"Lessons Of The Greatest Generation, Now Forgotten By Too Many" Part Three

First published in July 2014


Americans had fought, and contributed greatly to, the winning of World War Two, but upon their return from distant battlefields, where they had fought the hatred and the desire to return to some glorified past of reactionary fascism, they re-entered a nation still fraught with injustices. The major issue was about race, more especially about the treatment of Black Americans, a part of the population over whose enslavement a civil war had been fought, but also a part of society kept segregated from others, with the accompanying discrimination, mistreatment and hatred. Unfortunately, some who had fought fascist hatred in World War Two, returned to America only to support hatred against other Americans, a nasty failing quickly exploited by those seeking to gain or to retain power; our very own reactionary fascists.

The greediest of the greedy and the most reactionary elements of the country gradually chipped away at protections for Americans put in place during the Great Depression, or added later as the legacy of the reforms of the Great Depression. To roll back advances and attempts to right wrongs to American society, reactionaries often used the states to whittle down federal power. This approach, by its very nature, divides the nation, as in the Civil War era, and gradually an anti-Uncle Sam campaign was mounted and financed by those seeking something of which there is obviously not a sufficient supply on this planet for them, MONEY, and the POWER that money can bring. Eventually the banking laws of the Great Depression were repealed. Why? Fewer and fewer people of "the greatest generation" survived to remember those times, by then long past. Further, "some," certainly not all, of their children and grandchildren, many of whom had taken up gallant causes to make the U.S. a better place by fighting racism, bigotry, pollution, militarism, and monopolistic business interests, among other things, during the 1960s and 1970s, decided that making money and accumulating more and more wealth was more important than promoting a fairer country.* The marked decline of activism and the forgotten lessons of the past most certainly contributed to the rise of those who had been waiting for just such an opportunity, and they gained power, along with their philosophy of self interest and greed.

So as, what has been called, "conservatism" became the prevailing philosophy from the 1980s forward, more and more state and local power was pushed, as well as the power of money and the power of those who have money ... lots and lots of money. This corrupting notion has permeated everything from business, to government, to the court system, ever since. Money, or wealth in some form, has always been around, and likely always will be, but when it is unleashed with few restraints, the egomaniacs driving its engine are bound to try to soothe their egos on the backs of others. Can catastrophe be far behind? In recent years, after an economic meltdown that almost brought about a collapse of the world economy, the Great Recession, the perpetrators of the collapse: businesses that moved plants and other facilities overseas, oil speculators, bankers and others with ties to the financial system, generally escaped unscathed from their manipulations and outright deceit. Millions of others lost their jobs, but wealthy bankers and Wall Street brokers whined when they were asked to take smaller bonuses, or when the prospect of slightly higher taxes for them were proposed. Lack of perspective here folks, so "sacrifice" became a word for poor and middle class Americans, not for the super rich. In the world of such egomaniacs, Robin Hood was no hero, but a villain. So instead of shared sacrifice we've seen the wealthiest Americans reap virtually all of the benefits of a gradually recovering economy. The "too big to fail" banks of the initial crisis** are now larger than EVER. This is all pretty much the OPPOSITE of how "the greatest generation" dealt with the economic catastrophe of the 1930s. Instead of pulling together and finding common ground when the crisis developed, the likes of Rush Limbaugh and others chose to try to keep Americans divided, a tactic that has worked, at least to some degree, and government action has been somewhat paralyzed to the delight of the reactionaries, who now await their return to power over the entire system. When a BP oil spill sent a huge spewing of oil into the Gulf of Mexico, one Republican congressman publicly announced that "we" should apologize to BP for the treatment they were receiving from angry Americans wanting the mess cleaned up and the Gulf's wildlife and ecosystem protected.

* The 1960s saw a major increase in activism, often led by younger people, but having lived through that era, the idea that younger people were very liberal, is not truly accurate, in my opinion. To this day, people's political views, including those of young people, are "often" influenced by the area of the country where they live and by the views of their elders. Let's be honest, people of any age vote for or against certain candidates or issues for a wide variety of reasons, some of which don't always make sense, but that's part of being able to vote the way you choose. Just try not to be misguided or to hold onto nasty views out of the false pride that changing your views shows weakness. That philosophy equals, "I'd rather be wrong, than to change," or "2 + 2=5, and I'm sticking with it, no matter what the rest of the world says."  

WORD HISTORY:
Burst (Bust)-Before I go into the history, "bust" is simply the same word as "burst," when the "r" sound died out in some dialects in America during the mid 1700s (see the entry for Low German, below). In this case, this is NOT the same word as "bust," meaning, "the chest of a woman," or, "a sculpture of the upper body of a person." "Burst" goes back to Indo European "bhrest," which had the notion "to split, to break apart." This then gave its Old Germanic offspring "brestanan," which had the same general meaning. As the West Germanic offshoot developed from Old Germanic, the vowel and "r" sounds changed places (called "metathesis''). This gave Old English (Anglo-Saxon) "berstan," meaning "to break apart suddenly," and this then became "bersten," before the modern version. The noun form was derived from the verb and also meant "damage, injury." The other Germanic languages have (verb forms): German "bersten," Low German "barsten" and "bassen" (the "r" sound has died out), Dutch "barsten," West Frisian "barste," Norwegian and Danish "briste," Swedish "brista." In Icelandic I found the noun "brestur," meaning "a crack, a break, a fracture."

"Lessons Of The Greatest Generation, Now Forgotten By Too Many" Part Two

This was first published in July 2014


As the grip of the Great Depression eased somewhat, fascist dictators Adolf Hitler and Benito Mussolini became allies, later adding a number of other countries to their fold, including growing Asian power, Japan. Events in Europe and Asia gradually overtook American reluctance to become involved in another military conflict far from home, but December 7, 1941 dramatically changed all of that. On that day, Japanese aircraft attacked the American fleet stationed at Pearl Harbor, Hawaii (then an American territory, not a state). President Franklin Roosevelt asked Congress to declare war, which it did. A few days later both Hitler and Mussolini declared war on the United States and Americans turned their attention away from the era of the Great Depression and toward the era of defeating reactionary fascism. Millions of Americans entered the armed forces and the nation's industrial production rose to new heights, as the United States produced weapons of war to supply not only its own forces, but to "help supply" the forces of its allies. Americans bought war bonds to help finance the war, women went to work in factories to replace men gone off to the military, and the country cared for its wounded, but barely had time to mourn its dead, as the main focus remained in defeating fascism, which was accomplished during 1945.

The end of the war brought new confrontation, however, as the United States, elevated to the status of world power by the just ended war, faced off against communist dominated countries, especially in eastern Europe, led by the Soviet Union, and in Asia led by China, known then to most Americans as "Red China." Large American forces remained in Europe and parts of the Pacific, but then even more troops were called upon to serve in Korea, then even later, in Southeast Asia, in Vietnam. These areas of war did not completely unite Americans, and little by little the unity of the clear cut cause of World War Two was forgotten, as not all Americans saw the need for the United States to be so militarily involved in many parts of the world, especially in Southeast Asia, a notion which only increased among Americans, as U.S. casualties mounted there.

Economically business people will always try to get the best possible deal for themselves, and just as World War Two unity drifted from memory, so did the focus to combat greed for the benefit of the few. The Great Depression saw Americans pull together to help one another, and in 1932, the worst year of the economic scourge, giving to charities actually INCREASED.* Changes came as the national government passed laws separating investment banking (also known disparagingly as, "casino banking," and not without reason) from commercial banking, like what most think of as their bank down the street, with checking and savings accounts, and various loans, like for homes and vehicles. Deposit insurance was implemented to protect Americans from the loss of their money, which often was their life savings. Change was implemented for the buying of stocks on credit, as the previous low down payment had "helped" bring about the catastrophic plunge to Wall Street in the fall of 1929. Instead, in order to buy stocks on credit (called "margin") under the new regulation, you needed to put up 90% of the purchase amount. New public works projects were implemented to fix, or to build anew, roads, bridges, dams and schools. Other such public projects cleaned up waterways, river banks and forest lands, with reforestation part of the project. Workers were given protections like minimum wage, regulated work hours, overtime pay, easier union organizing, and better Federal unemployment insurance. Minimum wage was an attempt to provide workers with at least enough income to buy the basics of life. As time passed, Americans, still connected to the activism of the Great Depression and World War Two eras, saw the need to try to clean up massively polluted rivers, creeks and streams, and to deal with choking air pollution engulfing many an urban community in the U.S. Both Pittsburgh and Los Angeles became targets of jokes and derision for their air pollution, but there were far more than those two communities. Here in Cleveland in 1969, industrial pollution in the Cuyahoga River actually caught fire, bringing derision, but also a wake up call for change, before the nation itself burst into flames or choked to death in its own air pollution. Laws aren't often perfect, maybe they never are, but at least Americans saw problems and chose to confront them. Do we really want to go back to the times prior to these laws? If you say, "Hell yes, I don't live near any of those areas, let 'em pollute and give people jobs," or, "get rid of the minimum wage and let businesses work people to near death, or the whole way, for a pittance, and do away with food stamps and other public welfare services so that these 'moochers' won't just resort to getting help to pay for their lives of working for low wages," you are part of the problem, and you seriously need to look into the mirror and do some self evaluation. If articles like this make you a bit uncomfortable, and I hope they do, you still have time to recapture a bit of your younger days, and you are NOT a lost cause reactionary, as long as you haven't descended into denial or fear of hearing ideas that may challenge ideas you are afraid to have challenged. You can start by listening to the counter views to some of the right wing nonsense espoused by the likes of Limbaugh, Hannity, Beck, and often by Fox News, a television station founded with the express purpose of promoting a political philosophy. Changing your reactionary views is not weakness, it is strength! Don't be afraid to change!

"More in Part Three ..."

* For a good history of the era, see "The Great Depression, America, 1929-1941," by Robert S. McElvaine, first published in 1984 and republished in 1993.

WORD HISTORY:
Token-This word, related to both "teach" and "toe," among several others, goes back to Indo European "deik," which meant "to show, to show how to do, to point to." This gave its Old Germanic offspring the noun "taiknam," which meant "sign, symbol." This gave Old English (Anglo-Saxon) "tacen," with the same meaning, but also "evidence/proof;" that is, "something that shows or points to truth, a sign/symbol of truth." This then became "taken" (not the same as the word from "take"), before the modern version. "Token" also later came to be applied to "a metal or wooden disc used to symbolize coins." Common in the other Germanic languages, all with the same general meaning as their English cousin: German "Zeichen" (German "z" is pronounced like English "ts," as in the end of "hits"), Low German Saxon, Dutch and West Frisian "teken," Danish and Norwegian "tegn," Swedish "tecken," Icelandic "tákn.

Herbert Hoover: March Toward Reactionary, Part Three/Final

While Herbert Hoover took the Federal government into the economy and into direct relief aid to the states, his words did not keep pace with his actions, as he spoke as if his America of old was still there all the same and unchanged, as such a great system would never need the programs he had just initiated. This was one of the reasons Hoover received little credit for his actions, since he himself denied they were changes to the system, although his limitations on his own programs left these programs far from achieving their potential to stabilize the economy, which was much more the reason for the lack of acknowledgement to Hoover. When smacked in the face by reality like bankers not wanting to make loans and charities being overwhelmed by impoverished citizens, Hoover did indeed change, but he could not bring himself to acknowledge that change. It is tough to tell what Hoover actually believed, as he later became one of the main critics of the New Deal; yet, later still, he admitted that he likely would have signed the same legislation that FDR signed; that is,  ... THE NEW DEAL! And the New Deal had its roots in many of Hoover's own policies.

Upon leaving the presidency, Hoover was one bitter man. He had shown signs of such during his time in office, as he seemed bitter at the terrible hand he had been dealt for the pinnacle of his career, the presidency. Hoover the humanitarian leader, Hoover the businessman and Hoover the Secretary of Commerce was used to giving orders and lecturing others, not having to garner votes from politicians or listen to their lecturing. He was very shy, but supremely self confident in his ideas to the point that when they failed, he kept going, almost contemptuous of others' ideas. Hoover, in my opinion, had a weak ego; that is, he was insecure to the point where a criticism of one of his plans was like a personal insult. In the rough and tumble world of politics, all of this took a toll on Herbert Hoover. He and FDR had been friends for years, but Hoover ended up detesting Roosevelt, partially because of Roosevelt's criticisms during the presidential election of 1932, when Roosevelt easily defeated Hoover, and Hoover took the criticisms  personally, as he had not come up in the give and take world of politics, and that insecurity of his was always there. When Roosevelt initiated the New Deal, taken in part from Hoover's ideas and policies, Hoover blasted it, in my opinion, because someone else came up with the necessary changes needed to make the ideas more successful. This created resentment in Hoover and it spilled out into the open as he bitterly attacked FDR and his administration and moved himself into the role of something of an arch conservative hero, a place he would pretty much hold until his death. Maybe someone should have tried to convince Hoover early on that the New Deal, at least in part, was really his idea and he might then have supported it, but in fact, Roosevelt and the Democrats didn't need Hoover's blessing, as the very mention of Hoover's name could draw highly negative responses at public events for many years, including when his image appeared in newsreels at theaters. As sensitive a man as he was, all of this negative use of his name embittered him all the more, and it wasn't until some Democrats began to feel a little guilty that Hoover mellowed a tad, and that first came when Harry Truman was president. Hoover, at Truman's request, helped to reorganize the federal government to save money, and he and Truman developed a friendship of sorts, but Hoover, ever hypersensitive to criticism, didn't trust Truman either, as old Harry was a politician, and he used Hoover's name to scare the hell out of some Americans at various political events. I'm sure Truman just saw it all as politics, but Hoover was furious at what he saw as personal insults.

Hoover has links to conservatives even today, except he was never as mean and nasty while in office as some of today's "take me back to the good old Stone Age" conservatives, and while he lived in something of a dream world about his policies and an idealistic America; in fact, he saw problems and at least he made an effort to solve them, albeit with limitations. The desire of today's conservatives to repeal the estate tax would have made Herbert Hoover furious, as he believed great fortunes should not be allowed to be passed on intact, with the biggest being broken up to give others a chance to share in the wealth, and his tax program was highly progressive, not regressive like that of Ronald Reagan, George W. Bush or Paul Ryan. Like today's conservatives though, Hoover wasn't too crazy about facts that disproved his own ideas, although he didn't have Fox News to cover for him. He did spout a lot of things along the line of today's conservatives about "America is the best at _______" (fill in the blank), although facts would contradict some of those things, just as today. Declaring that we're the best at everything was not a way to deal with problems and flaws in Hoover's time, nor today, but Hoover often eventually relented. Some modern conservatives have done everything they can to disavow Hoover, since they are NEVER wrong, just as their philosophy of deregulation had nothing to do with the financial meltdown in 2008. If you believe that, would you like to buy the Washington Monument? I'll sell it to you. Like today's conservatives, Hoover also tried to revise his role in history by continuing to advocate for his policies, pretty much stating they would have succeeded had the country stuck with him instead of turning to Roosevelt. The ultimate thing was, Hoover and his administration misjudged the severity of the economic downturn more than just at its beginning and therefore Hoover's  prescription of trying to restore confidence by helping banks, railroads, and business in general was inadequate to deal with it,* as too many Americans had little or no money left to up demand for goods and services. Confidence helps when people HAVE money, but are afraid to spend it, or even deposit it in banks. Even the larger expenditures by New Deal programs under Roosevelt couldn't quickly help the beleaguered economy to recovery quickly; that's how bad things were.

Over time Hoover's image did recover to some degree, but some people still detested him decades later. It bears repeating, Hoover was not a true progressive nor a true conservative during his presidency, but he most definitely took on the mantle of conservatism after he left office, accompanied by that delusional belief that he had not deviated from American individualism and by his extreme bitterness. The passing of time and the political atmosphere surrounding Hoover had progressives eventually discover (or perhaps rediscover) Hoover's progressive side, which then gave reactionaries something to point to, in the sense, "If progressives like some things about Hoover, he can't be a conservative."

The economic and financial meltdown in 2008 rekindled interest in Herbert Hoover, Franklin Roosevelt and the Great Depression, in general, as people wanted to see how that major historical event developed and was handled all of those decades ago. The problem is, in more recent times, many people obviously knew little or nothing about the Great Depression, as they seemed to want to experience such an event in their own lifetime; thus we had awful policies put into place, or policies that were not enforced, bringing instability and a virtual total collapse of the American and world economies. While most of the perpetrators have been Republicans, some Democrats seemed anxious to be a part of this "let's see what kind of a great depression we can create" philosophy. Throughout the build up to the 2008 meltdown lay the bizarre and troubling idea of "the country should be concerned with the plight of millionaires and billionaires; they've got it tough," instead of what had been happening to the middle class and the poor. These groups would suffer even more from the economic mess of what has been called "the Great Recession." While Republicans scoffed at President Obama's remedies (also often at Ben Bernanke's policies, the Federal Reserve Chief), the economic plunge of late 2008 and early 2009 was halted, and matters never got out of hand as they did in the early 1930s, but recovery has been slow, just as it was in the 1930s. The problem this time was, some of the structural problems were not corrected, like with the banking industry, which has made me think Democrats too haven't studied the policies of their own political icon, Franklin D. Roosevelt. In my opinion, while health care reform was a very important policy, financial reform should have been the first item on the agenda after the stimulus package, but it was not. By the time financial reform was put on the front burner, the political situation had changed drastically, with a resurgent, ideologically fire-breathing GOP, invigorated by the unpopular health care law debate at that time, able to get a substantial watering down of financial reform. We'll see if all of this comes back to haunt us.    

Almost all that I've written in this three part series about Hoover comes from memory, and over the years, I've read a lot of books (some many times over) and articles about him, including his own memoirs. With so much done from memory, it's tough to "credit" specific authors for the information I've put into these articles, and some might not want to be "credited," since it is given from the perspective I've developed on Hoover over the decades (I mean this both seriously and humorously). I guess the biggest compliment to any and all of the authors is that I read their material and retained a good deal of it, that's how good the information was. What I've decided to do is to list a number of books I've read over the years which dealt in large part with Herbert Hoover. Some were more specific biographies of Hoover, others were not just about Hoover, but they dealt with parts of his life, most especially his presidency and his attempts to halt the Great Depression. Some of these books I no longer have on hand, and this list will certainly not be complete, as I'm sure I've read some books or articles years ago, the names of which I no longer recall.

"Herbert Hoover" by William Leuchtenburg; "The Memoirs of Herbert Hoover," 3 volumes by Herbert Hoover (there may be abridged/condensed versions available, but I'm not sure); "American Individualism" by Herbert Hoover; "Herbert Hoover: Forgotten Progressive" by Joan Hoff; "An Uncommon Man-The Triumph of Herbert Hoover" by Richard Norton Smith; "Herbert Hoover-A Public Life" by David Burner; "The American Political Tradition" by Richard Hofstadter (has a very good chapter on Hoover: "Herbert Hoover and the Crisis of American Individualism"); "Herbert Hoover and the Reconstruction Finance Corporation" by James Stuart Olson; "The Great Depression" by John Garraty (obviously not just about Hoover); "The Great Depression-America 1929-1941" by Robert S. McElvaine (again, not just about Hoover, but with very good info and opinions on him-one of my favorite books on the subject); "Herbert Hoover and Harry S. Truman-A Documentary History" edited by Timothy Walch and Dwight M. Miller; "The Great Crash of 1929" by John Kenneth Galbraith; "The First New Deal" by Raymond Moley (has some info about the New Deal's ties to Hoover)

* To be honest, Democrats didn't know what the hell to do about the Great Depression either, thus they really didn't put forward many plans during Hoover's term, fearful they would then take part of the blame if the plans didn't work. FDR talked about "experimentation" in his inaugural speech, which tells you he wasn't exactly confident about specific plans either. 

WORD HISTORY:
Boor/Bower-These closely related words go back to Indo European "bu/bhu," which meant "dwell, live upon/on." They are closely related to the second part of "neighbor" (British spelling: "neighbour"), as neighbor simply means "a person (or people) who dwell(s) nearby," literally "nigh-dweller." The Indo European form gave its Old Germanic offspring "buraz," with the meaning "place where one dwells." This gave Old English "gebur," which meant "dweller, farmer," and also "bur," which meant "dwelling, cottage, hut, room for dwelling," but also meant "farmer, peasant," likely from the notion, "one who dwells in a hut/cottage in the countryside." This then became "bour," before "bower," by which time it also had taken on the meaning "lady's living quarter's in a palace/castle," as well as the "area in a garden sheltered by trees or leafy plants." "The Bowery" of New York City was simply a continuation of the Dutch term for what was then (the 1600s) an area with farms. As for "boor," it seems to have died out, but came back to English as a borrowing in the earlier 1500s from either Low German "bur," Dutch "boer," as England had much trade with northwestern Europe. It came into more prevalent usage in the late 1800s and early 1900s from contact and conflict with Dutch settlers in southern Africa who were called "Boers." The conflict between the Boers and British settlers and colonial authorities was termed "the Boer Wars" (there were two). The term "boorish," meaning "rude, ill-mannered or crude behavior," came from the notion of "behavior by farm/rural residents, as compared to the sophisticated behavior of city dwellers." The other Germanic languages have lots of relatives to English "bower" and "boor," some of which are: German has "Bauer" (pronounced very much like "bower"), which means both "farmer/peasant" and "birdcage" (from the sense "room, enclosed dwelling area"); Low German Saxon has "buur" (farmer); Dutch has both "buur" (neighbor) and "boer" (farmer);West Frisian has "boer" (peasant/farmer); Swedish, Danish and Norwegian have "bur" (cage); Icelandic has "búr" (cage).

Herbert Hoover: March Toward Reactionary, Part Two

During his lifetime, Herbert Hoover marched from moderate progressive toward a position on the solid political right; that is, he became something of a reactionary. I say "something of," because it is difficult to actually tell what Hoover truly believed at times, as in my opinion, he lived in a bit of a dream world where his words were often in denial of the actions he had taken. That dream world consisted of the American system which he had come to idealize; the system he had lived in and prospered in for his life up to the point of the Great Depression. It was a system of neighborliness, of voluntarism, of cooperation to help others, and it was a system where private business ruled, but where private business also needed a bit of government regulation to keep a check on ruthless exploiters (Hoover had been a supporter of progressive reformer Teddy Roosevelt). Hoover had been overseas a good part of his adult life, so he had seen many other parts of the world, including Europe during and after World War One. He had seen powerful rulers suppress their people and he had seen the absolute horrific results of  (then) modern warfare. He returned to the United States to serve in Woodrow Wilson's administration during America's time in the war, only to leave for Europe after the war to help feed starving Europeans and to sit in on the peace conference that officially ended the war. He came back home and took a position in Warren Harding's administration as Secretary of Commerce, which then led to his own successful run for the presidency. Wherever he served he had been known for his tremendous energy and his organizational abilities. Now to continue with some of the actions he took during the Great Depression, especially with the Reconstruction Finance Corporation from "Part One." (For those who need a refresher about the first part, or for new visitors, click here for "Part One:" http://pontificating-randy.blogspot.com/2013/06/herbert-hoover-march-toward-reactionary_15.html

Hoover's Reconstruction Finance Corporation (RFC) had some success in 1932, and the economy actually saw a mild tick upwards and confidence improved a great deal as the number of bank failures dropped dramatically, but confidence could not put food on the table nor money into empty pockets, and the economy continued in its depressed condition, with high unemployment. Franklin Roosevelt used the RFC much more than Hoover, as FDR wasn't as dogmatic in his approach to getting money into the economy as the methodical Hoover, and parts of the RFC were made into separate agencies under Roosevelt, like the Public Works Administration (PWA), for instance. Hoover and Congress expanded the RFC in mid 1932 to include aid to strapped states to help the unemployed and poor, an idea finally embraced by Hoover, as he belatedly admitted that private charities and state and local governments could not cope with the extent of the increasing poverty. The expanded RFC, besides its original purpose primarily to shore  up struggling banks, was also to provide loans for state and local public works projects and loans to agricultural entities, with the ultimate goal that all of this would generate employment to give the economy a boost toward recovery. The public works projects had to have some means of raising money on their own to help guarantee the repayment of the loans, as well as provide for continued operation and maintenance after they were built, so this was not a program where people were to be put to work digging ditches without purpose. Two of the problems with the program were, Hoover and his administration put limitations on the RFC by having the government charge higher interest rates than private loan institutions, so as not to compete with them, but the whole point was, the loans were NOT being provided by private lending institutions anyway, as they were generally holding onto their cash, and the main economic problem was not the lack of loans for businesses to expand, but a lack of demand by strapped consumers, the solving, or partial solving, of which would have created demand, which then would have led to a true demand for loans by businesses to expand production and to hire more workers. Second, the administration set the terms requiring loans to be repaid within the atypically short period of ten years. Hoover would not agree to use any of the money as "grants," only as "loans," and that mentality had the RFC giving close scrutiny to applications, fearful that the money could not be paid back. This meant that applicants faced almost the same requirements from the RFC as they faced from private bankers, but at a higher interest rate! Needless to say, applications were often sparse for many things and the process of approving the applications that were made took a good deal of time. Further, as the Obama administration found out early on, getting most projects mapped out, applied for, engineered and tweaked, took time, thus few projects were even approved or underway by the time Hoover left office in March 1933, with the "glory" then going to FDR as the projects finally started.*

Much the same happened with the relief expansion part of the RFC, as Hoover's administration made each state go through a pretty rigid approval process to show that the state had indeed exhausted its funds and had done all it could to help its own unemployed and poor. Even after jumping through the hoops, some states were given paltry sums compared to their actual needs. This all left many Americans embittered and angry at Hoover, but again, this was typical Hoover, where method was something of a result in itself.** In fairness, this was all new to America and Hoover deserves credit for making the changes, limitations or not, as without his having done all of this beforehand, FDR would likely have had a more difficult time, as Hoover's term showed that past policies didn't work, and that Hoover's new policies were too limited or too cumbersome to effectively halt the decline or bring about recovery, but that these new policies had promise, if they weren't hamstrung by the administration. The Roosevelt administration used the RFC to far better service right up through World War Two than did Hoover, even though it was Hoover's creation.

While a large number of banks had collapsed throughout the 1920s, with far higher numbers during the Great Depression, one of the enduring legacies of the Great Depression was the national panic during the waning days of Hoover's term in office. In 1932 the RFC had bolstered a number of banks, and while some banks still failed, including some that had received aid, the banking system appeared to have stabilized. Most of the failed banks came from generally rural areas, but failures in smaller cities had increased. The appearance of stabilization was all an illusion, as general business conditions were very depressed and, as unemployment remained high, many Americans had little or no money to become the consumers American businesses needed to prosper. Farming communities were very hard pressed, as were urban industrial centers. All of this was bound to have dire consequences for the American banking system.

Receiving loans from the RFC turned out to be a double-edged sword, as Congress mandated that the RFC turn over periodic lists of recipient banks to them. The names of the banks were at first to remain out of the public domain. The idea was, if you heard that your bank had received RFC money, you might very reasonably assume that your bank had been in trouble, and might still be in trouble. This could then prompt you and other depositors to run to the bank to withdraw deposits and this would then bring about a possible failure of that bank. Well Congress, unhappy with some loans, wanted the names of the banks made public, and while it didn't exactly cause a panic, it made many a depositor of these banks nervous. At first though, with the banks seeming to have stabilized, it didn't cause much of a stir, but that would change. Further, some banks in need of help "may" have forgone seeking RFC help for the fear of their public image.

Franklin Roosevelt convincingly defeated Hoover in the 1932 election, but the very fact that a change in administrations was coming made some uneasy, as FDR had tried to steer clear of a commitment to any specific policies during the campaign. In those times, presidents were sworn into office on March 4, not January 20, as today, and during such an economic meltdown this extra period of time just served for even more calamity, with a politically defeated outgoing administration still in power, and a politically victorious new administration waiting to take the reins of power. In the interim period, Hoover tried to get Roosevelt to commit to certain economic policies, essentially Hoover's policies, something FDR would not do (correctly, as the country had just overwhelmingly rejected Hoover). This likely contributed to the uncertainty and shakiness of early 1933, but it was also not the primary cause of the banking crisis, as Hoover conveniently later said. Hoover was the last president to take office in March, as the amendment (the 20th Amendment)  to change the inauguration of presidents to January 20 was ratified in early 1933.
   
One of the industrial powerhouses of the nation was Detroit, where the auto industry had taken a major hit from the Great Depression, with a large percentage of production shut down. With prolonged high unemployment the Detroit banks suffered accordingly. In early 1933, a couple of large Detroit banks were on the verge of collapse and the RFC stepped in to to help, also seeking assurances from none other than large depositor Henry Ford that he would remain a depositor of the banks, something to which he would not commit. The fear that Ford would withdraw his money from the banks prompted the governor of the state to declare a bank holiday to head off the collapse. The news shook the country and other states began to follow suit in closing their banks for a time. The whole situation caused panic, as Americans, terrified they would lose their money (remember, no deposit insurance back then) or not have access to needed funds, raced to their banks before they were shut out. With many banks closed by their states and Americans so fearful of losing their money, spending dried up even more, sending the economy into another plunge.

There will be one more part ....       
 
* The "stimulus bill" passed very early in the Obama administration was to provide funding for many "shovel ready projects." The President later lamented there weren't many such projects available, as again, states and local governments had basic plans they wanted to develop, if and when they got the money, but then actually preparing those plans to go forward with firm architectural and engineering designs, public hearings (many cites and states require public hearings on such plans), modified zoning (if needed), any new roads or other infrastructure needed to support the project and the proper contracts, took much more time than "shovel ready." Someone didn't read or know their history, because Hoover's administration suffered from the same problem in 1932, with many projects terribly delayed and a demanding public furious that everything took so long.

** When Hoover was administering food programs in Europe during and after World War One, the overhead for such programs was astoundingly small and his vaunted "efficiency" was seen as an example of how to help people, but with almost all of the funds going directly to those in need and not to administrative costs, but Hoover also was dealing with many volunteers and charitable contributions back then, including from governments, a fact he did not publicly talk about, which did put a somewhat deceiving gloss to the process, and there's no question in my mind that all of this colored his thinking about the efficiency and voluntary cooperation efforts he tried later as president. Hoover's omission of telling about the large contributions of governments, including that of the United States, was part of that dream world he lived in, where he wanted so much to believe that people would voluntarily help other human beings that he was in denial about how far such help would go. Like today's conservatives, to admit government helps anyone is to admit failure of your own philosophy.

WORD HISTORY:
Rear (2)-English has a couple of words spelled "rear," this is the word meaning "hind part, back of, last part." The ultimate origin of this word is unknown. It goes back to Latin "retro," which meant "back, behind," a form of which was inherited by Old French as "riere" and then used in the compound "rerewarde," used in military terminology for "the rear guard." Another form, Latin "adretro," which meant "to the rear," was inherited by Old French as "ariere" (which was borrowed by English and became English "arrear"). It is unclear if English got "rear" by using a short form of French "rerewarde" or from a shortened form of "arrear." It is common to call the military units behind the front the "rear" or simply "the rear," so that might well be the source.  

Herbert Hoover-March Toward Reactionary

I've written a good bit about Herbert Hoover, including the recent, "Herbert Hoover: Good or Bad?" To view any of the articles where Hoover is more than just mentioned, go to the bottom of this article and click on "Herbert Hoover" in the "labels" section. This will take you to all of the other articles. In my opinion, Hoover, while not a successful president, was a very important president, because he was a transitional figure who tried using many of the old ways to combat the nation's most severe economic downturn, but who then turned to new ways, albeit with many self imposed limitations. Herbert Hoover lived more than three decades after he left the presidency and I remember his funeral in 1964, which was carried on television back then. He was the first former president to die in my lifetime and I took great interest in the events surrounding the death of the 90 year old Hoover and he was discussed in my school classes too. With his death coming only a year after the assassination of President Kennedy, I'm sure that focused a lot of attention too, as prior to that, the last president to die was Franklin Roosevelt in 1945.

As I noted, Hoover was something of a transitional president, finally willing to abandon tradition in favor of new ideas and programs, although often grudgingly doing so. The interesting thing is, Franklin Roosevelt, his successor, became renowned for his efforts to combat the Great Depression with his "New Deal," but Hoover was scorned by much of the American public and even out and out hated by some. Why the difference? For one thing, being in the "broad middle" of the American political spectrum at certain times can be a very dangerous place to be. The Great Depression tried the nation's patience with Hoover, as his methodical, often doctrinaire approach ignited strong animosity from a large part of an American public stricken by poverty or the fear of falling into poverty. On the other hand, arch conservatives felt he did too much. Hoover had come out of the progressive wing of the Republican Party (progressives were a fairly substantial element of the GOP in those times), but he wasn't a "true believer," he had limits to his progressivism, although he later abandoned some of those limits. Some saw him as a conservative as president, but he wasn't a "true believer" on that side either. With Americans split between those demanding bold, decisive action and those fearful of breaking new ground, Hoover was sort of trapped in between, although, as I mentioned, many saw him as a more conservative president. The reason is likely that "Hoover the conservative" was always trying to down play "Hoover the progressive." He never really jumped onto the bandwagon of change, even when he initiated it, as he preferred to try to link his change programs to some sort of continuity with the past, as if there were no real breaks in policy. FDR had no such reluctance about embracing change, although he and Hoover shared much the same basic philosophy (Hoover would later change, as I will note later on). Roosevelt publicly embraced change, but privately worried about some of the potential consequences of that change.

With Hoover so reluctant to admit to having changed anything, FDR and his advisers took some of Hoover's ideas and programs, tweaked and expanded them, and then claimed them as their own, leaving Hoover with no credit whatsoever. Hoover's personality made him a bit of an odd guy to be president, although that isn't quite fair. In an age when radio was a great means of communication with the public, and sound movies had replaced silent films, Hoover was shy and very serious. He was not a great communicator, especially when compared to FDR's jovial, inspirational personality. On the other hand, Hoover might look downright dashing compared to his predecessor Calvin Coolidge. When the dour Coolidge died and someone told one reporter who had covered him that the former president was dead, the reporter asked, "How can you tell?"

Hoover's really big change idea came with the Reconstruction Finance Corporation, known by its initials "RFC." First, a little background. Why were banks in trouble? You go to a bank for a loan and they want collateral. You give them property, jewelry, or some other valuable items sufficient to secure the loan. The problem was, the depression brought a big decline in the value of everything, leaving banks (and other financial institutions) exposed to losses. Further, financial institutions had loaned money for companies and individuals to buy stocks, with the stock used as collateral. When the stock market imploded the value of stocks dropped leaving the institutions with losses. Also, financial institutions and insurance companies invested in stocks and bonds, with the same resulting losses. Many banks were located in rural agricultural areas. With American agriculture already in dismal condition throughout much of the 1920s, many rural banks collapsed even prior to what is generally seen as the start of the Great Depression in 1929, an event that sent more rural banks into closure. In those times, there was no system of insurance for bank deposits, so when Americans got rattled, they headed to their bank and demanded their deposits in cash, fearful they otherwise would lose their money. With banks already strapped by losses for many of the above noted reasons, coming up with large cash sums to pay depositors off was difficult. Some assets they possessed could be turned into cash fairly quickly (this is called "liquidity"), but other items took longer to sell, if they could even be sold at the depressed prices then prevalent. In order to get help from the Federal Reserve, a bank had to belong to the Fed's system. In those times, many banks didn't belong and other financial institutions couldn't belong, so there was nowhere for them to turn for help.

A couple of years into the Great Depression, Hoover tried one of his voluntary cooperative programs, this one to shore up the banking system. Hoover called together a number of the country's bank executives and got them to pool some money to loan to other banks that were experiencing difficulty. The bankers were reluctant to do so and really seem to have preferred government intervention, but they gave a lukewarm effort to satisfy the President. The thing was, they were so fearful of losing their money to the troubled banks, they set tough criteria for borrowing banks to meet and more banks failed. It wasn't long before Hoover saw that voluntary cooperation doesn't always work and he got Congress to approve the RFC. Hoover had been a businessman, he had appealed to business people for humanitarian aid during and after World War I, he was involved with business as Secretary of Commerce, so he had a strong connection to business giving him a business point of view, which coupled with his engineering mindset, gave him a zealousness for "efficiency," which then hampered the success of the RFC program. The RFC took government directly into economic matters. It was set up to loan government money directly to troubled banks and other financial institutions and to railroads and to farm boards for seed loans. The idea was, if financial institutions were stabilized, the public would gain confidence, the run on banks by depositors would cease and such institutions would then lend money to business people and the economy would recover. The problem was, many in the public were broke, so lack of demand stood in the way of any strong recovery, plus, banks took the RFC loans to stabilize themselves, but NOT to then loan money out in the troubled economy.* One of the problems was, that the Hoover mindset, and it seems even more so the mindset of the business people running the RFC, made qualifying for a loan a bit difficult, when the program was set up to make loans that were intended to be a bit risky and that would not be made by private business. Further, by making loans to banks and railroads, but NOT to states and local entities to feed and help the masses of unemployed and destitute families, Hoover was seen, correctly, as being for "trickle down" economics. During the period leading up to this point, Hoover had fretted and lectured Americans about maintaining their individualism and their commitment to self help, a sense he noted that would be damaged if Americans took government money. As the bank and railroad loans were handed out, many Americans took notice that their president had no such worries that bankers and railroad execs would have their individualism and sense of self help damaged, only the poor and unemployed, as well as many small banks and financial institutions. Money provided to the lower end likely would have helped the economy much more, as it would have created demand for goods, as the recipients were going to spend that money, not hoard much of it. 

More in "Part Two" ...

* This should sound somewhat familiar, as the bank bailouts a few years ago helped banks recover, but the banks then maintained very high credit standards so that few companies or people qualified for loans, which  left the economy to very slowly recover.

WORD HISTORY:
Lust (List)-This word, closely related to the "list" of "listless" (see below), goes back to Indo European "las," which had the notion of "be eager, want to do, desire." This gave its Old Germanic offspring "lustuz," with the same general meanings, but also "pleasure," likely from the notion that "things you are eager to do give you pleasure." This gave Old English (Anglo-Saxon) "lust," with the same meanings. Later, as religious writings began to be translated into English, "lust" took on the foremost meaning of "sexual desire," which remains its primary meaning to this day. The verb later developed from the noun. The same Old Germanic source also produced a verb "lustijanan," a verb which meant "to please, to bring pleasure, to cause desire." This then gave Old English "lystan," with those same meanings. This later became "liste" and then "list" (not related to "list," as in grocery list), an archaic word by itself now, but still used as the first part of the compound "listless;" that is, "lacking in desire or pleasure." The other Germanic languages have: German has various forms of "lust/list," some of which are, "Lust," a noun meaning "desire/have an inclination to do something," used frequently like, "Hast du Lust Karten zu spielen?" (literally, "Do you have the desire to play cards?"), and it also means "take pleasure in doing something; enjoy doing," but it can also have the "sexual desire" meaning. German also has "lustig," which, like its close English relative "lusty," doesn't necessarily carry the sexual connotation, but rather generally means "happy, merry," as in "Die Lustige Witwe," "The Merry Widow." The German verb "gelüsten" means "to crave, to covet;" that is, "have strong desire for." The German noun "Lüstling," however, carries the sexual appetite idea and means "lecher." Low German Saxon has both "Lust," meaning "desire," and the noun "Lüst" ("appetite;" that is, of course, "desire for food") and the verb "lüsten" ("to have an appetite, or craving") Dutch has "lust," which means "be inclined to do something, desire, like/relish doing." West Frisian once had "lust," but apparently it is now little used, if not outright archaic. Danish and Norwegian have "lyst" (desire, inclination, strong desire, pleasure). Icelandic has "losta," which seems to carry both the general meaning "desire," but also of the sexual type. Swedish has "lust" (desire, yearning).

Capitalism & Long Term, Broad-based Prosperity, Part Two

In 1970 the Vietnam War was raging and U.S. military forces were deployed around the world, with more than 250,000 being stationed just in Europe. The U.S. military in 1970 totaled more than 3 million (active) men and women. By 1975 that number had dropped by almost a million. In 1995 the total was just above 1.5 million, and since 1996 the total number has been "around" 1.4 million; that is, less than half the total in 1970.

In 1970, the unemployment rate in January was 3.9%, but it had climbed to 6.1% by the end of the year. In 1975 unemployment was 8.1% in January and 8.2% at the end of the year. When Ronald Reagan took office for his second term in January 1985, the unemployment rate was 7.3% and was 7.0% by the end of the year, and 5.4% when he left office. When Bill Clinton took the oath for his second term, unemployment was 5.6% and was the exact same rate at the end of the year, and 4.2% when he left office. When George W. Bush took office for his second term in January 2005, unemployment was 5.3% and 4.9% at the end of the year, and was 7.8% when he left office.*  

Critics of capitalism over time have contended that the economic system heavily benefits those lucky enough to get to the top, or those already there by birth, and that capitalism can't provide long term, broad-based prosperity without large scale war to bolster the economy. Nothing I publish here, now or in the future, will resolve that debate, but hopefully you will come away with an understanding of the debate, although the idea that those born into wealthy families having a DECIDED advantage over others is hardly in dispute, except for perhaps some on the right, who seem to view this as an "entitlement."** The direction of the economy can be influenced  by a number of factors, not just wars, but as can be seen in the numbers above, the American military has been relatively stable in numbers for quite a long period. Any war where you risk your life is a major war, but in terms of numbers, the wars and military actions since Vietnam have not involved as large a number of troops as that war, which itself didn't compare to the huge military commitment of World War Two, when more than 16 million Americans served in the military. In 1944, when U.S. forces and the American economy were both fully engaged in World war Two, unemployment was about 1%.***

So, as the American military scaled back, unemployment has bounced around, and unemployment has even dropped to fairly low levels at times, but only temporarily, and income disparity has increased. After 9/11, President George W. Bush ordered an invasion of Afghanistan, followed not long thereafter by an invasion of Iraq. Any effect on unemployment seems to have been little, if any, but there was not an increase in the overall number of Americans in the military, nor did the country require a huge build up in military goods and equipment. If we, or any other country, concentrate on building loads of military goods, even, or especially, in times of relative peace, when do we begin to look like Nazi Germany? When Hitler took power, he used a number of things, like public works projects, to help the German economy rebound from the Great Depression. Later he shifted much of the effort into both the expansion of the German military in manpower and weaponry.****

Purist capitalism has lots of rough edges, and, in my opinion, they have to be filed down in order to have reasonable periods of prosperity for many and not just the few. Business people resist hiring, by nature; after all, if you own or have owned a business, do (did) you just go out and hire people without the business to sustain such employment? The notion by some that there is (or has been) some sort of conspiracy by business people to keep unemployment high just doesn't wash with me. With some nutcase right wing business people? Maybe, but the desire to make money is too strong for most people, and that includes us further down the income scale.

When Ronald Reagan was in office, unemployment dropped from nearly 11% about midway in Reagan's first term to 5.4% when he left office in January 1989, BUT there were huge deficits run every year of his presidency. Now, I'm not against Keynesian economic policies in their proper place, but Reagan "claimed" to be a conservative. Ever since, conservatives have tried to give Reagan credit for the drop in unemployment, but place the blame for the huge deficits on Democrats. This is an attempt to have it both ways, or actually, multiple ways. Conservatives argued that the New Deal spent money foolishly and that it did not end the Great Depression. They then turned right around (no pun intended) and said that the huge spending and deficits of World War Two ended the economic downturn. Either increased government spending helps or it doesn't. Pick one, please! With Reagan, huge government deficits helped reduce unemployment, but then conservatives blamed the deficits on Democrats, claiming Reagan's tax cuts saved the economy (conveniently leaving out the number of times taxes were raised under Reagan) and that tax cuts "pay for themselves;" thus not increasing the deficit. With such huge deficit spending an issue, the Reagan administration then argued "the deficits don't matter." Conservatives continued to blame Democrats for the deficits, always saying "Democrats blocked Reagan on budget cuts." Nonsense! Reagan had "working majorities" in Congress much of the time; after all, that's how he got a number of things passed. The fact is, he NEVER proposed a balanced budget, nor did he indicate how a balanced budget should be achieved. My overall point here is, you can't claim purist "capitalism" brought unemployment down, rather huge government outlays and Reagan's military build-up (which took much of the added spending) did so, or at least had much to do with lowering the unemployment rate. If you worked in an industry that benefited from military production, you too benefited, but the 1980s saw an overall decline in the middle class, as unions lost favor,***** indeed hastened by Reagan's anti-union policy, which began to give American business a grip on the country which has only increased incredibly since then. 

So my answer is, no, purist capitalism cannot produce long term, broad-based prosperity. Purist capitalism may well need help from wars, although the kinds of wars that produce mass employment seem to be a thing of the past. Capitalism needs help in reducing income disparity and in keeping it from self destruction, and that means it then is not "purist" capitalism, although today's Republicans seem bound and determined to take the country down the road to purity. That is a dangerous path for us, and for capitalists.

* Statistics are from the Department of Labor/Bureau of Labor Statistics.

** "If" concerted efforts by Republicans to repeal inheritance taxes on the wealthiest Americans succeed, this will indeed become even more of an "entitlement" than it is now. Even some very wealthy Americans fear this will establish a true "aristocracy" in America in place of a "meritocracy;" that is, a system where a person is rewarded by their merits (achievements). An "aristocracy" is a system where people of wealth and high social standing rule by inheritance, regardless of any achievement, or perhaps, even in spite of any achievement.

*** It would be interesting to know who made up this 1% (we know who makes up the 1% in today's jargon; the wealthiest Americans), as labor was in such short supply during the World War Two, that many women who were previously out of the labor force took jobs, some of which had been seen as "man's work," in  factories that produced military goods. "Rosie the Riveter" became a popular song and poster figure representing American women working for the war effort.

**** Some would undoubtedly argue that Hitler even used the public works projects to plan for military actions, and I would agree, BUT better highways, railways, ports, and waterways do not HAVE to be used solely for military purposes. As a kid I recall some people talking about America's then developing interstate highway system as being for war (it was the Cold War era). Defense planning was undoubtedly taken into consideration as part of the program, but not exclusively, and it would have been irresponsible not to consider such measures, but by the time of interstates, the idea of some mass invasion of America by conventional forces was lessening, as long-range missiles had become the concern. Hitler, on the other hand, was able to mask his aggressive military plans in eastern Europe, to some degree, with Germany's Autobahn system being seen as a measure to bring Germany more into the automotive age, which was undoubtedly part of the plan, too. The Autobahns were then coupled with plans to build an affordable car for Germans, the Volkswagen. The mass production of the Volkswagen, however, was interrupted by the war and did not take place until the postwar period. Militarily Hitler faced a problem not historically unique to German leaders; potentially hostile forces on both Germany's eastern (Poland, Czechoslovakia, Soviet Union) and western (France and probably Britain) borders. Improved transportation between Germany's border areas would allow him to shuttle troops to either border much more quickly, something that indeed happened during World War Two. Hitler's pact with Mussolini secured Germany's southern border, which by 1938 included Austria, thus making the southern border directly up against Italy.

***** Not every decline in unions or in the middle class can be pinned on Reagan, as some things were "in motion" when he took office, but his policies certainly seemed to make a bad situation worse.    

WORD HISTORY:
Broad-The origins of this fairly common word are unknown; in fact, its forms are only found in the Germanic languages. Old Germanic had "braidaz," which meant "spacious, wide." This gave Old English (Anglo-Saxon)  "brad," with a long 'a' sound, and with the same general meaning. This then became "brode," before the modern version. The expression that something is "as broad as it is wide" is certainly true, because "broad" and "wide" really mean the same thing. The noun slang form for "a woman" started in the early 20th Century in America, but the exact reason is uncertain, although some attribute it to "broad hips." Common in the other Germanic languages: German has "breit," Low German Saxon has "breet," West Frisian and Dutch have "breed," East Frisian, Swedish, Norwegian and Danish all have "bred," and Icelandic has breithur. Like their English relative, these all mean "broad, wide."

The Great Depression, Part Twelve

Between 1929 and 1933, the economy suffered some staggering blows. Business investment plummeted by more than 95% from the 1929 level, international trade declined by about 50%, Gross National Product (GNP), used to measure the sum of all goods and services produced by the economy, dropped by nearly 30%, construction spending fell by 78%, the Consumer Price Index (CPI) showed an overall drop in prices by 18%, and the unemployment rate hit 24.9%; that is, 15 million Americans were unemployed, and millions more had only part time work. Even with these stark statistics, in 1932, charitable giving by Americans hit a record amount.

Franklin D. Roosevelt brought a new demeanor to the White House. Unlike the moody, more intellectual Hoover, Roosevelt was smiling, confident and optimistic. Highly respected Supreme Court Justice Oliver Wendell Holmes, after meeting the new president, issued a statement that has, more or less, labeled Roosevelt ever since, “A second class intellect, but a first class temperament.” Seemingly aware of his intellectual limitations, he brought into his administration highly competent advisers who devised a wide variety of plans to combat the Depression. Roosevelt reviewed their plans and then acted to “sell” the ideas to Congress and to the public. He wasn’t a saint, and he could be downright petty and vindictive; a trait that got him into some trouble with the electorate during his second term*, but the good will he had established with the American people trumped his personal faults. He had a knack for politics, a natural feel for what people wanted and what they would support. While Hoover had great difficulty conveying his personal concern for people, Roosevelt excelled at “connecting to people;” and during the Depression, this kind of “national hand holding” was important. Roosevelt had suffered from polio during the 1920s, and he was left essentially unable to walk or even to stand for long periods. His affliction seems to have given him a deep compassion for others, and he carried that compassion into the White House. For a nation suffering with a crippling affliction of its own, that compassion was much needed.**

Roosevelt took action immediately. He called Congress into session and presented a basic plan of action to try to turn the tide against the Depression. The banks were closed, in a bank holiday (a tactic actually devised by many states, not the Federal government), and Americans were assured that the banks that reopened would be safe, that they would have Federal inspections, new regulations, and that deposits would be insured by Uncle Sam, through the FDIC, the Federal Deposit Insurance Corporation. The stock market would have new regulation, too, with margin (credit) requirements being upped to 90%. (Remember in an earlier part of this series, I said that previously, if you bought $1000 worth of stock on margin, you only needed to put down $100. With the new regulations, you would have to put up $900, and thus you held a large equity in the stock, making “margin calls” a rarity.) Many mortgages were helped by the advent of the Federal Housing Administration (FHA) in 1934, which gave Federal insurance to many homeowners. New public works projects, through the Public Works Administration (PWA), put the unemployed to work building schools, highways, and dams. The Civilian Conservation Corps (CCC) cleaned up riverbanks and did reforestation. The Tennessee Valley Authority (TVA) built dams to control flooding and to provide electric power to a large area of the southeastern part of the country where electric service had not yet been made available; thus opening new markets for appliances (you can’t very well sell electric appliances to places that don’t have electricity). Workers were given rights and protections, including minimum wage, regulated work hours, overtime pay, easier union organizing, and better Federal unemployment insurance. Not all programs proved to be politically popular, and the plan that paid farmers NOT to grow as many crops received harsh criticism at a time when many people lacked adequate food. This situation proved to be a tough one, as farmers had often been producing so much, that they were actually hurting themselves, and frequently they had to sell produce at a loss or at the break even point, at best. The Roosevelt administration opted to pay farmers not to grow as much, so as to bring prices for farm produce to the point where farmers would make a profit.

All of these programs and many more that I haven’t touched upon were enacted during Roosevelt’s first two terms. Many business interests and purist capitalists huffed and puffed and stomped about many of the programs designed to help average Americans, and in spite of the hand wringing by these folks, the country survived and Americans didn’t all go around wearing little hammer and sickle insignias, and a red flag was not run up over the White House. FDR helped save their basic system for them.

Roosevelt was not really all that far removed from Hoover’s beliefs, and he feared high deficits on a Keynesian scale. John Maynard Keynes was an economist who pushed the idea of countries spending their way out of depressions, even if they incurred huge budget deficits. Also like Hoover, Roosevelt feared the “dole” mentality; that is, that some unemployed people would develop a lifestyle of taking money from the government and then not wanting to return to work when work was available. In those times, it was called “being on the dole,” an expression seldom heard in our modern times. Unemployment remained very high throughout the 1930s, in the double digits, but life was made easier for the unemployed and low income folks by the new government programs. The basic plan for old age income security was taken from the Hoover administration’s never completed program. The plan was modified and expanded and enacted as Social Security. This was one of those programs that was never properly funded, and it was instituted as a pay as you go system, but it helped many older Americans with their incomes and their dignity in retirement and it continues as a highly popular program to this day.

Now all of this being said, Roosevelt’s program, termed the “New Deal, did NOT end the Depression, as even in 1939, ten years after the start of the Depression, the unemployment rate was more than 14%. The tremendous expenditures made to fight World War Two provided the final push that conquered not only Hitler, Mussolini and Tojo, but also the Great Depression.

* Roosevelt got into some trouble with Americans when he began to try to “purge” members of his own Democratic Party from Congress who disagreed with some of his programs. Further, he tried a move to circumvent the existing Supreme Court by proposing an expansion of the number of justices, a plan that came to be dubbed by the Press and the public, “a court packing scheme.” These unpopular moves and a downturn in what had been a gradually improving economy led to big Republican gains in both houses of Congress in the midterm elections of 1938, but the GOP had been so decimated, that even with these gains, Democrats maintained control of both houses of Congress by hefty margins.

** I recall reading and hearing about when FDR's funeral train or funeral procession (I can't recall the exact details) was passing by mourners, a man was asked if he had known the President, and he said, "No, but he knew me." That one statement tells how FDR related to millions of Americans.  

WORD HISTORY:
Dole-This word, closely related to "deal," goes back to Indo European "dail/dhail," which meant "to divide, to part." This gave its Old Germanic offspring "dailiz," with the same general meaning. This then gave Old English (Anglo-Saxon) "dal," with the notion of "divide" giving the meaning "portion or share (of something)." This then became "dol," and with the more specific meaning "something given as charity." By the 20th Century, the term came to be used in England for "government support given to citizens," and thus developed the expression, "on the dole," to mean "someone receiving government aid." "Deal," from the same source, retained the more general meaning "divide, apportion;" thus later used also for cards. The verb form "dole" developed in the 1400s from the noun, and is most common today in the expression "dole out." Common in the other Germanic languages, but more so with the meaning "part, portion, allotment;" thus making these versions more directly related in meaning to "deal." English is the only Germanic language, to my knowledge, to use a variation to mean "government aid." German has "Teil," Low German has "Deel," Dutch has "deel," West Frisian has "diel," Danish, Swedish and Norwegian all have "del." Again, all of these forms generally meaning "part, portion." Icelandic has "deila," but it has come to mean "quarrel;" that is, "a division between people."

Allied Leaders of World War Two/Roosevelt, Part Two

"Roosevelt & The New Deal"

Roosevelt's political skills, especially his public speaking, had developed tremendously, and his inconsistencies drove logical, technocratic Republican incumbent, Herbert Hoover, nuts. Roosevelt portrayed Hoover as a big spender, while at the same time saying how he would help people in need, which meant he would have to spend more money. Trade was a hot issue in those times, as it is today, and tariffs were used to control incoming goods from foreign lands. High tariffs were obviously used to lower imports, while lower tariffs were used to increase particular products. Two of Roosevelt's advisers wrote lines for speeches for him; one favoring high tariffs, one favoring low tariffs. After reading both, Roosevelt told the two men to sit down and "blend the two together." Roosevelt straddled issues like this, often taking a firm position, ON BOTH SIDES! With the country in deep distress, Roosevelt's inconsistencies didn't bother the electorate much, and he and Democrats won a huge victory in November 1932. Between election day and the day of Roosevelt's taking office,* banks began to fail in increasing numbers. Upon taking office, Roosevelt closed the banks, calling it a "bank holiday," in order to stop runs on the banks, and to buy time to develop and implement a plan to keep the country's financial system from going further off the rails. The usual free market complainers believed such intervention meant the end of civilization was near, but the country survived, so did most of the banks (and bankers), and the overwhelming number of Americans didn't wave hammer and sickle banners or join the Communist Party.

Roosevelt and Congress moved a large amount of legislation though to try to improve confidence and stabilize the downward slide. I have written various times about FDR, and here are some links to more; I hope you will check out both:

http://pontificating-randy.blogspot.com/2009/07/new-deal-era-now-end.html

http://pontificating-randy.blogspot.com/2007/09/great-depression-part-twelve.html

Next... "Roosevelt As War Leader"

* In those times, presidents did not take office until March 4. By the next election, the date had been changed to January 20, as it still is today. The gap between election day and taking office had been necessary when the country was founded, as people and information traveled more slowly.

WORD HISTORY:
Thee-While no longer in general every day usage, this word is still encountered in old texts and hymns, and it is still used by quaint religious sects. English once used "thu," which later became "thou," for "you," in the singular nominative case (German still uses "du" and Frisian uses "do"). The accusative and dative case form of "thu" ("thou") was "the" (later "thee").^ This "seems" to go back to Indo European "te," also with the meaning "you," which then gave its Old Germanic offspring "thehk." This then gave Anglo-Saxon "the," which later became "thee." German has "dich," Low German "di," West Frisian "dy," Dutch (seems to be archaic or dialect now) "dij," Norwegian has "deg," Icelandic has "thér," Danish and Swedish have "dig."

^ Grammar in the old Germanic dialects/languages was very complex, and some other modern Germanic languages, including standard German, have retained much of the complexity; although luckily, English grammar has been simplified over the centuries. The terms above mean this: nominative case simply means when a word is used as the subject of a sentence or phrase; accusative and dative cases mean when a word is used as the object of a sentence or phrase. Examples: "You gave me the coat." "You" is the subject of the sentence and is thus in the nominative case. "Me" is the dative case form of "I," as it is the recipient of the action, "giving the coat." Languages change word forms to show differences in usage. "The coat" is in the accusative case, as it is the item being given. In a simple example like this, German is similar to English, but it retains the complexity, because the word for "the," in this case, "den," shows the "Mantel" (coat) is in the accusative case. "Mantel" is grammatically a masculine noun; thus, "der Mantel," but it changes to "den Mantel" in the accusative. Hey, I told you it is complex: "Du gabst mir den Mantel."

The New Deal Era & Now, End

When Franklin Roosevelt took office, the American economy was in a shambles. Between 1929 and 1933, the economy suffered some staggering blows. Business investment plummeted by more than 95% from the 1929 level, international trade declined by about 50%, Gross National Product (GNP), used to measure the sum of all goods and services produced by the economy, dropped by nearly 30%, construction spending fell by 78%, the Consumer Price Index (CPI) showed an overall drop in prices by 18%. This huge price drop is called "deflation." Now, we all LOVE when the price of goods or services fall, but trust me, we don't want this to happen. When prices fall because of better producer efficiency or because they were way over priced, that's one thing, but when prices fall because businesses are trying desperately to bring in customers who are either hoarding funds or don't have many funds to hoard, this is a serious situation. A "mentality" sets in, with buyers waiting for prices to fall further before buying, which leads to prices falling further. If your employer is making less money, because of lower prices, guess who might not have a job soon?

After taking office, Roosevelt embarked on a course to try to stabilize, and then to reinvigorate, the economy. His proposals to Congress are known collectively as "The New Deal." Did his plans work? Well, the next election would seem to indicate that a great many Americans believed they did, or at least that many wanted to give FDR's policies more time, as Roosevelt swamped his Republican opponent, Alfred Landon, by a huge margin in both the electoral vote and in the popular vote.*** Roosevelt went on to win again in 1940, but while the popularity of the New Deal certainly continued with voters, war had broken out in Europe and in Asia, Japan was at war with China. There's no question that these events also influenced the outcome of the election. In 1944, Roosevelt won again, but by that time, America was in the midst of the war, now called "World War Two," and voters certainly weren't interested in changing administrations with the country at war. But elections aren't the only way to judge Roosevelt's two terms in office; we have statistics, and they can be little "buggers" for those desperately trying to throw history into reverse. Here, from "Historical Statistics US (1976) series D-86," are the unemployment rates, by year, during Roosevelt's first two terms.

Roosevelt took office on March 4, 1933, as presidents assumed office on that date in those days.
1933
24.9 (Further, and this is significant, a substantial part of the workforce had been reduced to part time from full time work.)

1934
21.7 (3.2% drop)

1935 (1.6% drop)
20.1

1936
16.9 (3.2% drop)

1937
14.3 (2.6% drop)

1938
19.0 (4.7% increase. Roosevelt cut back on New Deal programs to try to balance the budget, an idea he abandoned, as the country registered a big downturn, quickly dubbed "The Roosevelt Depression," by conservatives. Those trying to discredit the New Deal use the unemployment number from this year as their point of comparison with 1933, not the intervening years, to claim that the New Deal was a failure.)

1939
17.2 (1.8% drop)

1940
14.6 (2.6% drop)

1941
9.9 (4.7% drop. In fairness, America was producing goods, including war goods, to help the Allies, and in an effort to build up our own military, in case of war, which of course came in December. I only included this number to show how government spending brought down unemployment.)

As you can see, unemployment dropped significantly between 1933 and 1937; 10.6%. Further, many more people were on full time rather than part time. Now, did the New Deal end the Great Depression? No, but it helped. Would we have rather had those 10.6%, and perhaps more, still out of work? Just as today, the "purists" can't accept that their system collapsed. It DIDN'T and it DOESN'T always work flawlessly. The interesting thing is, I've often heard from some how the New Deal spending didn't help, but then these same people cite World War Two spending for ending the Great Depression. You can't have it both ways!!! Then Hitler, that SOB, can also be cited for combating the Great Depression. There were something like 6.5 million unemployed Germans in 1933 when Hitler took power (January 30th), and many more had only part time work. Germany's situation is analogous to America's, at that time. Hitler started lots of public works, building roads, bridges, and such in an effort to sop up unemployment. After a year or so, he began a dramatic military build up. German unemployment dropped precipitously up until the start of World War Two. Ronald Reagan became president when the country was in a downturn, which worsened considerably in his first two years in office. Reagan proceeded to run big government deficits and initiated a huge military build up. Okay, I'm NOT saying Reagan was Hitler. I'm only comparing the similar economic policies they used to fight economic downturns.

Now, will the Obama Administration's policies on spending work? We'll have to see, but the severe downturn has slowed. I didn't agree with how it was handled,^^^ but let's hope they get this right. Will it end the downturn? Probably not, just as the New Deal needed more "OOOMMMPPPPFFFF," this "stimulus" needs to get out the door faster, and "may" need a boost. (A word history follows the notes)

***Roosevelt received 60.8% of the popular vote and 523 electoral votes from 46 states to Landon's 36.5% of the popular vote and just 8 electoral votes from 2 states. For those unaware, in 1936, the Unites States had only 48 states.

^^^See: http://pontificating-randy.blogspot.com/2009/02/what-about-stimulus-bill.html

Word History:
Prince-This word came into English during the 1200s from Old French "prince." It came to Old French from Latin "princeps," itself formed form Latin "primus;"^ that is "first," and supposedly a form of "capere," which meant "to take."^^ Thus we have "to take first place (in leadership)." During the 1300s, English acquired the feminine form, also from French, which was "princesse" in French and gave us PRINCESS.

^ Latin "primus" goes back to Indo European "per," with the notion of "in front (of), before, forward, foremost, first;" thus also indicating, "chief, leader."

^^ Latin "capere" goes back to Indo European "kap(h)," meaning "grasp," thus, "take, seize, capture, take in mentally;" thus also "understand, comprehend."  

The New Deal Era & Now, Part Three

In mid January of this year, just days before Obama was sworn in as President, the Senate gave the authority for the release of the second installment of bailout money; that is, the remaining 350 billion dollars. In researching this just a bit, it seems that only one house had to authorize the release of the funds, and while both houses debated the issue, only the Senate voted. Also, the measure was not voted upon straight up, for or against, but the measure was put forth in "negative wording;" that is, opposing the release of the funds, and if a senator was against the money being authorized, he/she voted "FOR" the measure, and of course, "AGAINST" meant he/she was in favor of releasing the money. Anyway, the vote was 42 FOR and 52 AGAINST, and thus the money was released to the Treasury Department. The vote was: 33 Republicans, 8 Democrats, and 1 Independent (who caucuses with the Dems) "FOR" (but actually meaning against releasing the money), and 6 Republicans joined 45 Democrats and 1 Independent (who caucuses with the Dems) in voting "AGAINST" (but meaning for releasing the money).

After taking office, the new President was faced with the collapse of the American auto industry. Having had overwhelming support from autoworkers, he could have tried to give them everything they wanted, meaning more billions with no strings, but he didn't! Billions were given to tide over two of the companies, General Motors and Chrysler, but they were also given a time table to achieve a plan on how they were going to survive and potentially prosper (let alone stop losing billions). Remember folks, these companies were losing MILLIONS of dollars A DAY!!! Since that time, both companies presented plans and both were "eased" into bankruptcy with the help of "Uncle Sam," who took part ownership.* Current reports indicate that both companies may be out of bankruptcy far sooner than expected. Now, whether all of this will work....I have no idea. General Motors, especially, will be much streamlined, with far fewer brands and far fewer dealers. Chrysler has streamlined too, and will be combined with Italian automaker FIAT.

Will these, what I'll call, "Bush/Obama policies" work? Opinions vary, and to be honest, no one really knows for sure. Will these "remedies" prove to be as bad as the "disease?" Who really knows? Time will tell, but one thing is unmistakable, we have gotten ourselves into one grand mess. I suppose none of us is completely innocent, but some are outright guilty. Thirty years of free markets, with the removal of business regulations, or lax enforcement of what regulation existed, coupled with "trickle down" economics has taken a huge toll on America. We've had to learn all over again, what we should have learned from history; that is, substantial laizzez faire and trickle down DOES NOT WORK!

The handwringers of American society have worked themselves into a lather over government involvement in all of these things I've gone over in these articles. My question is, "Is our system so fragile and are Americans so insecure, that government can't intervene to try to halt a potential train wreck?" Let me tell you what this is about... MONEY and EGOS!!! With so many of these folks, it is always MONEY and EGO!!! They dream in dollars. Virtually every ounce of life is devoted to making more money in an attempt to soothe their insatiable egos. The rest of society can't keep up with them or their shenanigans, because WE DON'T THINK LIKE THEM! Many wealthy people and their money managers are terrified of government, because these folks don't have to answer to anyone.....except on occasion, to GOVERNMENT! (At whatever level: federal, state, local.) And they DON'T like it one bit! I wish there were a way of finding out what these egomaniacs were saying about the various current bailouts and those going back to the Bush Administration, and what their money was saying by how they invested it. If all of these companies had crashed last summer and fall, these folks (and many of the rest of us...maybe ALL of us) would be in even worse straits than we are today. Don't forget, these are many of the same people who wanted to get their hands on your Social Security money to ....ahh....invest it in the stock market!!! Remember that one? After seeing how THEIR whole system is just a mess, do you feel like turning over ANY money to these folks? If they want to be gamblers, they should go into business in Las Vegas.
Next...the final installment.... (A word history follows)

*The Canadian government also loaned them a smaller amount of money, and took a smaller ownership stake.

Word History:
King-This word "seems" to go back to Indo European "gen/gn," which had the notion of "production, offspring." The Old Germanic "offspring" (I couldn't resist that) of this was "kunjam," which seems to have meant "people, group of related people," from which Germanic developed "kuninggaz," seemingly "a leader of the people, offspring of the people." In Old English it was "cyning," and it was used for the name of Anlgo Saxon tribal chiefs, and later for the leaders of the individual Old English states, or provinces, if you will. Later still, when the English coalesced around a more "national" leader, that was the name given to him, and the name was then dropped for the regional leaders, and thus the title has carried forth until modern times. Germanic passed the term along to other non-Germanic languages like Russian and Finnish, for example, which use their own forms of the word. It prevails in all of the Germanic languages, as modern German has "könig", Dutch has "koning," Danish has "konge," Swedish "konung," Norwegian "konge". In English during the 1600s, the term also took on the additional meaning "big/large," as in "King Crab."

The New Deal Era & Now, Part Two

U.S. automakers have been struggling for the past number of years to remain profitable, but the economic downturn has put them flat on their backs.*** The automakers were literally losing millions of dollars each day!!! In September, 2008; that is, under the previous Congress and the Bush Administration, 25 billion dollars were authorized as loans to the three main American automakers; Ford, Chrysler and General Motors, for retooling to produce more energy efficient vehicles. This money was included as part of a major bill of more than 600 billion dollars, funding many aspects of government operations, and, therefore, there was not a separate vote on the auto loans.
Then in the middle of December 2008, Bush Secretary of the Treasury Henry Paulson loaned several billion dollars to both General Motors and Chrysler, to prevent them from going bankrupt. In all, General Motors, along with its finance arm, GMAC, has received over 63 billion dollars. Chrysler, along with its finance arm, Chrysler Finance Service, has received more than 16 billion dollars. (These figures from "Propublica.org") These funds came from the 700 billion amount voted on for banks previously, so again, there was no separate vote on this money. While Ford hasn't received any of the money (only the "retooling loan" money), they, too, have been losing billions, but in the last few months, they have been losing at a lower rate than GM and Chrysler. Recently, Wall Street cheered when analysts predicted that Ford would report a 10 billion dollar loss, and they actually "only" lost 9 billion. Don't pop the champagne corks yet! And I'll come back to the auto companies again shortly.
Enter the Obama Administration, January 20, 2009 (The new 111th Congress took office earlier in January, with both houses controlled by Democrats.):
Congress passes what most Americans know as the "economic stimulus bill." It provides 787 billion dollars (that's "billion," with a "B") for a wide variety of projects over a two year period. Some economists say it was not enough, while others say it was too much. There were two separate bills passed, one by the House and a slightly different version by the Senate (not an unusual situation). Then a conference committee, with members from both the House and the Senate and members from both parties, presented a new "compromise" bill for a final vote in both houses. The bill passed and was signed by President Obama in February. The final vote totals were:
House-246 FOR (all Democrats)-183 AGAINST (7 Democrats and 176 Republicans)
Senate-60 FOR (56 Democrats-2 Republicans-2 Independents)-38 AGAINST (All Republicans)
To be continued... (A word history is below the note)

***It should be noted that "foreign owned" automakers in the U.S. market have also experienced significant drops in sales during this downturn. Initially, the American companies took the major hits, prompting some commentators on CNBC (a cable business channel, owned by NBC) to proclaim that this problem in the auto industry was an American problem, and that the American companies should be allowed to file bankruptcy or liquidate. When other commentators asked if America wanted to still have American auto companies, the answer from the previous groups was, "We'll still have American auto companies; they're called 'Toyota' and 'Honda.' " The above is not a true word for word exchange, but rather a summary of things that were said.

Word History:
Switch-verb form-This was derived from the noun. See Part One of the above article for the noun's history at this link: http://pontificating-randy.blogspot.com/2009/06/new-deal-era-now-part-one.html

During the 1600s, the verb meant "to beat with a switch;" that is, beat with a riding whip or thin flexible twig. You don't hear this meaning used much anymore, but when I was a kid, it was not uncommon to hear another kid say, "I got switched last night!" Let me tell you, they didn't mean they got switched at the hospital either, but rather....YEOW!!! Further, the noun meanings transferred to the verb. I guess you could say they were "switched." Okay, back to the word. The noun also gave the meaning "to switch something on or off," or "to divert a train from one track to another." The notion of "swapping" didn't come about until the latter part of the 1800s.