General Commentary
Perhaps we need another depression
By Denis J. Uminski
Dec 12, 2007, 15:35

What this country needs is a good depression,” my Dad would say when speaking about the materialism he saw around him. Dad worked at Ford and Mom sold shoes. They banked their savings and borrowed only to buy our home.

The Great Depression was a time of widespread suffering. The stock market crashed after a long period of growth and prosperity in the roaring ’20s. Fortunes were lost overnight. Banks and businesses failed. Suicides increased. Foreclosures sky-rocketed.

People lost their jobs, homes and farms. As farms failed, there was a mass migration to the cities. People went hungry. Soup kitchens sprang up. A song of the time said: “Once I built a railroad. Buddy can you spare a dime.”

The Great Depression deeply shaped people’s defensive habits for years to come. “Are you working, John?” my Aunt Marie would ask every time she saw my Dad,

right up until his retirement. I recall many holiday meals when my aunts would watch the serving dishes being passed around to make sure they got their share, even though there was plenty more in the kitchen. Why did this all happen? To put it simply, people ran out of money to buy things.

But lessons were learned from the crash and reforms took place. During the ’30s, safeguards were put in place: deposit insurance, securities regulation, welfare relief, unemployment insurance and Social Security, to name a few. Workers got collective-bargaining rights and regulation of minimum wages and maximum hours.

Many say that the crash of 1929 cannot happen again. However, it seems that today the lessons of the crash and Depression have been forgotten by our nation’s leaders and economic gurus. Our government has slacked off in enforcing regulations. Banks have been making bad mortgage loans. Limits on credit card interest seem non-existent. There is a growing disparity between rich and poor. Organized wealth is trumping organized labor. CEO salaries are 400 times the salaries of the average worker. While CEO salaries and corporate profits are at record highs, workers are being forced to accept lower wages and fewer benefits. The federal wages and hours law has been changed to make it harder to claim overtime.

The country’s largest private employer has a reputation for keeping down wages and benefits and keeping out labor unions.

About 50 million Americans cannot afford health insurance and the insured have payment problems, too. Walk into any restaurant foyer and see the number of flyers on the walls advertising fund-raisers for victims of catastrophic illnesses and accidents.

It is the government’s duty to balance the interests of organized wealth and organized labor. Unions are often portrayed in the media as a restraint on trade. Surveys show that most Americans want to join unions, but do not.

Our nation’s leaders have been following laissez-faire policies that have allowed our economy to become like a deck of cards. Regulation is viewed as bad for prosperity. After the 9/11 attack, Americans were told to go out and spend. While our troops went to war, our citizens went to the mall.

As in 1929, people are running out of money to buy things. Consumer spending is being fueled by consumer debt, rather than by savings. Real wages have been going down and our national savings rate is negative.

When workers are prospering, America is prospering. Are workers prospering? Is America prospering? Maybe Dad was right.