Learning from the Great Depression

Black Local and National News

by Staff 83 Views

by Chris Wright Like today, austerity during the Great Depression was unnecessary. From sales tax, states had become wealthy, but even those with budget surpluses refused to provide relief for the unemployed. According to Mark Twain (supposedly), history doesn’t repeat itself, but it frequently rhymes. He was right. Donald Trump, for example, rhymes with Mussolini. The decline of organized labor in recent decades rhymes with its decline in the 1920s. And the coming depression will rhyme, in many respects, with the Great Depression. For decades, in fact, it has been clear that the political economy of neoliberalism “rhymes” with the political economy that caused the Depression. In addition to (and in part because of) the analogous collapses of organized labor, economic inequality skyrocketed in both eras: In 1929, the richest 0.1 percent of families in the U.S. owned 25 percent of all wealth, which is almost exactly the same amount as today. Real wages in the last 40 years have stagnated or even declined, as in the 1920s. What these trends, coinciding with an explosion of debt, have indicated is a dangerous weakness in aggregate demand, which has heralded an eventual collapse of markets. Now that markets are imploding (although...