Saturday, October 18, 2008

Timeline of the Great Depression - interesting parallels

Timeline of the Great Depression: "TIMELINES OF THE GREAT DEPRESSION:
This adds a little context to our present day difficulties. Paralleles include the non interventionist freemarket approach which actually aids the rich with its tax structure. Unions and social services are gutted. Wealth becomes more and more concentrated with the top 1 percent.

Differences: A greater middle class presence, more immediate government intervention (or is it just another Bush Co raid on our treasury).

You also get a perspective on the opposition to Roosevelt's policies which might recur in an Obama administration, included lawsuits and an attempt by bankers at armed rebellion which was foiled by our own Smedley Butler.

1920s (Decade)

* During World War I, federal spending grows three times larger than tax collections. When the government cuts back spending to balance the budget in 1920, a severe recession results. However, the war economy invested heavily in the manufacturing sector, and the next decade will see an explosion of productivity... although only for certain sectors of the economy.

* An average of 600 banks fail each year.

* Organized labor declines throughout the decade. The United Mine Workers Union will see its membership fall from 500,000 in 1920 to 75,000 in 1928. The American Federation of Labor would fall from 5.1 million in 1920 to 3.4 million in 1929.

* Over the decade, about 1,200 mergers will swallow up more than 6,000 previously independent companies; by 1929, only 200 corporations will control over half of all American industry.

* By the end of the decade, the bottom 80 percent of all income-earners will be removed from the tax rolls completely. Taxes on the rich will fall throughout the decade.
* By 1929, the richest 1 percent will own 40 percent of the nation's wealth. The bottom 93 percent will have experienced a 4 percent drop in real disposable per-capita income between 1923 and 1929."


* The conservative Supreme Court strikes down federal child labor legislation.


* President Warren Harding dies in office. Calvin Coolidge, becomes president. Coolidge is no less committed to laissez-faire and a non-interventionist government.
* Supreme Court nullifies minimum wage for women in District of Columbia.


* The stock market begins its spectacular rise. Bears little relation to the rest of the economy.


* The top tax rate is lowered to 25 percent - the lowest top rate in the eight decades since World War I.


* Between May 1928 and September 1929, the average prices of stocks will rise 40 percent. The boom is largely artificial.


* Herbert Hoover becomes President.

* Annual per-capita income is $750. More than half of all Americans are living below a minimum subsistence level.

* Backlog of business inventories grows three times larger than the year before.

* Recession begins in August, two months before the stock market crash. During this two month period, production will decline at an annual rate of 20 percent, wholesale prices at 7.5 percent, and personal income at 5 percent.

* Stock market crash begins October 24. Investors call October 29 Black Tuesday. Losses for the month will total $16 billion, an astronomical sum in those days.


* By February, the Federal Reserve has cut the prime interest rate from 6 to 4 percent. Treasury Secretary Andrew Mellon announces that the Fed will stand by as the market works itself out: 'Liquidate labor, liquidate real estate... values will be adjusted, and enterprising people will pick up the wreck from less-competent people'.


* No major legislation is passed addressing the Depression.

* The GNP falls another 8.5 percent; unemployment rises to 15.9 percent.


* This and the next year are the worst years of the Great Depression. For 1932, GNP falls a record 13.4 percent; unemployment rises to 23.6 percent.

* Industrial stocks have lost 80 percent of their value since 1930.

* 10,000 banks have failed since 1929, or 40 percent of the 1929 total.

* GNP has also fallen 31 percent since 1929.

* Over 13 million Americans have lost their jobs since 1929.

* International trade has fallen by two-thirds since 1929.

Congress passes the Federal Home Loan Bank Act and the Glass-Steagall Act of 1932.

* Top tax rate is raised from 25 to 63 percent.

* Popular opinion considers Hoover's measures too little too late. Franklin Roosevelt easily defeats Hoover in the fall election. Democrats win control of Congress


* Roosevelt inaugurated; begins 'First 100 Days'; of intensive legislative activity.

* A third banking panic occurs in March. Roosevelt declares a Bank Holiday; closes financial institutions to stop a run on banks.

* Alarmed by Roosevelt's plan to redistribute wealth from the rich to the poor, a group of millionaire businessmen, led by the Du Pont and J.P. Morgan empires, plans to overthrow Roosevelt with a military coup and install a fascist government modelled after Mussolini's regime in Italy. The businessmen try to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot is foiled when Butler reports it to Congress.

* Congress authorizes creation of the Agricultural Adjustment Administration, the Civilian Conservation Corps, the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Emergency Relief Administration, the National Recovery Administration, the Public Works Administration and the Tennessee Valley Authority.

* Congress passes the Emergency Banking Bill, the Glass-Steagall Act of 1933, the Farm Credit Act, the National Industrial Recovery Act and the Truth-in-Securities Act.
* Roosevelt does much to redistribute wealth from the rich to the poor, but is concerned with a balanced budget. He later rejects Keynes' advice to begin heavy deficit spending.

* The free fall of the GNP is significantly slowed; it dips only 2.1 percent this year. Unemployment rises slightly, to 24.9 percent.


* Congress authorizes creation of the Federal Communications Commission, the National Mediation Board and the Securities and Exchange Commission.

* The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. A long road to recovery begins.

* Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.


* The Supreme Court declares the National Recovery Administration to be unconstitutional.

* Congress authorizes creation of the Works Progress Administration, the National Labor Relations Board and the Rural Electrification Administration.

No comments: