What if This is 1929 All Over Again

Back in 1929, and 1930, and 1931, and 1932, in the Great Depression, a bunch of banks failed every year. Peaking in 3,000 banks failing in 1932. And the Republicans just stood around and did nothing. Even with Andrew Mellon, banker, as Secretary of the Treasury, they did nothing. Mellon, whose father started the Mellon bank as T. Mellon & Co., was used to financial wipeouts, and learned from his father in the Long Depression that started in 1873 that you just ride these things out and make sure that your bank doesn't go under.

Of course, both the Long Depression of the 1870s and the Great Depression of the 1930s were both, in my view, a consequence of the deflation that followed the "resumption" of the Gold Standard after an inflationary war. Apparently the high-and-mighty in 1930 weren't reading Walter Bagehot and his commentary on the 1870s financial crash in Lombard Street. In which the central bank is the "lender of last resort" and prevents a collapse of credit. Oh well.

But now we seem to be in a market rout and the Federal Reserve is raising interest rates in a rather tardy response to the money printing of the last two COVID years.

And we have the Biden administration executing on the ruling-class faith that we are all going to die of climate change unless we stop using fossil fuels.

Back in the 1930s the American people sent the Republicans packing and elected New York princeling Franklin Delano Roosevelt and a very Democrat Congress. Of course, they were fools that mucked around with the economy for eight years as it continued to wallow in depression, and only got the economy back on track by preparing for a nice little world war.

Will history repeat itself, with Democrats flopping around as the economy goes to hell, as Republicans did at the start of the Great Depression? And will Republicans take Congress in a mega-midterm, as the Democrats did in 1930. And will a Republican sweep all before him in 2024 as FDR did in 1932.

We Don't Know. 

But I do think that the Democrats have a problem. We saw the problem in the early years of the Obama administration when its stimulus package was mainly devoted to shoveling money at Democratic constituencies and not getting the economy back on track.

And now the Democrats think that the proper economic policy after the COVID stoppage is to shovel money at climate change. Of course they do, because apart from anything else, it will benefit educated Democratic voters.

I do not think it likely that our Democratic friends will wake up one day and decide that their climate policies are an economic and political disaster. Humans, and especially progressives, are not like that. Even when their religious cult leads them into the wilderness they still believe, and they believe what their leaders tell them, that the fault is all those evil monsters.

But ordinary people and ordinary voters just want the economy to work, and if the Democrats can't or won't make it work then the voters will decide it is Time For A Change, and elect the other guys.

And say what you will about dumb Republicans, they do believe that the number one job of a national government is to get the economy on track so ordinary people -- that obey the law, go to work, and follow the rules -- can wive and thrive in this land we call America.