Bob Schwartz

Category: Economics

May 29, 2020

Could We Have Survived a Great Depression?

This post was originally published in March 2012. It was just a few years after the Great Recession and the beginning of the 2012 presidential campaign. The title question “Could We Have Survived a Great Depression” seems somewhat resonant today. It contained two overall thoughts: Creativity matters. Optimism matters. They still do.

The Great Recession did not turn into a(nother) Great Depression, and the prospects of continuing towards prosperity, or at least less economic insecurity, seem good. The big question that we now have a limited luxury to ask is this: Could we have survived a Great Depression? The study of that question may be the most valuable we can make.

The Great Depression has spawned an industry for scholars, historians, and thinkers of all stripes, and that has been a good thing. Systems and people are seen truest at their moments of greatest stress, and hardly anything before or since qualifies

Looking at how we managed to survive the last Great Depression – whether it was leadership and action, the normal cycle correcting a horrific anomaly, the fortunate unfortunate impact of a global war, or all/none of the above – tells us something about how we might handle the next. A couple of small starting points:

Creativity matters. Dismissing creative civic solutions out of hand and out of political pique is something we can never afford, and in the worst times something we should never tolerate. Love him or hate him, FDR got boldly creative, pushing the bounds of constitutionality, convention, and common sense. But when things fall apart as they did, common sense is cold comfort. Herbert Hoover, who was in fact a man of civic accomplishment, lacked the boldness and sense of adventure needed for the unprecedented times.

The question is: At that moment in 2008, if things had gone from bad to worse, would there have been the will to be creative and to try things, even if that meant setting aside ideology and political advantage. The answer is that nothing at the time, and nothing today, tells us that there would have been.

Optimism matters. One of the latest political ads from Rick Santorum depicts a cautionary apocalyptic vision of Obama America, something straight out of the Book of Revelation. During the Great Depression, there was no need for a fanciful version of the Apocalypse; it was already there. Books, songs, and movies painted an accurate vision of hardship, but they also tried for uplift and hope. The best and smartest politicians realized that when the spirit of America was already broken, the last thing people needed was a reminder that things could and might yet get worse. Happy days might not have been there again, as the song said, but there was no point in saying that they never would.

So as with the dismissal of creative solutions, the question is, in the face of a 21st century Great Depression, whether today’s politicians could find a way to set aside the darkness and pessimism for a brighter vision of good times ahead, even if it meant faking optimism, even if it meant losing political advantage. There is little evidence of that.

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September 6, 2019

The American Economy and Kites

Mega Flag Kite

Mega Flag is one of the world’s largest kites, measuring 138 feet x 83 feet.

Some say the winds of the American economy will never stop blowing, carrying the economy infinitely higher forever. Some of the same people say that if we rely on intelligence, reason, and science, with initiatives such as wind turbines, the lights will all go out when the wind stops blowing.

What if the winds do slow or stop blowing and instead of the lights going out, the Mega Flag economy can’t stay aloft and comes crashing to the ground?

 

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December 24, 2017

Pope Francis: Change the Rules of the Socio-Economic System

“We must work toward changing the rules of the game of the socio-economic system. Imitating the Good Samaritan of the Gospel is not enough. An entrepreneur who is only a Good Samaritan does half of his duty: he takes care of today’s victims, but does not curtail those of tomorrow. It is simple to give a part of the profits, without embracing and touching the people who receive those ‘crumbs’. This can never be said enough — capitalism continues to produce discarded people whom it would then like to care for. ”
Pope Francis

The news in America this Christmas is dominated by talk about taxes and the economy. So it is appropriate that my Christmas message come from a speech about economics given by Pope Francis on 1 April 2017.

Greed, which by no coincidence is a capital sin, is the sin of idolatry because the accumulation of money per se becomes the aim of one’s own actions.

When capitalism makes the seeking of profit its only purpose, it runs the risk of becoming an idolatrous framework, a form of worship. The ‘goddess of fortune’ is increasingly the new divinity of a certain finance and of the whole system of gambling which is destroying millions of the world’s families, and which you rightly oppose. This idolatrous worship is a surrogate for eternal life. Individual products (cars, telephones …) get old and wear out, but if I have money or credit I can immediately buy others, deluding myself of conquering death….

Today, many initiatives, public and private, are being carried out to combat poverty. All this, on the one hand, is a growth in humanity. In the Bible, the poor, orphans, widows, those ‘discarded’ by the society of those times, were aided by tithing and the gleaning of grain. But most of the people remained poor; that aid was not sufficient to feed and care for everyone. There were many ‘discarded’ by society. Today we have invented other ways to care for, to feed, to teach the poor, and some of the seeds of the Bible have blossomed into more effective institutions than those of the past. The rationale for taxes also lies in this solidarity, which is negated by tax avoidance and evasion which, before being illegal acts, are acts which deny the basic law of life: mutual care.

But — and this can never be said enough — capitalism continues to produce discarded people whom it would then like to care for. The principal ethical dilemma of this capitalism is the creation of discarded people, then trying to hide them or make sure they are no longer seen. A serious form of poverty in a civilization is when it is no longer able to see its poor, who are first discarded and then hidden.

Aircraft pollute the atmosphere, but, with a small part of the cost of the ticket, they will plant trees to compensate for part of the damage created. Gambling companies finance campaigns to care for the pathological gamblers that they create. And the day that the weapons industry finances hospitals to care for the children mutilated by their bombs, the system will have reached its pinnacle.

The economy of communion, if it wants to be faithful to its charism, must not only care for the victims, but build a system where there are ever fewer victims, where, possibly, there may no longer be any. As long as the economy still produces one victim and there is still a single discarded person, communion has not yet been realized; the celebration of universal fraternity is not full.

Therefore, we must work toward changing the rules of the game of the socio-economic system. Imitating the Good Samaritan of the Gospel is not enough. Of course, when an entrepreneur or any person happens upon a victim, he or she is called to take care of the victim and, perhaps like the Good Samaritan, also to enlist the fraternal action of the market (the innkeeper)….An entrepreneur who is only a Good Samaritan does half of his duty: he takes care of today’s victims, but does not curtail those of tomorrow….

Capitalism knows philanthropy, not communion. It is simple to give a part of the profits, without embracing and touching the people who receive those ‘crumbs’. Instead, even just five loaves and two fishes can feed the multitude if they are the sharing of all our life. In the logic of the Gospel, if one does not give all of himself, he never gives enough of himself.

 

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September 5, 2016

International Ladies Garment Workers’ Union

ILGWU 1

It’s #LaborDay. My Grandpa Harry was a member of the International Ladies Garment Workers’ Union (ILGWU). He made beautiful coats. I still keep one of his union dues cards among my treasures.

All this talk about “Made in America” is incomplete. If we want things made in America, instead of all the other countries most of us buy most of our stuff from, we will pay a price. Unless we are planning to pay American workers the substandard wages of many of our import nations, we have to be willing to pay more for our goods. Are we willing? Are you willing?

Meanwhile, here’s the once famous song of the ILGWU. Maybe it can be famous again.

Look for the Union Label

Look for the union label
when you are buying that coat, dress or blouse.

Remember somewhere our union’s sewing,
our wages going to feed the kids, and run the house.

We work hard, but who’s complaining?
Thanks to the I.L.G. we’re paying our way!

So always look for the union label,
it says we’re able to make it in the U.S.A.!

And view this ILGWU singing ad from 1978.

Happy Labor Day.

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April 16, 2016

Bernie Sanders and Pope Francis

Bernie Sanders at the Vatican

This kind-of-cute headline from Politico sort of says it all.

Bernie’s fanboy moment: A meeting with Pope Francis

As you may know, Bernie Sanders was invited to a conference at the Vatican on issues related to economic justice. He interrupted his New York campaign to attend, gave an excellent speech that frequently cited the Pope’s own writings, but was told that the Pope would not be able to meet with him and others at the conference.

Then, at the last minute, the Pope was able to meet for five minutes with Bernie and his wife Jane. It was thrilling to hear that. It is unimaginable to conceive what it must have been like for Bernie, who as the headline suggests, is a huge fan of the Pope and his thinking on economic issues.

In case you think this is all about electoral politics, think again.

A major American politician has met with the Pope, based on a shared vision of economic justice. That vision comes from a background of Jewish fairness and compassion in one case and from the deepest, most Jesus-based tenets of the Catholic Church in the other. This doesn’t happen every day, or month, or year.

It is a unique and sweet moment for those who care about the future of America and the world. If that sounds a little grandiose, maybe believing big is exactly what we need.

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March 10, 2016

A Visual Vacation in Fun and Relevant History: WPA Posters

WPA - Shall the Artist Survive

In case you think that government has no positive role to play in our lives, society or culture, especially in times of national stress, please have a look at the WPA posters from 1936 to 1943.

The Library of Congress has the largest collection:

The Work Projects Administration (WPA) Poster Collection consists of 907 posters produced from 1936 to 1943 by various branches of the WPA. Of the 2,000 WPA posters known to exist, the Library of Congress’s collection of more than 900 is the largest. The posters were designed to publicize exhibits, community activities, theatrical productions, and health and educational programs in seventeen states and the District of Columbia, with the strongest representation from California, Illinois, New York, Ohio, and Pennsylvania. The results of one of the first U.S. Government programs to support the arts, the posters were added to the Library’s holdings in the 1940s.

Here is a description of the WPA:

Of all of Roosevelt’s New Deal programs, the Works Progress Administration (WPA) is the most famous, because it affected so many people’s lives. Roosevelt’s vision of a work-relief program employed more than 8.5 million people. For an average salary of $41.57 a month, WPA employees built bridges, roads, public buildings, public parks and airports.

Under the direction of Harry Hopkins, an enthusiastic ex-social worker who had come from modest means, the WPA would spend more than $11 million in employment relief before it was canceled in 1943. The work relief program was more expensive than direct relief payments, but worth the added cost, Hopkins believed. “Give a man a dole,” he observed, “and you save his body and destroy his spirit. Give him a job and you save both body and spirit”….

When federal support of artists was questioned, Hopkins answered, “Hell! They’ve got to eat just like other people.” The WPA supported tens of thousands of artists, by funding creation of 2,566 murals and 17,744 pieces of sculpture that decorate public buildings nationwide. The federal art, theater, music, and writing programs, while not changing American culture as much as their adherents had hoped, did bring more art to more Americans than ever before or since.

It would be lovely to include dozens of the posters here. Instead, here are just a few more. Please visit and enjoy the entire collection.

WPA - Yellowstone

WPA - Mural Studies

WPA - Letter Writing

WPA - Music Project

WPA - Lack of Funds

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January 12, 2016

“Wrong Direction” Is the Wrong Question: A Nation Lost

GPS

Seventy-five percent of Americans say the country is moving in the wrong direction. But that isn’t the problem they actually perceive. It isn’t that they think we should go East when we’re heading West. It’s that, like an unprogrammed GPS, we have no idea where we want to go.

Americans love their GPS. They love it not because it can tell heading North from South; any compass can do that. They love it because when you put in a particular location, it will, mostly, direct you there. But that presupposes that you have a particular destination in mind.

America was least lost in the years following World War 2. There had been two very specific objectives, both of which had been achieved. We wanted to restore a failed economy and introduce renewed prosperity. Done. We wanted to defeat the most evil threat the world had ever known. Done.

We proceeded on autopilot for decades, though there were bumps on the road. It was about prosperity and freedom. When there were obstacles to either, we eliminated or overcame them. There were recessions here and there, but they passed. There was global Communism, which we fought wherever we found it, and found it sometimes where it wasn’t.

Then some things happened. A new generation was born, which had no native knowledge of any of that. A new economic generation was born, with money machines on a scale that dwarfed anything in history. A new technological generation was born, transforming the nature of human experience. A new threat to freedom and security emerged, though it didn’t much look like the Communism we had come to know, hate, and fight. Whereas only two countries had world-destroying weapons after WW2, the list was now long and growing.

And then, on top of all that, the prosperity we had depended on for more than sixty years was put into question. It wasn’t that it was taking a break. Maybe it would never come back again, ever, at least not the way it had been.

Which brings us back to the ‘wrong direction” question. If we say that 20th century-style prosperity and that freedom and security are what America is living for, is our personal and national direction, there is nothing wrong with that. But what if that is something we can’t program into our national GPS because it is not a destination we can reach, at least not fully and unconditionally?

We can keep saying we are moving in the wrong direction. Politicians and leaders are more than happy to exploit this, telling us who to blame and how they can fix it. But maybe we are lost, and should admit it, and should spend our energy figuring out, very specifically, without vague ideas of “prosperity” and “freedom”, where exactly we want to go, and then how we might get there.

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June 23, 2015

Pope Francis’ Encyclical Laudato Si’

Laudato Si'

The Pope’s new encyclical, Laudato Si’, has been much in the news. Whatever you’ve heard about it, if you haven’t seen it, you really don’t know the whole story.

You’ve heard it is about the environment and climate change, which is in small part true. You’ve heard Catholic presidential hopefuls such as Jeb Bush and Bobby Jindal admonish the Pope, their spiritual father, telling him to stick to religion and stay out of politics.

The encyclical is much bigger than climate change, the environment, and certainly bigger than Bush or Jindal or dozens of politicians. It is a big statement about the moral and religious shortcomings of this modern world and us modern people. You don’t have to be Catholic or Christian or faithful or religious to read and appreciate it. You just have to read it.

It is full of inconvenient and uncomfortable truths. Which is probably why the coverage has focused on the environmental exhortations, rather than on the broader cultural, media, technological and social ones. In essence, it is nothing less than a call for radical evolution, in the spirit of the radical evolutionary upon whom the church is built. There are plenty of established institutions and powerful interests and individuals, including the media, who could be forced to change if such radical evolution came to pass. And many of them don’t want to change, and don’t even want us to listen to the Pope talking about it.

The encyclical is a long and deep but very readable work. Download it, sample it. You don’t have to read it all, or all at once. It is naturally grounded in theology, and in some particular theology, but be assured that the observations and conclusions don’t require you to hold any sectarian beliefs. It only requires that we believe that things are far from perfect, and that after we take a close look at ourselves and others, we believe that we have the power and obligation to make things better.

It is filled with so much quotable inspired thought and inspiration. Here is just one brief excerpt:

114. All of this shows the urgent need for us to move forward in a bold cultural revolution. Science and technology are not neutral; from the beginning to the end of a process, various intentions and possibilities are in play and can take on distinct shapes. Nobody is suggesting a return to the Stone Age, but we do need to slow down and look at reality in a different way, to appropriate the positive and sustainable progress which has been made, but also to recover the values and the great goals swept away by our unrestrained delusions of grandeur.

Laudato Si’ PDF

Laudato Si’ epub and Kindle

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September 11, 2014

The Abstract Perpetual War Is Real

Rome

Consider this: If you have a child or grandchild age 12 or younger, they have lived their lives with America at war.

And this: In six years that child will be old enough for military service, but will not necessarily have to serve because we have no mandatory universal service. So even if we are still at war, that child is probably not at risk.

And this: Why don’t we have mandatory universal service, especially if we are in perpetual war? Do we have perpetual war because we don’t have mandatory universal service?

Michael Auslin, a Resident Scholar at the American Enterprise Institute, has a fascinating piece in Politico about the prospect of a perpetual war footing, Don’t Do As the Romans Did… His politics may not be yours, but his analysis is compelling and worth reading in its entirety:

For Washington, which has already spent at least $2 trillion on relatively limited wars in Iraq and Afghanistan, the prospect of decades more competition, deterrence and fighting at an unknown cost represents the greatest security challenge since the Cold War, and perhaps since World War II. It is just as much a domestic political issue, and will figure as prominently in the debates over the future direction of the country, as do the battles over Obamacare, the regulatory burden or the transformation of the economy. Yet so far, it does not seem that either the country’s political elites or ordinary citizens have fully appreciated both the scope and, more importantly, the nature of America’s new two-front conflict. They soon will, as the country’s economic health and domestic political stability will be directly affected by rising global risk. To quote Leon Trotsky, “You may not be interested in war, but war is interested in you.”

Americans must accept the fact that, while their country may not be engaged in daily fighting, neither will it know peace for the foreseeable future. The world will become far more insecure and unstable over the next decades, and the amorphous yet crucial idea of global “order” will be strained, perhaps to the breaking point.

America’s greatest strength is also its greatest weakness. The spirit of can-do, roll up your sleeves, and in the words of Larry the Cable Guy, “get ‘er done” is a model for the world. But a related failure to think things through, apply broad and deep vision, and act deliberately and more slowly, can neutralize or outweigh the benefits of that spirit.

Living in the moment, in the now, is a great way for people to not be mired in the mistakes of the past and not be intimidated by the hypothetical misfortunes of the future. That is, unfortunately, not a luxury that nations, particularly super powerful ones, have. When you can spend trillions of dollars of your citizens’ money, send thousands of citizens to their deaths, and have the potential to blow up cities and the whole world, we expect you to think twice or more before you roll up those sleeves and get ‘er done.

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June 24, 2014

Mississippi’s Existential Election

Mississippi Tourism Guide

The Republican primary runoff today between long-time U.S. Senator Thad Cochran and insurgent Tea Party candidate Chris McDaniel is a story of pragmatism clashing with political philosophy.

My love and appreciation of Mississippi is unbounded. My frustration at how it is misunderstood, mischaracterized, and disrespected is constant. But my sense of realism means saying this: Mississippi would not have survived and thrived as it has without generations of powerful U.S. Senators making sure that federal defense projects and other spending were directed its way. Mississippi is one of those states that receives much more in federal spending than it gives in taxes.

And that’s just fine. I have affection for the many states I’ve lived in, and recognize the distinctive value of each. Like a parent, I may not want to say that any of them is more or less deserving. Yet given a hard choice, I would choose to help Mississippi more than the others.

No doubt the anti-government, anti-earmarking tide is rising, and the Tea Party and Chris McDaniel are rising with it. But Thad Cochran, whose problems include his age and his supposed “liberalism”, has had to be pretty plain in pointing out that if re-elected, his seniority means that he will still be in a position to bring home the bacon for Mississippi. Maybe not as much as in years past, but still more than someone who is philosophically opposed to such spending, and who in any case would end up being one of the most junior Senators in the country.

And therein is the irony. If McDaniel wins the nomination, and if he wins the Senate seat, he can’t possibly serve the interests of his state by forcing it to go “cold turkey” without federal funds, as the Tea Party wants. Mississippi is wonderful and irreplaceable, and if there was any justice in the game of economic geography, it would be high on all the important rankings, rather than languishing at lower levels. It has been, and for the moment remains, a state in need.

There is no shame in that. If shame there is, it is in politicians who want to claim that Mississippi should just sink or swim because that’s what some abstract philosophy dictates. It may also be a shame that when push comes to shove, those same politicians may end up being hypocrites and opportunists. If and when they take office, they will face the existential question. Survival trumps philosophy, and in the case of Mississippi, it should.

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