Everyone had some kind of racket in the works, and at that time it was real estate. I watched the prices just balloon out of my reach, out of the reach of many people. But we did still have rent control. I was taking a college course at the time about economic science and I remember the professor telling the class that the markets were in good shape because inflation was low. I'll never forget what she said when I tried to disagree with her assessment. I told her there was extreme inflation. In real estate. She totally knocked me down, saying real estate is never factored into inflation numbers because it's something that's paid over many years. I tried to counter with--but it's the biggest expense that most people take on in their lives, and if the monthly cost of it is more than 75% of someone's income, wouldn't that be considered inflationary? She just blew me off. I didn't know what I was talking about--she was the professor.
ReplyDeleteWell, the bottom fell out. People lost their shirts. I heard the apocalyptic conversations at the weddings--the weddings that disappeared because no one could afford to pay high end photographers any more. And the company I worked for, Bachrach (Yes, the same one that photographed all the presidents), they lost their shirts. People have totally forgotten that time and what it led to. People were homeless, living in their Mercedes Benzes. There was massive unemployment. I graduated in 1990. I remember there were 500 people applying for one job. I went back to school to wait things out because I couldn't get a job. And the housing market crashed spectacularly--50% loss in value.
I'm terrified by what's happening now. I fear our economy is about to crash hard. It's because we have been led here by people who believe in casino capitalism, even though it doesn't work, even though there are few winners, and many losers when there's the eventual correction. And every time this cycle happens, we as a culture lose a little more of our humanity.
Capitalism, the economic order under which we labor, reproduce and live experiences crisis ever 5-7 years. Dahn has indicated some dates to peruse but the system itself is crisis prone.
ReplyDeleteThat is why generating crisis and profiting from it is what the ruling elite do either through ineptness or design, depending on the situation.
Not only is the system not stable or sustainable, it is prone to fascism when the 'downturns' or depressions are to deep.
We see that now.
The crisis is the crisis of over accumulation.
Most understand that the rich have gotten richer and he poor poorer but many do not understand this inequality is baked into the system.
The issue for the capitalists is how and where to invest their surplus capital.
Mergers and acquisitions can work for awhile, but this generates no value and thus is a temporary stopgap.
Investing in high grade real estate was a big source of surplus capital, but this too if falling apart as interest rates rise.
Gold and silver are subjects saved for the fiction section of the bookstore.
AI, global warming and nuclear war are the dilemmas facing homo-fabian.
The lack of class consciousness on behalf of the general public is appalling and owed to a culture wedded to an economic system that resemble a carny.
How will capitalism absorb its tremendous profits in an era when capitalism is in decline?
The savagery of the system will not go away but must be confronted by the same ruthlessness and organizational skils the current ruling class has.
Americans suffer from avoidance and denial both personally and as a culture. And for this reason the country is sick.
A form of menticide has been unleashed through corporate media and 'anti-social' media and the critical thinking skills needed to ferret out what is real and what is appearance is shrinking.
We are still in the Age of Dominance.
Master - slave
Lord-serf
Employer-employee
And this Age of Domination is seated within the repeal of both the Enlightenment and a recession to what is now a nomadic digital dark ages of despair and degradation.
Great essay! In answer to your question: "Does anybody read? Even a little?" I think the answer is no.
ReplyDeleteWe live in a time when it has become fashionable to be ignorant of history, literature, and even American geography. Our "educated" intellectuals write off the past as nothing more than the story of exploitation by privileged and racist bigots. The elites take pride in the fact that don't know anything about "flyover country" or American history. The mainstream media are cheering on the Ukrainians in the Ukraine-Russia war, but how many people know anything about the historical relationship between Ukraine and Russia, the Holodomor, or the horrors committed by the German and Russian armies in eastern Europe during World War II?
And no one knows anything about the economic history of Germany between the two world wars --the hyperinflation, the violence committed by paramilitary organizations, the destruction of the savings of middle-class Germans, and the manipulation of the German mark. There are many parallels between the German economy in the 1920s and the U.S. today.
It would be enormously helpful if America's privileged elites would do a little reading.
Richard, I'm wondering how many elites do know the history, but stand to gain from the ignorance of others.
DeleteEndemic to capitalism is crisis. It is its structural nature that crisis be created every seven to ten years or so.
ReplyDeleteNow it is happening with more frequency.
Repeatedly using quotations can be annoying and a way to avoid thinking but when it comes to capitalism not to quote Karl Marx or figures like him would be a dis-service.
“Accumulation of wealth at one pole is therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole, i.e., on the side of the class that produces its product in the form of capital.”
The system is the crisis, the system is the problem and nothing can be done to reform it.
It must be euthanized so a new system that provides basic human rights can emerge.
We are in an interregnum.
We either exit with a new economic system devoted to people and not profit or we enter into fascism.
Anyone not aware of the illegal meddling in the railroad strike by the corporate state should be concerned about this so-called retirement section of Austerity Joe’s private retirement plan.
It is a move on the chessboard to privatization and as all repeals of the New Deal, is left to democrats to complete.
Using words like debt relief, savings, retirement funds the bill:
“…will mandate businesses to automatically sign up new employees for the employer-sponsored a retirement plan (if one is offered) as part of the onboarding process. The rule would take effect in 2025 and would apply to businesses that offer a 401(k) or 403(b) plan.”
https://www.aol.com/finance/heres-whats-53b-retirement-bill-201537197.html
This ‘mandate’ is government control of business through the state which is classic fascism.
As Mussolini himself declared:
“The fascist regime does not intend to nationalize or worse bureaucratize the entire national economy, it is enough to control it and discipline it through the corporations….
The corporations provide the discipline and the state will only take up the sectors related to defense, the existence and security of the homeland.” 26
Hitler likewise pronounced:
“We stand for the maintenance of private property…. We shall protect free enterprise as the most expedient, or rather the sole possible economic order.”27
https://monthlyreview.org/2017/04/01/neofascism-in-the-white-house/
Mandatory masks, mandatory retirement, mandatory payments for student loans to criminal banks is to be controlled and policed by the state.
The US seems to be moving towards a form of State Capitalism as the Chinese have, but with fascist characteristics.
The automatic enroll plan, whereby the mandate is carried out:
“We've decided to begin with automatic enrollment and make it difficult to opt out,” Rep. Neal said. “I think automatic enrollment is a big deal for eligible participants.” (Ibid).
“The bill also aims to help part-time employees at companies of all sizes.
These employees often have to wait three years before they can enroll in a retirement plan. The new rules lessen the wait to two years beginning in 2025.” Ibid)
This is acknowledgement by the ruling elite that unemployment the gig economy is the future along with precarious work.
The article goes on to note:
Continued:
ReplyDelete“Also in the bill is treating student loans as deferrals for the purpose of retirement savings. Collateralizing debt and calling it retirement.
What that means in practice is that student loans and retirement savings will now effectively be linked if an employer chooses to offer the benefit.
And that employer is now mandated by 'the state'.
Beginning in 2024, an employee could pay their student loan, but in the process earn a “match” from their employer with that money heading into a 401(k) or 403(b) or SIMPLE IRA account.” (ibid).
Currently, in some companies, very few, if you put in $1.00 in your 401K the company matches a portion or the whole thing.
Now, the company will be mandated by law. Forced.
And this all funnels into stocks and bond markets hungry for cash.
It is a form of leveraging savings for the Casino economy.
The 401K harboring the deferred loans to banks for student debt, they say, will earn interest while it sits in an IRA, that you no doubt cannot touch.
A new form of collection agency under the rubric of saving for retirement.
George Orwell observed that correctly: “Political language…is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.”
----- Karl Marx
''The mine owners did not find the gold, they did not mine the gold, they did not mill the gold, but by some weird alchemy - all the gold belonged to them! If the workers are organized, all they have to do is to put their hands in their pockets and they have got the capitalist class whipped.''
~ Big Bill Haywood, Miner, founding member & leader of the Industrial Workers of the World (IWW).
Lots of important information from the HEI readers. Sadly, most will say they didn't see it coming...again.
ReplyDelete