Marching Backwards, Back to 1937

The world's politicians seem ever more determined to achieve the infamous double dip, the "depression within a depression" of 1937 when FDR listened to the fraidy cats and "tightened" up on the budget and immediately plunged the US economy off a cliff.

From Wikipedia:

By the spring of 1937, production, profits, and wages had regained their 1929 levels. Unemployment remained high, but it was considerably lower than the 25% rate seen in 1933. In June 1937, some of Roosevelt's advisors urged spending cuts to balance the budget. WPA rolls were drastically cut and PWA projects were slowed to a standstill. The American economy took a sharp downturn in mid-1937, lasting for 13 months through most of 1938. Industrial production declined almost 30 per cent and production of durable goods fell even faster.

Unemployment jumped from 14.3% in 1937 to 19.0% in 1938, rising from 5 million to more than 12 million in early 1938. Manufacturing output fell by 37% from the 1937 peak and was back to 1934 levels. Producers reduced their expenditures on durable goods, and inventories declined, but personal income was only 15% lower than it had been at the peak in 1937. In most sectors, hourly earnings continued to rise throughout the recession, which partly compensated for the reduction in the number of hours worked. As unemployment rose, consumers' expenditures declined, leading to further cutbacks in production.

Here's is Robert Reich piling on and pointing out that Obama under the endless brow-beating of the idiot right, the Republicans, in the US is now force marching the US down the same path, a repeat of the 1937 infamous "double dip":

The May jobs report is a disaster — the weakest reading since September. Non-farm payrolls grew only 54,000 last month, according to the Labor Department’s Bureau of Labor Statistics. Private employment rose only 83,000 — the smallest growth since last June. Government payrolls dropped 29,000.

The overall jobless rate rose to 9.1 percent.

Together with plummeting housing prices, falling wages for non-supervisory workers, a paltry 1.8 percent growth in the first quarter, and a precipitous drop in consumer confidence, the picture should be clear to anyone able to see clearly.

The recovery has stalled.

We’re not in a double dip yet, but the odds are increasing.

The question is whether all this will wake up Washington, and stop the monumental distraction of the games being played over the debt ceiling and long-term budget deficit. The Republican lie that the nation’s long-term budget deficit is responsible for high unemployment would be laughable if it weren’t so tragically irrelevant to the current situation.

The President cannot be reelected if the economy tanks. He may not even be reelected on an anemic recovery in which unemployment remains nearly this high. But all incumbents are endangered. Republican House members from swing districts are toast if they don’t show voters they’re actively working on the twin problems of jobs and wages.

Several steps need to be taken right away. Exempt the first $20,000 of income from payroll taxes for two years. Lend money to cash-starved state and local governments. Initiate a new WPA for the long-term unemployed. Amend bankruptcy laws to allow homeowners to include their prime residencies in personal bankruptcy (giving them more bargaining leverage with their lenders to renegotiate mortgage loans).

Above all: Washington needs to show Americans it’s taking seriously the ferocious problem of jobs and wages, and the trend back toward a double dip.

I never cease to be amazed at how stupidity gets you elected, how obtuseness allows you to pontificate, and a cruel indifference to suffering makes you a media analyst. How much longer must the long suffering public put up with incompetence at the top? with inaction in the face of a national disaster? with cynical political maneuvering when moral courage and leadership is so desperately needed?