New Gilded Age or New Era

The period from the end of the Civil War in 1865 until just after the turn of the century is known as the Gilded Age, it is the time of big railroads, big banks, and big steel. Men like J.P. Morgan and Andrew Mellon made themselves wealthy by monopolizing trade and corrupting government then built grandiose homes and earned the appellation robber baron. Economic inequality reached historic levels and children starved while Morgan and Mellon decided where to build their next 75 room mansions. Teddy Roosevelt earned a reputation as a trust buster through his efforts to curb the most egregious excesses of such men. Roosevelt didn’t attack all trusts or monopolies, only those he felt took excess profits and failed to provide good, efficient services or high quality products. While his public face was that of a protector of the common man he was very much a supporter of capitalism who believed that strong government provided necessary balance. Economic inequality continued to increase through the Roaring 20’s proving that Teddy Roosevelt didn’t go far enough.

Just two decades after Teddy Roosevelt’s presidency the national economy took a nose dive into what became known as the Great Depression. It took reformers like Teddy’s nephew Franklin Delano-Roosevelt and his vice-president, Texan John Nance Garner, to push back against the avarice of the robber barons’ successors and set the stage for the rapid growth in the middle class after the end of World War II. Roosevelt and Garner were forced to compromise with southern Democrats and withhold some of the protections and benefits from domestic help and farm workers, who were often minorities, in order to pass their legislation. Those left out were unable to fully enjoy the benefits of the vibrant economy.

Two decades later another reformer was needed and Texan Lyndon Johnson took up the banner to expand those benefits to the grandsons and grand-daughters of slaves and other minorities. Like all reformers before him he also had to be pushed by those who suffered under the existing system and he had to accept compromises in order to move forward.

While each of these great reformers efforts were necessary they have never been enough and soon after LBJ left office the legislation and regulations that protected the middle class were weakened or reversed. It has been 50 years since LBJ and once again economic inequality has reached record levels with just three men holding as much wealth as the bottom 50% of Americans combined.

In 2020 we have an opportunity to elect a reformer who will turn back the tide of avarice that threatens the fabric of our society and prevent another Gilded Age or Great Depression. I hope you watched the two nights of Democratic presidential candidate debates and recognized that some of them will move us forward while others just offer the status quo. Sanders, Warren, Harris and a few others offer a chance to restore balance to our economy. Biden, Hickenlooper and the rest would happily settle for scraps off the table of the new robber barons of Facebook, Amazon, and Apple.

Desperate people do desperate things

While the TEA Party continues to play into the hands of Wall Street bankers and billionaires with delusions of grandeur the U.S. economy is once again swirling around the drain. If House Speaker John Boehner is successful in his oft stated goal of making President Obama a one term president we can all look forward to further austerity measures which will put the economy into a tailspin the likes of which haven’t been seen since Herbert Hoover was President.

Many Americans were in desperate shape even prior to the Great Depression and once it struck their ranks only grew. Our parents and grandparents often went hungry sometimes for days on end. What is usually glossed over in history classes in this country is that there was quite a bit of civil unrest in this country in the early part of the 20^th century with labor strikes and government troops used by the corporate bosses to break those strikes often using deadly violence.

We’ve already seen pre-cursors to such heavy handed tactics in places like New York and the University of California at Davis where police pepper sprayed peaceful protestors who were sitting on the ground. What the Koch brothers and the Walton family seem to have forgotten is that in this age of improvised explosive devices when people have nothing left to lose they are willing to take measures that they would never have risked with just a little food on their tables and a roof over their heads.

The insanity of tax breaks for millionaires

I keep hearing the TEA Party screaming that the reason they want Democrats out of office is because they’re all about big government and spending the taxpayer’s money. What they don’t seem to get is that last month our government shed nearly 160,000 jobs. The government now employs fewer people than it did during the Bush administration.

Republicans claim that lower taxes would foster more economic growth and more jobs but if you look at the last six years of the Bush presidency when taxes were near a century low you’ll find that zero net new private sector jobs were created. The remedy for this they claim is even lower taxes. Doesn’t this remind you of the famous remark “Insanity is doing the same thing over and over again and expecting different results”?

After WWII, the event which compelled massive deficit spending that finally brought this country out of the Great Depression, the U.S. was much deeper in debt than we are today. Through wise management by Harry Truman and Dwight Eisenhower who invested in education via the G.I. Bill and infrastructure like the interstate highway system our country became prosperous once again and the standard of living for rich and poor alike improved immensely.

The Republican argument that cutting government spending will help create jobs is kind of like a doctor telling you that the solution to your anorexia is to go on a diet.

Wasteful spending in the stimulus, but it's not what you think

The stimulus package signed into law by President Obama last year has been criticized by many for not creating jobs and for generally being a program of wasteful spending that only makes conditions worse. There is some truth to that, in fact 36.6% was wasted in an attempt to achieve Republican support. That 36.6% was tax cuts like accelerated depreciation (multiplier .027) which time and again has been shown to create substantially less economic activity than direct spending on things like schools and bridges (multiplier 1.59) or extending unemployment benefits (multiplier 1.64). Government spending increases by the Roosevelt administration stopped the economic free fall America suffered during the Great Depression. Tax cuts like Reagan’s trickle down economic policies led to greater deficits and no new jobs.

Much of the remaining stimulus funds went to state and local governments for use in paying our policeman and teachers among others. Without those funds our children would have found themselves in classrooms with substantially more kids per class and we know that leads to poor education. So while the stimulus didn’t create as many jobs as we need it did prevent things from getting worse.

If we want our economy to start making new jobs paying more than fast food wages we’re going to have to spend some big money and the best way to do that is to invest in infrastructure because not only does it provide jobs but we also end up with something of value when it’s done.