7-21-08, 10:38 am

While preparing a lecture on the Great Depression, I saw TV news clips of George Bush saying that the economy was “sound.” He has actually said that a few times in the last few weeks. I also thought of really nasty right winger, Phil Gramm, saying that what the country was facing was a “mental recession” and that Americans were a “nation of whiners.”

Then, I thought about Herbert Hoover, who also said that the “economy was fundamentally sound” for three years while things went from bad to much worse. I thought recalled how Hoover told Americans that what was happening was little more than a loss of confidence, that is, if only Americans regained confidence and began to invest and buy more goods all would be well. How they would do that he didn’t say, although he did suggest privately that it would be great if someone would write a great popular song to stir confidence.

Herbert Hoover wasn’t an idiot (something than many would doubt about the present White House occupant), but the policies of his class and his party compelled him to act like one. In the nation, there was popular confusion and alienation. People were being told by the head of the National Association of Manufacturers that there were jobs out there for those with the 'get up and go' to find them. Auto magnate Henry Ford insisted that “these are really good times but only a few people know it.” Other “opinion makers,” as pundits were then called, believed the economic crisis was not all bad because it would help people return to basic spiritual values.

By contrast, the Communist Party began organizing unemployed councils throughout the country beginning in 1930 to fight against home evictions and for unemployment insurance, jobs for the unemployed (then called “work relief”) and aid for women with dependent children and others who could not work (then called home relief).

Socialists, unaffiliated progressives and many others were also involved in a rising tide of protest that turned the tables against Hoover by 1932 and gave him the crushing defeat that he and his party richly earned. Voters rejected Hoover's, attempt to portray his opponent Franklin D. Roosevelt, as a potential dictator, Communist, Socialist even at times Fascist, someone who would threaten the “American Way of Life” which people saw disappearing before their eyes.

Today, many people, including my students, are worried about the crisis Bush refuses to call a recession becoming a Great Depression. And they are very right to worry. We have experienced since the beginning of the Reagan presidency nearly 30 years of anti-regulation, anti-labor, and anti-social welfare policies led by those who literally seek to eliminate both the policies instituted in these areas by the New Deal and its successors and the social and economic rationale for them.

At the same time the institutions established by the New Deal and its successors to insure large capital have been sustained, creating a political economy which some call a “corporate welfare state.” But I see it as sick dependency relationship produced by reactionary Republican policy, one that has the government offer everything for and asks nothing from large capital and the rich.

The present mortgage crisis is a textbook example of this. The crisis is potentially the biggest since the early 1930s, much bigger than the Savings and Loan crisis of the late 1980s or the “dot.com” crisis of the late 1990s. J. P, Morgan and Company, Citicorp, Merrill-Lynch, household names of finance/monopoly capital are reporting spectacular losses. Freddie Mac and Fanny Mae, the federally supported national insurers, are turning to the federal government for a bailout and Congress is drafting legislation to do so.

For those who have some doubts about the class nature of the political system, I would ask them to think when the last important Civil Right bill was past? The last major pro labor bill? I would also ask them how quickly the government acts to “bail out” the unemployed, the homeless, workers who lose their pensions and health benefits because of corporate fraud?

But my major point is this. What if the recent decades of 1920s style profiteering overwhelm the insurance protections of the New Deal era the way Hurricane Katrina overwhelmed the inadequate and neglected levee system of New Orleans? What if employers intensify both layoffs and outsourcing of jobs, mortgage defaults mount by the millions, and the banks and insurance companies drown in a mountain of bad paper or, given present technology, bounce back electronic transfers while the people face unemployment and foreclosure with canceled credit cards?

That is a nightmare scenario that would make today’s crisis look very mild but it is a real possibility unless a new administration moves to reverse not only the disastrous policies of the Bush administration but the whole anti business regulation. environmental regulation, anti-progressive taxation, and anti labor and anti- social welfare direction of national policy over the last three decades.

I ended by lecture by looking at Franklin Roosevelt, his background and associations as a progressive governor of New York, the fact that much of the left in 1932, Communists, Socialists, and various progressives, criticized him for the inconsistencies of his policies, his failure to articulate specific programs, and what they saw at the time as merely shallow political rhetoric.

I then said as a sort of coming attraction for future lectures that the new administration’s course, after Roosevelt huge victory, was unclear, and that the left, particularly the activists of the Communist Party, USA, would play a leading role eventually in the development of that course, but that Roosevelt’s critics on the left in 1932 really couldn’t see the forest from the trees.

Roosevelt had called for a “New Deal for the forgotten man at the bottom of the economic heap” in a direct appeal to the working class and the poor that few if any major party candidates had ever made. He already had a record as Governor of New York supporting pro labor and pro social welfare policies, even though those policies had only been enacted in a very limited way. New forces, progressive and largely independent political forces ,were already rallying around him.

I would say the same thing today about Senator Barack Obama. He has a solid record as a progressive in both the Illinois State Legislature and the US Senate. His campaign has mobilized independent non party progressive forces in a way unprecedented excepting the mobilization of non party forces of the religious right behind the Republicans, since the McGovern campaign of 1972 (and his chances of victory today and infinitely stronger than McGovern’s then). Those who are attacking him from the left because of his inconsistencies and lack of specific policies are ignoring both what American politics is and what he is and can become.

Hopefully, McCain and his party will go down to the crushing defeat that the Bush administration and the congressional GOP has richly earned in this coming watershed election. If we are successful in making that happen, an Obama administration will be in a position to address both the present crisis and begin to reverse the disastrous policies of a generation. If we don’t succeed, 1932 on an even grander scale will very likely be the shape of things to come.

--Norman Markowitz teaches history at Rutgers University.