Hard Times


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Hard Times

“Gore Vidal uses the phrase, the United States of amnesia. Well, I say United States of the big A — Alzheimer’s, because what happened yesterday is forgotten today.” Studs Terkel

Studs Terkel will forever be remembered as an apostle to our past. The actor, radio host and biographer dedicated his life to chronicling diverse aspects of our American experience so that we might not lose sight of ourselves.  Terkel lived the images that he projected – – a child of Russian immigrants, a student of journalism and theatre, a blacklisted artist who would not inform on friends and a present day Tom Joad, advocating for the disenfranchised, bullied and under represented.  In an interview just before his death, Terkel lamented our sound bite society’s inability to reflect and learn from even our most recent current events.

In his award winning oral history of the Great Depression, Hard Times, Terkel conducted a symphony of history – trumpets, trombones and saxophones of the 1920’s, the melancholy deep bass of the Black Tuesday stock market crash and the chaotic syncopation of economic and social hardships of the 1930’s.

Terkel left us more than narratives, he guided us through heartache, human endurance and history and through this experience, we learned to sing a richer anthem about American living and learning.  His recording of American’s personal Depression stories revealed not only our failings but our triumphs and the human instinct to persevere in the face of great crisis.    Immigrants, minorities, investment bankers, union activists, musicians and working class families all related the ordinary and extraordinary circumstances that carved deep psychological lines into the rouged, youthful cheeks of a nation emerging from the prosperity of the early 20th century.

The Blues of our current economic uncertainty are not unique sounds to our generation.  Every society faces periods of uncertainty that threaten prosperity.  These challenges in hindsight often become the defining moments for a generation.  Those that choose to dismiss the factors that precipitated the Great Depression as singular and unique ignore the past.  CS Lewis referred to this indifference as a “snobbery of chronology”, a syndrome where descendents armed with hindsight often view themselves as impervious to replicating the missteps of their predecessors.  The arrogance that develops as a culture achieves advances in medicine, technology and science often impedes our spiritual and social progress.  The lack of heavy lifting tends to atrophy the muscles of character that people need in times of challenge.

In 1929, the stock market crashed.  Entire fortunes were lost.  People committed suicide rather than face the humiliation of total material ruin.  In the late 20’s, the Dow was soaring. Everyone became a stock speculator and could indulge their irrational exuberance with easy credit and margin purchasing of equities.  Gains were kept of the table to double down on even bigger bets. Consider the echoes of Martin Devries, a prominent Chicago and NY broker as he reflected on Wall Street in 1928.

“There were a great many warnings.  The country was crazy.  Everybody was in the stock market, whether they could afford to be or not.  You had no governmental control of margins, so people could buy on a shoestring.  And when they began to pull the plug..you had a deluge of weakness.  You also had short selling and a lack of rules.   It wasn’t just the brokers involved in margin accounts.  It was the banks.  They had a lot of stinking loans.  The banks worked in as casual a way as the brokers did.”

Herbert Hoover and the Republican party held the White House and governed with laissez faire fiscal policy and a populist view that periodic downturns were the natural fires that needed to be allowed to burn themselves out within the forests of our endlessly promising economy.

By raising taxes at a time of tight unemployment, the US government took more money out of the hands of consumers thereby reducing consumer consumption – which is critical to economic growth.  The Fed’s reaction to the crisis was to tighten policy and drive a kind of Darwinian cleansing of weaker financial institutions.  Confronted with the embarrassment of a sudden financial tailspin, the government under reacted and then overreacted.  When banks failed, the Fed did not lend the failing bank money or afford additional money to other banks to compensate for the shrinkage in money supply.  The Fed instead squeezed monetary policy and tore at the deep fissure in the economy. Lack of credit led to banks failing at an astounding rate. Frenzied queues of depositors attempting to withdraw their savings from uninsured banks “ran” to withdraw savings that were either illiquid or nonexistent.  The lack of liquidity caused mortgage defaults, bankruptcies and financial ruin.

To add insult to injury, in 1932, a Democratic Congress and a worried, willing Republican Hoover administration passed the largest peacetime tax increase in history.  According to web based financial writers Gold Ocean, “Marginal income tax rates were raised from 1.5% to 4% at the low end and from 25% to 63% at the top of the scale. A huge tax increase by any measure.”  As US consumption shrank and unemployment rose, Smoot Hawley was passed to stimulate jobs at home by reducing imports, This lead to a global trade war that debilitated the world economy.  Most historians agree that it was only WWII that got us back on the economic track.

The level of financial hardship was unprecedented. There was no place to hide as our parents and grandparents were pulled down into an economic sink-hole that stretched from China to Chile, and New York to Melbourne.  Families were fractured as fathers left to try to find employment in far off cities.  Some families were never reunited.  Mothers went back to work doing odd jobs while older siblings raised younger brothers and sisters.  Aunts, uncles, and grand parents moved in to offset expenses.  People became infinitely more dependent on one another resulting in stronger, more tightly knit communities of common interest.There was a gracious humility in many towns that hung like the sweet smell of lilacs in spring as people accepted life on life’s terms and understood that gifts were to be shared with those closer to the abyss of poverty.

Life was about making ends meet.  Basic necessities were rationed and would remain precious indulgences for over a decade.  A new sense of social justice emerged in America as dust bowl minstrel Woody Guthrie and social activist/writer John Steinbeck chronicled the inequities and humanity that blossomed in the miasma of depression. The anvil of hardship pounded an entire generation and out of it, there emerged an alloy of American values – – resilience, dedication, community, empathy and equity.  These attributes would be put to good use in 1941 as a generation rose up to defeat global fascism, stand up to communism and to form the foundation for a benevolent world power.  The lessons of the depression taught those who endured it to live within their means, and not take on massive amounts of personal debt.  They understood it meant relying on your own initiative to solve personal problems, not abdicating this responsibility to large government.

We now find ourselves in the midst of another financial crisis.  We are worried.  Oil is at an all time high.  People are losing jobs.  The Dow teeters each day like a four foot Jenga stack.  Most do not remember that it took the Dow until 1954 to match its high of 312 that it had held in 1929.  Credit is tight. Those who watched the missteps of the Fed in the 1930s know that the supply of credit is the issue, not money supply.  We have learned that there can be abundant money in the system, but if a conservative paranoia swings the pendulum too far to where banks hesitate to lend, business can’t expand. With over massive and ever expanding public debt and an economic recovery shored up by rotten timbers of cheap creidt , we know there is more pain to come and that scares us.  Anxiety and lack of faith opens up the Pandora’s box of society’s self interest.  Self-centered fear triggers many character defects – the penchant to hoard, to be selfish, to be ignorant of others in need and to prioritize oneself above all others.  The exact opposite of how history has taught us to survive catastrophe.

If Studs were sitting with us by a summer camp fire, he would surely tell us of hard times and hobos, migrant workers, dust bowl farmers and soup lines.  He would also reassure us with personal stories of compassion and love, attributes that he believes are the ties that lash the broken boats of any society and help protect against the ravages of indifferent dark passages.  He may even suggest as Dickens once mused, that we are in for “the best of times and the worst of times”.  The question is whether we can find critical perspective, strength and wisdom from the words and actions of others who survived the Great Depression or whether we dismiss these personal memorials as trite, gilded nostalgia.  Terkel would urge us to faithfully learn from the past, carefully nurture the present and actively participate in making the future.  Sometimes, he would argue, the things we fear most, are the things we most desperately need.

Character, after all, is found in the hard times.

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