( – promoted by buhdydharma )
Let me say it right up front: I’m getting sick and tired of the charlatan blowhards claiming that the New Deal “didn’t work”. I was already mulling over a diary on this, when a Feb. 3 article by Charles McMillion (Blog for America’s Future) came to my attention:
The monthly data for industrial production show a near three-year collapse under President Hoover, ending when FDR came to office in March 1933. Production rocketed by 44 percent in the first three months of the New Deal and, by December 1936, had completely recovered to surpass its 1929 peak.
GDP, only available as annual averages, plunged 25.6 percent from 1929-1932, including by 13.0 percent in 1932. It stabilized in 1933, and then soared by 10.8 percent, 8.9 percent and 12.0 percent, respectively, in 1934, 1935 and 1936. Real GDP surpassed its 1929 peak in 1936 and never again fell below it. After-tax personal income, consumer spending, real private investment and jobs all reached or surpassed their 1929 peaks by late 1936.
It’s time to take a peek at President Hoover’s policies.
Cross posted at DailyKos
LEAVE IT TO THE PRIVATE SECTOR
That above-the-fold graphic is pretty good. Rachel Maddow did a great job deconstructing it after President Obama’s press conference. If you missed it, it’s worth taking a moment or two to consider it, in conjuction with the associated Industrial Production graph (below).
The famous Stock Market Crash of 1929 came during Hoover’s first year in office, so he had a full three years in power to resuscitate the economy before the next election. It’s an understatement to say he didn’t do very well, and when Republicans today start talking like Hoover, it’s time to crank up the ridicule. A history course from the University of Maine offers the follow statistics:
- Industrial Index +70%
- Output per man-hour +75%
- Cororate profits +62%
- Dividends +65%
- Real Wages +22%
- Work Week -4%
Illusion of “New” Mass Market: In 1929, 80% of all families (21 million households) had no savings. The top one tenth ( .1%) of one percent held 34% of all savings. The 2.3% of Americans earning over $10,000 controlled 2/3 of America’s savings. Stocks: the top one half of one percent owned 32.4% of all the net wealth of individuals.
Source: Robert McElvaine, The Great Depression (New York, 1984), 38-9.
A billboard, near Bakersfield, California served as a windbreak for this small Hooverville of Dust Bowl refugees:
To my thinking, we’ve been seeing much the same in recent years. Hoover followed Harding and Coolidge, both Republicans, in office. He ran for office on their successes – this from his nomination acceptance speech at the Republican Convention in August 1928:
Unemployment in the sense of distress is widely disappearing. . . . We in America today are nearer to the final triumph over poverty than ever before in the history of any land. The poor-house is vanishing from among us. We have not yet reached the goal, but given a change to go forward with the policies of the last eight years, and we shall soon with he help of God be in sight of the day when poverty will be banished from this nation. There is no guarantee against poverty equal to a job for every man. That is the primary purpose of the economic policies we advocate
He certainly missed the boat on that one. Utterly and completely. Not unlike McCain insisting the economy was strong, when it was obvious to everyone else that it was in big trouble. Hoover’s solution? Big tax cuts – the top rate was cut from 73% to 24%. And as Commerce Secretary (under both Coolidge and Harding, he had his own version of the “Ownership Society” that Bush & Cheney used to boast about. Hoover’s was called “Own Your Own Home”, and a lot of those ended up in foreclosure after a speculative bubble popped, too.
And in the following years, Hoover had repeated statements that were the predecessor of the Friedman window. January 21, 1930 press release (press conferences largely curtailed after October 1929):
Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed that the tide of employment had changed in the right direction.
And then, two months later on March 8. And it went on and on, just like that damned “six month window” about the Iraq war:
President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.
In December 1930, things weren’t exactly hunky-dory. But Hoover’s take on it all was not much different than what Republicans like Mitch McConnell and Michael Steele are saying today. Hoover was an advocate of local and charitable relief, with the federal government keeping out entirely:
Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselves.
THE DUST BOWL
Of course, doing nothing wasn’t exactly helping all those people who were out of work, and losing their homes and farms. And that big drought known as the Dust Bowl began in the summer of 1930, making things even worse. I wish discussions of the Depression/New Deal would more frequently mention the environmental disaster going on at the same time. I suppose I’ll have to do a whole diary on the Soil Conservation Service (still going as NRCS now) sometime in this series. The Dust Bowl is most famous for its effects in Oklahoma, but many other states were affected as well. Arkansas had a rough year in 1930, with widespread failed crops. And the Great Depression’s first food riot:
On January 3, 1931, H. C. Coney, a tenant farmer from Lonoke County, was visited by a neighbor who was distressed because she was unable to feed her children. He decided that he must do something, so he loaded his truck with several other neighbors and headed to England to demand food from the Red Cross. Though the original group of men consisted of approximately fifty farmers, some armed, reports state that anywhere from 300 to 500 came together once in the city proper. The Red Cross, which lacked the forms necessary for people to apply for aid, took the brunt of their anger for the promised food never given to those in need. The merchants, either out of fear of what the mob was capable of or out of the kindness of their hearts, offered food to the people that day.
And as the drought continued, very little vegetation grew, making way for soil erosion either by wind, or when the occasional rains came:
The fatal flaw in Hoover’s approach was that, just like after Katrina, local resources were devastated, and unable to rise to the need even if they wanted to. The next month in Minneapolis:
In Minneapolis, several hundred men and women smashed the windows of a grocery market and made off with fruit, canned goods, bacon, and ham. One of the store’s owners pulled out a gun to stop the looters, but was leapt upon and had his arm broken. The “riot” was brought under control by 100 policemen. Seven people were arrested.
Similar scenarios played out throughout the country. And at the same time in California:
But in the depression years there was little market for all this home-grown wealth, and the consequent waste was appalling – especially to the hungry, who saw food going to destruction all around them every day. In 1932 in the Imperial Valley alone, 1.4 million creates of cantaloupes, 2.8 million watermelons, and 700,000 lugs of tomatoes had been destroyed because they could not be sold. In the orange groves that stretched nearly unbroken for more than seventy miles from Arcadia to beyond Riverside, hundreds of tons of unsold oranges a week were piled up in huge mounds, covered in thick heating oil to discourage pilfering, and left to rot in the full view of those who could have used them.
December 1931, there was a national hunger march to the nation’s capitol. First Amendment respected about as much as by Bu$hCo
Vice-President Curtis sent out word that no marchers could enter the Capitol grounds carrying placards that were critical of the president. Congress refused to let them speak in the Capitol. Neither Democrat nor Republican heard their demands. In response the demonstrators sang the “Internationale”. President Hoover also refused to see them. According to the Washington Herald, the marches who were arrested were beaten. The march then went to the AFL Headquarters to meet with President William Green, who promptly berated the marchers.
The first hunger march was over and the marchers left Washington. However, it had forced the media to actually report on the hunger problem in America, something it was loath to do. It also pushed Congress to propose relief legislation, which the Hoover Administration promptly defeated.
It’s really no wonder the nation didn’t re-elect ol’ “Let them eat cake” Herbert Hoover in 1932. I couldn’t find a version of the Internationale with the IWW lyrics (found in their pocket-sized songbook), which is probably what the marchers sang that cold December day. These Socialist Scotsmen will have to do:
WWI VETERANS BONUS EXPEDITIONARY FORCE
Veterans of WWI formed a “Bonus Army” which encamped in DC to claim payment promised them for their service. I won’t go into that in detail, because our own Unitary Moonbat did a great diary on it last summer:
By 1932, after months of insisting that the worst was over and that prosperity was “just around the corner,” Hoover was now openly mocked: a newspaper covering a homeless guy on a bench was a “Hoover blanket,” the rabbits raised for food in backyard hutches were “Hoover hogs.”
The Bonus Expeditionary Force’s Hooverville was torched by the authorities, and several died, including an infant born a few weeks earlier in the camp.
MODERN DAY HOOVERVILLES
In the last year, the housing situation has deteriorated precipitously, from an already bad situation. Christopher Leinberger in an article called The Next Slum? (Atlantic, March 2008):
At Windy Ridge, a recently built starter-home development seven miles northwest of Charlotte, North Carolina, 81 of the community’s 132 small, vinyl-sided houses were in foreclosure as of late last year. Vandals have kicked in doors and stripped the copper wire from vacant houses; drug users and homeless people have furtively moved in. In December, after a stray bullet blasted through her son’s bedroom and into her own, Laurie Talbot, who’d moved to Windy Ridge from New York in 2005, told The Charlotte Observer, “I thought I’d bought a home in Pleasantville. I never imagined in my wildest dreams that stuff like this would happen.”
In the Franklin Reserve neighborhood of Elk Grove, California, south of Sacramento, the houses are nicer than those at Windy Ridge-many once sold for well over $500,000-but the phenomenon is the same. At the height of the boom, 10,000 new homes were built there in just four years. Now many are empty; renters of dubious character occupy others. Graffiti, broken windows, and other markers of decay have multiplied. Susan McDonald, president of the local residents’ association and an executive at a local bank, told the Associated Press, “There’s been gang activity. Things have really been changing, the last few years.”
So, houses are empty, and falling to ruin. It’s as senseless as destroying crops while people are hungry – the sign of a completely deranged kind of economy. And more and more Americans are finding themselves in squatter tent cities. This is Ontario, CA:
And this Reno, Nevada:
In Miami last week, over a thousand applicants lined up, some camping for two nights in line, to apply for 35 fire fighter jobs with starting pay of $47,000 a year.
Back in the Depression, things got pretty rough. And it’s arguably part of why the New Deal did as much as it did for the have-nots – something we’ve not seen a whole lot of for many years here in the U.S. I’ve not heard of the website Bits of News before. The food part of this diary is drawn from there. The article, “Hunger on the March” by Garrett Johnson a year ago, has such a good closer, that I’m not going to try to better it.
Some people may be under the impression that FDR’s election and the New Deal was simply a logical reaction to extreme hardships. That democracy naturally corrected itself. That wasn’t the case. It took a grassroots movement, working against all odds, to push the government into action. It’s a lesson we should remember in 2009, even if a Democrat wins the White House.
It’s gonna be getting worse before it gets better. And consulting that above-the-fold graphic, the longer the delay, the worse it’s gonna get. It’s hard to see any way around that.
Hooverville, Central Park, New York City
Previous entries in the series: