The prologue years...
[...] unionism had shrunk, corporate America had blossomed -- at least in the size of individual entities and in the salaries and other benefits of those who sat at the top of them. In the decade following the war twelve hundred mergers swallowed up more than six thousand previously independent companies [...] some two hundred corporations controlled almost half of all American industry. The fewer companies, the less competition, the less competition, the less incentive to keep profit margins down -- and federal tax policies took very little of that profit. As a result, most of the personal wealth in the country resided in the pockets, bank accounts, and stock portfolios of a tiny percentage of the population.These are excerpts from The Great Depression: America in the 1930's by T.H. Watkins. It doesn't take a lot of imagination to draw a direct comparison to elements of the Bush recession, and see history repeating, not only in the activities encouraged that brought about the current crisis, but also the responses both enacted by one party and suggested as "ideas" by another party.
But goods had been produced for the millions, not for the thousands, and the millions, in the end, simply could not afford them.
[...] Then there was the banking system. [...] the Louisiana Banking Commissioner took a look at the failures in his state and penned an assessment that could have served as an indictment of the entire system. "[...] poor management, promotion of speculative enterprises, loans without security, too large loans, loans to companies in which officers were interested, were the major causes of bank failure."
[...] It was up to the survivors now to sift through the wreckage to find what they could that would help them build a new world. There was plenty of wreckage to go around.
The parallels in cause and response -- if you consider that aspect of the history as well -- make today's "debate" and policy of timid stimulus, deficit commissions, and lack of unified economic vision pale in comparison to the policies of FDR and the WWII generation.
They were courageous enough to not only address the causes of crisis, but also to build an economic future in the face of those too small-minded and easily frightened to think of anything but austerity. At the end of the second World War, the debt to GDP ratio was 120%. They put everything on the line to rebuild from the Great Depression to the end of the war. The strategy prevailed, and by the time Mr. Trickle-Down-Economics came along to begin undoing what had been achieved, debt to GDP was down to 30%, and the American economy was leading the world. This didn't happen by magic, and most definitely wasn't the result of "tightening the belt" and "waiting it out" (or as I like to call it: The Utah Legislature's Only Plan, Every Time, Ad Naseum). The activities that increased the debt from depression to the end of the war were responsible for the infrastructure that then brought debt down while at the same time creating economic expansion. Today's austerity "leaders" offer no such plan (i.e. cutting Social Security may reduce short term costs, but how does it create opportunity or incentivize growth? Hint: It doesn't.).
It may seem cliche, but when I read passages like the one above it also seems relevant: it's simply the difference between a "can-do" approach to economic policy and future, as opposed to tea-bagging ourselves back into the economic middle-ages. The real lesson of the era was a bravery to rebuild and remake the country in response to changing demands and economic forces. To listen to Mike Lee, Jim DeMint, Bachmann, or any member of the TeaBagger Brigade, America of today could not handle such a challenge, and we must downsize opportunity, huddle together in frightened "principled" masses, cowering in Hoovervilles, covering ourselves from the rain with our pocket Constitutions and Eagle Forum fliers.
A Bold Plan vs. Driving out immigrants and Mark Shurtleff's protest rallies.
The Greatest Generation vs. The Generation that Winced.
Ability vs. Limitations.