Fear and Anger

 
Fear and anger are abroad in the land.  We are falling into the trap that FDR warned us about.  We are letting fear of the boogieman debt dictate our actions.
 
There are lots of reasons to be angry but it is unworthy and un-American of us to be afraid of anything, much less the idea that we cannot take care of our own future.
 
Politically, we have not done a good job of governing ourselves since the early 1980s.  The idea from that time that government itself is the problem is pernicious.  It undermined the idea that we can act in unison to provide the common good.  It undermined our political life and we are now reaping the consequences.
 
That idea spawned the belief that government is always too big and taxes are always too high and that the corporate sector is always more efficient, honest and honorable than government.  That is self-destructive nonsense that breeds fear of ourselves.
 
Economically, the government did indeed fail us but because there was too little, not too much government.  Our financial sector became arrogant and greedy because that is what government allowed it to become.  The banks should be nationalized until they recognize they exist to serve the economy rather than the economy existing to serve them.
 
The idea that markets can operate on their own gives corporations the freedom to abuse the economy in any way they want. The best way to maximize profits is to shove costs off on to the public sector through monopoly, pollution and private legislation. Now, profit levels have never been higher.  The labor share of income has never been lower. We should be angry about that.
 
America is instead angry for all the wrong reasons.  Amidst the cacophony of voices raising their specific complaints, be it of President Barack Obama, Speaker Nancy Pelosi, the health-care public option, the seizure of General Motors and Chrysler or the TARP giveaway to the banks, the anger appears directed mostly toward taxing and spending at all levels of government.
 
The anger seems to arise from the fear that the truly enormous budget deficits of the past two years, and into the foreseeable future, are going to bankrupt our economy and our grandchildren. The protesters see the national debt as a symbol of the chaos in our political and economic lives.  They see that as our government failure.
 
To those of us ancient enough to remember, we've been here before.
 
In 1946-48 the situation was as bad or worse.  A beleaguered and ill-prepared President Harry Truman was universally dismissed as alarmingly incompetent.  In addition Senator Taft and the Republican Congress were determined to thwart his presidency and reverse the New Deal. He and everyone else expected that, with 6 million GIs being rapidly demobilized, .there would be a reappearance of depression level unemployment.
 
To show how similar times really were, Truman's campaign in 1948 focused on inflation, expansion of civil rights, aid to education, housing, the minimum wage and medical care for the poor and the elderly. Truman himself was condemned for seizing the railroads and threatening to take over the coal and steel industries.  Harry Truman, of all people, was accused of being “soft on communism.”  Today's problems echo that time perfectly.
 
In the midst of all this, the national debt was 125 percent of GDP, twice what it is now. But no one seemed to care! We were, despite that debt, able to pay for the Cold War and remobilization, fund the Marshall Plan and still increase our living standard many fold.  We just were not afraid of anything. In fact, those supposedly debt-burdened years immediately after WWII were designated "The Best Years."
 
In today’s crisis, the TARP money, however badly spent, did keep the financial system from collapsing.  The stimulus money assured business that the government was willing to bail out the economy and do whatever was necessary to avoid a depression. Two years of a real depression would see lost output the size of our GDP. It would dwarf any spending or the national debt. We have so far avoided that.
 
America has to get its act together; there is no doubt about that.  But the people who think that the debt and taxing and spending are a problem should get some perspective.  Complaining about President Obama, Speaker Pelosi and government spending is fear mongering. Put government to work.