The Great Depression Read Online Free Page A

cycles?
     
    It is humbling and a little scary to realize that, since Benjamin Roth first began keeping his journal, millions and millions of man-hours have been spent framing, quantifying, and hypothesizing these questions without creating bulletproof answers or even much of a permanent consensus. Economics uses the statistics and ostensible precision one associates with, say, physics and astronomy. Yet to survey economic opinion on even seemingly simple questions gives the impression that economists as a group cannot consent to their equivalent of the hypothesis that the earth orbits the sun rather than the other way around.
     
    It’s easy (and instructive) to read this diary and reassure ourselves about how many lessons policy makers learned from the 1930s and how many more economic safety mechanisms are in place. Insurance for the unemployed and guaranteed Social Security income for the elderly and infirm are standard features of the American economy; without them, the impact of current recessions on individuals could easily be as bad as it was during the Depression. On the federal policy level, the government guarantee of bank deposits up to a certain monetary amount makes panicky bank runs less likely and less damaging (though by no means impossible, and of course there are those who argue that such guarantees are harmful; see the above observation about the earth and the sun). And when banks do close, the process is orderly and the impact on the overall financial system minimized. Moreover, decades of experience with monetary policy have given the Federal Reserve—a relatively new institution in Roth’s time—much greater power in steering the economy away from extremes of inflation or unemployment. In the decade covered by this diary, Roth rarely takes the time and the perspective to assess the value of these lessons learned in the New Deal and beyond; he wasn’t, after all, seeing many permanent signs of their efficacy. Still, there is much in Roth’s descriptions to bolster the arguments of those who wish to argue that today’s economic managers are much better off than their counterparts in the thirties.
     
    And yet: It’s nearly impossible for any reader in 2009 to examine this work without seeing stark, sometimes eerily prescient, parallels to our own age. Here, for example, is an entry from May 1933: “Investigations are the order of the day. The Senate is investigating private banking and in particular J. P. Morgan & Co. Mr. Morgan was on the witness stand all day yesterday and today. The evidence shows that his firm made loans to many men now prominent in public affairs.” There is this on June 1, 1933: “In looking back over the 3 months since Roosevelt became President it seems that the U.S. has traveled a long way toward some form of socialism or managed economy.” And this in 1932: “It looks as though the Democrats will win because everybody wants a ‘change.’”
     
    The point here is not whether bulls or bears are right or wrong within any snapshot of any decade, or whether critics of FDR in 1933 or Barack Obama in 2009 are off base or right on the money. Rather, Roth’s diary is a reminder that our economic security, individually and collectively, always rests on a complex interaction of market forces, politics, consumer perception, and the impact of unforeseen (and sometimes unforeseeable) events. As in so many other areas, those offering predictions for the future or even detailed readings of the present are often wrong because of incomplete information, flawed statistical models, or hidden agendas.
     
    And even when they are right within a particular time frame, history often has other plans in mind. The Youngstown that Benjamin Roth knew and hoped to see revived—the booming steel town, where soot-choked skies meant prosperity—did in fact survive the Depression, thanks in large part to the military buildup during World War II, a major theme of this book’s final chapter. But